Customers, marketing and competition

• Marketing


  Helps a business identify and satisfy the needs and wants of its customers
• Identifying customer needs


  1. Finding out about the variety and quality of goods and services that customers want

  2. Prices they are willing to pay

  3. Promotional techniques that may persuade them to make repeated purchases

  4. Convenience factors, including where and how they want to purchase products

  5. After-sales services they anticipate
• Satisfying customer needs


  1. Ensuring products are available when and where customers want to buy them

  2. At a suitable price

  3. At the quality expected

  4. With effective customer service
• Need


  The amount of money a customer is willing to pay for a product or service
• Quality


  The standard of excellence that a customer expects from a product or service
• Choice


  Customers want a variety of products or services to choose from
• Convenience


  Customers want products that are easy to access and use
• Customer loyalty is when existing customers buy products from the same business over and over again
• Customer loyalty leads to repeat purchases and a rise in market share
• It is much cheaper for a business to try to keep existing customers than trying to gain new customers
• Building customer relationships


  1. Developing close ties with customers and finding out if products/services are continuing to meet their needs

  2. Using technology to gather important information about customers
• If businesses fail to respond to changing customer needs, then they are likely to fail
• Competition occurs when at least two businesses are providing goods/services to the same target market
• Competition results in many benefits for the customer, such as lower prices, better-quality products, and better customer service
• The absence of competition reduces incentives for businesses to innovate, be efficient or offer consumers lower prices
• Steps a Business can take to Remain Competitive

  1. New product development

  2. Customer focus

  3. Improve products

  4. Minimise costs
• Competitive businesses can never stand still. They need to be constantly investigating and responding to changes in the market or risk losing their competitive advantage
• Mass market


  Products are aimed at broad market segments
• Niche market


  Products are aimed at a small subset of the larger market
• Ways to Segment a Market

  • Location
  • Demographics
  • Age or gender
  • Behaviour & lifestyle
• Advantages of Market Segmentation

  • Recognises that consumers are not all identical
  • Products and marketing activities can be altered to meet different needs
  • Less expensive and wasteful than marketing products at wide market segments
  • It may increase loyalty if the consumer feels that their needs are being met
• Disadvantages of Market Segmentation

  • Not everyone within a segment will behave in the same way
  • It may be difficult to identify a segment and consumers can belong to multiple segments at the same time
  • Segmentation requires more detailed market research, which can prove costly
  • A segment may be identified but it may be too small and unprofitable to cater for
• Factors Affecting Choice of Market Segmentation

  • Brand image
  • Cost of entry into the market segment
  • Market analysis data