customer focus and the marketing mix
Learning Objectives:
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Specification:
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A business can only survive if it has customers. A business must have enough customers willing to pay a high enough price for it to cover its costs and make a profit. Focussing on what the customer wants is vital to most businesses. Also, successful businesses are often ones that are able to anticipate changes in customer needs. For a small or start-up business, customer focus is essential if it wants to make the business a success. Entrepreneurs may think they have a good business idea for a product but there have to be customers willing to pay money if the idea is to become a business.
IDENTIFYING NEEDS - businesses must understand what their customers want from a product or service.
ANTICIPATING NEEDS - a successful business must understand what its customers want in advance.
MEETING CUSTOMER NEEDS - a business will identify and anticipate what its customers want, but then must meet these needs with its product or service.
IDENTIFYING NEEDS - businesses must understand what their customers want from a product or service.
ANTICIPATING NEEDS - a successful business must understand what its customers want in advance.
MEETING CUSTOMER NEEDS - a business will identify and anticipate what its customers want, but then must meet these needs with its product or service.
the marketing mix
Any business must consider the marketing mix:
Key term - MARKETING MIX - The combination of factors which help the business to take into account customer needs when selling a product – usually summarised as the 4P’s, which are price, product, promotion and place.
Key term - MARKETING MIX - The combination of factors which help the business to take into account customer needs when selling a product – usually summarised as the 4P’s, which are price, product, promotion and place.
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Key term: PRICE - The amount of money customers have to give up to acquire a product.
Price is important because it must match the quality of the product, or the quality the customers perceive the product to be. If you charge too high a price, nobody will buy the product, but if you charge too low a price, you won't make a profit.
Key term: PRODUCT - A good or service produced by a business or organisation and made available to customers for consumption.
The product is important because it must meet the needs of the customer. A business must identify the segment of the market it wishes to appeal to and ensure that people within this segment will want it. It must be attractive and well made for the price charged. If there are similar products, what can be done to make this one stand out?
Key term: PROMOTION - Communication between the business and customer, making the customer aware that the product is for sale, telling or explaining them what is the product, making the customers aware of how the product will meet customers’ needs and persuading them to buy it for the first time or again.
Promotion is important as the customer needs to know that a product or service is available for purchase. It is about giving them information about the product, but also persuading them that they should buy it. This could be through brochures, sales promotions, sponsorship, local radio or newspapers or direct selling. Remember that this unit is about small businesses who won't have as much money as larger businesses.
Key term: PLACE - The way in which a product is distributed – how it gets from the producer to the customer.
Place is important because a product or service must be available to the customer where they want it and when they want it. Does a small business want to sell through a website, set up a small shop or use a market stall? Or do they want to sell through other businesses such as other retailers?
The marketing mix is different for each business and for each industry. So the marketing mix for cars is different from that for cornflakes or that for jewellery. Larger businesses can afford more expensive forms of promotion or better located premises so smaller businesses have to use more effective methods for their size.