Business paper 1

• What is the purpose of a market map?

  To understand a business's location in the market
• How does mapping the market help businesses?

  It reveals competitors and market gaps
• What information can a business find using a market map?


  • Competitors selling similar products
  • Customer perceptions of competitors
  • Gaps in the market
• What two variables are often shown in market maps?

  Price and quality
• What does a blank area on a market map indicate?

  A potential gap in the market
• What should a business do after identifying a potential gap in the market?

  Conduct market research to confirm demand
• Why is it important for businesses to use different types of information?

  To ensure accurate market analysis
• What is market segmentation?

  Dividing a market into different groups
• How can market segmentation help businesses?

  It identifies the target market for products
• What are the methods of market segmentation?

  • Demographics (age, income)
  • Location
  • Lifestyle
• How might a mobile phone company segment its market?

  By targeting older customers with specific features
• Why is it ineffective to market a stair-lift during a children's television program?

  It targets the wrong market segment
• What is the main goal of market research?

  To find out what customers want
• How does market research help businesses improve performance?

  By ensuring products meet customer needs
• What can market research inform businesses about?

  Product offerings, pricing, and promotion
• What is a gap in the market?

  A need not being met by existing products
• What might a business do to fill a market gap?

  Develop a new product or adjust pricing
• How can market research reduce risks for a business?

  By informing decisions to avoid costly mistakes
• What are the two types of market research?

  Primary and secondary research
• What is primary research?

  Collecting information directly from customers
• What are the methods of primary research?

  • Questionnaires
  • Interviews
  • Focus groups
  • Observation
• Why might a business choose to conduct research over the internet?

  To save costs and reach more people
• What is a disadvantage of primary research?

  It can be expensive and time-consuming
• What is secondary research?

  Analyzing existing data from other sources
• Why do small businesses often use secondary research?

  It is cheaper and easily accessible
• What is a disadvantage of secondary research?

  It may not be relevant or up-to-date
• What is the main purpose of market research?

  To understand customer needs and preferences
• What are the key components of market research?

  • Identifying customer needs
  • Understanding market segmentation
  • Making informed business decisions
  • Spotting market gaps
  • Reducing business risks
• What is one decision businesses make based on market research?

  What products to sell
• What is a gap in the market?

  A need not being met for customers
• How might a business fill a gap in the market?

  By developing a new product
• What can market research help businesses avoid?

  Costly mistakes
• Why is reducing risks important for businesses?

  To avoid losing money on unwanted products
• How does competition affect business decisions?

  It pushes businesses to attract customers
• What might a business do to compete on price?

  Charge lower prices than competitors
• How can customer service influence a business's success?

  It can attract customers willing to pay more
• What is one way businesses can improve product quality?

  By developing high-quality products
• Why might a business offer a large product range?

  To attract more customers
• How can location affect a business's sales?

  Convenient locations increase customer purchases
• What does the term 'market' refer to?

  A place where goods are traded