Spotting a business opportunity Flashcards
Why do businesses need to meet customer needs?
to make products that are desirable and profitable encouraging repeat purchases and attract new customers
What are the four customer needs?
- price
- choice
- convenience
- quality
In what ways will customers with similar needs be influenced in different ways?
- personal circumstances
- characteristics
What are some personal circumstances for customers?
- family needs
- financial needs
- personal tastes and preferences
- emotional needs
What is the purpose of market research?
- identifying and understanding customer needs
- identifying opportunities and gaps in the market
- identify and understand competitive
- understand the businesses success and opinions of customers
- inform business decisions and reduce risk
- understand trends in the market
Types of market research:
- primary research (field research)
- secondary research (desk research)
What are some examples of primary research?
- surveys
- questionnaires
- social media
- experiments
- observations
- focus groups
What are the advantages of primary research?
- accurate
- up to date
- specific to needs
- qualitative data
- direct customer contact
What are some examples of secondary research?
- sales data
- telephone directories
- market reports
- internet sites
- government reports
- local newspapers
What are the advantages of secondary research?
- general
- less time consuming
- quantitative data
Qualitative data:
information about opinions, judgments and attitudes
Quantitative data:
expressed as numbers and statistically analysed
Market segments:
a group of buyers with similar characteristics and buying habits
What are some examples of ways to segment a market?
- age
- demographics
- lifestyle
- gender
- income
- location
What are the benefits of segmentation?
- meet specific customer needs
- differentiate products
- specific focus
- targets marketing activities
- develops a unique brand image
- build close customer relationships
What are the limitations of segmentation?
- can be expensive
- may miss new opportunities
- customer characteristics change over time
Market maps:
a diagram used to identify gaps in the market and compare products
What are the benefits to market mapping?
- identifying gaps in the market
- identifying close rivals
- supports market segmentation
- helps make decisions in marketing and branding
What are the limitations of market maps?
- based in opinions and perceptions
- simplistic comparison in two variables
- difficult to identify most appropriate variables
What are some ways a business may compete?
- wider product range
- better customer service
- strong brand images
- convenient locations
- higher quality
- better design
- lower prices
How does product differentiation help businesses?
- to position their products and target different markets
- gain an advantage over rivals
What is a competitive market?
large number of businesses relative to the number of potential customers
What decisions may a business make in competitive markets?
- improving efficiency
- improving competitiveness
- differentiating it’s products and services
- lowering prices
- special offers
- cutting costs
What are the drawbacks to highly competitive markets?
- lower prices
- lower profit margins
- cut back on expenditure
- cautious when expanding
- monitor competitors closely
