Case Study for Yedo

450 Words2 Pages
After studying and analyzing the situation and problems faced by Yedo, we would suggest Yedo to implement membership card system in their department store based on SWOT analysis. Firstly, the strength to the company for having membership card is not only to attract more customers and increase sales volume, but also retain current customers. By offering membership card, members would enjoy lower pricing of goods at lower price. Reichheld and Sasser (1990) claimed that companies can boost profit by almost 100% by retaining just 5% more of their customers. According to the law of demand, customers would purchase more as the price goes lower. A study from Shopzilla (Greg Howlett, 2009) in 2007 had shown that 49% of shoppers considered the price to be most important factor in making a buying decision. This showed that pricing is still the most important factor that affects buying decision. Therefore, by offering goods at lower prices compared to competitors is definitely a smart choice to attract customers, especially when members’ day is held every month. Members can collect points and redeem free gifts and vouchers with the member card. This is a very attractive measure to consumers especially the luxurious gifts such as cars, laptops and television from lucky draw on members’ day. Raghubir (2004) stated that coupons and promotions give an economic incentive for the customer to use when purchasing a brand and the effect on consumer redemption of coupons has mostly been positive as it attracts customers, and gives them interest in a particular brand. Furthermore, vouchers are like free money to consumers and they always tend to spend more than the amount stated on the vouchers as they will be willing to pay some extra money instead of wasting it. This is indeed a common consumer psychology. Besides, long-term relationship can be built between the company and the
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