Lecture 10: Repeat Buying and Loyalty

Question 1

relational marketing

Answer 1

develop long term relationships with customers

Question 2

companies develop marketing programs to (3)

Answer 2

1. improve customer retention
2. aim to dialogue with customers
3. lead to relationships that create competitive advantage

Question 3

4 types of customer loyalty

Answer 3

1. undivided loyalty
2. divided loyalty (multiple brands at once)
3. unstable loyalty
4. no loyalty

Question 4

models of repeat buying

Answer 4

based on probability theory, focuses only on purchase behaviour

Question 5

2 types of models of repeat buying

Answer 5

1. stochastic models

2. dirichlet model

Question 6

stochastic models

Answer 6

• used to predict market share

- using repeat buying data of a single brand

Question 7

dirichlet model

Answer 7

allows comparison between brands

Question 8

deterministic model

Answer 8

• based on the thought processes a consumer goes through

- recognizes the potential for losing customers and then regaining them

Question 9

deterministic model considers (3):

Answer 9

• when the consumer is first acquired
• the processes involved in how consumers are retinaed
• how consumers become regular buyers

Question 10

repeat buying may be due to (3):

Answer 10

• inertia (buy a brand our of habit merely because it requires less effort)
• indifference to brands
• lack of choice rather than loyalty

Question 11

loyalty

Answer 11

combination of behaviour (repeat buying) and relative attitudes to a brand, emotional level

Question 12

loyalists

Answer 12

high satisfaction and loyalty, may become advocates

Question 13

defectors

Answer 13

low to medium satisfaction, switch brands due to unsatisfactory experience

Question 14

mercenearies

Answer 14

High satisfaction but low loyalty, do not stay long enough to become profitable

Question 15

Hostages

Answer 15

low to medium satisfaction but high loyalty probably because of lack of choice

Question 16

Customer Switching Behaviour Reasons (8)

Answer 16

• Core service failure
• Service encounter failures
• Employee response to service failure
• Pricing
• Inconvenience
• Attracted by competitor
• Ethical issues
• Involuntary issues

Question 17

loyalty programs aims: (4)

Answer 17

• to retain customers by providing value and satisfaction
• to increase spending by existing customers
• to cross-sell other products which consumers not aware of
• to increase repeat buying, trial, toward loyalty

Question 18

relational consumption

Answer 18

• involves the development of a relationship between the organization and the consumer
• special treatment

Question 19

Relationship Marketing (3)

Answer 19

interaction
relationship
networks

Question 20

successful relationship marketing requires the following from the customer (5)

Answer 20

1. trust
2. commitment
3. mutual goals
4. satisfaction
5. cooperation