Spotting A Business Opportunity

Question 1

What will a business encourage by meeting customers needs?

Answer 1

Repeat purchase and attract new customers

Question 2

What are four customer needs?

Answer 2

Price, choice, convenience and quality

Question 3

Why do businesses need to understand the differing needs of its customers?

Answer 3

So that it can continue to generate sales and survive

Question 4

What are the personal circumstances businesses need to consider about each individual’s needs?

Answer 4

Family needs- customers with children will have different needs from a couple with no children 👶🏻
Personal tastes and preferences- all customers have personal preferences based on style, colour, function and personal taste
Financial needs- people with different incomes will choose to buy products and services at different price points
Emotional needs- some customers may have strong emotional 😭 connections to certain brands and products

Question 5

What is price point?

Answer 5

The point on a scale of possible prices at which a business fixes the price of its product

Question 6

What is convenience?

Answer 6

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

Question 7

What is market research?

Answer 7

The process of gathering information about the market and customer’s needs and wants in order to help inform business decisions, including product design and marketing

Question 8

What is the purpose of market research?

Answer 8

Identify gaps in the market or opportunities
Identify and understand competitors
Understand trends in the market, such as market growth
Inform business decisions and reduce the risk associated with making business decisions
Understand how well the business is doing, such as customers’ opinions of its products
Identify and understand customer needs

Question 9

What is primary research (field research)?

Answer 9

Collecting information that did not exist before. This first-hand contact with customers is valuable to a business in understanding its market.

Question 10

What is secondary research (desk research)?

Answer 10

The process of gathering secondary information data, which is information that already exists

Question 11

What are some examples of primary research?

Answer 11

Focus groups, observations, experiments, questionnaires, social media, surveys

Question 12

What are some examples of secondary research?

Answer 12

Internet sites, local newspapers, government reports, market reports, telephone 📞 directories, sales data

Question 13

Why is primary research good?

Answer 13

More accurate 
Up to date 
Specific to needs 
Effective at collecting qualitative data 
Direct customer contact

Question 14

Why is secondary research good?

Answer 14

More general
Less time-consuming
Effective at collecting quantitative data

Question 15

What is market share?

Answer 15

The proportion of sales in a market that are taken by one business.

Question 16

What is qualitative data?

Answer 16

Concerning the quality of something that cannot be measured in numbers

Question 17

What is quantitative data?

Answer 17

Concerning the quality of amount of something that can be measured in numbers

Question 18

How can market research be biased?

Answer 18

The inclination to agree with a particular idea. Market research can be biased if customers give the answers that they think the business wants them to give. Bias also occurs by not surveying a representative sample of people.

Question 19

What is a market segment?

Answer 19

A group of buyers with similar characteristics and buying habits.

Question 20

What does segmenting a market allow a business to understand?

Answer 20

It’s customers needs and to target its customers better

Question 21

What are examples of some segment categories?

Answer 21

Age, demographics, lifestyle, location, income, gender

Question 22

What are the benefits of segmentation?

Answer 22

Meet specific customer needs 
Differentiate its products 
Focus on a specific group of customers 
Target 🎯 its marketing activity 
Develop a unique brand image 
Build close customer relationships

Question 23

What are the disadvantages of segmentation?

Answer 23

Targeting a range of different customers with different products and services can be costly
Focusing on one group of customers can cause a business to miss another opportunity
Customer characteristics change over time, such as lifestyle, income and demographics

Question 24

What do market mapping help a business to do?

Answer 24

To position their products by identifying gaps in the market

Question 25

What is a market map?

Answer 25

A diagram that can be used to position and compare products in a market. It is also used to identify gaps in the market, which are opportunities where a customer needs are not being met. A market map 🗺 will compare businesses based on two variables, such as price and quality

Question 26

What are the benefits of market mapping?

Answer 26

Helps to identify potential gaps in a market (opportunities)
Helps businesses to identify their closest rivals
Supports market segmentation
Helps businesses to make decisions about marketing and positioning its brand.

Question 27

What are the disadvantages of market mapping?

Answer 27

Based on opinions and perceptions, rather than on accurate data
Compare businesses based on only two variables, which is simplistic
Can be difficult to identify the most appropriate variables

Question 28

What is head-to-head competition?

Answer 28

There doesn’t always have to be a gap in the market for a business to be successful. Businesses can target the same customers as other businesses and still succeed:
If there is enough demand in the market (enough customers)
If the business is able to meet customer needs better than its competitors (by offering more choice or better customer service)

Question 29

What are ways to compete?

Answer 29

Wider product range
Lower prices
Better design 
Higher quality 
More convenient location 
Stronger brand image 
Better customer service

Question 30

What is product differentiation?

Answer 30

Is about making a product different from others in some ways. It helps businesses:
To position their products and target different segments
To gain an advantage over rivals when faced with competition

Question 31

What is a competitive market?

Answer 31

A market is competitive when there are a large number of businesses relative to the number of potential customers. Competition is also high in markets where businesses sell very similar products and services that are difficult to differentiate.

Question 32

What are some decisions that a business might make in a highly competitive market?

Answer 32

Improving efficiency 
Finding ways to improve competitiveness 
Differentiating it’s products and services 
Lowering its prices 
Giving customers special offers 
Cutting costs

Question 33

What might a business that operates in a highly competitive market have to do?

Answer 33

Lower prices in order to compete 
Accept lower profit margins 
Cut back on expenditure 
Be careful about how and when it expands 
Monitor its competitors closely.

Question 34

Why do consumers benefit from competition?

Answer 34

As it encourages businesses to lower their prices and also improve quality and customer service