1.2: spotting a business opportunity

• what do customers needs?

  - price

  - quality

  - choice

  - convenience

  - efficiency and reliability

  - design
• what do customers need in regards to price?

  customers want value for money and the price they pay for a product should reflect the satisfaction they receive from the product
• what do customers need in regards to quality?

  customers expect to get what they want or better than expected and the quality should reflect the price they pay for a product
• what do customers need in regards to choice?

  customers want options that will increase the chance of product being perfect for a specific individual
• what do customers need in regards to convenience?

  customers want easy accessibility that will make their shopping experience more satisfying
• what do customers need in regards to efficiency and reliability?

  customers want their needs to be met consistently and may be loyal to a business that can constantly provide for their needs
• what do customers need in regards to design?

  customers will value products that are aesthetically pleasing over average looking products as it makes the product look unique
• why is meeting customer needs important?

  businesses need customers to cover costs and make profit, hence surviving as a business
• why is a loyal customer base important?

  loyal customers will result in repeat purchases from them and maybe even recommendations to other people - this is also why it is important to meet customer needs
• market research


  the action or activity of gathering information about consumers' needs and preferences
• what is market research used for?


  - gathering information about customer needs

  - identifying gaps in the market

  - reducing business risks

  - making informed business decisions
• why does a business need to understand customer needs?

  to understand what customers expect in a product/service
• why do businesses need to identify gaps in the market?

  to know what goods or services are currently available and know how they can fill the gaps
• why do businesses need to reduce risk risks?

  to reduce the likelihood of business failure
• why do businesses need to make informed business decisions?

  to increase the chances of business success
• what are the two types of market research?

  primary and secondary
• primary market research


  process of collecting and analysing first-hand information and applying the results to current research needs
• primary market research methods

  - surveys

  - interviews

  - focus groups

  - observation

  - product testing and trials
• surveys


  collect data from subjects who respond to a series of questions about their opinions on products/services, often in the form of a questionnaire
• interviews


  person-to-person conversations for the purpose of gathering information by means of questions posed to respondents
• focus groups


  a strategy to obtain data from a small group of people using interview questions
• observation


  the action or process of observing someone/a group of people carefully or in order to gain information about customer attitudes towards a product/service
• product testing and trials

  a method of analyzing a product concept, feature or functionality to determine how potential customers may use or react to the product
• primary market research advantages

  - directly made for personal business use

  - tends to be more up-to-date

  - more detailed insights (particularly in customer views)
• primary market research disadvantages

  - research samples may not be representative of the whole population

  - time consuming to carry out

  - expensive to obtain
• secondary market research


  process of obtaining information that already exists within the company or that can be obtained from outside sources
• secondary market research methods

  - government/market reports

  - the internet

  - analytics
• government/market reports


  a document that contains information, stats, research and facts on a chosen field, such as customer trends
• the internet


  a global network open for customers to freely share their thoughts and free for businesses to base research on
• analytics


  process of transforming second-hand data into insights
• secondary market research advantages

  - less expensive to carry out

  - easier to obtain

  - quick access and use
• secondary market research disadvantages

  - may be out-dated

  - not specific to personal use

  - less guarantee of data's credibility
• what types of data are there?

  qualitative and quantitative
• qualitative data


  descriptive data - provides insight into judgements/opinions of (potential) customers
• quantitative data


  numerical data - can be used to provide statistics
• market segmentation


  the process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
• market segments


  the relatively homogeneous groups of prospective buyers that result from the market segmentation process
• market segment examples


  - age

  - gender

  - location

  - occupation

  - income

  - lifestyle

  - religion/beliefs

  - health
• market mapping


  helps businesses to identify market segments and position their products through identifying gaps in the market
• how are gaps in the market found with market maps?

  quarters with a lower concentration of brands indicates a gap in the market research used