Evaluating A Business Oppertunity

Question 0

Secondary research

Ads & Disads

Answer 0

Finding out information that already exists
Ads- often free, easy access, lots of info available
Disads- often out of date, competitors have access, can be unreliable, commercial data can be expensive

Question 1

Primary research

Ads & Disads

Answer 1

Any research that is undertaken for the first time
Ads- up to date, tailors to companies requirements, not available to competitors
Disads- expensive, time consuming, risk of poor results if not planned well

Question 2

Random sampling

Answer 2

People selected at random

Wide range of people

Question 3

Quota sampling

Answer 3

Certain amount of a type of person

E.g 50 men, 50 women

Question 4

Stratified sampling

Answer 4

Population split into different groups

People from one group are selected

Question 5

Problems with sampling

Answer 5

Can be bias, leading questions
Inaccuracy with small size
Inaccuracy by selecting convenient people

Question 6

Market size

Answer 6

Measured by total sales volumes
Or
Value of all sales
How valuable a market is at one time, how much revenue is already being generated

Question 7

Market segment analysis

Answer 7

Process of dividing a market into segments of customers with similar needs or characteristics
E.g geographical, Age, gender

Question 8

Behavioural and psychological segments

Answer 8

B- spending and loyalty patterns

P- lifestyle and personality

Question 9

Qualities of a niche market

Answer 9

Usually higher prices
As customers are more willing to for the n
Unique product

Question 10

Market share

Answer 10

Percentage of the market a business owns
Sales of business / total sales in market

X 100

Question 11

How to position a business idea

Answer 11

Exploit weaknesses of competitors
Differentiate yourself, 
- branding, advertising
-range if products
- customer service

Question 12

Market mapping

Answer 12

Shows a range of positions that. Product can take in a given market

Question 13

Adding value

Answer 13

Difference between value of the input costs and final selling price
Selling price- total costs

Question 14

Product trial

Answer 14

When a company tests out its new products on a small segment of the markets
Usually a geographical segment

Question 15

Upsides of product trials

Answer 15

Tests market to asses likely demand levels
If successful the company is more likely to calucute accurate estimated sales for launch
Allows them to change their marketing mix accordingly to feedback

Question 16

Downsides of product trial

Answer 16

Gives competitors awareness of upcoming launches, allow them to develop or push forward a product they have already been developing

Question 17

Main advantages of product trialling

Answer 17

• risks are reduced

- allows change to marketing mix before official launch

Question 18

Main disadvantages of product trialling

Answer 18

• can be expensive
• takes a long time- trends could pass
• competitors could copy
• invalid feedback could be given

Question 19

Opportunity cost

Answer 19

The cost of the next best alternative that must be forgone in order to Persue a certain action

Question 20

He to turn product trial into repeat purchase

Answer 20

• offer products people like
• excellent customer sevice
• advertising (reminding of the product)
• loyalty schemes
• sales promotions