1.2 Spotting a business opportunity

What are the customer needs

• price

• quality

• choice

• convenience

The importance of identifying and understanding customers

• generating sales

• business survival

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 primary methods of market research

• survey

• questionnaire

• focus group

• observation

What are the benefits of primary market research

• provides data that’s up-to-date

• accurate

• specific to business needs

• effective at collecting qualitative data.

What are the drawbacks of primary market research

• expensive

• time consuming

• sometimes difficult to collect.

What are the secondary methods of market research

• internet

• market reports

• government reports

What are the benefits of secondary market research

• quick and easy to gather information

• instantly available

• cheaper than primary research

• can provide industry-specific information

• often easy to analyse

• effective at collecting quantitative data

• less time consuming

What are the drawbacks of secondary market research

• more general

• not specific to the business

• could be out of date

• may be biased or inaccurate.

What are the uses of market research

• qualitative and quantitative data

• social media

• reliability to understand the market

why is social media effective in collecting market research data

• it is cheaper than other forms of research and can often be free

• it can save time putting information together,

• it allows businesses to spot the latest tastes and trends

• monitor the behaviour of their competition

• conduct research cheaply and on a large scale

• business bringing out a new product or offering a discount to match its competitors

What are the advantages of having reliable market research data

• the business can make properly informed decisions

• reduces risk means less money is wasted

• gives a higher chance of business success

What are the consequences of relying on unreliable market research data

• the business making unwise decisions

• it could ultimately cost the business money

• the business could bring out products that don’t sell

• the business could fail

• it must have a high level of validity which could be expensive

What are the market segments

• Location: Geographic targeting.

• Demographics: Age, gender, income, etc.

• Lifestyle: Interests and activities.

What are the benefits of market segments

• 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

What are the drawbacks of market segments

• costly

• missed opportunities with other customers

• Customer characteristics change over time

What is the purpose of market mapping

• to identify a gap in the market

• to identify the competition.

What is the benefit of market mapping

• 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

What are the drawbacks of market mapping

• Based on opinions and perceptions, rather than on accurate data

• Compares businesses based on only two variables, which is simplistic.

• Can be difficult to identify the most appropriate variables

What are the strengths and weaknesses of competitors

• price

• quality

• location

• product range

• customer service

What is the impact of competition

• Drives businesses to improve quality and pricing.

• Can lead to aggressive pricing strategies that may harm smaller competitors.