This myth is partly true because most

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The loyalty retailer then needs to watch carefully its generic prices and in the meantime offer a price matching guarantee with the EDLP player. Such a situation exists in the UK where grocer Asda owned by Walmart follows an EDLP approach and competes with several retailers that are loyalty Hi Lo players. To attract shoppers from other loyalty playing retailers.

Asda has offered a percent price advantage guarantee for its shoppers and will reimburse shoppers if Asda is not percent cheaper on the comparable shopper s total shopping basket. This has been effective to the extent that Tesco now offers a price matching promise vis à vis Asda and other retailers on top of its own loyalty program. Normally one would Chinese Overseas America Number Data expect this price matching guarantee to call an end to the price war. But other more global issues seem to be at stake and Asda continues to guarantee a percent price advantage. For Asda short term profits don t seem to top its list of objectives. Loyalty Systems And Infrequently Purchased Goods Another myth is that loyalty programs do not work in categories that are purchased infrequently or do not affect the behavior of customers who shop infrequently in the category. Consider the impact of frequent flyer programs for families that travel mostly for vacation.





It might take them more than a year to accumulate enough miles to get a free airline ticket. Would a frequent flyer program affect the choice of airline when making the next reservation for a family vacation In other words it is difficult to make a loyalty program effective if the consumer does not believe that the rewards are achievable. retailers agree with the observation but have found ways to get around it. They have done so by either making the award more lucrative and therefore more salient in the minds of the consumers or they help consumers accumulate rewards in other ways that could be redeemed in their stores. To solve the challenge of the infrequent vacation traveler airlines introduced credit cards so consumers can earn points or rewards for all their spending on the card and advance to levels that make the rewards more easily achievable.