Business 1.2

• Customer needs


  specfic things that a buyer wants about goods and services
• Customer reviews


  feedback from customers which are mainly made online
• Word of mouth


  when a customer tells another person about a business
• All the main customer needs

  -Price that reflects on the quality of the product

  -Quality

  -Choice between a range of products

  -Convenience

  -Efficiency of product

  -Design of product
• Qualitative data


  research into opinions and views
• Quantitative data


  data that is numerical
• Primary research


  collecting new information which requires more money and time
• Secondary research


  research that has already been carried out for another purpose and requires less money and time however this information can contain a lack of accuracy and a lack of relevance
• focus group


  a small number of consumers who have a discussion
• bias


  one-sided view
• market trends


  overall pattern related to products
• market gap


  where demand is not being met by the existing products available
• Purposes of market research

  -to identify and understand customer needs

  -identify market gaps

  -reduce risk

  -inform business decisions
• Advantages and Disadvantages for primary research

  Advantages:

  • up-to-date info
  • info is secret from competitors

  Disadvantages:

  • can be expensive
  • can be time consuming
  • results may be inaccurate
• Advantages and Disadvantages of secondary research

  Advantages:

  • easy to find
  • cheap and free to obtain
  • good overview of whole market

  Disadvantages:

  • may be inaccurate
  • can be out-of-date
  • likely to be unrelated to business needs
• market segmentation


  splitting up all consumers into different groups that have similar needs or characteristics
• target market


  the specific market segment a business aims to sell to
• demographics


  customers based on statistical data relating to the population
• market map


  a diagram that positions all products within a market

  using two features e.g. price and quality
• ways a market can be segmented

  -location

  -demographics

  -lifestyle

  -income

  -age
• monopoly


  a market where there is only one business
• oligopoly market


  a market where there are a few firms that dominate the market
• competitive market


  where there are lots of small firms offering very similar products
• Ways to compete:

  -price

  -quality

  -location

  -product range

  -customer service
• Disadvantages of qualitative data:

  -responses based on a person's opinions meaning they can be varied making it difficult to make a judgement

  -non-numeric making it difficult to find a majoritative opinion

  -takes a lot more time
• Disadvantages of quantitative data

  -can lead to misleading results

  -open to misinterpretation

  -require a certain skill set in order to pull results effectively and accurately
• Advantages of using social media as secondary research:

  -cheaper or maybe even free

  -time saving

  -allows businesses to spot latest tastes and trends and monitor behaviour of competition through social media accounts
• Advantages of having reliable market research:

  -business can make properly informed decisions

  -reduces risk of failure

  -less money wasted

  -offers a higher chance of business success
• How to identify market segments:

  -location - used to split up a target market based on where people live

  -demographics - considers people's characteristics

  -lifestyle - considers what sorts of lives the people in a business's target market lead

  -income - considers how much people earn and how much disposable income they have

  -age - different ages = differents wants
• Advantages of primary research:


  -provides up-to-date

  -accurate

  -specific to business needs

  -effective at collecting qualitative data
• Disadvantages of primary research:

  -expensive

  -time-consuming

  -sometimes difficult to collect
• Examples of primary research

  -focus groups

  -survey

  -questionnaires

  -observation