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1.2 SPOTTING A BUSINESS OPPORTUNITY - Coggle Diagram
1.2 SPOTTING A BUSINESS OPPORTUNITY
1.2.1 CUSTOMER NEEDS
Value for money
Want to have a cheap product but a high quality good
Choice
Want to feel in control of their purchasing habits
Good customer service
Good post-sale support. If leave market angry they will be dissatisfied so will not buy again
Convenience
Efficiency of service - want the easiest option (not out of their way)
Social image
Buy product to satisfy social image eg. football shirts
Benefits of satisfying customer needs
Good reviews
Word of Mouth advertising
Increases brand reputation and encourages further customers
Repeat purchases
Allows business to have security of steady cash flow
Increased customer base
Improves brand reputation and more purchases from wider audiences
1.2. MARKET RESEARCH
Purpose of Market research
MARKET RESEARCH = gatthering information about consumer needs or preferences
Identifies consumer needs
Targets right prosuct to audience - is there demand for product? Eg. colgate launches lasagne but fails
Reduces risk of launching new products
Less risk of losing revenue, time, resources
Minimises loss revenue
Informs business decisions
Product development - finetunes design
Identifies gaps in market
Could spot new opportunity with reduced competition
Methods of market research
Primary research
Data collected for purpose of investigation
Examples
Focus groups/consumer panels
Group of people answer in-depth questions to gauge opinions about product etc.
Online surveys
Similar to questionaires - make use of email and internet to conduct research
Questionaires
Paper based surveys eg. conducted by interviewer or sent in post
Observations
Business observes ad records how people behave eg. shopping habits of customers in supermarket
Pros
Relevant data collected for specific need of business
Up to date info gathered
Confediential - no one else can access primary data
Unique data
Cons
Time consuming
Expensive - info not readily availble
Validity questionable - sample size too small, sampling method biased, poor research design etc.
Secondary research
Data collected by someone else not for company's needs
Pros
More accessibility - internet improved access and opportunites to consuct SR
Fast access to data - info readily available eg. company info and data
Cheaper, less time consuming to collect - info readily gathered
Cons
Outdated info - little value to business
Incomplete data - secondary data collected for different purpose
Examples
Government reports
Office for National Statistics reports regularly on wide range of metrics - vital for business trying to find target market
Internet
Wealth of info on internet that business can use to find market. eg. restaurant planning to open in certain area use website OpenTable
Market reports
Reports produces by business and consumer watch dogsto provide info about particular market
Use of data in market research
Qualitative vs Quantitative data
Qualitative
Quantity - NON-NUMERICAL
Subjective - made of opinions
Eg. in-depth interviews, focus groups, observations
Advantages
Deeper insight into peoples thoughts and opinions
Disadvantages - data subjective and often misinterpreted
Quantative
Quantity - NUMERICAL
Eg. Companies financial records, official government statistics,
Advantages - data easier to analyse and present
Disadvantages - data cannot tell full story
Objective - not biased
Role of social media in market research
Examples
Image ads
Text and posts ads
Video ads
Benefits of using social media
Larger audience
Improved data set (more accurate)
Brand recognition improved
Community between brands
Insights and analytics (cookies)
Customer engagement
Humand bond - stronger relationship with others
Importance of reliability of data
Trusted to be used
Informed decisioNS
ASK TEACHER
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How to ensure data is reliable
Increase sample size
Eliminate bias (non-representative of population)
Bias = opinions that skew data to suit POV
1.2.3 MARKET SEGMENTATION
Ways to segment a market
Age
Gender
Culture
Income
Lifestyle
Location
Social class
Religion
Benefits of market segmentation
Design responsive products to meet consumer needs (glocalisation)
Develop efficient/cost effective marketing campaigns
Finetune current marketing strategies
Disadvantages of market segmentation
Expensive and time consuming
Markets are dynamic so segments change constantly
Market Mapping
Market positioning - how a business places brand in relation to consumer perceptions and positions of competitors
Market map illustrates range of positions that product can take in marker based on two dimensions that impact customers eg. qualities vs price
1.2.4 THE COMPETITIVE ENVIRONMENT
Ways business compete
Price
Quality
Product range
Location
Customer service
Effect of competition on business
Make more desirable product
Lower cost
Price war
Increased product range
Greater selection of goods
Expand to new locations/markets