Understanding Customer/ Markets
The Customer and the Consumer
Some terms need to be defined clearly first:
A consumer is the final consumer of the product.
A customer is the person who makes the purchase decision.
For example the consumer of a toy is the child but the customer is the parent. However in some cases the customer and the consumer are the one and the same.
The difference has to be clearly understood since in some cases not paying attention to the final consumer has had disastrous consequences. The phenomenon has arisen due to the level of complexity in modern supply chains were specialisation in production has taken place to a very great extent.
This is a very important term in marketing. What it means is what percentage of the market demand is being satisfied by the company. To truly understand market share one must have a very good understanding on the market.
One definition of the market is the aggregation of all alternative goods or services, which customers regard as being capable of satisfying the same customer need. For example in satisfying the need for lunch one has many options of fast food, up market restaurant or sandwich bar – but the need might be for a more formal luncheon meeting to discuss business. As can be seen from the preceding the need is the most important factor in determining the market.
Aggregating currently available products/ services is, however, simply an aid to arriving at the definition, as it is important to recognize that new products, yet o be developed, could better satisfy users needs. For example the button manufacturers who believed that his market is the button market will be extremely disappointed when he realized that zips and Velcro can also be used as alternative fastenings.
This highlights the importance of the necessity to have a properly defined need based definition of the market.
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