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Marketing Exam Study!

  • Jeffrey Pfeffer: “the effects of unions depend very much on what management does”

  • The higher wages, lower turnover, clearly established grievance procedures, and improved working conditions often found in highly unionized organizations are all characteristics of the cycle of success: yielding positive benefits in a well managed service organization

Four advantages to incremental profits of a loyal customer

  • 1)

    Profit derived from increased purchases

    • Individuals or businesses may purchase more as their families or businesses grow larger and need to purchase larger quantities

  • 2)

    Profit from reduced operating costs

    • As customers become more experienced, they make fewer demands on the supplier (less mistakes made)

  • 3)

    Profit from referrals to other customers

    • Positive world of moth recommendations are like free sales and advertising, saving the firm from having to invest as much money in these activities

  • 4)

    Profit from price premium

    • new customers often benefit from introductory promotional discounts, whereas long-term customers are more likely to pay regular prices, and when highly satisfied are even willing to pay a price premium

Membership relationships and loyalty programs

Membership relationship

  • -

    A formalized relationship between the firm and an identifiable customer, which may offer special benefits to both parties

    • o

      Advantage to firms is it allows services to know who it current customers are and, usually, what use they make of the service offered.

      • o

        Good for segmentation purposes

The wheel of Loyalty

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