1.2 Spotting a Business Opportunity

customer needs

price, quality, choice, convenience

market research

the process of gathering information about customer needs to help inform business decisions

the purpose of market research

• to identify consumer needs and wants

• to understand and identify gaps in the market

• to understand competitors

• to reduce risk

primary research

first hand research that is carried out to find specific information from specific people

secondary research

second hand research using sources that already exists

primary research methods

surveys, questionares, observation, focus groups

primary research advantages

• specific to your needs

• up to date

• can be cheap

primary research disadvantages

• lack of expertise

• time consuming

• results may be limited

secondary research advantages

• already exists

• may be compiled by experts

• quick to access

secondary research disadvantages

• can be out of date

• could be biased or inaccurate

• not specific to you

secondary research methods

internet, market reports, government reports

qualitative data

• is usually expressed as opinions

• includes descriptive information

• is gained using open ended questions

quantitative data

• is numerical data

• is gathered through closed questions

• can be expressed in a graph or a chart

advantages of social media

• cheap methods of advertising

• quick easy to easy to set up surveys and polls

• users are engaged in the comment

disadvantages of social media

• can become negative

• can be time-consuming to monitor

market segmentation

the process of dividing a target market into small categories by grouping together consumers with particular needs or interests

market map purpose

• see all the products and services in the market

• identify its competitors

• spot gaps in the market

disadvantages of market maps

• a gap in the market does not mean there is a demand

• not guarantee of success

• only uses two variables