IGCSE Enterprise: Specimen Questions with Answers 39 - 40 of 49

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Case Study -2

Pottery Barn & Sherwin-Williams

Co-Branding Campaign: Color Your Room

  • One of the biggest benefits of co-branding campaigns is the opportunity to expose your product or service to a brand-new audience. that՚s exactly what home furnishing store Pottery Barn and paint company Sherwin-Williams did when they partnered together back in 2013.
  • Together, the two brands created an exclusive product line of paints, and then added a new section of Pottery Barn՚s website that helped customers easily select paint colors to complement their furniture choices.
  • Customers could coordinate paint colors with picture-perfect Pottery Barn furniture for a mutually beneficial partnership – and style assistance for both brands customers to boot. “Paint Landing,” Pottery Barn՚s landing page for the partnership, contains helpful blog posts and how-to ideas for do-it-yourself painting and decorating.

Question 39 (2 of 12 Based on Passage)

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Short Answer▾

Explain any two methods of retaining customers.

Explanation

Customer orientation was mentioned to be the objective of most successful companies. A company who is customer oriented for its customer retention becomes a natural process and strategy. Higher rate of retention is possible, only if, the company pays attention to the following factors:

  • Customer service: Service plays a significant role in the customer՚s decision to stay with the product and the company. Research has shown bad experience on this account has enraged customers forcing them to abandon the company.
  • Continuously enhancing value: Continuous value enhancement through increasing customization also helps to enhance customer retention. This is greatly facilitated by co-opting customers in designing products and other elements of marketing mix.

Question 40 (3 of 12 Based on Passage)

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Short Answer▾

What are the reasons of retaining customers?

Explanation

Customer retention refers to the process of maintain the current customers on whom a business has already spent on acquiring them. Attracting new customers to a firm costs five times more than retaining the old customers. Customer retention helps to increase the profitability of the firm.

Reasons for customer retention are:

  • To save money spent on marketing as acquiring new customers costs a lot more to the firm.
  • To encourage repeat purchases from loyal customers or repeat customers and to earn more profit.
  • Firms get free word of mouth advertising from loyal customers.
  • Firms also gets valuable feedback from retained customers. Customers who make regular purchases from a brand will know about the areas where improvement is required.

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