This short story about market research talks about an entrepreneur named Garfred who decided to start his own clothing company.
Garfred Leroy set up his business 10 years ago. The business manufactures a range of clothes. Its best-selling products are fashionable leisure clothes such as sweatshirts. The consumers of these clothes are mainly in the age range 18-25 years and usually have high incomes.
Garfred is ambitious and he wants his business to continue to grow. He thinks that this can be achieved by widening his range of products.
He employed a market research agency to investigate the clothing market. He wanted to identify a consumer need or a gap in the market. He told the agency to research the 18-25 year age range.
The agency interviewed a sample of potential consumers.
What are the primary market research results?
Some of the results of this survey are listed below:
➢ Young people like to buy fashionable clothes even if they are expensive.
➢ Price is not the most important factor in the buying decisions of young people.
➢ Young people buy their clothes in fashion shops, not department stores.
➢ The clothing market is expected to grow by 6% in 2003.
➢ Choice of fashion jeans is limited to a few major brands.
➢ Style and appearance are more important than durability of clothes.
What are the secondary market research results?
Were the market research results useful to Garfred?
Having studied the information, Garfred decided to design a new brand of fashion jeans. He knew that the market was competitive. He realized that he would not benefit from the economies of scale of his larger rivals. However, he felt that his selling point would be design, not low prices.
Garfred set himself a target of a 5% market share of the total jeans market. With a Gross Profit Margin (GPM) of 30% he felt that this would be profitable.
Garfred knew that he must design and produce these jeans quickly if he was to fill the market gap. The workforce would have to learn new methods quickly. New machinery using the latest technology would be needed and batch production methods might need to be changed.
Some of the employees were worried about these changes. Garfred told his production manager to make sure that motivation of the workforce in the factory was high. If the new products were to be a success then a new marketing policy might be needed.
Garfred had no time to lose.
