1.2 Spotting a business opportunity

Question 1

Customer service

Answer 1

The actions of a business that aim to meet the customers needs a fully as possible

Question 1

Positive customer engagement

Answer 1

When customers have a good experience of interacting with a business, its products and services

Question 1

Closing

Answer 1

Finalising a sale, getting the customer to agree to buy

Question 1

Post-sales service

Answer 1

After-sales help, advice and support for the customer

Question 1

Benefits of good customer service

Answer 1

Defines the brand image, increases competitiveness, encourages repeat business

Question 1

Customer expectations

Answer 1

What the pre-existing knowledge and experience the customer has about the business and its products

Question 1

Risks of bad customer service

Answer 1

Loss of sales, market share, increased costs and poor reputation

Question 1

Premises

Answer 1

The building or physical space where a business operates, shops, factories and offices

Question 1

Word-of-mouth

Answer 1

Customers talking about their experience of service and influencing others

Question 1

Product knowledge

Answer 1

Staff knowing the features and benefits of the product or service being sold

Question 1

Data analysis

Answer 1

Collecting and understanding information about the business operations so informed decisions can be made

Question 1

Customer feedback

Answer 1

Asking the customers about their experience of the product and the interaction with the business

Question 1

Customer loyalty

Answer 1

When customers return to buy products and services from the same business

Question 1

Point-of-sale

Answer 1

The place and time that a transaction is made between the customer and the business

Question 1

Customer satisfaction

Answer 1

How far the needs and expectations of customers are being met

Question 2

Market research

Answer 2

Methods that a business uses to find out about the viability of a new product, attitudes and opinions towards existing products and how to better satisfy the needs and wants of the customer

Question 3

Purposes of market research

Answer 3

Identify customers and their needs, find gaps in the market, reduce risk and make better business decisions

Question 4

Quantitative research

Answer 4

Finding out statistics, percentages and data

Question 5

Qualitative research

Answer 5

Finding out opinion, experience and attitudes

Question 6

Primary research

Answer 6

Getting first-hand information from customers sometimes called ‘fieldwork’

Question 7

Secondary research

Answer 7

Using existing sources of data sometimes called ‘desk research’

Question 8

Online survey

Answer 8

Computer-based questions, collected and collated automatically

Question 9

Questionnaire

Answer 9

Usually sets of written or verbal questions to customers

Question 10

Focus group

Answer 10

A small group that is asked about their opinions, habits and choices

Question 11

Observation

Answer 11

Watching the behaviour of customers and consumers

Question 12

Internet research

Answer 12

Using the web to do market research, this can be both quantitative and qualitative

Question 13

Sales volume

Answer 13

The number of products sold

Question 14

Sales value

Answer 14

The amount of revenue received from products sold

Question 15

Market share

Answer 15

The percentage of the market that an individual business or product commands in comparison to its direct competitors

Question 16

Demand

Answer 16

The need to buy or consume goods and services

Question 17

Competition

Answer 17

Other businesses who are trying to sell their products in the target market

Question 18

What is a segment?

Answer 18

A piece of the whole usually expressed as a percentage or fraction.

Question 19

What is market segmentation?

Answer 19

Dividing the market up into groups of customers and consumers with specific needs and wants.

Question 20

What is mass marketing?

Answer 20

Marketing a product to the whole, unsegmented market, regardless of individual group or demographic differences.

Question 21

What does location refer to in marketing?

Answer 21

Where people live, work and interact with the market.

Question 22

What does income refer to in marketing?

Answer 22

How much money customers earn.

Question 23

What is lifestyle in the context of marketing?

Answer 23

The choices people make in the way they live, e.g. hedonistic, vegetarian, health-conscious.

Question 24

What does age refer to in demographics?

Answer 24

The different age groups that make up the population, usually divided into bands or life stages, e.g. over 65s or retired people.

Question 25

What are other demographic factors?

Answer 25

Factors that define people into groups, e.g. race, religion, gender.

Question 26

What is demographics?

Answer 26

The study of statistical differences within a given population.

Question 27

What is market mapping?

Answer 27

Setting out the features of a market in the form of a diagram.

Question 28

What does targeting mean in marketing?

Answer 28

Aiming your product or service at a specific group or set of groups in the market.

Question 29

What does competing effectively mean?

Answer 29

Gaining market share and driving inefficient products and businesses out of the market.

Question 30

The Market

Answer 30

The place where the laws of supply and demand operate and buyers and sellers interact

Question 31

Competition

Answer 31

Other businesses that offer potential customers similar products or services that meet their needs and wants

Question 32

Monopoly

Answer 32

When a business has no competitors

Question 33

Market share

Answer 33

The percentage of the goods and services in a particular market provided by an individual business

Question 34

Competition by price

Answer 34

The strategy of lowering the price of goods and services to increase sales

Question 35

Competition by product development

Answer 35

The strategy of improving or developing products to increase sales

Question 36

Competition by advertising or marketing

Answer 36

The strategy of using communications to increase demand for a product

Question 37

Uncertainty

Answer 37

A future outcome that cannot be predicted or managed

Question 38

Risk

Answer 38

A future outcome that can be predicted and managed

Question 39

Internal risks

Answer 39

Risk that arises from the business, its staff and operations

Question 40

External risks

Answer 40

Risk that arises from outside the business

Question 41

Minimizing risk

Answer 41

The identification, prediction and management of potential risks

Question 42

Diversification

Answer 42

Having a range of products or operating in a range of markets to avoid over-reliance on a single product or market

Question 43

Recession

Answer 43

A fall in GDP in two successive quarters

Question 44

Depression

Answer 44

An extreme recession that lasts 3 or more years and results in a fall of over 10% GDP