1. GCSE Revision Exercise
MEETING CUSTOMER NEEDS

2. 1. Define the following terms;
a) repeat purchase
b) just in time
c) stock
2. Explain the design mix.

3. FUNCTION
ECONOMY OF
MANUFACTURE
AESTHETICS
The trade-offs involved in designing new products can be shown in the triangle. As Craig tried to make his boot perform better, it became more expensive to produce and looked uglier.

4. 3. List the problems a firm may encounter with poor stock control;
Too much stock
Costs will rise – warehouse costs
Stock may go out of date
Too little stock
May run out of stock – miss orders, poor reputation

5. What is the aim of stock control?
To make sure that businesses always have sufficient stocks to meet its own needs and those of the consumer
However, it needs to keep the minimum amount of stock so as to avoid damage and waste, and to minimise the cost of holding stock

6. Stock Control Graph Stock Level Time
Maximum Stock Level
Re-order triggered
Re-order level
Minimum Stock Level
Lead Time
Time
When the stock level reaches the re-order level, it triggers a new order. The difference between the time of re-order and delivery is the ‘lead time’.
Maximum stock levels achieved after stock delivery. Stock levels decline during production.
The Traditional Stock Control Model

7. Warehousing
Warehouse Costs
Rent / mortgage
Utilities – gas, electricity, water bills
Depreciation
Store person's wages
Money tied up in stock
Security
Insurance
Re-Order Costs
Purchasing more frequent smaller amounts will result in higher purchase cost
Higher transport costs
Handling costs
Risk of running out of stock

8. TQM
Total Quality Management is the commitment by all employees to providing quality products. The concept relies on all employees following a written procedure. Employees are encouraged to make suggestions feeding back their ideas on how the process could be improved; this is known as continuous improvement. The ultimate objective is to achieve zero defects, no faulty goods at all. Good quality components and machines are used. Everyone should ensure their work is done correctly before passing it on. TQM uses the idea of quality assurance.
When staff are initially trained, procedures written and new machinery purchased, costs are likely to rise. However, as wastage falls and hidden costs are reduced such as a firm getting a poor reputation or customers not returning because they have had poor quality products, then costs should start to fall in the long term.

9. Quality Control Checks are made on completed products.
It takes place after the event.
Inspects in Quality.
X - could be a lot of waste
X - not always possible to put fault right

10. Quality Assurance
Quality components or raw materials are used in the production process.
Everyone follows a written procedure.
Employees are responsible for their own work.
Focuses on how the products are produced
Prevents failure – Right First Time
 - less wastage

11. JIT and TQM – True or False?
Just in Time
Just in time production keeps stock to a minimum.
Stock arrives just in time to before it is used.
Warehouse cost are very high.
JIT requires good communication.
Goods are made just in time to meet orders
Feedback from workers is encouraged.
Authoritarian management is preferable.
There must be no bottlenecks in the production.
A large numbers of suppliers are used to keep costs low.
A relationship is built up with one supplier.
True
True
False
True
True
True
False
True
False
True

12. TQM True True True False True True True True False True
TQM stands for total quality management.
TQM is a commitment by all staff to quality.
TQM requires democratic management
TQM firms have a quality inspection department.
A written procedure is followed by everyone.
TQM uses the concept of quality assurance.
There should be zero defects i.e. no faulty products.
Continuous improvement is feedback of ideas by staff.
Workers check each other’s work.
There should be less hidden costs such as poor reputation.
True
True
True
False
True
True
True
True
False
True

13. Review Objectives: To review and increase understanding of JIT & TQM
Key Terms
Just In Time
TQM
Quality Control
Quality Assurance
Continuous Improvement
Zero Defects

14. To know what is meant by customer service
“Customer service is the ability of an organisation to recognise and consistently meet the needs of its customers”
The role of everyone in the organisation is to meet CUSTOMER NEEDS AND EXPECTATIONS

15. Customer Service
1) List as many ways as you can stating how BA First Class could offer good customer service;

16. Customer Meeting Needs Elderly Customers Parents and Infants
Customers with mobility problems
Deaf or heard of hearing
Blind or partially sighted
Card Sort Activity

17. Customer Meeting Needs Elderly Customers
Provide Seating at checkouts, Packing bags, taking shopping to the car,
Parents and Infants
Designated car park spaces, Different trolleys, Priority wide aisle checkout, Baby Changing facilities,
Customers with mobility problems
Disabled parking spaces, Wheelchairs available, Adapted trolleys, electric scooters, Wide aisle checkout , Open doors
Deaf or heard of hearing
Loop system, leaflets, Speak slowly, Write it down,
Blind or partially sighted
Personal shoppers, guide dogs , lead gently, braille,

18. Answer Prompt a) Why do most firms attempt to create customer loyalty?
Start with a killer first sentence – define repeat purchase
How do firms attempt to gain repeat purchases?
Why are existing customers so important for a new business?
Give some examples
Conclude – what are the advantages of having loyal customer and repeat purchases?

19. Example Answer
Most businesses attempt to build up customer loyalty in an attempt to encourage repeat purchases of their products. New customers are both very difficult and very expensive to win. Businesses spend large sums of money on advertising and with promotions such as penetration pricing in order to win new customers. Once those customers have been won, then a business will attempt to build up brand loyalty. For example, Tesco use Club Card Points and Sainsbury’s Nectar Cards in an attempt to build customer loyalty. Firms will also offer a good quality product or service and support this with good customer care in order to ensure customer satisfaction.
In conclusion, in order to be successful in the long run a business must retain its existing customer base through a culture that creates customer satisfaction and hence customer loyalty, which should result in repeat purchases. For example most consumers will become loyal to a particular supermarket if they are satisfied with the service they receive and are likely repeatedly use the same shop. Customer loyalty resulting in repeat purchases will be a key element in a firm maximising its profits.
Positives in My Answer Targets to Improve my Grade

20. Review Test (10 minutes)
Explain the difference between quality culture (assurance) and quality control? (8 marks)
Why is good customer service so important to a business? (5 marks)