Harrah's Case Study

Due to high competition in the industry and high bargaining power for buyers, Loblaw offers loyalty programs including President’s Choice Financial and PC MasterCard, to encourage repeat business. By providing added-value services, consumers can benefit from unique experiences and Loblaw can further differentiate its brand from its competitors.

Loyalty programs include frequent flier miles or points systems associated with credit card offers that can be used only with the original company, creating a perceived loss or cost when switching to a competitor. Most programs are able to get consumers to spend more money just to get to free or bonus item.

The cost of operating such a scheme are greatly reduced due to the shared cost of having multiple partners involved.

With the program, the risks shift to a win-win for the consumer, rather than buyer’s remorse. It removes the uncertainty component in the decision-making process.

This initial cost of the startup of this program will be a minimal impact on Kudler Fine Foods. The initial advertisement effort will be done via social media; the companies Facebook page and Twitter account, email and word of mouth. Allowing for a reward system for costumer referrals can be used for current and new customers as the programs is employed and continues to grow. Rajiv and bell argue “customer retention costs are generally lower than customer acquisition costs, companies are better of focusing attention on their more loyal customers especially since the top 20% of customers account for 80% of revenues and often more than 100% of profits” (p. 180, 2003). Kudler Foods could reduce their marketing expenses by using a customer loyalty system through the use of rewards. The sales increase from this program should be reflected by the increase of new customers and the increased returning customers increased spending. The use of seasonal promotions only available to costumers enrolled into the frequent buyers program could also help in increased sales profits.

Developing a loyalty program is challenging. You team must understand what will keep your current customers interested and what will spark them to purchase multiple times.

Market players generally have a wide variety of potential customers, which considerably weakens buyer power. Although consumers in this industry may be loyal to particular brands or chains, loyalty to retailer brands is arguably less important than competitive pricing. Many supermarkets run rewards programs for frequent shoppers, such as Tesco’s ‘Clubcard’, and these schemes can help companies retain customers and reduce buyer power.

Over the decades there were tremendous amount of challenges for every business. Customers have more knowledge, they have more options, and they have higher expectations. Customers are more informed with the humungous development in technology. Having more options in front of them, expectations has surpassed in retail industry. Loyalty is a customer having faith that your organization’s product or services offered is the best for them. It is the process of tapping the buying pattern of customers in a store based on their preferences. Customer loyalty is significant because it is economical to retain the old customers rather than acquiring new customers. So, organizations employ loyalty programs which reward customers for their repeat business.

Like Harrah’s, our casino’s distinctive capability is customer loyalty and service (Davenport & Harris, 2007). Our main goal is to continuously bring new and prior customers to the casino, provide with them exceptional service and entertainment, and have them leave with the intent to return.

1. What are the objectives of the various Database marketing (DBM) programs and are they working?

Halagera also goes on to say “A 2% increase in customer retention has the same effect on profits as cutting costs by 10%.” (Halagera, n.d.). This shows that keeping customers returning to Kulder Foods will increase business. The Frequent Buyer Program will promote repeat buisness in Kulder Foods and will aid in profit increase, so long as the customer is satisfied with Kulder’s Foods products and services. Although there are a lot of upsides to the Frequent Shopper Program, there are also concerns that Kulder Foods will have to take into account.

The casinos at these resorts are crowded daily with adults who share the love and excitement of gambling responsibly. Guest at the hotels and resorts can also enjoy other options for entertainment like spas, shows, concerts, and dining. Guest can also enjoy playing a variety of free casino themed social games which is used for advertising the products and services at the casinos. Today the company is focused on building valuable relationships with their loyal customers to regain market share and boost competitiveness and profitability.

The casino marketing is directed to individuals who want to have fun and those who are willing to risk their mortgages (Klebanow, 2009)

One important way Harrah’s utilized DBM was by analyzing customers using a method called opportunity-based segmentation. When customers began to use their loyalty cards, they started to leave behind a digital trail of every type of gameplay activity they engaged in while gambling at Harrah’s. This enabled aspects like betting patterns, play preferences, where they frequently ate at the casino, how often they bought a hotel room, how often they visited, how much money they played, and how long they played to be tracked and monitored by the marketing department. This information, coupled with basic client information like name, address, phone number, and birthdate, gave Harrah’s the opportunity to create intricate customer profiles.

* Customer loyalty program. The company secured a high level of customer loyalty due to its membership program and its general approach to customizing services to the needs of every customers.