1.2.

1 Customer needs

BQ -
Why is it important to identify what the customer needs are ?

Success criteria:
§ is for you to be able to understand & identify what customer
needs are
§ is for you to be able to understand the importance of
identifying customer needs
From Edexcel
Identifying and understanding customer
needs:
• What customer needs are:
• price
• quality
• choice
• convenience
•The importance of identifying and
understanding customers:
• generating sales
• business survival
Types of business risks:

Reasons or motives for setting up a business:

Impact on business decision making of being in

a competitive market:
Discuss

• Which of these products do you think you need?

Definition: Customers’ needs
• In business terms a need is a problem which
customers could solve with the purchase or a
product or service

• A good business will aim to satisfy

customers’ needs
What are the main customer needs ?

Price – customers need a product or service that is the right price

Customers will have expectations about the price that they will pay
for the goods

Quality – customers need products that are of a satisfactory quality

For example the more you pay for a watch the more you expect it to
last, keep time, look smart and for the strap

What do successful businesses do ?

What are the main customer needs ?

Choice –
Giving customers options and increasing the chance that the
product will be perfect for the tastes/habits of one type of
customer
 Customer needs - choice

How many types of yoghurt might you find in a supermarket?

What are the main customer needs ?

Convenience - Making life easier for customers, perhaps by

• a great location (next to the bus stop)
• or a product that saves time in preparation or
consumption (eg microwave meals)
• Portability e.g. easy to carry round like a mobile phone
• Usability e.g. online ordering
• Packaging e.g. single serving portions
• Services e.g. dog walking
Customer needs - convenience

Look at the photos on

the right – which of the
above convenience
categories do these fall
into?
Task to complete Specification Topic: Identifying and understanding customer needs

Q1 Fill in the gaps

Identifying and understanding customer ________________ is very important to a business and, if
done successfully, will mean a business is able to provide ____________________ or services that
customers will want to ________________. This, in turn, will help generate ___________________ and
reduce the _______________ of launching an unsuccessful product, which will therefore increase the
chances of business ____________________.

Customer needs include __________________, quality, _____________________ and convenience.

Choose from: chance; choice; goods; price; needs; buy; survival; sales

Q2 Match it - number 1! Match the customer need to the relevant definition

2.1 Price a. when the customer has a range of options from which to choose

2.2 Quality b. the amount a business charges a customer for its goods/services

c. when a customer’s life is made easier by choosing specific

2.3 Choice
goods/services

d. when customer expectations are met or exceeded when purchasing

2.4 Convenience
and using a good/service

Q3 Match it - number 2! Match the customer need to the relevant example

3.1 A supermarket sells award winning own label products a. Price

3.2 A supermarket has a wide range of breakfast cereals on offer b. Quality

3.3 A supermarket opens smaller local stores c. Choice

3.4 A supermarket charges 30 pence for its own brand baked beans d. Convenience
Pick a supermarket and answer the questions below, with a
focus on your chosen supermarket.

1. How do supermarkets meet the needs of their customers ?

2. What are these customer needs ?

3. Are the needs of the shoppers changing – WHY ?

4. Do all shoppers have the same needs ?

5. What are you looking for when you enter a supermarket / what are your

shopping needs ?
Watch the Dragons Den clip (Flavourly) and find the answers to the questions
below on the sheet given

1. What goods/services does Flavourly offer?

2. Flavourly operates in the food and drink market. What is the value of this
market?
3. How did Flavourly research customer likes and dislikes?
4. How many paying subscribers do Flavourly have and what is the value of their
sales currently?
5. How did Flavourly raise the 150K of seed capital?
Why is it important to understand customer needs?

• A business needs to Generate sales / demand to survive

• Understanding customer needs is strongly linked with business success

• Ensures business survival

• Ensures repeat purchasing (loyalty) from customers over time

 Explain one reason why a business needs to
understand its customer needs (3)

Point – one reason is …….

Because …..

Lead to……

Therefore / as a result ….

provide
sales Repeat Customer
Sales goods
Sales Sales
purchases loyalty
/services
 Identify 5 ways Snapchat meets the
needs of its customers.

• Identify a risk for Snapchat if it didn’t meet

its customers needs?
• Develop your ‘risk’ using two development
strands. (3)

app Intense Customers

Sales Sales Sales popularity
competition leave