1.2 Spotting a Business Opportunity

Question 1

What is a stakeholder?

Answer 1

Someone who has an interest in the business. Internal stakeholders are inside the organisations e.g. manager and employee, whereas external stakeholders are outside the business e.g. customers and suppliers.

Question 2

What are the four key customer needs?

Answer 2

The four key customer needs are: Price, quality, choice and convenience.

Question 3

What is meant by ‘convenience’?

Answer 3

Convenience refers to how easy it is for a customer to obtain or use a product or service. Convenience usually refers to the following factors:

• Location
• Availability
• Payment options
• Delivery

Question 4

What is market research?

Answer 4

The process of gathering information about the market and customers needs and wants in order to help inform business decisions, including product design and marketing.

Question 5

What is the purpose of market research?

Answer 5

The purpose of market research is to:

• To identify and understand customer needs
• To identify gaps in the market
• To reduce risk
• To inform business decisions

Question 6

What is the difference between primary research and secondary research?

Answer 6

Primary research is direct, carried out by the business, and thus is reliable; it is, however, time consuming. Whereas secondary research is indirect and carried out by a third party; it is therefore not as reliable, but it is less time consuming.

Question 7

State the different types of primary market research.

Answer 7

Primary research includes: Surveys, questionnaires, focus groups and observation (although direct, can be time consuming as the data needs to be collected and then analysed before judgement can be made).

Question 8

State the different types of secondary market research.

Answer 8

Secondary research includes: Internet, market reports, government reports (indirect, and although less reliable, is time saving as someone has done the data collection for the business).

Question 9

What is the purpose of a focus group (primary research)?

Answer 9

A focus group is a target group of people that are taken to discuss a concept or idea. This is qualitative research and thus not easily measured.