Unit 2 KA1- Customer

Question 1

What are the two ways a business can be led?

Answer 1

Market-led
Customer-led

Question 2

What is a market-led business?

Answer 2

Market-led businesses find out what the customer wants through intensive market research and then creates a product that will satisfy those wants.

Question 3

What are the factors of a market-led business?

Answer 3

• Very customer focused
• More responsive to changes in the market
• Reliant on market research to inform their product development
• Often in competitive markets such as make-up and clothing

Question 4

What is a product-led business?

Answer 4

Product-led businesses develop a product first and then try to sell it to the customer through intensive advertising. Little or no market research is carried out before production begins, instead time and money is spent on researching and developing the product.

Question 5

What are the factors of a product-led business?

Answer 5

• In high tech industries
• With little competition

Question 6

Why do businesses look at consumer behavior?

Answer 6

Businesses look at consumer behaviour, so they can better understand:

-The decision behind why customers purchase certain products
-What influences them to make those purchasing decisions

Businesses want to understand the decision-making process of the customer, so they can better tailor the company’s marketing strategy to meet their needs.

Question 7

What are the three different types of consumer behavior?

Answer 7

• Routine/habitual
• Informed
• Impulsive

Question 8

Describe routine purchasing

Answer 8

Routine purchases require little involvement by the customer. Routine purchases are made automatically for items such as:

• Cereal
• Washing powder
• Toiletries

Sales promotions such as money off vouchers or buy-one-get-one-free (BOGOF) can be used to influence routine purchasing.

Question 9

Describe Informed purchasing

Answer 9

Informed consumer behaviour is when the buyer takes time to investigate the product. They will consider different products that are on offer and the specifics of the product they are interested in.

This behaviour is usually used when a customer is buying expensive long-term goods such as:

• A car
• An expensive item of technology

Question 10

Describe Informed purchasing

Answer 10

Impulse purchases happen without any prior planning or thought. Impulse purchasing often happens because a product has caught a customer’s eye, such as a bar of chocolate placed at the checkout.

Effective point of sale displays can influence impulse purchasing.