Page 142 - Cambridge IGCSE Business Studies
P. 142
Cambridge IGCSE Business Studies Section 3 Marketing
Businesses often use promotional activities, especially advertising, to persuade
Promotional activities: consumers that something they want is a need. In doing so, business sales, revenue
see Chapter 13, page 182. and profits will rise.
Market research methods: You will learn, in a later chapter, how businesses identify the needs of
Chapter 11, page 153. consumers through the use of market research methods. Once the needs of
consumers have been identified a business must then decide if it is able to satisfy
those needs by producing goods or services which they can sell to the consumer
at a profi t. This is the main purpose of business activity. Businesses will also use
market research to check that the goods and services produced and sold do satisfy
consumer needs.
Business activity: see
Chapter 1, page 9.
Maintaining customer loyalty
Without customers there is no business. Therefore one of the most important
roles of marketing is to create a group of customers who the business can sell
KEY TERM
its products to. This is known as a customer base. The business must then build
Customer base: the group of customer relationships to maintain the loyalty of its customers to the business and
customers a business sells its its products.
products to.
Building customer relationships
Once a customer base has been established, the marketing function must then
aim to keep these customers – this is known as customer loyalty. Th is requires
collecting as much information as possible about each individual customer, for
example their income, lifestyle and buying habits. This information is then used
to better identify and satisfy customers’ needs and carefully target individual
140
customers with information about the fi rm’s products.
CASE STUDY Developing customer loyalty in the African mobile
(cell) phone market
Mobile (cell) phone usage has been increasing in Africa. With so much competition, operators are forced into new
ways of holding on to their customers. Developing loyalty among multi-sim customers is one of the major challenges
faced by Telecom operators in Africa.
One of the ways operators are trying to increase their revenue is to offer added value services. Operators in Africa
are investing in providing solutions that give the customer better value for their money.
It is true that poor customer service can cost operators millions of dollars. Customer service departments are
studying their customers more closely to know who they are and what keeps them going. One of the strategies is to
involve your customers right from the product design stage.
TASK
a What is meant by ‘added value’?
b Identify and explain the importance of customer loyalty in the mobile (cell) phone market.
c Do you think that the approach to customer service outlined in the case study will increase customer loyalty? Justify
your answer.
TEST YOURSELF
1 What is meant by the term ‘marketing’?
2 Why is consumer loyalty important to business?
