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Business Studies > Spotting a business opportunity > Flashcards

Spotting a business opportunity Flashcards

1
Q

What is the purpose of market research?

A

To gather information that helps businesses succeed and identify opportunities, such as gaps in the market.

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2
Q

How does market research help identify customer needs?

A

It helps businesses understand customer preferences regarding price, quality, choice, and convenience, enabling them to offer the right products at the right time and place.

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3
Q

Why is it important for businesses to stay updated on customer needs?

A

Customer needs change over time, so staying updated and innovating helps businesses remain competitive and relevant.

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4
Q

What is a gap in the market, and why is it important?

A

A gap in the market is unmet demand for a product or service. Identifying these gaps can give businesses a competitive advantage and increase their chances of success.

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5
Q

Can you provide an example of how identifying a market gap led to business success?

A

Cars addressed the need for faster transportation, and music streaming services provided a more convenient way to listen to music, meeting customer demand effectively.

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6
Q

Why do entrepreneurs face high risks when starting a business?

A

Entrepreneurs often invest their own money, and many businesses fail within the first year.

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7
Q

How does market research help reduce risk?

A

It provides information on customer preferences, unmet needs, competition, target markets, and pricing strategies.

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8
Q

Why is market research important for making better business decisions?

A

It helps businesses predict customer responses to changes, such as new products or location moves, reducing the chance of failure.

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9
Q

Can you give an example of how market research supports better decisions?

A

A café might survey customers before introducing a new type of coffee to see if it would be popular, increasing its chances of success.

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10
Q

What is primary market research?

A

Primary market research is new research collected by a business itself, providing customized data specific to its needs.

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11
Q

What are some methods of conducting primary research?

A

Methods include surveys, questionnaires, focus groups, and observations.

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12
Q

What is the difference between open and closed questions in a questionnaire?

A

Open questions allow detailed responses in the customer’s own words.
Closed questions limit responses, often to yes/no or rating scales.

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13
Q

Why is the size of a focus group important?

A

The size must be balanced—too small and there won’t be enough opinions; too large and some participants may not contribute.

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14
Q

What are some advantages of primary research?

A

It provides specific, detailed, relevant, and up-to-date information, and can gather both quantitative and qualitative data.

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15
Q

What are some disadvantages of primary research?

A

It can be time-consuming, expensive, and difficult to collect.

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16
Q

What is secondary market research?

A

Secondary market research involves gathering existing data that has already been produced, from internal or external sources.

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17
Q

What are some sources of secondary research?

A

Sources include internal data, internet research, market reports, and government reports.

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18
Q

What is the difference between internal and external secondary research?

A

Internal research comes from within the business, such as financial or marketing information.
External research comes from outside sources, like market reports, competitor websites, or government reports.

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19
Q

What is an example of how a market report could help a business?

A

A market report might reveal that 46% of adults aged 35–50 visit a coffee shop at least once a month, helping a business decide which demographic to target.

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20
Q

What are some advantages of secondary research?

A

It is quick and easy to gather, can provide industry-specific insights, and is often easy to analyze.

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21
Q

What are some disadvantages of secondary research?

A

It may not be specific to the business, could be outdated, and may be biased or inaccurate.

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22
Q

What is qualitative data?

A

Qualitative data is descriptive and often expressed as opinions. It is gathered using open-ended questions, providing detailed information about customer experiences.

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23
Q

What is an example of how qualitative data is collected?

A

An example is asking open-ended questions like, “What do you like about the product and why?

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24
Q

What are the advantages of qualitative data?

A

It provides in-depth and detailed information that can give a business valuable insights into customer opinions.

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25
Q

What are the disadvantages of qualitative data?

A

It can be time-consuming and costly to gather and analyze.

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26
Q

What is quantitative data?

A

Quantitative data is numerical and can be gathered through closed questions, such as yes/no responses, multiple-choice, or rating systems.

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27
Q

What are the advantages of quantitative data?

A

It is simple to gather, quick to analyze, and can be expressed in graphs or charts for easy understanding.

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28
Q

What are the disadvantages of quantitative data

A

It lacks specific opinions, so businesses may not fully understand what customers truly think.

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29
Q

How can businesses use social media for market research?

A

Businesses can use social media to gather data from a large number of customers, track trends, and analyze competition, often at a low cost.

30
Q

What are some benefits of using social media for market research?

A

It is cheaper than traditional research methods, saves time by automating data analysis, and helps businesses spot trends and monitor competitors.

31
Q

Can you give an example of using social media for market research?

A

A hairdresser might ask their social media followers to complete a short questionnaire in exchange for a chance to win a free haircut.

32
Q

What advantage does social media provide in terms of reaching customers?

A

Social media allows businesses to reach a local, national, and international customer base quickly and affordably.

33
Q

Why is social media an effective tool for spotting trends?

A

Social media gives businesses real-time access to what customers are discussing and sharing, helping to identify the latest tastes and preferences.

34
Q

Why is reliable market research important for a business?

A

Reliable market research helps a business make informed decisions, reduces risk, saves money, and increases the chance of success.

35
Q

What does it mean for market research to have a high level of validity?

A

It means that the facts and evidence gathered are accurate and reflect the true market conditions.

36
Q

What are the advantages of having reliable market research data

A

It leads to informed decisions, reduced risk, less wasted money, and a higher chance of success.

37
Q

What can happen if a business relies on unreliable market research data?

A

It can make poor decisions, lose money, create products that don’t sell, and even fail.

38
Q

How does reliable market research help reduce risk?

A

By providing accurate data, businesses can make decisions that are more likely to succeed, minimizing the risk of costly mistakes.

39
Q

What is market segmentation?

A

Market segmentation is the process of dividing a target market into different groups based on specific characteristics to tailor products and marketing strategies.

40
Q

What are some common factors used in market segmentation

A

Location, demographics, behaviour, lifestyle, and income.

41
Q

What is geographical segmentation?

A

Geographical segmentation divides a market based on where people live, allowing businesses to target specific areas with tailored products.

42
Q

How does demographic segmentation work?

A

Demographic segmentation targets people based on characteristics like age, gender, ethnicity, or occupation. For example, a makeup company might target females aged 19-35.

43
Q

What is behavioural segmentation?

A

Behavioural segmentation focuses on how people behave or purchase at certain times of the year, like during holidays or special events.

44
Q

How does lifestyle segmentation help businesses?

A

Lifestyle segmentation targets people based on their hobbies, interests, or activities. For instance, a camera shop may target people interested in photography.

45
Q

Why is income segmentation important?

A

Income segmentation helps businesses target customers based on their earning potential and disposable income, ensuring products are priced appropriately for their market.

46
Q

What is market mapping?

A

Market mapping is the process of creating a graph to plot competitors and their products to understand competitor behavior and identify gaps in the market.

47
Q

What does a market map help a business identify?

A

It helps identify gaps in the market, understand the competition, and see where opportunities exist for new products or services.

48
Q

What are two common factors measured on a market map?

A

Price and quality.

49
Q
A
50
Q

Why would a business use a market map?

A

To identify gaps in the market where there is a lack of products, allowing them to launch a product with higher chances of success.

51
Q

What other factors, besides price and quality, can be plotted on a market map?

A

Duration, taste, luxury level, budget, age of the target market, and gender.

52
Q

What is your competitor’s USP?

A

A USP is what makes a business unique, like a vegan restaurant or high-quality products.

53
Q

How does your competitor’s price compare to yours?

A

If their prices are lower, you may need to adjust your pricing to compete.

54
Q

How is the quality of your competitor’s product?

A

If they offer better quality, focus on improving your product’s quality

55
Q

Is your competitor’s location more convenient than yours?

A

If they are in a better location, you may need to make your business more accessible.

56
Q

How wide is your competitor’s product range?

A

If they offer many products, consider expanding your range or focusing on a niche.

57
Q

How does competition affect businesses?

A

It pushes businesses to improve quality, lower prices, and innovate.

58
Q

Why is competition good for customers?

A

It ensures high-quality products and fair prices.

59
Q

What happens when one business introduces a new product?

A

Competitors may also introduce similar products.

60
Q

What is territorial competition?

A

It happens when businesses in the same location try to force each other out by using aggressive pricing.

61
Q

How can a business struggle in territorial competition?

A

A business with higher prices may lose customers to cheaper competitors.

62
Q

Why is it important for a business to meet customer needs?

A

It helps attract and retain customers, leading to business success.

63
Q

What do customers expect from the price of a product?

A

Customers expect fair pricing and good value for money.

64
Q

How does quality relate to price?

A

Higher prices usually mean higher quality, and lower prices imply lower quality.

65
Q

Why is choice important for customers?

A

It allows customers to find products that suit their specific needs and preferences.

66
Q

What is convenience in the context of customer needs?

A

It refers to making the purchase process easier and quicker, such as through online shopping or app-based services.

67
Q

Why is it important for a new business to understand its customers?

A

It helps generate sales and increases the chance of survival.

68
Q

How can a business generate sales?

A

By offering products or services that meet the specific needs of customers.

69
Q

What role does customer understanding play in business survival?

A

It helps the business stay relevant and adapt to changing customer demands, improving the chances of continuing to operate.

70
Q

Why must businesses keep up with changing customer needs?

A

To remain competitive and ensure long-term survival.

Business Studies (10 decks)

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