1.2 Spotting a business oppurtunity Flashcards
Discuss the components of customer needs that a business must understand.
Price- Affordable pricing- pricing that the customer are willing to pay ie high quality: premium price
low: cheap quality
Quality- How ‘fit for purpose’ the product is, its durability->making sure it meets customer expectation->high customer satisfaction->repeated purchases.
Includes the service provided by employees.
Choice- selling wide range of products -> more likely that customers will find a product that meets their needs-> products appeal to a larger rang of customers–> increased sales.
-helps customers with buying decisions ie product differentiation.
Convenience-> location, delivery, accessibility, fast delivery–> easier for customers–> increases customer satisfaction.
Discuss the importance of understanding customers and their needs.
Family needs
Financial needs
Emotional needs
Brand loyalty
What is market research?
Process of gathering info about the market and the customer needs in order to make informed business decisions.
Benefits of Market Research.
Familiarise with the market:
-i.e gaps in the market
-trends in the market
Competitors-knowing their market share, helps make informed business decisions, ie their target market.
-reduced risk
CUSTOMERS- their needs, what price they are willing to pay.
What is meant by the term ‘primary research’?
New first hand information that hasn’t been collected before.
Examples of primary research.
Questionnaires
Focus Groups
Social Media
Expriments
What is meant by the term ‘secondary research’?
Gathering info from existing sources that have previously researched.
Give examples of secondary research?
Internet Sites
Trade associations
Government reports
Sales figures
Evaluate the use of market research to a business?
ADS:
- Accurate because it is done by the business itself, face to face interviews are more trustworthy. (Direct customer contact)
- Observations are less biased because the customer behaves more naturally.
- Effective for collecting qualitative data–> customer satisfaction.
DIS:
- time consuming, requires more effort
- more expensive
- more resources ie human resources and materials required.
- information given by customers may not be true, biased.->negative impact on the business as their feedback affects the decisions.
What is the difference between qualitative and quantitative data?
Qualitative- descriptive data
Quantitative-numerical data
Advantages and disadvantages of using qualitative data?
ADS:
- More detailed and accurate
- Helps business makes customer based decisions.
DIS:
- small sample of people are surveyed
- subjective responses
Advantages and Disadvantages of using quantitative data?
ADS:
- quicker
- easier to compare
DIS-
Large proportion of people needed for accurate results
Easy to make mistake
Requires skilled and educated workforce
Discuss the use of social media in collecting market research?
- inexpensive and useful
- less time consuming
- helps identify new trends
- communication/feedback can be used to improve products
What is meant by the term ‘market segmentation’?
Dividing a target market into smaller categories by grouping together customers of similar interests.
What are the diff ways in which market segmentation can be used to target market.
- Location: more accessible
- Demographics: family, young people
- Lifestyle
- Income (socioeconomic groups)
- Age
