Spotting A Business Opportunity Flashcards by Grace-Divine Machingauta

Main customer needs a business must consider

Price
Quality
Choice
Convenience

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Convenience

A product or service’s ability to fit in well with a customer’s lifestyle or routine, the ease with which it can be use and/or its easy-to-reach

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Price - customer needs

Businesses find that lowering their prices will increase their sales
Value can change depending on circumstance for example weather

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Quality - customer need

A customer assesses a products quality based not only on the amount that they spend but also their expectations of the product and whether the product meets its customers’ expectations
Customer service

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Choice - customer need

Customers like to have a choice because different customers have different tastes and needs

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Price - Example of meeting customer need

Offering products at a competitive price

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Quality - Example of meeting customer need

Training and encouraging staff to provide a very friendly an helpful service

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Choice - Example of meeting customer need

Keeping a wide variety of products in stock for customers to choose between

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Convenience - Example of meeting customer need

Offering same-day or next-day delivery

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What needs and behaviours do customers make buying decisions based on ?

Family needs
Financial needs
Emotional needs
Brand loyalty

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Viable

Able to work properly or successfully

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Primary research

New research that is carried out to answer specific issues and questions

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What does primary research usually involve?

Questionnaires
Focus groups
Interviews
Observations

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Ways a survey could be conducted

Online, using online questionnaires and online focus groups
In person or face-to-face, using interviews and focus groups
Over the telephone or through the post

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Questionnaire

A set of questions with a choice of answers

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Focus group

A group of people who discuss their views on a product, service, advertisement or idea, either face-to-face or online

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Target market

A particular group of consumers at which a business aims its products and services

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Sample

A portion of the population asked for their opinions in order to draw conclusions about the behaviour of the whole population

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Interviews

Can be conducted by telephone, face - to face or online.

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Observations

Means watching how customers behave naturally, when they do not think they are being watched.

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Examples of situations in which observation could be used include

Understanding people’s reactions to different packaging designs
Measuring how long it take someone to make a purchase decision in a shop
Understanding how people actually use a product and whether they encounter and whether they encounter ay problems

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An advantage of using observation

The customers behaves relatively naturally, according to their own feelings or thoughts, because they are unaware that they are being observed

Biased

Unbalanced or inclined to agree with a particular judgement or idea rather than presenting the evidence fairly

Secondary research

Research using existing sources of information that has previously been researched, often by other people or for other purposes, including published research reports, scientific reports

Disadvantage of using observation in market research

It is time-consuming ad observations can be inconclusive , meaning they do not give a definite answer, and do not give the researcher clues abt the persons wider attitudes or opinions

Internally-soured information

The data, statistics and research that a business has accumulated in the past, such as past sales.

Externally-sourced information

Information published by people or organisations that are not related to the business, including government agencies, industry, ad trade associations, trade unions, Chambers of Commerce and media sources such as newspapers

Office of National Statistics

Government agency that gathers and analyses data about people in the UK. This includes - social trends - regional trends

Source

A place, person or thing, such as a book, or report, that can be used in research

Chamber of commerce

A local association that promotes the interests of businesses in a county or region

Trade association

Organisation founded and funded by businesses that operate in a specific industry

Analysis

The process of looking at data to identify patterns or trends

Qualitative data

Descriptive data that cannot be measured in numbers

Quantitive data

Numerical data

Uses of qualitative data

To find our customers’ views on - products and services - design and packaging - advertising and marketing message - price changes

Advantages of qualitative data

Provides depth and detail, giving a detail, giving a detailed picture of why customers behave in a particular way Helps a business to listen to what their customers want, rather than jumping to conclusions

Disadvantages of qualitative data

Small sample of people is surveyed, so results may be biased Responses are very subjective Results can depend on skills of the interviewer

Incentive

Something such as a payment or gift that encourages someone to do something

Advantages of quantitive data

Data is easy to analyse Numerical data provides insights into relevant trends Make lack reliability if sample size and method is not valid

Disadvantages of quantitative data

Focuses on data rather than explaining why things happen Doesn’t explain the reasons behind numerical trends

Advantages of using social media in collecting market research data

Deepen their understanding Identify popular trends Improve their products ad marketing Save time conducting market research

Validity

A measure of how good the design and methods of research are and suggests whether the findings of the research can be trusted.

Reliability

Indication of whether the research results from a sample are representative of a wider group or the population as a whole

Market segmentation

The process of dividing a target market into smaller categories by grouping together consumers with a particular need or interpret

Examples of market segments

Location Demographics Behaviour Lifestyle Income Age

Segmentation

The process of breaking something up into smaller parts

Market mapping

The process of creating a diagram that identifies all products in a market and maps them against two of their features

What does a market map allow a business to do ?

See al the products or services in the market Identify its competitors Spot any gaps in the market

Direct competitors

Business that sell the same type of product or service

Example of direct competitors

McDonalds and Burger King are direct competitors

Indirect competitors

Business that do not sell the same product or service it still find themselves in competition with one another

Example of indirect competitiors

Ferry, coach, plane

SWOT analysis

A study undertaken by a business to identify the strengths and weaknesses, opportunities and threats