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Edexcel GCSE Business

Topic 1.2 Spotting a business

opportunity

1.2.1 Customer needs

1.2.2 Market research

1.2.3 Market segmentation

1.2.4 The competitive environment

Name:

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1.2.1. Customer needs

What customer needs are:

The importance of identifying and understanding customers – explain each of the

following:

Generating sales

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Business survival

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Explain the benefit for a business if they meet their customer’s needs (3m)

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1.2.2. Market research

The purpose of market research

To i____________ customer n__________________

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To identify ________________ in the market

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To _______________risk

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To make __________________ business decisions

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Methods of market research

What is primary market research?

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Which are the primary research methods

1_____________________________________________________________________________

2_____________________________________________________________________________

3_____________________________________________________________________________

4_____________________________________________________________________________

What is secondary research?

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Which are the secondary research methods

1_____________________________________________________________________________

2_____________________________________________________________________________

3_____________________________________________________________________________

Define quantitative (Quantity data)

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Define qualitative (quality information)

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What is the role of social media in collecting market research data

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What is the importance of the reliability of market research data?

“We loved it.”

“It really worked for my

family.”

“We liked the natty design

and showed it to our

neighbour.”

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1.2.3. Market segmentation

What is segmentation?

Identifying market segments

Location

A business may decide to sell its ________________ in just one country, one region (like

Scotland), or in an even ____________ area

A business may target its product at _____________ rather than urban areas

A business may target its products depending if the market area is hot (____________)

or cold (_______________)

Demographics

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statistical data relating to the ____________ and particular groups within it

For example market segmentation helps book _________________ target customers as

we won’t all read the same books (not everyone wants to read Harry Potter)

Lifestyle

Customers can be ___________ according to the way they lead their lives and the

attitudes they share

For example, young professionals may drive a _______________ car because of the

image they want to project

Parents might want the same things, but have to provide for their children, which is a

large extra cost. They will need a ___________________ car to suit their _________________

Lifestyle 2

A business may decide to _____________ the market according to lifestyle

This may be a combination of; values ____________, perceptions, beliefs

This may also include ___________________ and interests

This may also include family _____________ (living on own or living with five kids)

Income

The population can be segmented according to annual _____________ (e.g. £15,000,

£30,000 etc.) or type of job and social class

The population can also be _____________ into; low income, middle income and high

income

Establishing a group's __________________________ ______________________ is important so

that products can be targeted to the relevant income group

Age Identify products the age groups below would be interested in

Age group Name of product

0-10 e.g. Dummy, nappies, cot, soft toys

10-16

16-19

20-25

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25-35

35-50

50+

Market mapping

1) Identify key features of competitors

Can spot a _______________ in the market

Can focus on ________________ to make their products different to competitors

2) Can make business decisions about products

Can make sure products are ________________________ to get more sales

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Complete this market map for a market of your choice.

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1.2 Spotting a business opportunity Key Words

Key word Definition

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 and/or its easy to reach location

Viable Able to work properly or successfully

Market research The process of gathering information about the market and customers’ needs and wants in order to help inform business decision, including product design and marketing

Focus group A group of people who discuss their views on a product, service advertisement or idea, either face-to-face or online

Target market A particular group of consumers at which a business aims its products and services

Sample A portion of the population asked for their opinions in order to draw conclusions about the behaviour of the whole population

Generation Y (also known as Millennials)

The people born shortly before the 21st century, usually defined as born between 1980 and 2000

Data Information, particularly statistics, that can be collected and analysed

Biased Unbalanced or inclined to agree with a particular judgement or ideas rather than presenting the evidence fairly

Ethics Moral principles or standards that guide the behaviour of a person or business

Source A place, person or thing, such as a book or report, that can provide information to be used in research

Chamber of commerce A local association that promotes the interest of businesses in a county or region

Trade association Organisation founded and funded by businesses that operate in a specific industry

Analysis The process of looking at data to identify patterns or trends

Incentive Something such as a payment or gift that encourages someone to do something

Valid Having a solid or accurate basis of facts

Segmentation The process of breaking something into smaller parts

Demographics Relating to the structure of a population

Axes The reference lines on a graph

SWOT analysis A study undertaken by a business to identify the strengths and weaknesses, opportunities and threats