Ch 15- Researching Your Business

Question 1

What are the steps to developing an idea into a realistic entrepreneurial idea?
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Answer 1

1. Generate an idea
2. Concept development
3. Market research
4. Decision

Question 2

How can ideas for a new business be generated?
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Answer 2

⇒Brainstorming

⇒Personal skills audit

Question 3

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What is idea screening?

Answer 3

Sorting the promising ideas from the weak ideas

Question 4

What is concept development?
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Answer 4

It involves taking a business idea and describing it in as much detail as possible.

Question 5

What are some questions aspiring entrepreneurs should ask themselves?
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Answer 5

⇒How is it different? (USP)
⇒How much time is needed?
⇒How much finance is needed?
⇒What skills are needed?
⇒What about personal needs?

Question 6

What is a prototype?

Answer 6

A sample product produced on an experimental basis to see if the idea works in practice

Question 7

What is market research?

Answer 7

It involves gathering and analysing information about the potential market for a product

Question 8

What are the benefits of market research?

Answer 8

⇒Indicates the size of the market
⇒Who the consumers will be
⇒Identifies competitors (their price, strengths, weaknesses, how well they are doing)

⇒Helps to predict sales and estimate demand
⇒Reduces risk of business failure
⇒Saves the entrepreneur time and money

Question 9

What is desk research?

Answer 9

research that already exists

Question 10

What are examples of desk research?

Answer 10

⇒The internet
⇒Newspapers and magazines
⇒Experts
⇒Reports and statistics
⇒Feedback
⇒Commercial market research companies

Question 11

What are the advantages and disadvantages of desk research?

Answer 11

ADVANTAGES

• convenient
• easy
• quick
• low cost
• lots of results

DISADVANTAGES

• may be too general
• may be too out of date

Question 12

What is field research?

Answer 12

gathering information directly from consumers and competitors in the market place

Question 13

What are examples of field research?

Answer 13

⇒Observation research
⇒Customer surveys

Question 14

What is observation research?

Answer 14

Watching the behaviours of consumers
e.g. observing how parents organise children’s parties

Question 15

What are customer surveys?

Answer 15

using a questionnaire and asking consumers about their attitudes towards new product ideas or to existing goods and services.

Question 16

What is sampling?

Answer 16

interviewing a small group of people who are representative of the larger target market

Question 17

What are the advantages and disadvantages of field research?

Answer 17

ADVANTAGES
-more accurate and detailed

DISADVANTAGES

• time-consuming
• costly
• may get less results

Question 18

What are focus groups?

Answer 18

A group of customers gather together and discuss in detail their consumer attitudes, habits and behaviour

Question 19

What is test marketing?

Answer 19

trying out the product or service on a small scale to evaluate customer reaction

Question 20

What is franchising?

Answer 20

setting up a business by renting a business name and idea that has already been proven successful