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
    • 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
    • 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

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