Question

In: Operations Management

According to recent consumer research from Kantar Retail, 71% of consumers now claim that loyalty incentive-programs...

According to recent consumer research from Kantar Retail, 71% of consumers now claim that loyalty incentive-programs don’t make them loyal at all. Instead, in this new era of digital-based competition and customer control, people are increasingly buying because of a brand’s relevance to their needs at the moment.

a. What makes a product or service relevant?

b. How can relevance be incorporated into loyalty programs? Provide and discuss an example.

Solutions

Expert Solution

a) A product and service is described as relevant because of its *usability and utility*. Usabiltiy means how useful that particular product or service is for the consumer and utility means how much satisfaction the product and service is deriving while using it. Thus, these two concepts make a product relevant as any consumer would buy the product to derive the utmost satisfaction while using that product that would help him/her to fulfill the desired and needs from the product. It should serve the purpose and thus be regarded as relevant.

2. To dicuss and explain about loyalty programs, the example I would like to take is of Amazon. Amazon as we all know provides the best customer service and secure customer satisfaction at large. For them, customer is their God and it's in their first rule to serve the customer at any cost. Thus, what is the reason behind all this strategy? The brand loyalty. Customer seeing Amazon is providing huge satisfaction in its products and services make the customer happy and they return to shop again at Amazon and thus are retained customer for the organisation. This is what brand loyalty is all about. By adding more and more satisfaction and features that would make your customer happy with your product and services is what makes them relevant. Loyalty could be achieved by adding value and quality and maintaining the name in the market that would attract more customer to shop.


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