1.2 Spotting a business opportunity

convenience

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 its easy to reach location

viable

Able to work properly

market research

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

focus group

A group of people who discuss their views on a product, service advertisement or idea, either face-to-face or online

Target Market

A particular group of consumers at which a business aims its products and services

Sample

A portion of the population asked for their opinions in order to draw conclusions about the behaviour of the whole population

Generation Y (Millennials)

The people born shortly before the 21st century, usually defined as born between 1980 and 2000

Data

Information, particularly statistics, that can be collected or analysed

biased

unbalanced or inclined to agree with a particular judgement or idea rather than presenting the evidence fairly

Ethics

Moral principles or standards that guide the behaviour of a person or business

source

A place, person or thing that can provide information to be used in research

Chamber of Commerce

A local association that promotes the interest of businesses in a county or region

trade association

Organisation founded and funded by businesses that operate in a specific industry

analysis

The process of looking at data to identify patterns or trends

incentive

Something such as a payment or gift that encourages someone to do something

valid

Having a solid or accurate basis of facts

Segmentation

The process of breaking something ou into smaller pars

Demographics

relating to the structure of a population

axes

The reference lines on a graph

SWOT analysis

A study undertaken by a business to identify the strengths and weaknesses, opportunities and threats

4 customer needs

price
quality
choice
convenience

Role of Market Research

To find out:
-if customers like existing products/services
-if customers would buy a new service/product
-how much customers would be willing to pay for a service or product
-who the competition are and what they are doing
-who they should aim their service/products at
-what promotion would be effective

Price - example of meeting customer need

Offering products at a competitive price

Quality - example of meeting customer need

Training and encouraging staff to provide a very friendly and helpful service

Choice - example of meeting customer need

Keeping a wide variety of products in stock for customers to choose between

Convenience - example of meeting customer need

Offering same-day or next-day delivery

What needs and behaviours influence buying decisions?

Family needs
Financial needs
Emotional needs
Brand loyalty

Primary Research

New research that is carried out to answer specific issues and questions
Usually involves surveying customer's opinions by asking them questions

Questionnaires

A set of questions with a choice of answers
Need to be planned carefully

focus group

A group of people who discuss their views on a product, service, advertisement or idea, either face to face or online

Interviews

In depth interviews can be conducted by telephone, face to face or online
Questions asked can be open leading to long detailed answers
Questions are designed to produce responses that will help identify trends and customer's opinions

Observations

Watching how customers behave naturally when they do not think they are being watched
Used in person or by using appropriate technology

Secondary Research

Research using existing sources of information that has been previously researched, often by other people or for other purposes

Internally sourced information

The data, statistics and research that a business has accumulated in the past

Externally sourced information

Information published by people or organisations that are not related to the business.

Examples of external sources

Government agencies
Industry and trade associations
Trade unions
Chambers of Commerce
Media sources

Advantages of Secondary Research

Information is quick, cheap and easy
Likely to have been well-researched and accurate
Data available covers a wide range of sources

Disadvantages of Secondary research

-May not be precisely relevant to info needs
-May be out of date
-available to every other competitor firm

qualitative data

Descriptive data that cannot be measured in numbers

Quantative data

numerical data

uses of qualitative data

Products and services
Design and packaging
Advertising and marketing messages

Advantages of qualitative data

Provides depth and detail
Helps a business to listen to what their customers want

Disadvantages of qualitative data

Small sample of people so results may be biased
Responses are subjective
Results can depend on the skills of the interviewer

The role of social media in collecting market research data

Deepen their understanding of their market
Identify popular trends
Improve their products and marketing
Save time conducting market research

Validity (market research)

A measure of how good the design and methods of research and suggests whether the findings of the research can be trusted

Reliability

An indication of whether the research results from a sample are representative of a wider group or the population as a whole

Market Segmentation

The process of dividing a target market into smaller categories by grouping together consumers with a particular need or interest

Identifying Market Segments

Location
Demographics
Behaviour
Lifestyle
Income
Age

Direct Competitors

Business that sell the same type of product or service

Indirect Competitors

Businesses that do not sell the same product or service but still find themselves in competition with another