1.2 - Spotting A Business Opportunity Flashcards
(43 cards)
What are the 3 possible definitions for a market?
A place where goods are traded between customers and suppliers
Trade in a particular type of product
The potential customers for a product
What are competitors
The different businesses that sell the same products in the same market. They compete with each other over sales to customers
Most businesses face competition. In what aspects might businesses look at in terms of strengths and weaknesses?
Price
Customer service
Quality
Product range
Location
How may price affect competition?
Customers will often want to pay less for a given product. If all products in the market are the same, then price becomes important.
BUT
Lowering the price means firms may not make much profit
How may customer service affect competition?
Offering customer service can attract customers and customers will be more willing to pay more money
Businesses might decide to train its staff in good customer service or provide extra service to attract customers
How may quality affect competition?
Offering better quality products means customers will be more satisfied. In order to convince customers that their products are better than their rivals, businesses will need to spend money on developing high quality products
How may product range affect competition?
Having a large range may make a business more attractive since customers have a better selection
They also might try to fill any gaps by making new products, there wont be competition for new products and the firm may appear more innovative than its competitors.
Innovative
Introducing new ideas
How may location affect competition?
Customers are more likely to buy from a business if it sells from a convenient place as they won’t have the inconvenience of waiting or travelling
Might decide to open stores in particular locations or to sell items online
Why do businesses carry out market research?
Find out about the market and how they are performing in it
Identify who the customers are
What is the market size?
The number of individuals within the market which are potential buyers or sellers of products
OR
The total value of products in the market
What is the market share?
The proportion of total sales within the market that is controlled by the business
What can market research give the business an understanding of?
What their customers need and how to satisfy them
What may customer needs include?
Type of product
Quality of product
Price
Convenience
Choice/Range
How will understanding customer needs help the business?
They will be able to make products that meet hese needs.
Increases their sales and help to ensure the businesses’ survival
Using market research to understand customers and their needs help businesses to:
- make informed decisions
- spot a gap in the market
- reduce risks
How can using market research to understand customers and their needs help businesses to make informed decisions?
Prodvides useful information like:
- what products to sell
- where to sell them and how to promote
- what price
How can using market research to understand customers and their needs help businesses to spot a gap in the market?
They can attempt to
- develop a new product
- selling an existing product in a new place/price or promoting it in a different way
How can using market research to understand customers and their needs help businesses to reduce risks?
if a business sells a product that people dont want or at a wrong location/too pricy, they could lose a lot of money, using MR they can make informed decisions to avoid this
What are the 2 types of market research?
Primary
Secondary
What is primary research?
Getting information from customers or potential customers
What are the most common forms of primary research?
Questionnaires
Surveys
What are the benefits of primary research?
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