Customer Needs
Business: Cambridge International GCSE (2027 Exams), topic 1.1.2
Customer Needs
Businesses can serve either customers’ needs or wants. Some businesses are called distributors - they buy products from manufacturers and sell them onto businesses or customers.
Customers' 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.
Customers’ wants
- Some businesses exist to serve customers’ wants. They don’t need these products and services but want them.
- E.g. television, jewellery or parties.
Factors of production
- Land: natural resources used in production.
- Labour: the human effort used to produce goods and services.
- Capital: tools, machines, and buildings used to make products.
- Enterprise: the initiative to bring land, labour, and capital together to start and run a business.
Opportunity cost
- Opportunity cost is the next best alternative given up when making a choice.
- Example: If a business invests in new machinery, it may have to delay hiring more staff
Test yourself on Customer Needs
Does Airbnb serve customers' wants or needs?
What are customers' needs?