TOPIC 1.2 Spotting a Business Opportunity Flashcards
What are the four main customer needs?
Quality: Customers assess quality as a product’s suitability and their opinion will depend on expectations.
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Price: Customers will be influenced by price, especially by low prices.
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Convenience: Convenience refers to how easy it is for customers to purchase desired products.
Why is it crucial for businesses to meet customer needs?
- Customers will continue to buy products
- Repeat custom ensures that the business generates cash flow.
- As the reputation of the business grows, more and more consumers are likely to buy its products.
- This should lead to increased profits making it likely that the business will continue to opera
What are the reasons for market research?
- To identify and understand customer needs
- To identify gaps in the market
- To reduce risk
- To inform business decisions.
What is primary research and how may businesses do this?
Market research carried out first-hand:
- Survey/ Questionnaire
- Observation
- Interviews
- Focus Group (small group of people discussing a product)
What is secondary research and how may businesses carry this out?
Market research which is information that has already been gathered:
- Internet
- Government Statistics
- Company Reports
- Newspapers
- Trade Associations
- Books
What is the difference between quantitative and qualitative data?
Qualitative - Data is non-measurable opinions and judgements
Quantitative - Data is measurable numbers and statistics
Why is social media crucial to market research?
Social media is a cheap way of understanding customers. It allows a business to:
- Deepen their understanding of the market
- Identify popular trends
- Improve their products and marketing
- Save time conducting market research
Why is the validity and reliability of research data important?
All your business decisions are based off it and so invalid and unreliable information will lead to a business making harmful mistakes that will limit their chance of profit and growth
What are market segments?
Part of a market that groups buyers with similar buying habits, such as:
- Location
- Demographic
- Age
- Income
- Lifestyle
What is a market map and what is it used for?
A market map is a four-quadrant map based on two features of a product (e.g. high/low price and high/low quality) to allow a business to identify a gap in the market
What features of competitors’ products may businesses monitor?
Price (Are their prices in a similar competitive range)
- Product range
- Quality (Are they delivering quality similar/ better)
- Customer service
- Location (Are they closer to their target market)
What may a business conduct to analyse its competitors and how they should affect their decisions?
A SWOT analysis (Strengths, Weaknesses, Opportunites, Threats)
