Submitted by: Submitted by dlgd
Views: 10
Words: 6142
Pages: 25
Category: Business and Industry
Date Submitted: 05/04/2016 10:40 AM
Coursework: Ebay plus
Loyalty program
Name: Shiwei Yu
Student number: 1155500039
Date:
As information technology booms and the world economy globalizes itself, it becomes feasible and important for firms, especially in regard of forging competitive advantages, to understand and meet customer needs down to individuals. So the customer concept has stood out from marketing ideas: Firms establish relationships with selected individual target consumers with whom superior customer values are designed, offered, redefined and realized in close cooperation with other partners in the marketing system such as suppliers and intermediaries, in order to realize long-term profits through customer satisfaction, partner- and employee satisfaction (Hoekstra, Leeflang & Wittink,1999, p. 43). In this definition, individual customer is seen as the starting point for value-creating marketing activities, from which another definition of the customer concept was derived later on: The conduct of all marketing activities with the individual customer as the central unit of analysis and action. This interpretation is characterized by the analysis and measurement of marketing activities and consequences at an individual level (Urban, 2015, p. 122).
The customer concept laid the foundation of the concepts of customer relationship management (CRM) and customer lifetime value. Attempts to develop improved relationships with consumers can lead to customer retention, a sense of loyalty among consumers and improved long-term profits due to an improved bottom line result (Wilson, 2002, p. 193). The awareness of the importance of individual customer has made marketing campaigns, at one time, aiming mainly to increase customer loyalty to a product or service.
The thought was that customer loyalty would lead to higher customer retention, larger tolerance to price increases from the customer side, and therefore the profitability of a firm would increase. But does the importance of...