1.2

• Market mapping


  Process of making a diagram, known as a market map, that identifies all products in a particular market and maps them against two of their features e.g. price and quality
• Gap in the Market


  Refers to a space in the market where there is demand for a product or service that is not currently being met
• Dimensions (factors/criteria used to map competitors)

  • High price vs low price
  • Basic quality vs high quality
  • Large product range vs small product range
  • Low volume vs high volume
  • Necessity vs luxury
  • Poor customer service vs good customer service
• Benefits of market mapping

  • Identify gaps in the market that can be targeted, helping to attract customers, increase revenue and increase profitability
  • Identify areas of high competition that need to be avoided because it is difficult to attract customers, reducing costs and therefore increasing profitability
• Direct competitors


  Businesses that sell the same type of product
• Indirect competitors


  Businesses that sell a different product but still find themselves in competition with one another
• Impact of competition on customers

  Highly competitive markets have lots of new products, lots of different outlets, lots of deals and low prices; good for customers. Not competitive markets have none products, few shops and high prices, bad for customers.
• Competition


  Other businesses or products in a market that are fighting to get market share and sales
• Price competition


  Where businesses compete primarily by changing their prices
• Non-price competition


  Competition in other areas than price, such as product quality, promotion or distribution
• Monopoly


  Where the market is dominated by one business
• Oligopoly


  Where the market is dominated by a couple of large companies who may split the market share between them
• SWOT analysis


  A tool businesses use to assess their competitive environment based on Strengths, Weaknesses, Opportunities and Threats
• Factors for analysing competitors

  • Price
  • Quality
  • Location
  • Product Range
  • Customer Service
• Customer needs


  What the customer needs to solve a problem or meet requirements
• Customer wants


  What the customer wants emotionally
• Customer expectations


  What the customer feels they should be getting
• Quality


  How well the product fits the purpose and how it makes the customer feel. The customer's opinion on quality is dependent on their expectations and may be linked to price.
• Convenience


  A product or service's ability to fit in well with a customer's lifestyle or routine, the ease with which it can be used
• Price


  How much customers pay. Customers may be limited by budget. Lower prices can lead to increased sales. We all have our own perception of good value for money.
• Choice


  Customers like to have a choice. Providing choice allows a business to meet the needs of different groups of customers and gives a reason for customers to return.
• Not meeting customer needs

  Leads to the wrong product, wrong price, or bad customer service. This results in customers not coming back, going to competitors, and leaving bad reviews, making it difficult for the business to survive and grow.
• Market research


  The process of gathering information about the market and customers' needs and wants to help inform business decisions, including product design and marketing.
• Purposes of market research

  • Understand customers
  • Identify gaps in the market
  • Reduce risk
  • Inform business decisions
• Primary research


  First-hand (new) information collected by the company itself using methods like observation, surveys, interviews, focus groups, etc.
• Secondary research


  Information already collected by someone else, gathered through desk research using existing sources like published reports, government data, trade associations, etc.
• Methods of segmentation


  • Age
  • Location
  • Lifestyle
  • Income
  • Demographics
• Benefits of segmentation


  • Helps design products
  • Set the right price
  • Decide how to promote
  • Decide where to sell
• Quantitative data


  Numerical data, usually collected through surveys, observations, and questionnaires. Advantages are it's quick to analyse and can spot trends, but disadvantages are it may lack reliability and the sample size may be too small.
• Qualitative data


  Descriptive data involving thoughts and opinions, usually collected through focus groups, open-ended interviews, etc. Advantages are it can identify customer needs, wants and expectations, but disadvantages are the answers can be anything making trends difficult to identify and it takes longer to complete.
• Social media research


  Using social media to deepen understanding of the market, identify trends, improve products/marketing, and save time on market research.