How to Conduct Secondary Market Research for Small Business
Article on immigration from Lithuania to UK
“Britain was one of only three EU states, along with Ireland and Sweden, to open its borders immediately to migrants from Eastern Europe, on the grounds that they would fill gaps in the labour market and if they did not travel legally they would do so illegally. More than 80% are young, between 18 and 34, and single. They earn between £4.50 and £5.99 an hour. The largest group come from Poland (204,895), followed by Lithuania (44,715) and Slovakia (36,355).” (Workpermit.2006)
This article points to the fact that the entry of Lithuania into the European Union (E.U.) has opened a new route of immigration into the United Kingdom (U.K.) for many Lithuanians. The article states that Lithuania has the second highest immigration rate into U.K. from Eastern Europe with almost 13%. In effect, such a figure suggests that the market for Lithuanian produce in the U.K. is growing extortionately and since there is only one major provider of Lithuanian produce in Stratford indicates a gap in the market for more Lithuanian stores in order to meet the unprecedented demand. The figures on immigration from Lithuania into the U.K. clearly reflect the questionnaire findings that show that 96% of the interviewees feel that there is a demand in Stratford for another Lithuanian store. However, the findings of the article are fairly limited since they are too vague and do not provide a geographical breakdown of Lithuanian immigrants by cities. As a result, it is thus much harder to determine the size of the market in individual cities let alone wards in Newham. Although an assumption can be made that most Lithuanians reside in London since it is the capital of England providing a great amount of jobs. Also, the article points to the fact that most Lithuanian immigrants earn minimum wages and it can thus be deduced that most of them reside in Newham since the cost of living is the lowest there.
The article states that most Lithuanians will be filling U.K. labour shortage and so will be undertaking lower paid jobs, which will allow them to earn roughly £4.50 an hour. In effect, such finding suggests that the produce provided by “The Lithuanian Sunset” will be both income and price elastic, which suggests that “The Lithuanian Sunset” will have to find a method of cost reductions in order to keep the prices fairly low to attract consumers as well as keep the profit margins fairly high.
The increasing immigration levels from Lithuania into the U.K. suggest that a Lithuanian shop is more feasible as the size of the Lithuanian market is increasing, which could in turn provide “The Lithuanian Sunset” with a substantial share of the market, provided it establishes its reputation very quickly and gains a time-based advantage over other new establishing Lithuanian shops. Yet, the fact that most people come to U.K. for low paid jobs reduces the feasibility for a Lithuanian shop as most people would prefer to buy inferior or supermarket goods (Morrison’s, Asda, etc) as they are much cheaper due to the supermarkets’ large economies of scale, whereas, “The Lithuanian Sunset” would aim its products at a Lithuanian niche market and as a result charge higher prices per unit, which would reduce demand in greater proportion than a change in price due to high price elasticity of demand.