S4: Entrepreneurship

KEY UNIT COMPETENCE: To be able to conduct market research for business start-up and growth.

Kagoyire is a senior 4 student of Associate nursing in Rwanda. she is equipped with some competencies of starting a business, having learnt entrepreneurship in O-level. she decided to start a small orange juice processing factory and her main market was the restaurants located in Agaciro village. Two years later, she found that the level of sales was extremely declining and started wondering why? Thereafter, she decided to gather all relevant information regarding the likely causes of such a decline.
Questions
Referring to the above text, answer the following questions:
1. What did Kagoyire not do before starting her business and how would she have done it?
2. Why do you think it is important to carry out market research?

5.1 Meaning of Market, Marketing and Market research

1. After analyzing the above pictures what comes to your mind?
2. What do you understand by the key terms which are reflected above?

A market: This is defined as an arrangement through which the buyers/customers/clients and sellers/business owner/entrepreneur come into contact to negotiate an exchange of goods or services for money.

Marketing: This is the action of promoting and selling products including market research and advertising.

Market Research: This is the process of collecting and analyzing information or data related to the demand of goods and services in a particular market. Market research gathers information about products, customers, distributors/ suppliers and competitors.

5.2. Elements of market research/Surveys


Enumerate any two elements one would consider while conducting market research.

a) Customer survey
This is the process of finding out customer’s attitudes (their needs, preferences, purchasing power) towards your product in the market or what you plan to put in the market. For the survey to be successful, one must know the types of customers.
Types of Customers
•Loyal customers: These are customers who buy from the business regularly. They are few but they bring more money to the business
•Impulsive customers: These buy whatever items that are attracting to them. No specific item in their mind, they just buy by impulse.
•Potential customers: These are people who are able to buy but not yet ready to buy business products. They can be turned into customers in the near future.
•Real / Actual customers: These are customers who have already done some transactions with the business.
•Discount customers: These are customers who buy low-cost products that have been discounted, they buy only when businesses discount their prices.
•Cash, cheque or credit customers: These are customers who buy depending on modes of payment.
•Wandering customers: These are customers who have no specific need in mind but go to the shop to get a sense of experience.

This refers to forming questions about a product, its quality and forming some answers. Before launching a new product, marketing professionals first test it with a selected audience. A new product survey provides a way for marketers to understand when to start, modify existing ideas, how and who to market. Product analysis can also be carried out by comparing similar products with each other using the same criteria.

The purpose of Product Analysis
•To help customers determine whether the product is worth buying.
•To improve the version of a product.
•To provide a prototype (something developed/ improved before a final product is manufactured)
•To determine product price.

b. Supply survey
A supplier is any person or a company that provides goods or services to another usually in exchange for payment. or
Supply survey refers to the process of analyzing, finding out and establishing the best potential suppliers of a given product.

Types of suppliers
▪Manufacturers: These are businesses that turn raw materials into finished goods. They supply their outputs to the wholesalers.

• Wholesalers:

These businesses buy large quantities and resell to other traders especially to large scale retailers.

▪Agents: These are suppliers who stock and supply products on behalf of other businesspeople especially manufacturers or wholesalers.
▪Retailers: These are small scale suppliers who sell goods in smaller quantities to final consumers.


c. Competitor survey/ competitor analysis
A competitor is any business firm that provides similar goods and services like ours and whom we are sharing the same customers.
Or refers to the process of assessing the strengths and weaknesses of both current and potential competitors.
You cannot analyze competitors unless you know them; here are some types of competitors:
▪Potential competitors are those companies that are not yet in the same marketplace as the one who intend to be in or who are already in.
▪Current competitors are those who are already in existence and already producing similar goods and services.
▪Direct competitor: This is the one who produces or sell identical/ similar products as your own business.
▪Indirect competitor: This is a business that produces products and services that are close substitutes. These competitors target the same customer with a product that provides an alternative level of satisfaction.
Importance of competitor analysis
▪It enables an entrepreneur identify market gaps
▪It helps in knowing the competitors’ position
▪It helps to know competitors’ strengths and weaknesses
▪It helps to identify market opportunities
▪It is a good way to develop new technologies
▪It is a key element in business plan
▪It helps in pricing goods and services
▪It helps to predict competitor’s behaviors
▪It is a good tool to adaptation of good strategies from competitors.

1. It is said that a customer is a king, explain this statement.
2. Explain the importance of competitors in business

5.3. Steps to follow when carrying out market survey

Discuss steps to follow when carrying out market research

1.Finding the topic of the research study. This is the title of all the research work that has to be done in the field. E.g., an evaluation of the influence of income levels of consumers to the growth of a business.
2. Defining the research problem. This enables the entrepreneur to find out how to deal with prevailing situation which consequently enables him/her to achieve his/her target.
3. Setting objectives. Specifically show what the research wants to achieve at the end of the study. They should always be brief and SMART (systematic/specific, measurable, achievable, realistic, time bound).
4. Selection of the basic data collection methods. (Observation, interview, questionnaire, field experiments, focus group etc.)
5. Determine the scope. The researcher determines the limitations of his/her study. That is to say, areas to be covered and what to be included or excluded. (sample/ population).
6. Designing a clear schedule for conducting the research or coming up with a clear plan of the whole research process. Consider the example below.
An example of a research schedule of activities on a topic of study ―Customer perception towards a new brand of product from a given company
7. Collecting data: The researcher collects data on a number of things such as price, product, promotion, target market etc. This is normally done in the real field study.
8. Analyzing data: This is done during and after the real field study. It enables the researcher to know how the market will be especially in terms of demand.
9. Presenting findings: After data analysis, the researcher presents his findings to the relevant authorities for action. The researcher should ensure that he presents empirical data and not estimates or hypothetical figures to those who are supposed to take the action.



Imagine a situation when you have finished your secondary school studies and one of your family members learns that you studied entrepreneurship and so accepts to grant you the capital to start your own business. But before he/she gives you that money he/she asks you to first carry out market research for the feasible business.
He/she then asks you to first carry out the following market research tasks after which you prepare report and present it to him for you to obtain the promised capital.
1. What products (goods or services) that people in your community would like to have but are currently not being provided?
2. Choose one product that you would be interested in dealing with.
3. Who from your community can give you information about the product you identified?
4. Decide the population sample (the number of people identified in no. 3 above) to ask
5. Formulate questions that you will use to collect the data that you require about the product that you chose in no. 2 above)
6. Plan of how you will collect the data and how you will analyze it.

5.4. Components of marketing / marketing mix elements (4Ps)

Activity 4.
Suppose you are to start a business; think about the elements you will take into consideration for making your products/services more marketable.

Marketing mix refers to the term used to describe all activities which go into marketing a product. It is composed of: Product, Place, price, Promotion

5.4.1. Product:

A product is something either good or service that is offered to the market to be sold in order to get profit. It can be goods (tables, rice, potatoes, beans, cars, books, pens, clothes, etc) or services (transportation services, music, medical care, communication, banking, etc ...)

5.4.2. Price:

This refers to the amount of money paid by customer for a product. The price has greater impact on the consumer demand for a product. If price is too low, then consumers may lose confidence in the quality of the product. If the price is too high the consumers will not be able to afford the product.

5.4.3. Place:

The place /location should be attractive and nearest to the customer (that place should be known). It involves the channels of distribution that are used.
The distribution process/ Supply Chain includes Manufacturers, wholesalers, Service providers, Retailers, marketing specialists and customers.

5.4.4. Promotion:

This is a set of ways of attracting customers to buy products either for the first time or to buy more of them. Forms of promotion include Advertising, aftersales service, sales promotion, personal selling etc.

Design a marketing mix for your business club products.
list down examples of items that you always use at home. Where do you get these items? How do you get them? Can you tell the class about the most interesting products that you always enjoy buying? How much do you pay for them? How do you know where to find them?

Skills Lab 5

Given the questions below, carry out a survey in your community and thereafter make a report according to the findings from the research.

Interview questions:
1) What do you like most about the products that you normally buy and why? If you have a business club at the school, ask them what they find interesting about the club product
2) What changes would you propose to the above product (ones they normally buy?)
3) How do other products similar to the above product differ from others?
4) As aspiring entrepreneurs, advise us on how we can best extend our products to bigger markets outside our community?
5)Name other products we could make from locally available resources that can be most competitive.


1. Choose the best answer for the following statements
i. Having no research questions or poorly formulated research questions will lead you to poor research findings because:
a) You will only consider epistemological queries
b) Marks are allocated for having a research question and without them my project will be penalized.
c) You will not know what data analysis method used.
d) Your research is likely to be unfocused and you are likely to be unsure of what data to collect.
ii) What is data collection?
a) Collecting the research question and objectives together
b) Gathering the information (data) which will help you address your research question
c) Reviewing the literature
d) Outlining how you will gather the information for your research question.
2) Explain how research can help the marketing department of a business in achieving its target.