1.2 Spotting a business opportunity

• Market Research - process of gathering, recording and analysing data to understand customers, competition and the market
• Purpose of Market Research:

  • Identify gaps in the market
  • Reduce risk
  • Inform business decisions
  • Identify and understand customer needs
• Primary research - new information that is carried out to answer issues or questions
• Types of primary research:

  • questions/surveys
  • focus groups
  • interviews
  • observations
• Secondary research - using sources of information that has previously been researched
• Types of secondary research:

  • internet
  • research reports
  • customer reviews
  • government reports
  • competitor websites
• Qualitative data - normally opinions, attitudes or beliefs e.g interviews and focus groups
• Advantages of social media in market research:

  • quick
  • free
  • users are engaged
  • insight into the market
• Disadvantages of social media in market research:

  • time consuming
  • actual opinions
  • can be too negative
  • need for staff training
• quantitative data - normally numerical data e.g surveys
• Advantages of Qualitative data:

  • Provides depth and detail
  • Helps to listen to customer needs
• Disadvantages of Qualitative data:

  • a small sample of people are surveyed
  • persons opinions are subjunctive
  • depends on the skills of interviewer
• Advantages of Quantitative data:

  • easy to analyse
  • insights into relevant trends
  • compare data
• Disadvantages of Quantitative data:

  • focus on data
  • no explanation
  • lacks reliability
• Market Map - used to identify competitors and to spot any gaps in the market
• Market Segmentation - dividing a mass market into smaller categories by grouping customers with a particular need or interest
• Market Segments include:

  • Age
  • Location
  • Gender
  • Income
  • Lifestyle
  • Demographics
• Direct Competitor - business that sell the same type of product/service
• Indirect competitor - business that do not sell the same product/service but are still part of the competition
• SWOT analysis - can help you find out about your business and competition

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats