Topic 1.2 Spotting a Business Opportunity Flashcards
What are the customer needs?
- Price
- Quality
- Choice
- Convenience
- Design
- Efficiency and Reliability
What is the purpose of market research?
- To identify and understand customer needs
- To identify gaps in the market
- To reduce risk
- To inform business decisions
What are the two methods of market research?
- Primary research
- Secondary research
What are the main ways of collecting primary market research?
- Online survey
- Questionnaire
- Focus groups
- Observation
- Consumer trials
What are the main ways of collecting secondary market research?
- Books/magazines/newspapers
- Published company reports
- Competitors data
- Government publications and statistics
- Purchase research material
What are the advantages of primary market research?
- Relevant (up to date)
- Information is specific to the needs of the business
- Data and information is only available to the business who got it (allowing a competitive advantage)
What are the disadvantages of primary market research?
- Costly and time consuming to complete
- A sample size that is too small may provide bias results
- Consumers aren’t always willing to take part in the research
What are the advantages of secondary market research?
- Cheaper than primary research and often free
- Information and data are frequently based on large sample sizes
- Not time consuming since the information is readily available
What are the disadvantages of secondary market research?
- The information is available to everyone (reducing the competitive advantage)
- The information and data may not be specific to the business
- Data may be out of date/irrelevant
In which two ways can primary data be collected in?
- Quantitative research
- Qualitative research
What are the advantages and disadvantages of online survey?
An advantage is that it can be used regularly (monthly to check customer satisfaction). A disadvantage may be that it’s mostly completed by those who have more time (e.g. old people and not actual customers)
What are the advantages and disadvantages of questionnaires?
The advantages are that a business can identify its target audience which helps with promotion and pricing. Another advantage is that it can take place in different locations and it’s relatively cheap to produce. However disadvantages are that it can be time consuming and expensive to carry out, also questions need to be carefully checked to avoid biases.
What are the advantages and disadvantages of observations?
An advantage is identifying what is happening and those being observed act naturally (as unaware). However, disadvantages are that it doesn’t provide explanations for their actions and it can be expensive and time consuming.
What are the advantages and disadvantages of focus groups?
Advantages are that it gives insights into customer perspectives and behaviour (helps with promotion), it also gives detailed opinions and responses can be probed and view visual clues (e.g. body language). However disadvantages are that it’s expensive and time consuming, also it’s only a limited number of people or they aren’t honest about thoughts. Also group may not represent the demographics of the whole market.
How can the market segmented?
- Location
- Income
- Lifestyle
- Age
- Demographic
What do businesses use market mapping for?
Spotting gaps in the market
What are the advantages of market mapping?
- Help spot gaps in the market
- Useful for analysing competitors
- Encourages use of market research
What are the disadvantages of market mapping?
- Just because there is a “gap” doesn’t mean there is a demand for the product
- It’s not a guaranteed success
- The research used for market mapping may not be reliable
What are the ways in which you can analyse competition?
- Price
- Quality
- Location
- Product Range
- Customer Sevice
What are the impacts of competition to a business?
- Offer good products and a good service
- Keep prices down
- Bring in new, innovative products or services to break away from fierce price competition
- Cut costs by cutting staff
- Price reduction
- Adopt unethical practices
