Topic 1.2 - Spotting a Business Opportunity

Choice

Giving customers options and increasing the chance that the product will be perfect for the tastes/habits of one type of customer

Convenience

Making life easier for customers, perhaps by a great location (next to the bus stop) or a product that saves time in preparation or consumption

Identifying customers

Finding out who they are: their age, gender, incomes, where they live and what they want

Quality

To a customer quality means getting what they want, or perhaps better than expected; some companies use the term 'customer delight'

Understanding customers

Learning why customers do what they do, making it easier to see how to make a product that better suits them

Focus group

A group discussion among people selected from the target market; it draws on psychology to provide qualitative insights into consumer attitudes

Primary research

Research conducted first-hand; it is tailored to a company's specific needs, for example a quantitative sales estimate for a brand new chocolate bar

Qualitative data

In-depth research into the opinions and views of a small group of potential or actual customers; it can provide insight into why consumers buy what they buy

Quantitative data

Factual research among a large enough sample of people to provide statistically reliable results, for example a survey of 500 people aged 15-24 years

Secondary research

When a company uses research that has already been carried out for general purposes

Demographics

The study of the statistical differences that exist within a population, both now and in the future

Lifestyle

Grouping people by common characteristics in how they live, from their participation in sports and leisure to their views on the environment, taste in music and even nerdier things such as a passion for trains

Location

The extent to which consumers identify with the place where they were born or grew up

Market segments

The subsets within a market that have been identified as a result of market segmentation

Competition

Companies operating in your market or market sector

Gap in the market

An area on a market map where few or no existing brands operate, implying a business opportunity to fill an unmet consumer need

Market map

Measuring where existing brands sit on a two-factor grid, for example young/old compared with high price/low price

Competitive environment

The strength of competition between companies in the same market

Innovative

A new, perhaps original, product or process

Unethical

An action or decision that is wrong from a moral standpoint