Theme 2 - Topic 1.2

• Customer needs

  Needs that a successful business must identify and understand to produce in-demand goods and services
• 4 main customer needs to identify

  • Price
  • Convenience
  • Choice
  • Quality
• Price

  Customers want to pay a reasonable price for a product, which depends on quality, timing and delivery
• Convenience

  Customers are more likely to buy a product that saves them time and can be used due to having modern busy lifestyles
• Choice

  Customers would prefer a variety of products and a good range, as this leads to high competition
• Quality

  Customers want a product that meets their expectations, and quality and price charged can be linked
• Importance of identifying customer needs

  • To generate sales: A business that can identify customer needs can create a good product/service that meets that need, leading to higher demand and sales revenue
  • For business survival: Identifying customer needs can help a business have a better chance of survival
• Market research

  1. To identify and understand customer needs

  2. To reduce risk and costly mistakes

  3. To identify gaps in the market

  4. To inform business decisions
• Market segmentation

  The process of splitting a target market into different groups to make it easier to develop products