1.2 Spotting business opportunity Flashcards
what is the difference between customer NEEDS and WANTS
NEEDS are essential items people need to live
WANTS are non essential things
what are the 4 customer needs
- price
- quality
- choice
- convenience
how is understanding PRICE a benefit to a business
Understanding this helps the business price its products competitively and offer promotions that appeal to their target market
how is understanding QUALITY a benefit to a business
Understanding this helps businesses create products that meet the desired standards, which can lead to customer loyalty and positive word-of-mouth advertising
how is understanding CHOICE a benefit to a business
Understanding this helps businesses to offer a range of options that cater to different customer preferences
This can increase customer satisfaction and loyalty, as customers are more likely to find a product that meets their specific needs
how is understanding CONVINIENCE a benefit to a business
Understanding this helps businesses create a customer experience that is both efficient and enjoyable
By providing a convenient shopping experience, businesses can build customer loyalty and increase repeat sales
what are the general benefits of understanding customer
- customer needs - able to tailor products to meet needs
- relationship building - repeat sales as customers are more likely to return to stores that value them
- target marketing - increases efficiency of marketing
how do we aid business survival
- competing - if able to outdo competitors, they will be unable to get sales
- changing preferences - if unable to keep up with changes, they may fail with sales
- building a reputation - leads to positive word of mouth
what are the two main ways to do market research
primary market research
secondary market research
what are the 5 methods of primary market research
- surveys
- observations
- interviews
test marketing
focus group
what is primary marketing research
first hand specific to your business research
what is secondary marketing research
second hand non specific research
what are the 3 secondary market research methods
- government reports
- market reports
- google / internet
what are the two forms of market research data
- Quantitative
- Qualitative
what are the limitations of Quantitative data
small
lacks relevance
not be accurate
expensive
out of date
what are the limitations of Qualitative data
small data gathered
bias
influenced by opinion
costs of hiring
time consuming
hard to represent on graphs
what is the purpose of market research
to gather information about a new business idea to limit risks.
how dose market research help a new business
reduce risks
Identify future needs and wants
potential gaps in the market
identify competitors
Make informed decisions
helps develop the marketing mix
what is market segmentation
the process in which a single market is divided into sub markets or ‘segments’
what are example ways to segment a market
by gender, age, demographics, lifestyle, etc.
what are the advantages to market segmentation
Recognises that consumers are not all identical; consumer groups do not all share the same tastes and preferences
Products and marketing activities can be altered to meet different needs of different groups of consumers and targeted more precisely
Less expensive and wasteful than marketing products at wide market segments
May increase loyalty if the consumer feels that their needs are being met, which can lead to repeat purchases
what are the disadvantages to market segmentation
Not everyone within a segment will behave in the same way
It may be difficult to identify a segment and consumers can belong to multiple segments at the same time
Segmentation requires more detailed market research, which can prove costly but beneficial to the business
A segment may be identified but it may be too small and unprofitable to cater for
how are market maps useful
Market gaps can be identified, which may enable a business to come up with ideas for new products
Comparisons can be made between a business’s products and those of its rivals - where are the business’ products positioned about its rivals?
Market maps are simple to construct and offer a visual illustration of a products position in the market
how are market maps limited
A gap in the market may exist because it is not profitable to fill
Mapping a market may require primary research, which can be expensive
Only two criteria can be chosen, which may prove too simplistic
Markets are often dynamic and a market map only provides insight at a specific point in time
