1.2.1a Customer needs: price, quality, choice and convenience Quiz: Pearson Edexcel Business, Unit 2

The 20 questions

1. Which of these is a customer need?

   • Convenience, such as being able to buy goods near home at a convenient time
   • A supplier's need to be paid in cash rather than by credit each month
   • A government's need to raise taxes from all firms in the economy
   • A business's need to increase its share of the market by spending more

2. Which of these is NOT one of the main customer needs listed for a business to understand?

   • Quality, which is how well the product meets the buyer's expectations
   • Price, which is the amount a customer pays for a good or service
   • Profitability, which is the surplus a business earns for its owners
   • Choice, which is the range of products available to the customer

3. Why is it important for a business to identify and understand its customers?

   • It helps the business generate sales and survive in the market
   • It means that the business never has to consider its competitors at all
   • It allows the business to avoid paying any tax on its profits each year
   • It guarantees that the business will not have to change its products ever

4. A shop extends its opening hours to suit commuters on their way home. Which customer need is being met?

   • Choice, because customers can pick from a greater range of products
   • Convenience, because customers can shop at times that suit them
   • Quality, because the goods on sale are of a higher standard overall
   • Price, because customers now pay lower prices for goods in the shop

5. A brand offers twelve flavours of the same drink. Which customer need is mainly being met?

   • Choice, because customers can select the flavour they prefer
   • Convenience, because the drink can be bought in the shop near home
   • Quality, because the drink has been made with a higher standard of ingredients
   • Price, because the drink has been reduced to a lower cost per bottle

6. A business reduces its prices to match a rival so that customers do not switch. Which customer need is it responding to?

   • Price, because customers want good value for the money they spend
   • Choice, because customers only want a single product from a single shop
   • Convenience, because customers need the product to be delivered to their door
   • Quality, because customers only want to buy the most expensive products available

7. How can understanding customer needs help a business to survive?

   • By helping the business make products that customers want to buy
   • By removing any competition from the market in which it trades
   • By allowing the business to ignore changes in what customers want to buy
   • By making sure that the business never needs to advertise its products

8. Which of these is the best example of a business responding to quality as a customer need?

   • A manufacturer checks each product carefully before it is sent to shops
   • A manufacturer reduces the number of checks to speed up its production line
   • A manufacturer increases the number of shops that stock its products nationwide
   • A manufacturer lowers its prices to match the cheapest rival in the market

9. Which of these shows a business failing to understand its customers?

   • A firm offers a delivery service after customers asked for home delivery
   • A firm tracks sales each month and adjusts its stock to match demand
   • A firm asks customers for feedback and changes its menu in response to it
   • A firm keeps selling a product that customers have shown they no longer want

10. A firm offers a loyalty scheme that rewards repeat custom. Which customer need is it most likely to meet?

    • Price, because loyal customers receive discounts or rewards for buying again
    • Choice, because loyal customers can buy a far greater range of goods each week
    • Quality, because loyal customers are guaranteed a higher standard of product
    • Convenience, because loyal customers can always collect goods from a second site

11. Why might a business that ignores customer needs struggle to survive?

    • The business will not need to generate any sales to pay its costs each month
    • Competitors cannot take market share from any business that is well known
    • Customers may switch to competitors that better meet their needs
    • Customers will always stay with the business, however its products change

12. A computer shop offers free installation with each sale. Which customer need is being met?

    • Price, because the installation makes the computer cheaper than rival models
    • Convenience, because the customer does not have to arrange installation separately
    • Quality, because the installation proves that the computer has no faults at all
    • Choice, because the installation gives the customer a wider range of computers

13. Which of these would show a business responding to customers' need for choice?

    • Stocking only one size and one colour of the jacket to keep costs low
    • Selling the jacket only at a single store in the town centre each day
    • Reducing the number of jackets in stock to make the shop look neater
    • Stocking several sizes and colours of the same jacket so buyers can pick one

14. A business surveys its customers and finds they want faster service at checkouts. What should it consider doing?

    • Removing the checkouts so that customers must serve themselves at all times
    • Adding more checkouts or staff at busy times to reduce waiting
    • Ignoring the survey because faster service does not affect sales in any way
    • Keeping checkouts the same because the survey results cannot be relied on

15. Which of these customer needs is most closely linked to the value for money a product offers?

    • Quality, because value depends only on how old the product's design is
    • Choice, because value depends only on the number of products in a range
    • Price, because value for money depends on what a customer pays for a product
    • Convenience, because value depends only on how close the shop is to home

16. Why does generating sales matter for a business that is starting up?

    • Sales bring in the revenue needed to cover costs and keep the business trading
    • Sales reduce the number of customers who will return to the business later
    • Sales remove the need for the business to think about its costs at all
    • Sales are only important to large firms, not to businesses that are starting up

17. A supermarket introduces a click-and-collect service so customers can pick up their shopping at a time that suits them. Which customer need is this meeting?

    • Price, because customers pay lower prices for every item they buy each week
    • Choice, because customers can choose from a wider range of brands on the shelves
    • Quality, because the items in the supermarket are of a higher standard overall
    • Convenience, because customers can collect their goods at a time that suits them

18. Why might a customer's need for quality be important to a business?

    • Customers who value quality do not care whether the product is reliable or safe to use
    • Customers who value quality never compare the product with rivals before buying it
    • Customers who are happy with quality are more likely to buy again and recommend the product
    • Customers who value quality will always pay the highest price in the market

19. A business offers a range of prices so that customers on different incomes can buy. Which customer need is this addressing?

    • Quality, because customers on lower incomes never expect a good product
    • Choice, because customers on higher incomes always want the cheapest option available
    • Price, because customers have different amounts they are willing to pay
    • Convenience, because customers on different incomes all want to shop at the same time

20. Which of these is a benefit to a business of identifying and understanding customers?

    • It means the business no longer has to pay any costs of production
    • It helps the business generate sales that are needed for survival
    • It means the business never has to update its products or services
    • It means the business will never face any competition in the future

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