Divided loyalty better describes actual consumer

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“Divided loyalty” better describes actual consumer behavior, since (25) customers typically vary the brands they buy. The reasons for this behavior are fairly straightforward: people buy different brands for dif- ferent occasions or for variety, or a (30) brand may be the only one in stock or may offer better value because of a special deal. Most buyers who change brands are not lost forever; usually, they are heavy consumers who simply (35) prefer to buy a number of brands. Such multibrand loyalty means that one company’s most profitable customers will probably be its competitors’ most profitable customers as well. (40) Still, advocates of loyalty programs contend that such programs are bene- ficial because the costs of serving highly loyal customers are lower, and because such loyal customers are less (45) price sensitive than other customers. It is true that when there are start-up costs, such as credit checks, involved in serving a new customer, the costs exceed those of serving a repeat cus- (50) tomer. However, it is not at all clear why the costs of serving a highly loyal customer should in principle be differ- ent from those of serving any other type of repeat customer. The key (55) variables driving cost are size and type of order, special versus standard order, and so on, not high-loyalty versus divided-loyalty customers. As for price sensitivity, highly loyal (60) customers may in fact come to expect a price discount as a reward for their
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loyalty. -------------------------------------------------------------------------------- Q33: The primary purpose of the passage is to A. question the notion that customer loyalty programs are beneficial B. examine the reasons why many customers buy multiple brands of products C. propose some possible alternatives to customer loyalty programs D. demonstrate that most customers are not completely loyal to any one brand of product or service E. compare the benefits of customer loyalty programs with those of other types of purchase incentive programs Answer: -------------------------------------------------------------------------------- Q34: Missing! -------------------------------------------------------------------------------- Q35: Missing! -------------------------------------------------------------------------------- Q36: Missing! ------------------------------------------------------------------------------------------------------------ Q37: Roughly one-half of the world’s population, including virtually all of East and Southeast Asia also, is wholly dependent on rice to be its staple food. ------------------------------------------------------------------------------------------------------------
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