Topic 1.2 Spotting a business opportunity Flashcards
What is the purpose of market research?
- to identify and understand customer needs
- to identify gaps in the market
- to reduce risk
- to help make business decisions
What are the 2 types of market research?
Primary research
Secondary research
What are the examples of primary research?
survey
questionnaire
focus group
observation
What are examples of secondary research?
internet
market reports
government reports
What is primary research?
Research that a person personally collects data people
What is secondary research?
Research that has already existed.
What is the advantage of primary research?
- Questions are tailored to the business needs
- Can create a competitive edge
What are the disadvantage of primary research?
- time consuming
- expensive
What are the advantages of secondary research?
- quick and instant information access
- likely to be cheaper
What is the disadvantage to secondary research?
- Competitor also has the same access to information (the company doesn’t have a competitive edge)
- Can be out of date
What is qualitative data?
non-numerical data
what is quantitative data?
numerical data
Why do business use social media?
It is a cheap way to collect information on market trends, customer opinions and the actions of their competitor.
What is the importance of having reliable data?
Basing decisions on unreliable research can be very costly to a business. Therefore the business should avoid bias within research.
What is market segmentation?
Is a group of buyers with similar characteristics and buying habits.
What are the market segments? (6)
Age Gender Income Location Lifestyle Demographics
What are the benefits of segmentation?
- meet specific customer needs
- differentiate its product
- focus on a specific group of customer
- develop a unique brand image
What are the limitations of segmentation?
- expensive
- business may miss opportunities
- customer characteristics can change overtime
What is the purpose of market mapping?
To identify gaps in the business
What is the benefit of market mapping?
- helps to identify potential gaps in the market
- Helps business to identify their rivals
- Helps make business decisions
What are the drawback of market mapping?
- based on opinion and perspective
- compares business from two variables
