Business revision

• What is a business?

  A business is something that sells a product or service to customers for money.
• Why do business ideas come about?

  Because there is a gap in the market (opportunity for a new business idea)
• What are the three purposes of business activity?

  • To produce goods/services
  • To meet customer needs
  • To add value
• How do you calculate added value?

  Price ÷ amount and then if there is more than one times it by the number of how many the amount is.
• What is the definition of market research?

  Market research is gathering, recording and analysing data about a particular target competition or environment.
• What is quantitative data?

  Information that you can measure such as 'how many cans of lemonade do you buy each week? '
• What is qualitative data?

  Information about people's attitudes, beliefs and opinions such as 'what do you think of pepperoni pizza? '
• How are business ideas generated?

  When there isn't many businesses in a specific area and the entrepreneur thinks that customers would like it.
• What are three rewards of business ownership?

  • Profit
  • More added value
  • Business success
• What are the 5 methods of adding value?

  • Branding
  • Quality
  • Design of the product
  • Unique selling point
  • Convenience
• What is an entrepreneur?

  Somebody who starts their own business and takes risks.
• What are the 3 skills of an entrepreneur?

  • Charismatic
  • Resilient
  • Determined
• What are the 4 customer needs?

  • Price
  • Quality
  • Choice
  • Convenience
• What is the importance of identifying and understanding customers?

  So that you can meet their needs and know their likes/dislikes.
• What are advantages of primary market research?

  • Data that is specific for your market
  • Only your business has the data
  • Reliable because you've collected it
  • Detailed
• What are disadvantages of primary market research?

  • Bias/not accurate
  • Don't ask enough people
  • Time consuming
  • Expensive
• What are methods of secondary market research?

  • Marketing reports(reports created for specific industries)
  • Census
  • Website analysis
• What are advantages of secondary market research?

  • Free
  • Easy to obtain
  • You can check if it's accurate by looking at other sources
• What are disadvantages of secondary market research?

  • Can quickly become out of date
  • Not specific
  • Rivals have the same data
• How can social media be used by businesses to do market research?

  It allows businesses to identify popular trends and deepen their understanding of the market
• What is the importance of reliable market research?

  The market research has to be reliable because the customers won't like the brand if it doesn't sell things that they like.
• What is market segmentation? 


  Dividing a target market in to smaller categories by grouping customers together with similar needs or interest
• What are methods of market segmentation?

  • Location
  • Demographics (gender, family life cycle)
  • Behaviour
  • Income
  • Age
• What are advantages of market segmentation?

  • Better opportunity to meet specific customer needs
  • Increases the ability to focus on one particular type of customer
  • Chance to build up brand loyalty
• Disadvantages of market segmentation?

  • Expensive
  • Make the number of potential customers too small
  • Could provide misleading results
• What is market mapping?

  A market map shows the position of a business or product in the market compared to other businesses or products
• What are the two purposes of market mapping?

  • To identify competitors
  • To find a gap in the market
• Advantages of market mapping?

  • Can identify your competition
  • Find a gap in the market
  • See if customers like your products
• Disadvantages of market mapping?

  • Your opinion could be wrong
  • The gaps could actually be bad
• What is a direct competitor? business that sells the same type of product or service as another business.
• What is an indirect competitor?

  A business that is not in direct competition but still finds themselves in competition with another business.
• What are different types of competition?

  • Quality
  • Price
  • Location
  • Product range
• What is a SWOT analysis?

  Strengths

  Weaknesses

  Opportunities

  Threats
• How do businesses use SWOT analysis to help them?

  They can see what they are doing well and what they need to improve on and also what they can do to make their business even better and what threats pose to them
• Product vs services

  Product- a tangible good that you can exchange for money

  Service- an intangible good that you can exchange for money
• Risks of business ownership?

  • Business becomes obsolete
  • Competitors have similar products
  • Not enough advertisement
  • Growing too fast
• What is primary market research?

  Research that didn't exist before it was gathered
• What is secondary market research?

  Research that already existed before it was gathered
• Ways of primary market research?

  • Questionnaire
  • Focus groups
  • Online survey
  • Test marketing