1.2 - spotting a business opportunity Flashcards
what are customer needs
- price
- quality
- choice
- convenience
why is understanding customer needs important?
- generate sales
- business survival
why do market research?
- identify/understand customer needs
- identify gaps in the market
- reduce risk (esp for startup businesses)
- make informed business decisions (growth/improvements)
primary market research
- survey
- questionnaire
- focus group
- observation
secondary market research
- internet (research)
- market report
- gov stats/reports
types of data and why is it for market research
-qualitative, quantitative
- increase reliability
advantages/disadvantages of primary market research
ADVANTAGE: tailored to product, research unique to the business carrying it out
DISADVANTAGE: if badly designed, results may not be what they’re looking for, expensive
advantages/disadvantages of secondary market research
ADVANTAGE: quick to get info, less expensive
DISADVANTAGE: collected for another purpose, not specific to business so must be adapted
different market segments to target customers
demographics:
- location
- lifestyle
- income
- age
advantages/disadvantages of market mapping
ADVANTAGES:
- see all products/services in the market
- identify competitors
- find gaps in market
DISADVANTAGES:
- only accounts for 2 variables (e.g. price v quality)
- no demand for the ‘gap’
- ‘bad gap’ (low quality w/ high price)
strengths/weaknesses of competitors
- price
- quality
- location
- product range
- customer service
ALL can impact business decisions (e.g. what to improve on to stand out from competitors)
what lead to business failure
- cash flow problems (customer not paying bills on time, firm not enough cash for its suppliers)
- falls in sales revenue (no raw material, recession - drop in spending, competition)
