Unit 3.2 Meeting Customer Needs Flashcards
Benefits of stock control
Don’t over stock so less wastage
Don’t under stock
Easier to manage
Good products = good reputation
Consequences of stock
May lose sales if not modern Wastage Health and safety issues Vermin Over or under ordering Expensive Disorganised
What is the FIFO principle
Stocking things with shorter shelf life in front of longer
What are the two stock control methods
Just in case (JIC) ordering a little extra
Just in time (JIT) ordering just before they run out
What is one way a firm can analyse its stock situation
Stock control charts
What are the parts of a stock control chart
Maximum stock level (most stock a firm is willing to buy)
Re-order level (stock level s new order is sent to suppliers)
Minimum stock or buffer (minimum amount)
Re-order quantity (number of items ordered)
Lead time (time it takes for order to come in)
What do stock control charts look like
. |
\ |
Time period ->
Stock levels ^
How to work out the reorder quantity
Max stock - min stock
How to find the lead time
Point between reorder point and delivery date
Advantages of JIT
Stock rotation and wastage is less of an issue good for food industry and technology
Storage space can be used for something else
Disadvantages of JIT
Any problems with suppliers effect the reputation of firm
More orders may be placed so costs may rise
Why is it important that a business identifies customer needs
So they can change and develop their products so they aren’t creating products no one would buy
Why is it important for businesses to anticipate customer needs
Business can stay competitive in market and develop things before others
Why is it important for businesses to meet customer needs
So customers continue to return and stay loyal
What is a first mover advantage
Advantage you gain from being first in a market so when competitors join you already have a market share
Why three things do stock refer to
- Raw materials ( go into production process)
- Work in progress (products semi finished by producer)
- Finished goods (products completed to right standard ready to be delivered)
What does offering great service help a business do
Increase and keep market share Improve sales revenue and profits Attract and retain customers Gain customer satisfaction and loyalty Spread information to customers Gain information from customers
What is quality
A product or service which meets the needs and expectations of customers and which achieve a desired minimum standard
What do customers need and expect in a product
- performance (fit for purchase)
- appearance
- availability and delivery
- reliability/ durable
- price/ value for money
How does a product meet quality test and what does it become if it doesn’t
Meets needs and expectations of customers and if not it is substandard
What are the benefits of quality
Gives competitiveness advantage Repeat purchase Build consumer confidence in brand Reduces costs incurred in solving past sale problems Helps improve efficiency
What is quality control
The process of inspecting products to ensure that they meet the required quality standard
Drawbacks of quality control
Rejected products are expensive for s firm as its the full cost of manufacturing but can’t be sold
Need more man power/ operations to maintain quality control and adds more time to initial process
Done at end so nothing can be done
What is quality assurance
The process that ensures production quality meets the requirements of customers. It is built in at the design stage and at every other stage of the manufacturing process.
What two things do a business need at least one of so it means firms set out clear procedures for all business processes
bs5750 (BS is British standard institute)
1509000 (150 is world wide)
What is total quality management
An approach aiming to develop quality through the firm. Consists of quality chains in which each person or team treats the receiver of their work as if they were an external customer. Also about getting things right first try so there is zero defects.
Product
Person ——> other person who checks it (if not good redo it)
What is benchmarking
Approach to improvement based of the best practices in the industry or in a similar industry allowing a business to identity where it falls short of current best within competitors and determine what action is needed to match or exceed them.
Who is best > research into them > analyse > adapt your business
What is a quality circle
Regular short meetings set up to help improve production issues. 2-3 members which are assigned issues close to their jobs so they can identify problems and discover long term solutions.
Person, person, person all from different parts of the business
What is the design mix
The range of variables that contribute to successful design
What are the variables in the design mix
Function. Cost. Appearance.
What is function in the design mix
How the product works. Is it effective? Sturdy? Easy to use,?
What is cost in the design mix
Cheaper the cost to design and product the better
If the business has low production costs compared to their competitors they will have a competitive advantages
What is appearance in the design mix
Someone is more likely to buy a product if they like the look
How does using scientific research help businesses
It can help devise more economical, effective ways of doing things and R&D can help make prototypes
What is research and development (R&D)
Continuous innovation
What are three different ways of carrying out research in R&D
Market research - finding out what customers want
Employee ideas - what alliteration so do the workers think could be made
Scientific research - what is machinery capable of doing
What are two ways of doing development in R&D
Making in bulk - is it possible, will it keep costs to a min
Test markets - what do customers think of new products, will they buy?
What does a business need to be to be competitive
Effective
What is productive efficiency
Lowest cost per unit at which production can take place
Why is productive efficiency important
More efficient = lower cost goods than competitors
May generate more profit
Investing in assets is expensive so business needs to maximise the return it makes on the assets (maximise what the asset can do)
What are three ways of measuring efficiency
Productivity
Unit costs
Non-productive (“idle”) resources
How does productivity help measure efficiency
Measures the relationship between inputs into the production process and the resultant outputs
How does unit costs help measure efficiency
Divide total costs by the number of units produced. A falling ratio would indicate efficiency improving
How does non productive resources help measure efficiency
Are employees left with nothing to do? What resources are used? Are machines used to full capacity? Machines only used part time?
Too many idle resources are a sign of inefficiency in production
What are three ways of calculating productivity
Output per worker of hour of labour
Output per hour/day/week
Output per machine
How would you work out products per hour for each person
Completed products divided by hours worked
What is automated production
Production and procedure processes that are performed by machines.
Reduces human intervention.
What ways are there to improve productivity
Training - workers will know how to make products so less made wrong
Improved motivation - want to work harder and create more
More and better equipment - less safety risks and faster
Better quality raw materials - treated carefully and less waste
Improved organisation of production e.g less wastage - less waste, less wasted money and time
What are the problems of training, motivation, improved equipment, better quality materials, improved orange ideation of production
Expensive Not last for very long Expensive go buy and waste of money from old equipment Expensive May move things around and take up time
Why do fair trading regulations exist
To protect consumers from exploitation so
When can consumers complain
If a product is given a misleading description, unsatisfactory quality or not fit for its intended purpose
What is the sales and supply of goods act 1994
All goods sold have to be of satisfactory quality meaning they have to be safe, last for a reasonable amount of time, be fit for purpose and have nothing wrong with them
What is the trade description act 1968 & 1972
Businesses can give false or misleading information about the products e.g can’t market fake designer goods as the genuine product. Labels must be truthful.
What can consumer protection regulation add to business costs
Cost of damaged reputation and image with customer
Cost of employing specialists to deal with the laws and their consequences so they can avoid breaking the law
Cost of changing business practices e.g retraining sales staff or redesigning labels because they can’t be incorrect and need to be able to deal with customers
Why is meeting customer needs so important
Customers will buy a product if it meets their needs so getting the product right is essential for the business
What are some key characteristics looked for in a bus service
Reliability Friendliness Clean Comfort Accessibility Convenience of stops Information Price
Why is quality of a product essential
It is meeting a standard that satisfies customer needs
Why is on time service essential
Offering a product that gets to the customers when they want will encourage repeat purchase but sometimes e.g traffic congestion for a bus service the customer service is out of their control
Why is innovation essential
Businesses must innovate to stay ahead of the competition
Why is collaboration essential
Businesses operate in a competitive environment but sometimes they can collab with other firms or with government agencies or pressure groups to improve what is being offered
Why is spotting problems essential
Successful businesses are ones which can identify problems as they arise and respond to them and those working with customers are often better placed to understand the problems and solutions
Why is listening to customers essential
Any business that wants to provide products customers want must listen to them so if they want to expand customer base they must listen to potential customers who aren’t using the product yet
Why is dealing with complaints essential
It is important for repeat purchases, if a customer has a complaint and doesn’t feel like it’s been dealt with they may not buy again even if they are wrong. So good customer service should find solutions to problem that satisfy customers and are affordable to business.
Why is staff training essential
Only properly trained staff can deliver a quality product so training is essential for every aspect of the business.
Why is going beyond what is expected essential
Some businesses acquire a reputation for excellence in customer service this can be a major selling point for businesses and can encourage repeat purchase
Why is customer service so important
Part of the package the customers buys Provides a way to differentiate product Helps keep customers and win new ones Makes customer feel valued Important source of customer feedback Helps attract and retain good employees
What are satisfied customers more likely to
Buy again Recommend the business Respond to promotional campaign Forgive occasional problems with quality Stay loyal to the brand
What is the circle of events that occur before of good customer seri e
Good customer service –> satisfied customer –> customer loyalty –> repeat business –> good customer service (etc,etc)
Why is competition for good customer service increasing
e-commerce and email marketing means businesses can reach customers 24/7
Improved technology allows products to meet individual customer needs more closely
Customers are getting more confident in complaining and expect a good service
