1.2.1

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 person becomes a customer once a product or service has been sold to them. The customer becomes a consumer after they use a product. 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

Investigating Small Business

1.1

Enterprise & Entrepreneurship

1.1.1The Dynamic Nature of Businesses1.1.2Risk & Reward1.1.3The Role of Business Enterprise1.1.4The Role of Business Enterprise 21.1.5The Role of the Entrepreneur1.1.6End of Topic Test - Dynamic Nature of Business1.1.7Grade 9 - Dynamic Nature of Business
1.2

Spotting a Business Opportunity

1.2.1Customer Needs1.2.2Market Research1.2.3Market Segmentation1.2.4The Competitive Environment1.2.5Primary & Secondary Market Research1.2.6End of Topic Test - Business Opportunities1.2.7Application Questions - Business Opportunities1.2.8Exam-Style Questions - Market Segmentation1.2.9Diagnostic Misconceptions - Competition
1.3

Putting a Business Idea into Practice

1.3.1Business Aims1.3.2Business Objectives1.3.3Business Revenues & Costs1.3.4Costs - Calculations1.3.5Revenue - Calculations1.3.6Business Profits & Break-Even Analysis1.3.7Profits & Losses - Calculations1.3.8Interest - Calculations1.3.9Cash & Cash Flow1.3.10Cash & Cash Flow 21.3.11Cash Flow - Calculations1.3.12Sources of Business Finance1.3.13End of Topic Test - Business in Practice1.3.14Grade 9 - Business in Practice1.3.15Exam-Style Questions - Business in Practice1.3.16Diagnostic Misconceptions - Profit1.3.17Diagnostic Misconceptions - Company vs Business1.3.18Diagnostic Misconceptions - Economies of Scale1.3.19Diagnostic Misconceptions - Cash Flow1.3.20Diagnostic Misconceptions - Break-even1.3.21Diagnostic Misconceptions - Fixed Costs
1.4

Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses1.4.2Limited Liability1.4.3Franchising & Not-For-Profits1.4.4Business Location1.4.5The Marketing Mix1.4.6Business Plans1.4.7End of Topic Test - Effective Business1.4.8Application Questions - Effective Business1.4.9Exam-Style Questions - Business Plans
1.5

Business Stakeholders

1.5.1Business Stakeholders1.5.2Technology & Business1.5.3Legislation & Business1.5.4Legislation & Business 21.5.5The Economy & Business1.5.6External Influences1.5.7End of Topic Test - Business Stakeholders1.5.8Grade 9 - Business Stakeholders1.5.9Diagnostic Misconceptions - Recessions
2

Building a Business

2.1

Growing the Business

2.1.1Business Growth2.1.2Finance2.1.3Changes in Business Aims & Globalisation2.1.4Ethics & Business2.1.5The Environment & Business2.1.6End of Topic Test - Growing a Business2.1.7Application Questions - Growing a Business2.1.8Exam-Style Questions - Business Growth
2.2

Making Marketing Decisions

2.2.1Product2.2.2Product Life Cycle2.2.3Price2.2.4Pricing Methods2.2.5End of Topic Test - Product & Price2.2.6Grade 9 - Product & Price2.2.7Promotion & Advertising2.2.8PR & Sales Promotions2.2.9Sponsorship & Product Placement2.2.10Promotional Mix2.2.11End of Topic Test - Promotion2.2.12Application Questions - Promotion2.2.13Exam-Style Questions - Promotional Mix2.2.14Place & Wholesalers2.2.15Direct to Consumer2.2.16E-commerce & M-commerce2.2.17Diagnostic Misconceptions - Decreasing Price2.2.18Diagnostic Misconceptions - Advertise vs Promote2.2.19Diagnostic Misconceptions - Social Media
2.3

Making Operational Decisions

2.3.1Job Production2.3.2Batch & Flow Production2.3.3Working with Suppliers2.3.4Effective Supply Chains2.3.5Just In Time & Just In Case2.3.6Managing Quality2.3.7Total Quality Management2.3.8The Sales Process2.3.9End of Topic Test - Operational Decisions2.3.10Grade 9 - Operational Decisions2.3.11Exam-Style Questions - Managing Stock2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4

Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions2.4.2Gross Profit - Calculations2.4.3Net Profit - Calculations2.4.4Rate of Return2.4.5Rate of Return - Calculations2.4.6Research & Financial Data2.4.7Marketing Data2.4.8Percentage Change - Calculations
2.5

Making Human Resource Decisions

2.5.1Organisational Structures2.5.2Organisational Structures 22.5.3Recruitment2.5.4Effective Recruitment2.5.5Training a Workforce2.5.6Motivating a Workforce2.5.7End of Topic Tests - Human Resources2.5.8Application Questions - Human Resources2.5.9Exam-Style Questions - Human Resources2.5.10Diagnostic Misconceptions - Owners vs Shareholders2.5.11Diagnostic Misconceptions - Internal Recruitment2.5.12Diagnostic Misconceptions - Employee Motivation

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 makes the best coats/jackets possible by carefully choosing materials. On which aspect is Moncler focusing?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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Grade 9 - Dynamic Nature of Business

Market Research