1.2 Spotting a Business Opportunity Flashcards
What is the purpose of market research?
- to identify and understand customer needs
- to identify gaps in the market
- to reduce risk
- to inform business decisions
What are the two methods of market research?
- Primary - where the business undertakes the research itself - collecting new info that has not been collected before.
- Secondary - where the business collects existing data - that has already been produced.
What are the four types of primary market research?
- Focus groups
- U
How is price a customer need?
Customers will demand a value for money - some will be prepared to pay a higher price if the product is worth it. Others may decide to choose a product of the lowest price.
How is quality a customer need?
Quality of the product needs to be of a sufficient standard and the business must match these expectations - the quality needs to be dependent on the expectations of the target market.
The price charged should match the quality of the product or service
How is convenience a customer need?
If businesses can make life much easier for customers, then customers would be more willing to pay a higher price to get that product or service
How is choice a customer need?
Customers expect to see a range of different products to choose from - the more choice they have, the more likely it is that their needs will be met.
What are is the importance of satisfying customers?
- developing customer loyalty
- generating sales - enables the business to produce a product or service that will directly meet customer requirements
- business survival - allowing the business to operate for at least 12 months - understanding customer needs means that the business has a much higher chance of survival
Name four examples of primary market research?
- Focus groups
- Questionnaire
- Observation
- Survey
What is a focus group? How to make info from a focus group accurate?
A group interview where people taking part are asked their opinions on the business + given different scenarios
The group size has to be an appropriate size - a large enough number to be representative of the whole target market.
What is a survey?
survey asks questions to get opinions and learn about customers’ experiences with a product or service
What is a questionnaire?
a questionnaire is a set number of questions to find out customers’ opinions. It can be done online, in person or through the post.
What types of questions can be asked to customers?
- Open ended questions - where opinions can be give
- Close ended questions - where there is a limited range of answers possible.
What are observations?
Watching customers to find out their reactions to certain products or services
What are the advantages and disadvantages of observations?
Ad:
- specific to the business
- provides detailed info
- relevant and up to date
- can gather a mix of qualitative and quantitative data
Dis:
- time-consuming
- expensive
- sometimes difficult to collect.
What are the different methods of secondary market research?
- Internet
- Market reports
- Government reports
What is the internet?
Data taken from competitors’ websites, newspaper articles and
social media.
What are market reports?
Market reports are industry specific. They may give specific information about an industry as a whole.
What are government reports?
Government reports may consist of general information that is not usually industry specific but can still be useful for a business.
What are the advantages and disadvantages of secondary research?
Ad:
- quick and easy to gather
- can provide industry specific info
- often easy to analyse
Dis:
- may be unreliable and out of date
- not specific to the business
- may be biased/inaccurate
What are the two types of data?
Qualitative data - data usually expressed as opinions + is descriptive
Quantitative data - numerical data, stats and figures
Benefits of using social media as a form of market research?
- cheaper
- save time
- allows businesses to spot the latest trends and tastes.
What are the advantages of having reliable market research?
- reduces risk
- less money is wasted
- higher chance of business success
- business can make properly informed decisions
What are the consequences of unreliable market research?
- business making unwise decisions
- ultimately costs the business money
- business could produce products that could not sell
- This leads to failure.
