Syllabus: Pearson Edexcel GCSE Business
Module: Enterprise and Entrepreneurship
Lesson: 1.2.1 Customer Needs

Introduction

This lesson on Customer Needs sits within Theme 1 of the Pearson Edexcel GCSE Business course, specifically 1.2: Spotting a Business Opportunity. Aligned with the specification’s goal to help learners understand how new and small businesses identify and meet customer needs, this topic provides a crucial foundation for both market understanding and product development.

Understanding customer needs is more than ticking off a syllabus point – it’s at the heart of what makes businesses thrive in real life. For learners, this means moving beyond textbook definitions to grasp how businesses build loyalty, improve their offer, and stay competitive. And for teachers, it’s a rich opportunity to embed enterprise thinking and real-world relevance from the get-go.

Key Concepts

According to the Pearson Edexcel GCSE Business specification (Theme 1.2.1), students are required to:

• Understand what customers need and want (distinguishing between needs and wants).

• Explore the importance of identifying and understanding customer needs, including:

  • Price

  • Quality

  • Choice

  • Convenience

• Recognise how businesses use this understanding to develop a product or service that appeals to the target market.

• Appreciate that meeting customer needs can help a business:

  • Generate sales

  • Increase customer loyalty

  • Build a positive reputation

These concepts are vital when considering how a business idea becomes a viable enterprise.

Real-World Relevance

You only have to look at recent business start-ups to see how this topic plays out in real time:

• Beauty Pie identified a growing customer need for high-quality skincare without luxury markups. By understanding customer frustration with inflated prices, they built a subscription model offering transparency and affordability.

• Greggs’ vegan product range was a direct response to customer demand for more inclusive dietary options. By aligning product development with evolving customer preferences, the brand boosted both media attention and sales.

• Octopus Energy built its entire service model around simplifying tariffs and offering excellent customer support, directly addressing widespread customer confusion in the energy market.

These businesses didn’t just guess – they listened, analysed and acted.

How It’s Assessed

This content can be assessed across various question formats in Paper 1: Investigating Small Business. Expect to see:

• Multiple-choice and short-answer questions testing definitions or recognising examples of customer needs.

• Data response questions involving market research data, where students must identify which need(s) are being met or missed.

• Extended writing questions (e.g. 6- or 9-mark questions) asking students to evaluate how well a business is meeting customer needs or how it could improve.

Key command words include: identify, explain, analyse, and evaluate. Students must link responses to real or hypothetical business contexts.

Enterprise Skills Integration

Teaching this unit is a great chance to explicitly develop enterprise capabilities. Key skills include:

• Problem-solving: Analysing how a business responds to customer complaints or unmet needs.

• Empathy: Putting themselves in the shoes of different customers and evaluating business decisions from that perspective.

• Decision-making: Weighing up trade-offs (e.g. offering more choice vs keeping costs low).

• Communication: Presenting customer profiles and suggesting tailored business responses.

You could use the MarketScope AI tool here to help students analyse trends in consumer behaviour, especially when developing mini business ideas or mock pitches.

Careers Links

This topic aligns well with Gatsby Benchmark 4 (Linking curriculum learning to careers) and Benchmark 5 (Encounters with employers and employees). Relevant roles that emerge from this learning include:

• Market researchers who gather data on customer needs and analyse patterns.

• Product developers who shape what’s made based on customer feedback.

• Customer experience managers who improve services to enhance satisfaction.

• Entrepreneurs who use insight into customer problems to build new ventures.

Invite alumni or local business owners to speak about how they identified their customer base—it brings this content alive.

Teaching Notes

Here are some tried-and-tested approaches:

• Common Pitfalls: Students often mix up “needs” and “wants”. Reinforce this early with simple, relatable examples.

• Interactive Start: Run a “customer safari” task where students identify the needs they experience as consumers across a day.

• Contextual Practice: Use real small businesses in your area or student-generated ideas and get them to map how they’re (or aren’t) meeting customer needs.

• Stretch & Challenge: Ask students to explore whether different customer segments have conflicting needs, and what this means for the business strategy.

• Extension Activity: Students could redesign an existing product (e.g. school lunch offer or a mobile app) to better meet identified needs, then pitch their improvements.

This is a unit where relevance, clarity and creativity intersect. When students can see themselves as customers – and future business decision-makers – the topic lands powerfully.