1.2 SPOTTING A BUSINESS OPPURTUNITY Flashcards
a market? 3m
- can be a place where goods are traded between customers and suppliers e.g. village market, shopping website
- can be a particular type of product e.g. the oil market
- can be a group of people, the potential customers for a certain product e.g. the age 18-25 market
competitors? 1m
business that sell the same products in the same market and compete with each other for sales over customers
market size? 1m
number of individuals (including companies) within the market which are potential buyers or sellers of products
market share? 1m
the proportion of total sales within the market that is controlled by the business
market research? 6m
- used to understand who the businesses customers are
- used to understand their customers e.g. needs and how to satisfy them
- examples of customer needs
= type of product,
= quality of the product
= the convenience of where its sold
= how much choice they have in range of products - by understanding these needs businesses are able to make better products that meet these needs and will increase their sales to insure the businesses survival
- market research helps businesses make informed decisions, spot a gap in the market and reduce risks
types of market research 2m
Primary research = doing your own work such as getting information from customers and potential customers e.g. asking for their opinions such as questionaries. surveys, focus groups and observations
Secondary research = looking at other people’s work such as market research reports, government reports and articles in newspapers or magazines. Analysing past trends and a wide range of data
- often used by small business as it is cheap
advantages and disadvantages of the different types of market research 4m
advantages of primary research = it is up to date, relevant and specific to your businesses needs
disadvantages of primary research = it is time consuming and very expensive
advantages of secondary research = it is cheaper, easy to understand and instantly available
disadvantages of secondary research = not always relevant to your business needs and is not specifically about your products and often not up to date
how market research data can be collected 2m
through social media e.g. Facebook
- businesses can collect customer reviews online for market research and can check for what is popular and unpopular
types of data 2m
Quantitative information is anything you can measure or reduce to a number e.g. “how many pizzas do you buy weekly”
Qualitative information is all about peoples feelings and opinions e.g. “what kind of pizza do you like?”
- qualitative data is tricky to analyse because it is hard to compare two people’s opinions
- good market research will use both types of information found
- all research data needs to be reliable so results can be repeated by another researcher.
- the more reliable he research the more useful for a business
market segmentation? 2m
when markets are segmented into different groups of people
- as well as knowing market size and market share it is useful to know how a market is segmented
- knowing the different market segmentations allows businesses to identify their target market - the specific group of people a product is aimed at
methods of market segmentation? 4m
by demographics
1. age e.g. the teenage market
2. income e.g. how much different people earn will affect what they are willing to pay
other ways to know is
3. location e.g. customers in different locations want different products
4. lifestyle e.g. whether people enjoy certain activities or not such as cycling, walking or reading
Mapping the market 2m
businesses use market maps to find out information and understadn their place in the mrket
- often market maps are formed in the form of a diagram that show different variables such as price, quality etc
a focus group? 1m
A focus group is a group discussion that provides qualitative data.
method of conducting external research? 1m
External research is conducted outside the business, such as through the internet.
why a business may decide to develop higher quality products 3m
- a business may devlop better quality products in order to stay competitive
- since its customers are more like;y to be satisfied
- and will therefore be more likely to buy from the business than from it’s competitors
