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| Question | Answer |
| What is an entrepreneur? | Someone who creates a business, taking financial risks with the aim of making a profit from the business. |
| Give three purposes of business activity. | -provide people with a good or service -meet customer needs as they change -add value to an existing product (more convenient, better quality, better brand image) |
| Explain why a firm might try to make a product more convenient for a customer. | If a product is more convenient, it will save the customer time, so they might be willing to pay more for the product. |
| What does USP stand for? | Unique Selling Point |
| Give three reasons why new businesses come about and give an example of each. | 1. changes in technology - eg internet 2. changes in what customers want - eg environmental concern 3. a product or service has become obsolete - eg videotape players were made obsolete after people switched to DVD's |
| What is a consumer, in business? | A consumer is someone who buys and uses goods and services |
| List three things an entrepreneur must do in order to run a successful business. | 1. organise resources 2. take risks 3. make business decisions |
| Explain three rewards an entrepreneur might get from setting up a business. | 1. their business idea becomes successful and they feel good about themselves 2. their business is profitable, they make more money, and they might get a better quality of life. 3. they have more independence, can make their own decisions about the business, and choose what they do day-to-day |
| Describe three risks an entrepreneur faces when starting a new business. | 1. They need to borrow money- if their business is not successful, they won't be able to pay the money back and may struggle to survive 2. They lose financial security if they give up their regular job 3. The time,money and effort they put in may be lost if the business fails. |
| List five areas where a business may compare itself to its competitors (businesses targeting a similar market with similar products) | 1. price 2. customer service 3. quality 4. product range 5. location |
| Why is it important for a business to understand a customer's needs? | By understanding customers' needs, businesses will be better able to make products that meet these needs. This will increase their sales and help to ensure the business's survival. |
| Name three ways a market can be segmented | 1. Demographics (age, income) 2. Location 3. Lifestyle |
| Give two pieces of information which a business might find out from a market map. | 1. Competitors selling similar products and how customers perceive them 2. Any gaps in the market - customers that have a need that isn't being met. |
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