CHAPTER 7: Customers and Competition

• A consumer is a person, a group of people or organisation which uses the products or services of a particular business enterprise
• A customer is also someone who makes use of or receives products or services, however they use a specific business, returning there frequently and making a habit of using that business
• Competitor Profiling

  Is an assessment of the strengths and weaknesses of current and potential competitors

  • Knowledge of rivals offers a legitimate source of competitive advantage, this advantage will offer superior customer value → by doing this, businesses cad adjust their price range, products and marketing strategies by analysing competitors perceived quality, price range, products and promotions
• Customer relationships

  Determines wants and needs of their customers and with this knowledge, they will adjust their products to meet their expectations

  • Elements could include location, demographic, lifestyle, behaviour and buying motives.
  • A greater understanding of buying motive will be better for customer profiling; Rationale (customer's quantifiable reason to buy products - reliability, durability and ease of use), Emotional (influenced, product is bought because of financial gain and satisfaction)
• Customer loyalty

  Refers to the degree of commitment a customer has towards a brand, it is how likely they continue purchasing from the same business, recommend to others, and resist switching to competitors

  • Loyalty programs: rewards for repeat customers/purchases
  • Exclusive offers and rewards: discounts and early access to loyal customers
  • VIP treatment: e.g. airline offering priority boarding, upgrades for frequent flyers
• Early adopter incentive

  A person who purchases products/services as soon as it becomes available, they are likely to pay more than later adopters. They do this if the product improves, efficiency, reduces cost, or simply raises their social status

  • Early access to limited edition handbags
  • Early adopters are interested in experimenting with the latest items, they want to be the first to try and brag about their experience
• Internet

  It provides a vast platform to facilitate promotional activities. Businesses are able to reach a wide audience globally, target specific demographics and engage in various online advertising. This saves costs as a businesses don’t have to spend much advertising in billboards.
• Mobile Device

  It is accessible to a lot of consumers, businesses can send personalised messages to promote offers and sales. There is a widespread use of mobile devices so businesses are able to leverage mobile apps to promote goods and services directly to consumers on their handheld device, which makes it easier to connect.