risks and uncertainties Flashcards
risk
always that chance something could go wrong
risks are contollable
unertainities
unexpected events e.g hurricane
product orinetation
when a business focuses more on the product they are selling rather than if its what their consumers will want to buy
e.g apple
market orientation
when a business focuses more on selling products which match their consumers preferences
invest into lots of market research to find out what consumers want and will be willing to buy
considered a more modern successful approach as much less risky
can charge higher prices as tailred to what consumers want
market research definition
collection and analyisis of market information
adv of using market research
helps find out what consumers need and want
allows business to predict how miuch demand there will be for its products
tell business how much consumers are willing to pay for a product
quantitive market research
using numberical statistics
oftenn is hsown in a multiple choice questionaire
closed quesions with fixed answers
qualative makret research
allows consumers to ellaborate answerrs
opions of the consumers
open questions
answer is not restricted like quantitive
adv of quantitive research
analysis is much quicker and easier
adv of qualative research
answers are more flexible
primary research
where a business gathers new data
secondary research
using data thats already avaliable
adv of primaray research
exclusive so competiors can not benefit
specific to the purpose its needed for
dis of primary research
slow, labour intensive, expensive
adv of secondary research
easy and faster to get hold of
dis of secondary research
risk of being out of date
what is represantive sample
small sample of the target population
keeps costs down and saves time and resources
needs to avid bias
interviewer needs to make sure they dont use opinions to influnece their intervieww
intervieww needs to make sure to anser the questions truthfully, not just saying what they think interviewer wants to hear
market segmentation
dividing a market into groups of buyers
consumers in each market share ibe or more characteristic e.g age, job, hobbies etc
different ways to segment a market
Demograpthic segments-age, gender, social class
Income segments-luxury porudts aimed at higher incomes rather then lower income famialies
Geographical segments-neighbourhood, city, country
Behavioursal segment-lifestyle e.g hobbies and interests e.g gym will wnat high protein content
study tip_DIG
market mapping
shows extremees for two measures imporant to customers e.g high price vs low price
adv of market mapping
reveals gaps in markets, can be then spotted and filled by a new business
shows business who its closest competitors are
can then plan best marketing strategy to persuade customers away from them
dis of market mapping
oversimplistic
based on opinion rather than facts
what one person sees as high pore another may see as low price, may also be biased if based of a matter of opinion
competive advantage
a condition which allows a firm to generate more sales/ be more profitable then its rivals
ways to achieive compeittiove advantge
lower costs-producing it lower means cn change lower price then compeititors
product innovation-business can try to be first in new market to bring in new functions
advertising and markting-more attraivt it is to buyers, more likely to generate sales
good customer service-more liekly to spread word or repeat visits
adding value
increasing difference between the cost of making the product and the price that the customer pays
this usually increases profit
added value=price product is sold for-cost of making product
price of elasticity of demand calculation
percenatge chnage of quanitity demanded divided by change in price
