Summarize the problems associated with frequency or loyalty programs
What will be an ideal response?
a. Making the reward too high – although the value of the program to the customer should exceed the cost of being a member, the programs should also be cost effective.
b. Ubiquity – you should target your best customers with these programs and provide a compelling reason to join.
c. What kind of loyal customers are you actually getting? – it is possible to confuse loyalty with repeat purchasing.
d. Lack of inspiration – many programs are simply copies of other programs.
e. Lack of communicating with customers – loyalty/frequency programs need to have a significant communication component to retain customer satisfaction.
f. Insufficient analysis of the database – to maximize the value of these programs, these data must be mined for better market segmentation, targeting, and new product development.
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Data mining can be used for each of the following purposes, except:
A) develop profiles of a firm's best customers B) develop profiles of customers who tend to purchase competing brands C) identify current customers who fit the profile of a firm's best customers D) identify current customers who would be good prospects for cross-selling other products
Which of the following supports the economic case for regional economic integration?
A. International institutions such as the World Trade Organization have been moving the world away from a free trade regime. B. The greater the number of countries involved in a free trade agreement, the fewer the perspectives that must be reconciled. C. Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement. D. It is difficult to establish a free trade and investment regime among a limited number of adjacent countries as compared to the world community. E. Since most governments do not intervene, unrestricted free trade and FDI have become a reality.