Bus100 Identify at Least Three Challenges When Setting Up a Business. Explain Why They Are Challenges... free essay sample

Running head: CREATING A BUSINESS Creating a Business Identify at Least Three Challenges When Setting up a Business. Explain why they are Challenges. There are a number of challenges involved with starting your own business. The first of which is coming up with a great business idea. This can become a challenge when the potential business owner builds their business plan around what they want to sell, instead of what customers want to buy. The potential business owner must research the target market thoroughly and develop his/her business plan centered on what consumers in the area need. After figuring out what the focus of the business is, many would-be business owners run into the next challenge; writing the business plan. The business plan is an important document that serves as an outline of every detail of the business. One of its main uses is to present to possible investors in order to secure initial funding for the company’s launch. Many people simply don’t want to put the time and effort in writing the business plan; they just want to get it off the ground. This could make it difficult to secure funding, but it could also be detrimental in accurately gauging the overall success of the company. The third challenge facing those who want to start a business is finding out how the business will reach their target audience. The challenge here is multi-faceted; finding the best way to reach customers, and providing a compelling message to them once they’re found. There are many ways to reach consumers, but business owners should spend the time getting to know where those consumers are looking to buy. Maybe it’s on the internet, or maybe it’s in the local newspaper; either way, it’s up to the business owner to find the customers. Define What a â€Å"Niche† Product is. Give at Least Three Examples of Niche Products The Dictionary. com definition of a niche product is one â€Å"that is marketed for use in a small and specialized but profitable market† (n. d. ). The Nintendo 3DS is an example of one such product. The 3DS is currently the only portable gaming device that features a 3D screen that does not require special glasses. This particular product targets gamers who wish to immerse themselves in a 3D gaming environment on-the-go, without clunky glasses. Another example of a niche product is the Segway Personal Transporter. The Segway Personal Transporter is a self-balancing, personal transportation vehicle that is marketed at consumers interested in a more efficient way of commuting. It is powered by two lithium ion batteries which results in increased efficiency and zero emissions. A third example of a niche product is called The Bed Moat. This product fits under the legs of your bed and traps bed bugs before they can climb up the bed for a blood meal. This product is targeted at hotel and apartment owners. Identify and Explain Three Reasons why Customers Would Pay More for Exclusivity. Consumers are willing to pay more for exclusivity for a number of reasons. The first of which being reputation. Many factors contribute to a brand getting a high reputation, but the biggest is the quality of the product. Certain brands are so popular in a specific category that all brands in that category are commonly referred to as the popular brand. Examples of this phenomenon are Kleenex and Xerox. Consumers might also pay more for luxury brand cars, for example, because it helps them to elevate their social status. Many customers are concerned about how others perceive them, so the purchase of the luxury brand car will definitely help these customers feel confident in their vehicle. Finally, customers really remember the places that they get outstanding customer service. Many customers will spend a few extra dollars shopping where they know they are going to get what they feel is the best customer service. In the case of retailers, companies like Kohl’s and Nordstrom have very lenient return policies, which take away many of the hassles of shopping and returns. This helps customers feel more comfortable shopping in their stores. Explain How a Niche Player Chips Away at a Larger Competitor’s Base. Give Three Examples of Retailers Who Have Done This. A niche player, compared to larger competitors, can usually offer a wider selection of products than the larger stores who carry a little bit of everything. GameStop is one such company who sells video games. Compared to bigger stores like Wal-Mart or Target, GameStop offers a much larger selection of titles. On top of that, GameStop has an exchange program in place where customers can trade in their old games for credit towards in-store purchases. GameStop has developed a niche on offering a wider selection of a specific type of product. Another niche player is Zappos. com. This company is an online-only store where customers can purchase apparel, jewelry, housewares, and more. Shopping here might be more ideal than larger competitors because you can shop from the comfort of your own home. Additionally, Zappos. com offers a 365-day return policy on all purchases, plus free shipping for purchases and returns. Zappos. com has developed a niche on superior customer service. A final example of a niche player is Hot Topic. Hot Topic is a company that operates small-box format retail stores that offer music and pop culture-related apparel and accessories. While larger retailers are beginning to offer this type of product, they do not offer the selection that Hot Topic does. Also, there are items found in Hot Topic that customers simply cannot purchase at larger stores. Hot Topic has built their niche on widening the product selection as well as being an exclusive place to find certain products. References Niche Product. (n. d. ). Dictionary. coms 21st Century Lexicon. Retrieved July 22, 2011, from Dictionary. com website: http://dictionary. reference. com/browse/Niche Product