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business unit 5 - Coggle Diagram
business unit 5
market analsysis
a target market is a precise description of the type of customers a business wnats t aim its product at.
market research isa process of systematically gathering, recording and analysing facts about a market yo satisfy their needs profitably and in an effective manner.
field research is first hand inforamtion gathered about the market from the amrket. it is gathered from asking customers diectly.eg surveys, focus groupd, observation.
desk research is analysing dta thats already been gathered. its secondary research and it isnot gathered first hand by the person using it.
benefits of market research
- you can collect data about the target market (size, location, etc)
- you cna collect data about competitors (rival prices, rival ideas, etc)
- you can improve the product before launching
market segmentation is dividing up the market into clearly identifiable sections with common charateristics. it highlights the target market. it divides a broad target market into subsets of consumers.
eg demographic segmentation (age, gender), geographic segmenttaion (asia, africa), psychological segmentation (social status, personality)
2 benefits of market segmenation:
1.adapts products to taget markets
- improves advertising decisions
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price
penetration pricing. business enters market at cheaper price than competitors and undercuts the market
price discrimination. age cards, different ages pay different fees, etc
psychological pricing. use numbers rounded up or down to give illusion or impresson that its cheaper than it is
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3 things that effect price: cost of production, demand, competitors
place
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place is about distributing the rihgt product in the right place to the right customer at the right time
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business expansion
drive to succeed, diversification, new markets, economies of scale
franchising- franchisor grants franchisee permission to use business idea, name, logo, etc in exchange for percentage of profits and often inital payment.
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takeover aquisition- can be hostile, take over 51%
business allience, remain seperate, just a temporary agreement
promotion
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public relations
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types of PR- sponsorship, celeb endorsement, social media
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advertising
advertising is the communication of inforation to a target market that a business has a product to sell them
purposes: to inform, to persuade, to compete, to remind
business start up
types of production.
- job production. it is spcific, it is unique and usulaly tailored to style. eg wdding dress shops.
- batch prodution. produces in large amounts each dsy that fills orders and specific quotas. eg batch bread.
- mass production. mass produed, not specific, lots of machineryinvolved. eg toothpaste.
job to batch or mass- loss of usp and reduced prices
batch to mass- capital required to buy more automation, fewer options for consumers
challenges
- raising long term finance. hard to attract invetors hwo want toinject captial. if you borrow debt captial, must repay with inetrest. if euqity cpital, must give away control and shares.
- working captial (money for day to day expenses). no creditworthiness or reputation for credit liabiliry bevasue new. hard to buy stock on credit. will have to sell goods on credit to compete with other retailers, meaning low cash sales in beginning.
- staffing. hard t ofind right staff with right skills and qualifications that worj well on a team.
intrapreneurship
intrapreneurship is employees acting in an entrepreneurial activity within the business / employees with new innovstive ideas that they turn profitable
internal sources of idea generation:
- research and dveelopment
- existing products within the business
- intrapreneurship
external sources:
- customers
- coptetiros
- market reseacrh
idea generation, product screening, concept development, feasibility study, prototype development, test marketing, production and launch
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prod life cycle: introduction, growth, maturity, saturation, decline