1.2 Spotting a Business Oppurtunity
- Created by: pinkbeer
- Created on: 05-08-19 13:43
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- Spotting a business oppurtunity
- Customer needs
- Price
- Lower price higher sales
- Sell products for less than their value
- Important to research customers opinions on pricing
- Quality
- Assessed about how fit for purpose it is
- Customers base it on cost and their expectations
- Also linked to customer service
- Choice
- Have different tastes and needs
- Large product differentiation makes it easier to choose
- Business should make the customer confident about their choice
- Convenience
- Customers need for convenience can help a business to reduce costs
- Important factor on how customers make decesions
- Following these needs will help to get repeat customers
- Price
- Identifying and understanding customers
- Customers will not buy a product that does not meet their needs
- Need to price the product so it is affordable for the intended target market
- Purpose of Market Research
- Test if business idea is viable
- Gather accurate information on customers, competitors and market
- Methods of Market Research
- Primary Research
- Is dome directly my the business to find out answers to specific issues and questions
- Questionnaire
- Set of questions that have to be planned out carefully yo provide useful feedback
- Have to identify the type of customer they want to ask the questions
- Multiple-choice, Yes/No and siding scale
- Focus group
- Group of people who are asked questions
- A business will have to run more that 1 group
- Can be held online
- Interviews
- Telephone, face to face or online
- Open questions that lead to long and detailed responses
- Observations
- Watching how customers behave
- Peoples reaction to a product
- How long it takes to make a purchasing decision
- Less likely to be biased
- Time consuming and could be inconclusive
- Quantitative Data
- Information about peoples habits and lifestyles
- Closed questions
- Business can create a clear picture of what their customers want
- Often offer the participant an incentive
- Used to generate statistics
- Data gathered regularly
- Social Media
- Cheaper method
- Deepen understanding of the market
- Likes and dislikes of their market
- Gives information about rivals
- Identify popular trends
- Understand what customers are talking about and searching
- Improve products and marketing
- Can see how customers talk about their product
- Seconday Research
- Using existing sources of information that have previously been researched
- Internally Sourced
- Data and statistics that the business has accumulated in the past
- Helps them to understand what their customer needs are
- Externally Sourced
- Information that is published by a person or organisation not related to the business
- Use of Data
- Based on analysis of sets of data in order to come to a conclusion
- Qualitative Data
- Finding out what people think and why they think that
- Getting people to talk about their opinions
- All market research can have the potential to be inaccurate
- Can usually be traced back to the validity and reliability
- Primary Research
- Market Segmentation
- Dividing a target market into smaller groups
- Location
- Uses type of area they live in to predict their purchasing behaviour
- ACORN A Classification of Residential Neighbourhoods
- Demographics
- Divides the market by sex or family type
- Family life cycle helps a business to understand customers choice of products
- Behaviour
- Impulse buying
- Special occasions
- Loyalty cards
- Lifestyle
- Defined by things they like to do in their spare time
- Helps a business to build a relationship with the customers
- Income
- Helps a business to choose where to advertise its products
- Mainly used in luxury brands
- Age
- Offer different products for different age groups
- Customers needs and wants change as they get older
- Market Mapping
- Price and quality
- Allows you to see all products in that market
- Allows you to see competitors and any gaps
- Sometimes there is not a need for a product to fill the gap
- Should only use it as a starting point
- Clear and straigtforward
- Based on opinion
- Competitive Enviroment
- Direct competitors sell the same type of product
- Indirect competitors don't sell the same product but still find themselves in competition
- Must know target market well
- Must know its own marketing mix and its competitiors
- need to know strengths and weaknesses to help the business to improve
- A business can do a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) on their own business and competitors to help to improve the business
- A business in competition is more likely to come up with new ideas and keep its costs under control
- Customer needs
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