2.1.2

Customer Needs

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Customer Needs

Customers' needs are the things that people can't live without. For example, Severn Trent provides water to people's homes in the United Kingdom. Addressing customers' needs involves four things:

Price

Price

  • A customer may only want to pay a certain amount for a product.
Quality

Quality

  • A customer will look for a certain standard or feature when buying a product.
Choice

Choice

  • A customer may want choice of certain aspects of the product.
  • For example, Nike lets customers buy shoes in different colours and even lets them customise them.
Convenience

Convenience

  • A customer may look for convenience when buying a product.

The Importance of Identifying and Satisfying Customer Needs

A consumer becomes a customer once a product or service has been sold to them. A business should identify the needs of potential customers and it should adapt to the changing needs of existing customers.

Consumers will buy it

Consumers will buy it

  • If a firm is identifying and meeting customers' needs then it is more likely that they will buy a product or service.
Market-driven

Market-driven

  • Being market-driven rather than product-driven means being driven by customers’ needs and then fulfilling them. This can:
    • Increase sales.
    • Improve current products and customer satisfaction.

The Market-Driven Approach

It is important for businesses to identify and satisfy customer needs. Being market-driven means focusing on customers' needs, rather than building a product and then searching for people to buy it. This can let a firm:

Find the correct marketing mix

Find the correct marketing mix

  • Identifying customers’ needs lets a business know how their product can be designed to serve customers best.
  • It also lets a company learn where customers shop, where to promote the product or service, which product/service to promote and what price customers are willing to buy a product/service.
Avoid costly mistakes

Avoid costly mistakes

  • Developing a new product or making adjustments to existing ones can need a lot of investment.
  • Being market-driven and developing products that customers need or want can avoid costly errors.
Be competitive

Be competitive

  • If a business satisfies a customer’s needs better than competitors do, then it is likely that a consumer will buy their product.
  • So identifying and satisfying customers’ needs is even more important when competing with businesses selling similar products.
  • Adapting to new customer needs is important for staying competitive as the business environment changes.
Jump to other topics
1

Exploring Business

1.1

Features of Business Organisations

1.1.1Sole Traders & Partnerships1.1.2Private & Public Limited Companies1.1.3Types of Liability & Not-For-Profits1.1.4Purposes of Businesses1.1.5Purposes of Businesses 21.1.6The Different Economic Sectors1.1.7Multinational Companies1.1.8Stakeholders1.1.9Influence of Stakeholders
1.2

Organisation of Businesses

1.2.1Organisational Structure1.2.2Types of Organisational Structures1.2.3Business Aims & Objectives1.2.4Business Aims1.2.5Business Objectives
1.3

Business Environment

1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2

Marketing Campaigns

2.1

Marketing

2.1.1Setting Marketing Objectives2.1.2Customer Needs2.1.3The Market2.1.4Competition & The Market2.1.5Consumer Behaviour2.1.6Market Research2.1.7Forms of Market Research2.1.8Market Segmentation2.1.9Cultural & Social Factors in Marketing2.1.10Promotional Decisions 32.1.11Pricing Strategies
2.2

Marketing Mix

2.2.1Marketing Mix2.2.2Product Life Cycle2.2.3Pricing Decisions & Price Skimming2.2.4Pricing Decisions & Price Penetration2.2.5Promotional Decisions2.2.6Promotional Decisions 22.2.7Promotional Decisions 32.2.8Market Mapping
3

Business Finance

3.1

Sources of Finance

3.1.1Internal Finance3.1.2External Finance3.1.3External Finance 23.1.4Sources of Business Finance
3.2

Financial Planning

3.2.1Revenue3.2.2Costs3.2.3Cash & Cash Flow3.2.4Cash & Cash Flow 23.2.5Break-Even Analysis3.2.6Profits
3.3

Financial Statements

3.3.1Balance Sheets3.3.2Income Statements3.3.3Liquidity
4

International Business

4.1

Globalisation

4.1.1Growing Economies4.1.2Specialisation & Trade
4.2

International Business

4.2.1Internationalisation4.2.2International Trade4.2.3MNCS4.2.4Conditions that Prompt Trade4.2.5Assessment of a Country
4.3

International Economic Environment

4.3.1Globalisation4.3.2Factors Contributing to Globalisation4.3.3Protectionism4.3.4The EU & the WTO4.3.5Trading Blocs
4.4

Factors Affecting International Business

4.4.1Global Competitiveness4.4.2Ethics of Global Business4.4.3Controlling MNCs4.4.4Cultural & Social Factors in Marketing
5

Principles of Management

5.1

Management & Leadership

5.1.1Managers5.1.2Management Theories5.1.3Managing Organisational Culture5.1.4Management Style
5.2

Theories of Motivation

5.2.1Motivating & Engaging Employees5.2.2Taylor's Theory5.2.3Mayo's Theory5.2.4Maslow's Theory5.2.5Herzberg's Theory
5.3

Managing Change

5.3.1Change5.3.2Key Factors in Change5.3.3Scenario Planning5.3.4Managing Change5.3.5Managing Strategic Implementation
6

Business Decision Making

6.1

Business Principles & Practices

6.1.1Influences in External Environments6.1.2Product Decisions6.1.3Competitive Environment6.1.4Corporate Strategy6.1.5Quantitative Sales Forecasting6.1.6Legislation
6.2

Quality Management

6.2.1Importance of Quality6.2.2Measuring Quality6.2.3Total Quality Management6.2.4Evaluating TQM
6.3

Human Resources

6.3.1Contracts6.3.2Recruitment6.3.3Training a Workforce
6.4

Documents & Business Decisions

6.4.1Sales Forecasts6.4.2Managing Strategic Implementation6.4.3Problems with Strategy

Practice questions on Customer Needs

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    There are 4 main things to focus on when addressing customers' needs. Nike letting people customise their shoes focuses on:Multiple choice
  2. 2
    There are 4 main things to focus on when addressing customers' needs. Ryanair making their flights as cheap as possible focuses on:Multiple choice
  3. 3
    There are 4 main things to focus on when addressing customers' needs. Moncler making the best coats/jackets possible focuses on:Multiple choice
  4. 4
    Which 4 things are important for addressing customers' needs?Fill in the list
  5. 5
    LEGO Ideas is an online community where members can submit their own ideas for new sets. These are voted on by other members and reviewed by LEGO. Each year an idea is comissioned by LEGO to be created and sold worldwide. This is an example of a business being what? Multiple choice
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Setting Marketing Objectives

The Market