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Business:PAPER 1 (Topic 1.1 (New business Ideas (Will either be: (Original…

- - - - Provide people with a good or service
      - Meet customer needs
      - Add value to existing product to make customers want to pay more by:
        
        Making it more convenient for customer
        
        Build a good brand image- makes it more trustworthy
        
        Improve products design or quality
        
        Give the product a USP
  - - - Original (nothing like it before)
      - Adaptation (of existing product as the business has found a way to improve it
  - - - To successfully run a business they must
        
        Take risks
        
        Will probably have to give up their current job and invest money into the business that they will lose if it fails. To help lessen risks they can write a business plan to work out if the business is a good idea, but this isn't a definite way of knowing if it will be successful.
        
        Make business decisions
        
        For example, the entreprenuer needs to be able to decide on the business's aims, its structure, who to employ, and how to grow the business
        
        Organise Resources
        
        Have to have good organisational skills to keep on top of day-to-day tasks, as well as planning for the future
      - Risks
        
        Will need money to buy equipment and pay workers, they can use their own or riase funds through banks or investors. However if they can't pay it back they may struggle to survive.
        
        Don't have much security when starting a new business as they probably have just given up their job to focus on their company. If things go wrong they could lose money and be wothout a job which could have a big impact on quality of life.
        
        Always the risk that the business will fail, so entreprenuer risks time, money and effort they put in to try to make the business work
      - Rewards
        
        Main reward is the business succeeding
        
        If the business makes lots of profit they can earn alot of money which gives them a better quality of life
        
        Gives the entreprenuer independence to choose what they day-to-day, and what direction the business goes
- - - - Price
        
        Customers will often want to pay less for a product. If all products in the market are the same then a business stands out from competitors by having a lower price. However, this means they won't make as big a profit margin
      - Location
        
        Customers are more likely to buy products if they are convenient to get to, so they won't have to travel or wait as much. Therefore a business will want to open a store in a convenient location or sell online
      - Quality
        
        Better quality means the customer is more satisfied and will be willing to pay more. This is a way to make their products seem better than the competition, but it will be costly
      - Customer service
        
        Will add value to the product and allow you to stand out from the competition. Therefore a business may wish to train staff in customer service and to maybe offer extra services
      - Product range
        
        Having a large range of products will make a business look more attractive to customers. A business may want to fill a gap in the market with a new product, which won't have any competition
  - - - Making informed decisions
        
        What products to sell, where to sell them, how to promote them, what price to sell them for
      - Reduce Risks
        
        Ensure they aren't selling anunwanted prodcut at a too high price or at the worng location
      - Spot gap in the market
        
        Tailor a product to a need that isnt being met before comeptititors do, may mean developing a new product or selling a new product at a new place, price or promoting it differently
    - - Used to identify who customers are, then can give the business an understanding of customers needs and how to satisfy them. Needs include:
        
        Choice of products
        
        Convinience
        
        Price of product
        
        Quality of product
        
        Type of product
    - - Getting your own information from customers/potential customers. Usually involve asking customers for opinions. Useful for finding out new information and getting customer's views.
        
        Survey
        
        Collecting information from people
        
        Questionnaires
        
        Documents with questions that are given to people
        
        Focus groups
        
        Where a small group of people discuss their attitudes to a product
      - A business can't ask everyone so it takes a sample instead. The larger the sample the more accurate but also the most expensive, so small businesses may have to compromise and use a smaller amount
      - Provides up to date, relevant, specific information that is tailored to a target market.
        
        However does have downsides. It is both expensive and possibly time consuming. Furthermore different types of primary research has different pros and cons
        
        PRO: observations are cheap to use and will provide accurate information CON: doesnt allow the customer to give their opinion, and therefore wont know why they are doing certain things
        
        PRO: Questionnaires are cheap and can be used to sample a wide area CON: unlikely that people will respond
        
        PRO: Phone surveys have more of a chance at getting a response CON: they can be expensive
    - - Looking at other people's work. it allows access to a wide range of date, and is useful for looking at the whole market and past trends
        
        Market research reports
        
        Government reports
        
        Newspapers
        
        Magazines
        
        The Internet
        
        Social Media can be used for market research.
        
        Businesses can collect information from people's profiles as they typically include what people enjoy.
      - Often used by small businesses as it is cheaper than primary research, data is more easily found, and are instantly available.
        
        Disadvantages
        
        They aren't always relevant to the business's needs
        
        It's not specifically about your products
        
        It's often out of date
    - - Information that you can measure or reduce to a number, easier to compare quantitative data
    - - Information about people's feelings and opinions. It is tricky to analyse because it's hard to compare two opinions, but allowing customers to express their views gives a greater depth of information
    - - Separated by demographics (identifiable characteristics)
        
        Age
        
        Income
      - OR
        
        Location
        
        Lifestyle
    - - Help a business to understand its location within the market, and see its key features
        
        Will show any two variables, for example it will compare price with quantity
        
        Can help a business find out two pieces of information
        
        Competitors selling similar products
        
        Any gaps in the market
        
        Once they find a gap, the business will have to use market research to see if there is actually a demand for the product. If there is the business can focus on creating products with the features needed to fill the gap, helping them to stand out from competitors
  - - - Will want to market size (number of individuals who are buying/selling a prodcut) and market share (proportion of sales that market by the business