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1.2 - Spotting a business opportunity Flashcards

1
Q

What customer needs must a business consider? (4)

A

Price, quality, choice, convenience

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2
Q

Convenience

A

A product or service’s ability to fit in well with a customers lifestyle or routine, the ease with which it can be used and/or it’s easy-to-reach location

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3
Q

Why are customers influenced by price?

What will a price a customer is willing to pay depend on?

A

Customers are influenced by price, especially low prices, and the price a customer is willing to pay will depend on the value they place on that product

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4
Q

What is Quality and what is it linked to?

A

Quality is a product’s suitability or fitness for purpose, and this is linked to their expectations, e.g. how much they pay
Quality is also linked to customer service, and how much it meets their expectations

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5
Q

Why do customers like to have choice?

A

Customers like to have a choice because different customers have different tastes and needs
It can also help customers make buying decisions e.g. with internet

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6
Q

How can convenience affect a business?

A

Convenience is an important factor as it determines the decisions customers make for products and services
Customers needs for convenience can help a business reduce its costs

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7
Q

What does a business need to know in order to generate sales?

A

A business needs to know hat it’s customers want, as if a brilliant idea doesn’t meet their needs then they won’t buy it

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8
Q

What can impact business survival?

A

The needs and behaviours of customers can also impact whether the product or service survives, so businesses have to make sure they follow these

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9
Q

Market research

A

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

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10
Q

Viable

A

Able to work properly or successfully

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11
Q

What are the purposes of market research?

A 
The purpose of market research:
To identify and understand customer needs
To identify gaps in the market
To reduce risk
To inform business decisions
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12
Q

Primary research + examples

A

Research that is carried out to answer specific issues and questions e.g. focus groups, questionnaires, surveys

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13
Q

Focus group

A

A group of people who discuss their views of a product, service, advertisement or idea, either face-to-face or online

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14
Q

Surveys + ways in which this can be done

A 
Surveys ask people questions in order to measure their opinions. This can be done through:
Online
In person / face-to-face
Over the telephone
Through the post
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15
Q

Questionnaires

A

A questionnaire is a set of questions with a choice of answers. They need to be carefully planned in order to provide useful feedback

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16
Q

Focus groups role

A

A focus group is a group of people who are asked about their view,s opinions, beliefs and attitudes towards a product, service, advertisement or idea

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17
Q

Target market

A

A particular group of consumers at which a business aims its products and services

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18
Q

Sample

A

A portion of the population asked for their opinions in order to draw conclusions about the behaviour of the whole population

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19
Q

Generation Y

A

(Also known as the Millennials) the people born shortly before the 21st century, usually defined as born between 1980 and 2000

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20
Q

Observation

A

This means watching how customers behave naturally when they don’t think they are being watched. It is effective as research is less likely to be biased. However, ethics need to be considered.

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21
Q

Data

A

Information, particularly statistics, that can be collected and analysed

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22
Q

Biased

A

Unbalanced or inclined to agree with a particular judgement or idea rather than presenting the evidence fully

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23
Q

Ethics

A

Moral principles or standards that guide the behaviour of a person or business

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24
Q

Secondary research

A

This is research using existing sources of information that has previously been researched

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25
Source
A place, person or thing, such as a book or report, that can provide information to be used in research
26
Internally sourced information
Data, statistics and research that the business has accumulated in the past
27
Externally sourced information
Information published by people or organisations that isn’t related to the business E.g. internet, market reports and government reports
28
Chamber Of Commerce
A local association that promotes the interests of businesses in a country or region
29
Trade association
Organisation founded and funded by businesses that operate in a specific industry
30
Analysis
The process of looking at data to identify patterns or trends
31
The use of data in market research
Market research is based on data analysis, which reveals useful information from a set or sets of data
32
Qualitative data
Data gathered by finding out what people think and why they think that way in order to understand people’s habits or preferences
33
Quantitative data
Quantitative data is gathered by asking people for information about their habits and lifestyles using a tool such as a questionnaire
34
Uses of qualitative data
Products and services Designing and packaging Advertising and marketing messages Price changes
35
Advantages of qualitative data
Provides depth and detail | Helps a business to listen to what customers want
36
Disadvantages of qualitative data
Relatively small sample surveyed Responses are very subjective Results can depend on skills of interviewer
37
What kinds of questions are used for qualitative data?
Open questions, that aren’t yes or no
38
What kinds of questions are used for quantitative data?
Closed questions, like yes or no
39
Incentive + link to business
Someone such as a payment or gift that encourages someone to do something, such as fill out a business survey
40
Uses of quantitative data
To see if there is a market for the product/service | Statistics
41
What has social media allowed businesses to do? (4)
Deepen understand the market Identify popular trends Improve products and marketing Save time on market research
42
Understanding the market
If the business uses something like a Facebook page they can see what customers like and dislike
43
Identifying popular trends
By setting up automated searches relating to a brand, a business can see how often they’re business is talked about on social media
44
Improving products and marketing
Social media platforms can help businesses to see how people talk about the business, and by joining in with discussions they can learn new things about this own business
45
Saving time
Social media can provide much larger samples, and because they are generally used casually they can encourage participation and honest feedback
46
The importance of the reliability of market research data | What causes most market research errors?
When a business uses market research results to make decisions, it has to be confident that results are accurate. Most errors can be traced to problems in validity and reliability of data gathering
47
Validity
A measure of how god the design and methods of research are and suggests whether the findings of the research can be trusted
48
Reliability
An indication of whether the research results from a sample are representative of a wider group or the whole population.
49
Identify 6 market segments
Location, Demographics, Behaviour, Lifestyle, Income, Age
50
What is market segmentation?
Market segmentation is the process of dividing a target market into smaller categories by grouping together consumers with a particular need or interest
51
Segmentation
the process of breaking something up into smaller parts
52
Demographics
relating to the structure of a population
53
MS - Location
A business may choose to divide its market into groups based on where they live
54
MS - Demographics
A business may choose to divide the market by factors like sex or family type
55
MS - Behaviour
This divides the population based on people's behaviour e.g. during Valentine's
56
MS - Lifestyle
This divide refers to the way in which customers live their lives. Customers can be sorted into groups defined by the things they like to do in their spare time
57
MS - Income
This is segmenting customers based on their income; the amount of money they earn
58
MS - Age
Customers needs and wants change as they get older, so businesses may target certain products at certain age groups
59
What is market mapping?
Market mapping is the process of creating a diagram, known as a market map that identifies all products in a market and maps the against 2 of their features
60
What does a market map allow businesses to do? (3)
see all the products or services in the market identify its competitors spot any gaps in the market
61
Axes
the reference lines on a graph
62
Direct competitors
Businesses that sell the same type of product or service
63
Indirect competitors
Businesses that don't sell the same product or service but still find themselves in competition with one another
64
Understanding the competitive environment - what must a business do?
A business must know its target market very well. It must be able to sell the right product in the right place, product, promotion and price (4Ps)
65
What can strengths and weaknesses of competitors be based on? (5)
Price, Quality, Location, Product Range, Customer Service
66
Strengths and Weaknesses - Price
A business may charge higher prices than its nearest competitor. The competitor has a strength in this way
67
Strengths and Weaknesses - Quality
A business may have lower quality products than its nearest competitor, which is a weakness for the business
68
Strengths and Weaknesses - Location
A competitor's business may be located at a railway station which receives higher footfall. The business is at a weakness
69
Strengths and Weaknesses - Product range
A business may make a wider variety of products than a competitor, giving it a strength
70
Strengths and Weaknesses - Customer service
A business may be rude to its customers, meaning it has a weakness
71
The impact of competition on decision making
Competition can make businesses more likely to innovate or think of new product ideas in order to get ahead of competitors, or to take control of the costs in order to make a profit
72
SWOT analysis
a study undertaken by a business to identify the strengths and weaknesses, opportunities and threats

Business Studies (3 decks)

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