1.2 spotting a business opportunity

Question 1

customer needs

Answer 1

-price–> offering products at competitive price
-quality–> training and encouraging staff to provide a friendly and helpful service
-choice–> a wide variety of products
-convenience–> offering same day or next day delivery

Question 2

market research

Answer 2

after an entrepreneur has identified a possible business idea they have to carry out market research to see if their business idea is viable

Question 3

methods of market research

Answer 3

-primary
-secondary

Question 4

primary market research

Answer 4

research done by the business
e.g. questionnaires, focus groups, interviews and observations

Question 5

secondary market research

Answer 5

research using existing resources of information that has been previously researched
e.g. research reports, newspapers, consumer surveys and the internet

Question 6

advantages and disadvantages of primary market research

Answer 6

disadvantages:
-time consuming
-expensive
-potential risk of biased results
advantages:
-up to date information
-more relevant to the business

Question 7

advantages and disadvantages of secondary market research

Answer 7

advantages:
-cheaper
-less time consuming
-easier to collect results
disadvantages:
-not likely to be relevant to the business
-info could be out of date

Question 8

advantages and disadvantages of qualitative data

Answer 8

advantages:
-provides in depth and detail
-helps a business listen to what their customers want
disadvantages:
-results may be biased –> small people is surveyed
-responses are subjective
-results can depend on the skills of the interviewer

Question 9

market segmentation

Answer 9

process of dividing a market into smaller categories by grouping together consumers with a particular need or interest

Question 10

identifying market segments

Answer 10

-location
-demographics
-behaviour
-lifestyle
-income
-age

Question 11

what does market mapping allow a business to do?

Answer 11

-see al the products or services in the market
-identify its competitors
-spot and gaps in the market
-spot strengths and weaknesses of competitors–> this knowledge will help the business improve its own performance and outperform its rivals on their weak points

Question 12

SWOT analysis

Answer 12

-identify the strengths and weaknesses of competitors
-investigate opportunities
-find out what threats are posed by competitors