-exchange goods and services for money -Identifies what customers need through market research
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Define market.
A market is made up of customers who want to buy particular items
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Define supplier
A business which sells (or supplies) products to other businesses
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What is a customer need?
- The wants and desires of a customer has when buying a product
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What is market research?
Market research is understanding the requirements of customers. It helps businesses: -understand customers better -target customers easily - be aware of competition
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What is primary research?
Primary research is gathering new information that did not exist before. Therefore it is original data.
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How can a business gather primary research?
-Questionnaires/surveys: lists of questions -Focus group: a group of people brought together to discuss a product -Interviews -Observations
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Name 2 forms of gathering primary research.
-Qualitative research: focuses on quality. Information about opinions and attitudes -Quantitative research: data that can be expressed as numbers. Used to inform the company about people’s behaviour but does not identify the reasons
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What is secondary research?
Secondary research (desk research) is research that already exists.
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How can a business gather secondary research?
-Newspapers, magazines - Internet -Statistics from market research organisations
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What is Market Mapping?
Market mapping is a diagram that compares two different variables such as price with quality. It is used to analyse customer buying habits. Business use market mapping to identify a gap in the market
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What is a gap in the market?
-Customer needs are not being met for a particular product -An opportunity for businesses to reach out to customers in a new market
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What is Market segmentation?
This occurs when the market is split into different categories in order to identify different types of consumer. Businesses use it to improve existing products and customer service
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How can business segment their market?
Age – children have different buying habits to adults Gender - based on men and women having different buying habits Income – people have low income, middle income, high income Location – the area people live in.
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What is ‘added value’?
Added value is the difference between the cost of materials and the selling price.
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How is added value achieved?
Make their product different from other by changing: -quality, high quality high price, -design, unique and different from others - branding, stong brand name stand out from competitors - USP, unique selling point.
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What is a Franchise?
A franchise is when one business gives another business the right to sell goods or services using its name
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What is a Franchisee?
A franchisee is the person who purchases the franchise.
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What is a Franchisor?
A franchisor is the business that gives another business (or person) the right to sell its products. They receive a royalty payment in return.
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What is meant by royalty payment?
A fixed sum of money that the franchisor pays the franchisee.
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Identify 3 advantages of a franchisee
-Help and support is provided by the franchisor -Lower risk option -Already established and a recognised brand
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Identify 3 disadvantages of a franchisee
-Set up and running costs can be high -Profits have to be shared -Franchisor is charge of final decision making
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What 6 factors effect where businesses are located?
1.Transport 2.Labour 3.Competition/other businesses 4.Technology 5.Proximity to the market 6.Costs
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Other cards in this set
Card 2
Front
Define market.
Back
A market is made up of customers who want to buy particular items
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