What do customers need?

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  • Created by: kaadaviss
  • Created on: 14-05-15 12:02

What do customers need?

Internal customers - This is the business's staff. Employees are internal customers in the sense that they need products and services from other staff within the business or from the business's suppliers to carry out their tasks.

External customers - The people or organisations that buy goods and services from a business. Some businesses' external customers are exclusively other businesses, some businesses trade exclusively with the general public and some have a mix of business and individual customers.

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Customer segmentation

Market - Where buyers and sellers come together to trade products and information. It might be a specific location such as a street market, or a means of communication such as the eBay website on the internet.

Market segmentation - The division of potential consumers into groups with similar characteristics.

Population structure - A country which is described by the proportion of the population that falls within different age groups such as 0-5 years, 21-25 years and 45-55 years old.

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Customer needs

Basic product - Provided for a limited number of needs, for example: a packet of crisps meets the need to snack between meals.

Complex product - Provided for a wide range of needs, foe example: a car meets transport, entertainment and status needs.

After-sales services - Provided to meet ongoing needs of consumers, and include features such as guarentees and information on using the product.

Essential products - Seen as being vital to the wellbeing of consumers, such as food and health care.

Non-essential products - Not vital to consumers' wellbeing. Products such as magazines and visits to the cinema are purchased in addition to essential products.

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Customer research methods

Closed question - Limits the responses to a set number of options, such as "yes" and "no". Sometimes a scale can be used, for example: a four-point scale with 4 meaning the person completing the questionnaire strongly agrees with a statement, while 1 means strongly disagree.

Open-ended question - Requires the person being questioned to provide a response in thier own words. For example: the question might ask "what could we do to improve your holiday experience?"

Fast-moving consumer goods - Products such as baked beans and washing powder that have high unit sales levels. They often have low customer involvement and are relatively basic, with the products offered by businesses in the market being very similar.

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Analysing customer research

Extrapolation - The process of using past data to predict future data. For example: by plotting past sales figures against time, you can generate a trend to estimate next year's sales.

Simple trend analysis - A method of extrapolation that assumes a simple linear pattern in the data, that is, a straight line is drawn through the time-series data.

Time-series data - Data plotted against months or years. For example: you could produce a time series by producing the number of customer complaints made each month.

Database - A collection of records, often stored onto a computer. A customer database is a collection of records holding the details of each customer such as the name, address and age.

Data mining - A technique used to analyse large databases in order to uncover previously hidden patterns in the data.

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How businesses differentiate their products

Core product - Describes the basic function of a product. For example: a car transports people, allowing the driver to choose the route.

Actual product - The additional features provided by a product. For example: a car might have anti-lock brakes, a turbocharger and a satellite navigation system.

Augmented product - The support aspects of a product. For example: a new car might come with three years' free service and a five-year warranty on parts and labour.

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The role of research and development

Research and development - A systematic approach to product development that draws on research into materials and production technology to develop new products.

Product range - The different products offered by a business. For example: a typical car manufacturer produces several different models, and a hairdresser offers different services such as colouring and styling.

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Using customer service to meet to customer needs

Added value - The difference between the costs of the materials to make a product or provide a service and the price for which it is sold. In other words, it is the value added by the business.

Unique selling point - A product's characteristics that makes it distinct or different from other similar products.

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