Building Lasting Customer Loyalty - Essay Example

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One of the first statements the author mentioned about customer loyalty is that it is more expensive and time consuming to build loyalty with new customers than to create loyalty with your existing customers…
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Building Lasting Customer Loyalty
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Download file to see previous pages The variable that drives customer loyalty the most is price. A company that has been able to build tremendous customer loyalty because they offer better price than the competition is Wal-Mart. A lot of customer supports private label brands because they offer greater value than national brands. The quality of the product is another important variable when a company is trying to build customer loyalty. Customers are willing to pay more for products of higher quality. Three additional variables that drive customer loyalty are location, selection, and service. Companies that are able to achieve customer loyalty obtain lower customer switching, increased profitability, and great word of mouth advertising. Six key elements of customer loyalty are: a) build on the foundation of a brand; b) use price to communicate a fair value; c) engage customers with great customer experience; d) recognize good customers; e) reciprocate customer loyalty; f) build intimate relationship with best customers (Bradner, 2007). If your customer has a business that offers items that your company uses it is a good idea to purchase from them to support the business of a client that is providing you with revenues. Marketers must pay close attention to their top customers to ensure customer retention of these key clients. Four types of loyalty tactics are price, experience, programmatic, and relationship loyalty. In the airline industry a company that has had success by offering low fares is RyanAir. s. Programmatic loyalty provides companies with discount and tcalled BK rewards that offers its customers a 5% credit towards the purchase of future food items. In the service industry having a good brand experience is very important to achieve a higher level of customer retention. Chapter 21 Summary The business world has become more interconnected than ever due to faster communication, transportation, and financial flows. The story of Red Bull is a great example of a company that was able to succeed in the foreign markets. Today Red Bull has penetrated over 100 countries worldwide. Corporations hold most of the wealth of the world. There are 200 companies that have more money than a quarter of the world’s countries. In 2003 international trade accounted for one-quarter of the U.S. GDP. A global industry is an industry in which the strategic positions of competitors of major geographic or national markets are affected by the overall global position. An example of a global industry is petroleum due to the fact that the majority of the automobile worldwide are powered by gasoline. A global firm is a firm that operates in more than one country. Five major decisions in international marketing are: 1) deciding whether to go abroad; 2) deciding which markets to enter; 3) deciding how to enter the market; 4) deciding on the marketing program; 5) deciding on the marketing organization. Many international markets offer opportunities to achieve higher profitability than the domestic market in which the companies operate. Expanding into international market allow companies to achieve economies of scale. It also helps companies reduce their dependency on one market. When a company gets attack by international competition a good strategic option is to counterattack by penetrating the domestic market of the international competition. Prior to penetrating a foreign location companies must identify the risk involved with the decision. The company might not understand the foreign nation business culture. The regulation of the country must be understood prior to establishing a presence in a location. For example the environmental laws of the country might impose additional cost the company was not incurring in its domestic marketplace. The four ...Download file to see next pagesRead More
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