Competition and Customer Service

Question 1

What is competition?

Answer 1

Rivalry between businesses where businesses are competing against one another for a share in the market, and where tactics are used to discourage their customers from going to other businesses.
It can be very healthy.

Question 2

Benefits of competition for consumers

Answer 2

Businesses are forced to offer good products and good service otherwise consumers will not return.
Businesses are forced to keep prices down, otherwise consumers will go buy their goods elsewhere.
Businesses will offer a wider range of products in order to be ahead of the competition.

Question 3

Strategies used to manage competition

Answer 3

Pricing - keeping prices at the same level or slightly lower than competitors.
Product - expanding the range of products, high quality, products in stock.
Effective customer service.
Promotion - advertise widely and use promotional offers.

Question 4

Impact of competition on the marketing mix

Answer 4

Product - quality of products will be kept high and range of products has to be greater.
Price - competitive pricing strategy will be used, prices cannot be high than the competitors price, special offers will be introduced in order to attract consumers.
Promotion - constant advertising is required, good customer service is important, attractive packaging will be used.
Place - products must be available in store when required, products have to be available in a convenient place for customers.

Question 5

What is customer service?

Answer 5

The provision of service to customers before, during and after a sale.

Question 6

How do businesses provide good customer service?

Answer 6

They make the customer feel valued, is aware of their needs and try to meet those needs.
They rectify situations where complaints have been made and exchange goods if they are faulty.
They prodvide information and advice about products so that customers can make informed decisions.

Question 7

Why is effective customer service important for a business?

Answer 7

It gives a business a competitive advantage over other businesses.
It will be rewarded with customer loyalty.
Good service will attract new customers.