WEBVTT 00:00:00.500 --> 00:00:03.955 Welcome to GCSE Edexcel Business revision. 00:00:04.105 --> 00:00:07.533 Unit B U S 2: Spotting a business opportunity. 00:00:10.200 --> 00:00:13.740 Customer needs are the benefits customers look for when buying. 00:00:13.890 --> 00:00:20.287 Important needs include price, quality, choice and convenience ; customers may prioritise them differently. 00:00:22.967 --> 00:00:26.067 Price affects affordability and perceived value. 00:00:26.217 --> 00:00:32.489 A lower price may attract budget-conscious customers, but a price that does not cover costs threatens survival. 00:00:35.167 --> 00:00:37.651 Quality means meeting expectations. 00:00:37.801 --> 00:00:46.291 For a café, reliable food and friendly service may matter more than expensive decoration; expectations vary between market segments. 00:00:48.967 --> 00:00:53.003 Choice allows customers to select an offer that fits their preferences. 00:00:53.153 --> 00:00:57.856 More choice can increase sales but also increase stock, training and waste costs. 00:01:00.533 --> 00:01:06.417 Convenience includes location, opening hours, delivery, ease of payment and ease of ordering. 00:01:06.567 --> 00:01:10.626 Making a service easier to use can distinguish it from competitors. 00:01:13.300 --> 00:01:20.786 Understanding needs helps the business design its product and marketing mix, generate sales and encourage repeat purchases. 00:01:20.936 --> 00:01:24.953 Sales support survival only if costs and cash are also managed. 00:01:27.633 --> 00:01:29.809 Customers' needs can conflict. 00:01:29.959 --> 00:01:38.107 A very broad product range may reduce convenience if ordering becomes slow; a premium product may not fit a low-income target market. 00:01:40.767 --> 00:01:48.615 Use evidence to decide which need matters most to the specific customer group, rather than assuming every customer wants the cheapest option. 00:01:51.267 --> 00:01:55.993 Market research gathers and analyses information about customers and markets. 00:01:56.143 --> 00:02:03.299 It can identify needs and gaps, reduce uncertainty and inform decisions about price, product, promotion and place. 00:02:05.967 --> 00:02:10.144 Primary research collects new information for the business's own purpose. 00:02:10.294 --> 00:02:15.914 A survey or questionnaire can ask potential customers about preferences and likely spending. 00:02:18.567 --> 00:02:23.494 A focus group discusses ideas in depth, giving qualitative explanations. 00:02:23.644 --> 00:02:29.027 It is small, may be costly and can be influenced by a dominant participant or the moderator. 00:02:31.700 --> 00:02:36.829 Observation records actual behaviour, such as which display customers approach. 00:02:36.979 --> 00:02:43.730 It avoids relying entirely on stated intentions but does not necessarily explain why people behave that way. 00:02:46.400 --> 00:02:52.955 Secondary research uses existing information: internet sources, market reports and government reports. 00:02:53.105 --> 00:02:57.851 It can be quicker and cheaper, but may be outdated or too broad for a local decision. 00:03:00.533 --> 00:03:04.950 Quantitative data are numerical, such as the number selecting a price. 00:03:05.100 --> 00:03:09.461 Qualitative data describe reasons, opinions or experiences. 00:03:09.611 --> 00:03:13.107 Use both to understand the pattern and its possible causes. 00:03:15.767 --> 00:03:23.297 Social media polls, comments and interactions provide quick feedback, but followers may not represent the intended market. 00:03:23.447 --> 00:03:29.055 Public comments and online surveys can attract unusually positive or negative responses. 00:03:31.733 --> 00:03:38.579 Reliable research uses a suitable sample, clear neutral questions, current information and a consistent method. 00:03:38.729 --> 00:03:43.423 A large sample can still be biased if everyone is drawn from the same narrow group. 00:03:46.100 --> 00:03:55.516 Avoid leading questions such as “Would you buy our excellent coffee?” State realistic prices and avoid assuming an intention to buy guarantees a purchase. 00:03:58.167 --> 00:04:03.447 Worked example: 36 of 120 respondents prefer a delivery option. 00:04:03.597 --> 00:04:11.872 Percentage equals the quantity 36 divided by the quantity 120 multiplied by 100 equals 30 percent . 00:04:12.022 --> 00:04:17.292 This describes the sample; it does not prove 30 percent of all local residents will buy. 00:04:19.967 --> 00:04:25.363 Market segmentation divides a market into groups with similar characteristics or needs. 00:04:25.513 --> 00:04:29.732 A business can target a group rather than trying to satisfy everyone equally. 00:04:32.400 --> 00:04:37.202 Segments can be based on location, demographics, age, income or lifestyle. 00:04:37.352 --> 00:04:43.292 These characteristics can overlap: local students with limited income may form one target segment. 00:04:45.967 --> 00:04:48.719 Targeting helps focus research and spending. 00:04:48.869 --> 00:04:55.928 A cycling service aimed at commuters may prioritise quick repairs and early opening rather than leisure accessories. 00:04:58.600 --> 00:05:02.597 Segmentation does not mean everyone in a group behaves identically. 00:05:02.747 --> 00:05:07.377 Check actual needs and avoid assumptions based only on age or income. 00:05:10.033 --> 00:05:16.464 A market map plots competitors against two relevant characteristics, such as price and perceived quality. 00:05:16.614 --> 00:05:19.706 It helps visualise positioning and possible gaps. 00:05:19.856 --> 00:05:21.883 An illustrative market map 00:05:26.533 --> 00:05:32.944 A gap is an area with few competitors, but it may exist because demand is too low or costs are too high. 00:05:33.094 --> 00:05:36.930 Further research is needed before treating a gap as an opportunity. 00:05:39.600 --> 00:05:43.463 Maps depend on the chosen axes and the accuracy of the data. 00:05:43.613 --> 00:05:49.617 A price/quality map may miss convenience, customer service or a competitor's online offer. 00:05:52.300 --> 00:06:02.067 Choosing a segment influences the whole marketing mix: a premium service needs suitable quality, price, promotion and distribution, not merely a premium label. 00:06:04.733 --> 00:06:08.313 Competitors offer alternatives that customers can choose. 00:06:08.463 --> 00:06:14.969 Direct competitors sell similar products; other alternatives can also compete for customers' time and money. 00:06:17.633 --> 00:06:24.320 Compare competitors' strengths and weaknesses in price, quality, location, product range and customer service. 00:06:24.470 --> 00:06:28.347 A strength in one area can coexist with a weakness in another. 00:06:31.000 --> 00:06:34.291 A low-price competitor may put pressure on prices. 00:06:34.441 --> 00:06:40.957 Matching it can increase sales but reduce profit per sale, especially for a small business with higher unit costs. 00:06:43.633 --> 00:06:51.408 Differentiation gives customers a reason to choose the business, such as specialist knowledge, reliable service or convenient delivery. 00:06:51.558 --> 00:06:55.108 It may allow the business to avoid competing only on price. 00:06:57.767 --> 00:07:01.039 Competition can encourage better quality and innovation. 00:07:01.189 --> 00:07:06.309 It can also increase promotional costs and reduce an individual business's market share. 00:07:08.967 --> 00:07:17.615 Monitor changes in competitors' opening hours, offers and reviews, then assess which response fits the business's resources and target market. 00:07:20.267 --> 00:07:24.909 Fictional case: a stationery shop faces a cheaper online competitor. 00:07:25.059 --> 00:07:31.585 Same-day collection might attract customers who need items immediately, although holding enough stock ties up cash. 00:07:34.267 --> 00:07:36.613 Analyse both demand and cost. 00:07:36.763 --> 00:07:45.498 A recommendation to offer collection is stronger when it explains which customers benefit, how sales may change and why the business can afford the stock. 00:07:48.167 --> 00:07:50.801 That completes Spotting a business opportunity. 00:07:50.951 --> 00:07:54.296 Revisit the notes and test yourself on the revision website.