1.2 Spotting A business Opportunity

• customer needs:

  • Price - the amount of money exchanged for a product / service
  • Quality - the durability and craftmanship of a product
  • Choice - the selection between products and services
  • Convenience - the accessibility of the product / service for the customer.
• Generating sales methods:

  • Product pricing (lowering prices)
  • Promotion (advertising through medias)
  • Improving existing product (more features)
• Business survival - where the business is able to continue to operate and meet its objectives.
• Market Research - the process of gathering information about the needs, wants, and attitudes of consumers
• Identifying and understanding customer needs will help the business identify customer wants.
• Identifying gaps in the market will allow the business to focus their efforts to an untapped market.
• Reducing risk can be done by finding out customers wants and what they expect.
• Informed Business Decisions can be made by using market research as it helps the business with their future business plan.
• Primary Research - data gathered first hand by the business
• Secondary research is data already gathered by another company. this includes if a company commissions another.
• Surveys are filled out by customers to measure customer satisfaction.
• Questionnaires are used to gather information from a large number of people.
• Fucus groups - potential customers review a new product / service.
• Observations - observations made by the business about their customers and what they're drawn to.
• Qualitative data type - data gathered that cant be represented numerically e.g. surveys, questionnaires.
• Quantitative data type - data that can be represented numerically in graphs or charts. e.g. customer age range.
• Market segmentation - breaking a market into sub-groups based on their needs, wants and characteristics
• market segmentation splits a market into different segments to enable the business to target their product ot the relevant customer.
• Market segmentation methods:

  • Location - A business might sell products in a specific location because their target audience is in that area
  • Demographics - the characteristics of certain customers might append to the product sold more.
  • Lifestyle - the way the consumer lives or pursues. for example hobbies / interests
  • Income - you can segmentate based on income brackets
• Market Mapping - A technique used to segment the market based on two scales e.g. price and quality.