The Role of Marketing (Cambridge International IGCSE Business)

Identifying and satisfying customer needs

• Marketing helps a business identify and satisfy the needs and wants of its customers

  • Identifying customer needs involves finding out about the

    • Variety and quality of goods and services that customers want
    • Prices they are willing to pay
    • Promotional techniques that may persuade them to make repeated purchases
    • Convenience factors, including where and how they want to purchase products
    • After-sales services they anticipate

  • Satisfying these customer needs involves ensuring products are available when and where customers want to buy them, at a suitable price, at the quality expected and with effective customer service

The benefits of identifying customer needs

The ultimate aim of identifying and meeting customer needs is to ensure business survival and success

• Businesses that successfully identify and satisfy customer needs

  • Compete more effectively than rival businesses
  • Keep up-to-date with changing tastes and preferences
  • Attract positive word-of-mouth recommendations and build the brand

Benefits of satisfying customer needs

Maintaining customer loyalty and building relationships

• Customer loyalty is when existing customers buy products from the same business over and over again

  • Customer loyalty leads to repeat purchases and a rise in market share.
  • It is much cheaper for a business to try to keep existing customers(for example, with loyalty cards) than to try to gain new customers, as this can involve expensive advertising campaigns

• Building customer relationships involves communicating with customers to encourage them to become loyal to the business and its products

  • Good relationships are maintained by

    • Developing close ties with customers and finding out if products are continuing to meet their needs

      • For example, using surveys to discover if preferences are changing

    • Using technology to gather important information about customers

• By having strong relationships with the customer, the business can respond appropriately when customers change their expectations

Exam Hint Use the phrase “building customer loyalty” in your answers – it shows deeper understanding that marketing is not only about attracting customers but also keeping them long term

Anticipating changes in customer needs

• Predicting what customers will want or need in the future helps a business stay ahead of competitors and continue meeting customer expectations

The role of marketing in anticipating customer needs

• Market research

  • Surveys, focus groups and sales data help businesses understand what customers want now and in the future

    • For example, McDonalds uses customer feedback and sales data to test new menu items like the McPlant burger, designed for the growing demand for plant-based food

• Product development

  • Teams use this research to improve or create products that meet changing needs

    • For example, Apple developed AirPods after noticing customer demand for wireless and portable earphones, especially among smartphone users who wanted more convenience

• Promotions

  • These can be adjusted to demonstrate how products match new customer values or interests

    • For example, Coca-Cola launched its World Without Waste campaign and promoted its recycled plastic bottles to appeal to environmentally conscious consumers

• Pricing strategies

  • These may change if customers become more price-conscious

    • For example, Netflix introduced a lower-cost plan in some countries to attract budget-conscious viewers during a time when many households were cutting back on spending