MCS 1000 Chapter 22: Chapter 22 Introductory Marketing Notes
17 Dec 2011
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Chapter 22 marketing: managing relationships & building loyalty. Loyalty: a customer"s commitment to continue patronizing a specific firm over extended period of time. Means behaviour, preferences, liking & future intentions. Defection: a customer"s decision to transfer brand loyalty from a current service provider to a competitor. A rising defection rate shows that something is wrong w/ quality or competitors offer better quality (& fall in profits) 0 defection means keeping every customer the company can profitably serve. Research has found that the longer customers remained w/ a firm, the more profitable each industry became. They also make fewer mistakes when involved in operational processes: profit from referrals to other customers: positive word of mouth are free sales advertising, profit from price premium: new customers often benefit from intro promotional discounts. Long-term customers are more likely to pay regular prices. When customers trust supplier, they are willing to pay higher prices at peak period.
