Satisfying Customer Needs
Business: Edexcel IGCSE, topic 4.2.2
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
- If a firm is identifying and meeting customers' needs then it is more likely that they will buy a product or service.
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
- 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
- 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
- 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.
Test yourself on Satisfying Customer Needs
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?
What does someone in the population become when they buy a product or service?
Consumers stopped wanting to buy DVDs and started wanting to stream TV and films online. Who met customer needs best?