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What is market research?
The process of collecting information to help a business succeed and understand customers
Why do businesses conduct market research?
To identify customer needs and spot gaps in the market
What are some customer needs market research looks at?
Price, quality, choice and convenience
What must a business provide to succeed?
The right product, at the right price, in the right place, at the right time
How does market research help reduce risk?
By helping the business make informed decisions
What is a gap in the market?
An area where there is demand for a product or service not currently being met
Why is spotting a gap in the market useful?
It gives a new business a better chance of success with less competition
What information can market research reveal?
Customer wants, unmet needs, competition, target market, pricing
What is the benefit of making informed decisions?
It increases the chances of business success
What is primary market research?
New research a business conducts itself to gather original data
What are examples of primary research methods?
Surveys, questionnaires, focus groups and observations
What is a survey?
A way to ask questions and gather customer opinions and experiences
What are methods for conducting surveys?
Online questionnaires, paper-based questionnaires, interviews, focus groups
What are the advantages of primary research?
It’s specific, detailed, relevant, up to date, and collects different types of data
What are the disadvantages of primary research?
It can be time-consuming, expensive and hard to collect
What is secondary market research?
Research using existing data that has already been produced
What are internal sources of secondary research?
Data from within the business, such as sales records
What are external sources of secondary research?
Internet research, market reports, government publications
What are examples of internet research sources?
Competitor websites, newspaper articles, social media
What do market reports provide?
Industry-specific information
What do government reports provide?
General data that may still help business decisions
What are some decisions businesses make using secondary research?
Pay levels, target markets, product development
What are the advantages of secondary research?
Quick, easy, often industry-specific, and simple to analyse
What are the disadvantages of secondary research?
Not specific, might be out of date, may be biased or inaccurate
What is qualitative data?
Opinions and descriptive info from open-ended questions
What are the disadvantages of qualitative data?
Time-consuming and costly to analyse
What is quantitative data?
Numerical data from closed questions like yes
What are the advantages of quantitative data?
Quick, simple, easy to analyse and present in graphs
What is a downside of quantitative data?
Lacks detailed opinions
How can social media help in market research?
Reaches many people, cheap or free, fast data collection, spots trends
Why is reliable data important?
It helps businesses make informed decisions and reduces risk
What can unreliable data lead to?
Poor decisions, wasted money, unsold products, and business failure
What is market segmentation?
The process of splitting a business’ target market into different groups
Why do businesses use market segmentation?
To develop products aimed at certain groups more effectively
What is geographical segmentation?
Splitting up a market by location
What does demographic segmentation consider?
The characteristics of people
What are examples of demographic characteristics?
Age, gender, race, religion, nationality, disability, ethnicity, sexual orientation, occupation
What does behavioural segmentation consider?
How people behave in relation to purchases at different times or in different situations
What does lifestyle segmentation consider?
What sorts of lives the people in a business’ target market lead
What does income segmentation consider?
How much people earn and their disposable income
What is market mapping?
Using a graph to plot competitors and their products
Why do businesses use market mapping?
To understand competitor behaviour and spot a gap in the market
What two elements are commonly measured on a market map?
Quality and price
Why is understanding competitors’ strengths and weaknesses important?
To make better business decisions
What is a competitor?
Any business that sells the same or similar products or services
What does USP stand for?
Unique selling point
What does price refer to?
How much a product or service costs to purchase
What does quality refer to?
How well a product is made
What does convenience refer to?
How easy something is to purchase
What does product range refer to?
The number and types of products or services sold by a business
Why is customer service important for a small business?
It helps attract and retain customers
Why is competition between businesses good for customers?
It leads to good-quality products and services at the right price
What does competition encourage businesses to do?
Keep updating and bringing out new products and services through innovation
Why can competitors be problematic for businesses?
Because some competition can be territorial
What are the four main customer needs a small business must consider?
Price, quality, choice, convenience
Why is generating sales easier with a clear idea of customers?
Because the business can meet customers’ requirements
What does meeting customer requirements enable a business to do?
Provide a product or service that meets their needs
What is one of the main aims of a new, small business?
Survival
What does survival usually mean for a new business?
Continuing to operate for at least 12 months
What is key to business survival?
Keeping up with the changing requirements of customers