Edexcel GCSE (9-1) Business (1BS0) · Spec 1.2.1, 1.2.2, 1.2.3 and 1.2.4
Spotting a business opportunity
Read the notes, then try the questions. Each one is marked the moment you press Check, and shows the right answer and why.
Key ideas
- Customers have needs such as price, quality, choice and convenience. A business that meets them can make sales and survive.
- Primary research is new information you collect yourself (surveys, interviews, focus groups). Secondary research uses information that already exists (government reports, market reports).
- Market segmentation splits customers into groups with shared features. A niche market is a small, specialised part of a bigger market.
- Businesses compete on price, and also on quality, service and choice. A market map shows where products sit, for example on price and quality.
- Data can be qualitative (opinions) or quantitative (numbers). Check it is reliable: a small or biased sample can mislead.
Key terms
- Primary research
- Information a business collects first-hand for its own purpose.
- Secondary research
- Information that already exists, collected by someone else.
- Market segmentation
- Dividing a market into groups of customers who share characteristics.
- Niche market
- A small, specialised segment of a larger market.
- Market map
- A diagram showing how competing products are positioned against two features, such as price and quality.
Common mistakes
- Mixing up primary and secondary. If the business collected it itself, it is primary.
- Writing that research 'guarantees' sales. It reduces risk but guarantees nothing.
- Thinking price is the only way to compete. Quality and service count too.
Exam tip
For a 3-mark 'Explain one' question, make a point, develop it, and link it to the business in the question. A general answer that could be about any firm loses the application mark.
Free practice questions
7 questions, 16 marks. Answer, then press Check. The marking guide explains how the marks are worked out. Nothing is saved.
- Question 1 · Multiple choice[1 mark]
A customer shops at a store because it is open late and close to her home. Which customer need is being met?
- Question 2 · Matching[4 marks]
Match each example to the customer need it meets.
- Question 3 · True or false[4 marks]
State whether each statement about customer needs is True or False.
1. Price is a customer need.
2. Customers only care about price.
3. Quality is a customer need.
4. Choice means the range of products customers can pick from.
- Question 4 · Multiple choice[1 mark]
Which of the following is an example of primary market research?
- Question 5 · Matching[4 marks]
Match each research method to whether it is primary or secondary research.
- Question 6 · Multiple choice[1 mark]
Which of the following best describes a niche market?
- Question 7 · Multiple choice[1 mark]
Which of the following is a non-price method a business could use to compete against rivals?