1.2 Spotting a business opertunity Flashcards
give 6 examples of customer needs
- durability
- choice
- good looking
- quality
- convenience
- price
How can a business increase sales?
- lowering the price
- promoting products through advertising
- running a competition/promotional activity
- improve the product
why should you use market research?
- to work out customer needs
- to identify gaps in the market
- to reduce risks and make informed business decisions
- identify and understand customers
- understand trends in the market
- understand how a business is doing
what is primary research?
information gathered by the researcher and is original data
give 4 examples of primary rearch
1) surveys
2) questionnaires
3) focus groups (talking to customers about a proposed product/service)
4) observation(watching what products customers buy in shops)
what is secondary research?
When data has already been collected by someone else
give three secondary research methods
1) internet
2) market reports
3) government reports
what is quantitative data?
data involving numbers
what is qualitative data?
information on feelings/thoughts
what is a market map?
a grid measuring two features of a product (normally price and quality)
what does market mapping allow businesses to do?
- identify a gap in the market
- product differentiation
what is a gap in the market?
when no business(es) is currently serving the needs for a particular product/service
what is market segmentation?
breaking the market down into sub groups
how can you segment a market?
location,demographics,lifestyle,income,social class
how is social class divided?
a-upper class b-middle class c1-lower middle class c2-skilled working class d-working class e-unemployed
what is a competitive market environment?
a dynamic external system in which a business competes and functions
how will businesses change in a competitive market?
1) make their brand stand out
2) be customer orientated
3) build customer loyalty
4) differentiate the product/service
5) add value
what are the advantages of primary research?
- more accurate
- up to date
- specific to needs
- effective at collecting qualitative data
- direct customer contact
what are the disadvantages of secondary research?
-more general
what are the advantages of secondary research?
- less time consuming
- effective at collecting qualitative data
what does bias mean?
the inclination to agree with a particular idea
why would market research be bias?
customers may give answers that the business wants to hear and not their actual opinion
what are the advantages of segmentation?
- meet specific customer needs
- differentiate its products
- focus on a specific group of customers
- target its marketing activity
- develop a unique brand image
- build close customer relationship
what are the limitations of market segmentation?
- targeting a range of different customers with different products/services can be costly
- focusing on one group of customers can cause businesses to miss opportunity
- some characteristics of customers change over time (lifestyle, income, demographics)
what are the benefits of market mapping?
- helps to identify potential gaps in the market
- helps business spot their closest rivals
- supports market segmentation
- helps businesses make decisions about marketing and positioning its brand
what are the limitations of market mapping?
- based on opinions and perceptions
- compares businesses only on two variables
- can be difficult to identify the most important variables
why should a business sell a particular product or service?
- if there is a gap in the market
- if their is enough demand in the market
- if a business can meet customer needs better than competitors
what is product differentiation?
making a product different from others
how could you compete with other businesses?
through. ..
- quality
- location
- brand
- price
what is a competitive market?
when there is a large number of businesses compared to potential customers
how would a competitive market affect business decisions?
may cause businesses to…
- improve efficiency
- find ways to improve competitiveness
- differentiating its products and services
- lowering its prices
- giving customers special offers
- cutting costs
what are the drawbacks of a competitive market?
- lower prices in order to compete
- accept lower profit margins
- cut back on expenditure
- be careful about how and when it expands
- monitor its competitors closely
why do businesses do market research?
to understand customers, competitors and the market
how should a business survive in a competitive market?
- make their brand stand out
- be customer orientated
- build customer loyalty
- differentiate products/services
- add value
