Topic 1.2

Question 1

What are the 4 Customer needs?

Answer 1

-Price

-Choice

-Quality

-Convenience

Question 2

Why meet customer needs?

Answer 2

-Generates sales

-Prevents business failure (business survival)

Question 3

What is Market Research?

Answer 3

The process of gathering information about the market and customer wants and needs.

Question 4

What is the purpose of Market Research?

Answer 4

-Identify market size and trends

-To identify and understand customer needs

-To identify gaps in the market

-To reduce risk

-To inform business decisions.

Question 5

Primary Research

Answer 5

-Survey

-Questionnaires

-Focus group

-Observation

Question 6

Primary Research - Advantages

Answer 6

-Detailed info/opinions

Question 7

Primary Research - Disadvantages

Answer 7

-Time consuming
-Expensive

Question 8

Secondary Research

Answer 8

-Internet

-Market reports

-Government reports

Question 9

Secondary Research - Disdvantages

Answer 9

-Out dated
-Not specific to business

Question 9

Secondary Research - Advantages

Answer 9

-Easy to access
-Free

Question 10

Qualitative data

Answer 10

Is based on opinions.

Question 11

Qualitative data - Advantages

Answer 11

-Provide depth and detail of why the customers want what they want.

-Helps a business understand what their customers want.

Question 12

Qualitative data - Disadvantages

Answer 12

-A small sample is being asked.

-Results can depend on the interviewer’s skills.

-Responses are subjective. Not based on facts.

Question 13

Quantative data

Answer 13

Is based on facts or numbers.

Question 14

Quantative data - Advantages

Answer 14

-Large quantity of info.

-Easier to analyse

Question 15

Quantative data - Disadvantages

Answer 15

-Lacks detail in info

-Cant gather opinions

Question 16

Surveys and Interviews

Answer 16

+Interviewer can explain questions
+Can target customers easily

-Expensive
-Customer might feel uncomfortable

Question 17

Questionnaires

Answer 17

+Cheaper than interviews
+Can target specific customers

-Low completion rate
-People may not understand

Question 18

Observations

Answer 18

+Business could save money if it finds out what customers don’t want

-Time consuming

Question 19

Focus groups

Answer 19

+Data is specific to group/business

-Time consuming
-Expensive compared to questionnaires

Question 20

Census Data

Answer 20

+Easy to access
+Free

-Info might not be specific to business
-Out of date (updates every 10 yrs)

Question 21

Competitors Websites

Answer 21

+Free
+Easy to access

-Not specific info
-Maybe be out of date

Question 22

Internal Data

Answer 22

+Specific to business
+Free
+Easy to access

-Out of date

Question 23

Newspaper and magazines

Answer 23

+Free
+Broad info for industry

-May not be specific to business
-Internet may be easier

Question 24

Market Segmentation

Answer 24

Splitting the market for a product or service into different parts of segments.

Question 25

How do businesses use market segmentation to target customers?

Answer 25

-By identifying market segments -By Identifying a gap in the market and competition using a market map

Question 26

What are some market segments?

Answer 26

-Age -Gender -Income -Location -Lifestyle -Behaviour

Question 27

What is a Market Map and what does it help you do?

Answer 27

-A tool to identify gaps in the market -Shows where a sector is overcrowded -Identifies competitors

Question 28

Exam Question - Explain one benefit to a business of using a market map. (3 marks)

Answer 28

One benefit of using a market map is that it allows you to SPOT THE GAP IN THE MARKET. This means that, you are able to IDENTIFY WHERE THERE IS A NEED FOR A PRODUCT OR SERVICE. This leads to, CREATING A PRODUCT THAT CUSTOMERS WOULD WANT meaning you have a chance of EARNING MORE PROFIT. (In a 6 marker use IDENTIFY COMPETITORS as the other point)

Question 29

What are Direct Competitors?

Answer 29

Businesses that sell the same product or service.

Question 30

What are Indirect Competitors?

Answer 30

Businesses that do not sell the same product or service but find themselves competing.

Question 31

What is a competitive environment?

Answer 31

The strength of the competition between companies in the same market.

Question 32

How could a business compete?

Answer 32

-Price -Quality -Location -Product range -Customer service