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Business > 1.2: Spotting a business opportunity > Flashcards

1.2: Spotting a business opportunity Flashcards

1
Q

What will a business encourage if it meets customer needs?

A

repeat purchase
attract new customers

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2
Q

What are the 4 customer needs?

A

price
choice
quality
convenience

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3
Q

What are the 4 personal circumstances that affect customer needs?

A

family needs
personal tastes and preferences
financial needs
emotional needs

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4
Q

What is the purpose of market research?

A

help a business understand it’s customers, competitors and the market that it operates in to make informed decisions about its products and services

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5
Q

Name some purposes of market research

A

identify gaps or overcrowded areas in the market
identify and understand competitors
understand trends in the market
reduce the risk of business decisions
identify and understand customer needs

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6
Q

What are the types of market research?

A

primary and secondary

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7
Q

What is primary research?

A

collecting information that did not exist before

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8
Q

What are some methods of primary research?

A

surveys
focus groups
observations
questionnaires
experiments
social media

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9
Q

What are the benefits of primary research?

A

more accurate
up to date
specific to needs
effective at collecting qualitative data
direct customer contact
competitors don’t have the same info

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10
Q

What is secondary research?

A

collecting information that already exists

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11
Q

What are some methods of secondary research?

A

internet sites
local newspapers
market reports
government reports
sales data

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12
Q

What are the benefits of secondary research?

A

more general
less time consuming
cheaper
effective at collecting quantitative data

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13
Q

What is qualitative data?

A

information about people’s opinions, judgements and attitudes

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14
Q

What is quantitative data?

A

data that can be expressed as numbers and statistically analysed

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15
Q

Why can small businesses only do a little bit of market research?

A

it can be expensive

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16
Q

What is a market segment?

A

a group of buyers with similar characteristics and buying habits

17
Q

Why do businesses segment the market?

A

allows the business to understand its customer needs and better target its customers

18
Q

What are the ways in which a market can be segmented?

A

gender
age
demographics
lifestyle
location
income

19
Q

What are the benefits of market segmentation to a business?

A

meet specific customer needs
differentiate its products
focus if a specific group of customers
target it’s marketing activity
develop a unique brand image
build close customer relationships

20
Q

What are the limitations of market segmentation?

A

can be expensive
focusing on one group can cause a business to miss another opportunity
customer characteristics change over time

21
Q

How does market mapping help a business?

A

identifies gaps and overcrowded areas in the market

22
Q

What are the benefits of market mapping?

A

helps identify gaps in the market
helps identify competitors
supports market segmentation
helps make business decisions

23
Q

What are the limitations of market mapping?

A

based on opinions rather than data
compares based on only two variables
can be difficult to identify the most appropriate variables

24
Q

Ways to compete?

A

lower prices
improve design
wider product range
better customer service
stronger brand image
convenient location
higher quality

25
Q

How does product differentiation help businesses?

A

position their products and target different market segments
gain a competitive advantage

26
Q

What is a competitive market?

A

when there are a large number of businesses relative to the number of potential customers
when businesses sell very similar products and services that are difficult to differentiate

27
Q

What are some decisions that a business might make in a highly competitive market?

A

improving efficiency
improving competitiveness
differentiating its products and services
lowering prices
special offers
cutting costs

28
Q

What are some drawbacks of a highly competitive market?

A

business might have to:
lower prices to compete
accept lower profit margins
cut back on spending
be careful about expansion
monitor its competitors closely

Business (10 decks)

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