1.2- Spotting a business opportunity Flashcards

1
Q

Customer needs:

A

Price, quality, choice, convenience

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2
Q

3 benefits to understanding customers

A

Generate sales
Business survival
Overcome competitors

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3
Q

Market research

A

Techniques used to gather information about its customers, market and competitors

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4
Q

4 Purposes of market research

A

Identify gaps in the market
Identify & understand customer needs
Reduce risk
Inform business decisions

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5
Q

Primary research

A

Collection of first hand data that didn’t exist before

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6
Q

Secondary research

A

Already been undertaken by another organisation

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7
Q

Quantitative

A

Numerical, easy to analyse and plot a graph

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8
Q

Qualitative

A

Non numerical, about people’s thoughts and opinions

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9
Q

Primary research
Ads and Dis

A

Ad-specific to needs, up to date, detailed information
Dis- time consuming, expensive

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10
Q

Secondary research
Ads and Dis

A

Ad-quick and easy to access, could be compiled by experts
Dis- could be out of date, not specific to you

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11
Q

Types of primary research

A

Questionaire
Survey
Focus group
Observation

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12
Q

Types of secondary research

A

Internet
Government reports
Market reports

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13
Q

Qualitative data
Ads and Dis

A

Ad- highlights issues, essential for new product launches
Dis- biased based on questions, expensive to collect

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14
Q

Quantitative data
Ads and Dis

A

Ad-easy to analyse, can be compared with other data
Dis- doesn’t explain why, things happen

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15
Q

Reliable market research data leads to:

A

Less money wasted
Reduces risk
Informed decisions

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16
Q

Unreliable market research data leads to:

A

Unwise decisions
Business could fail
Could lose money

17
Q

How can social media help market research

A

Quick and cheap, can spot latest trends

18
Q

Market segmentation

A

Dividing a market into smaller sections of dif customer needs

19
Q

5 Types of market segments

A

*Demographic- statistical data of population(age)
*Income- disposable income (luxury/budget)
*Location- products may sell sell in dif areas
*Lifestyle- people’s lives (hobbies)
*Behaviour- purchases at dif times of year (christmas)

20
Q

Benefits of market segmentation

A

*Match a product to specific customer needs–>Satisfaction–>Repeat customers
*Build closer customer relationships–>Satisfaction–>Charge higher prices

21
Q

Market map

A

Shows the positions a product can take in a market based off two variables

22
Q

Common features of market maps

A

Price, quality, level of luxury

23
Q

Purposes of market mapping

A

Identify competition
Find gaps in the market

24
Q

Market mapping
Ads and Dis

A

Ad- helps spot gaps in the market and competitors
Dis- gap ≠ demand, no guarantee of success

25
Competitive environment
The dynamic external system in which a business competes
26
What do businesses compete on?
Price, quality, location, product range, customer service
27
Competing on Price:
Lower prices=lower profits, would have to lower costs Starts a price war with competitors
28
Competing on Quality
High quality is strength Better quality= higher costs =profits lower Customers could care more about price
29
Competing on Location
Convenient location is a strength Offering free parking Being out of town can have a larger store
30
Competing on Product range
Wider range of products targets more customers, attracts customers
31
Competing on Customer service
Quick service to customers Being helpful and friendly wins loyalty
32
Competition can make a business...
Reduce its prices Reduce its costs Innovate Increase product range
33
Effect of understanding customer needs
Provide what customers want--->Satisfy customers--->Encourage purchases--->Successful business
34
Effect of identifying gaps in market
USP--->Competitive advantage--->More sales--->Better reputation
35
Effect of reducing risk
Make changes to product--->More successful launch--->Prevent business failure
36
Effect of informing business decisions
Checks if an idea is viable--->Prevents wasting resources--->Checks an appropriate price of product