Discuss about the Report for Marketing Customer Engagement of Business Implications.
In the present business environment, organizations utilize loyalty program to ensure future businesses. Loyalty program also help to identify behavioral trend, spending pattern and future needs of the customers. In this assignment, the focus will be on Fly Buys that represent largest loyalty program in the country. The company established in 1996 to develop loyalty program that could able to recognize the consumers of the New Zealand. Presently Fly Buys has around 2.5 million cardholders with more than 50 business partners. Almost 3,00,000 time New Zealanders swipe the card every day (“New Zealand’s #1 loyalty programme.”, 2016). However, increase challenges in the market have creating lot of difficulties for the program to maintain its popularity. The report will evaluate options that Fly Buys can utilize for maintaining its position in the market.
From the study, I have assessed that Fly Buys focusing on the brand stretching policy in order to maintain its popularity in the market. As per the article by Singh (2013), brand stretching reflects a marketing strategy in which an organization promote product or services with a well-developed image for providing different types of products and services. I found that Chris have consciously tried to utilize the brand popularity for the further utilization of the loyalty program. The case study has selected brand-stretching strategy for the enhancement of the loyalty program as it can provide several benefits. I believe Chris selected brand stretching strategy to reduce the perceive risk of the customers at the time availing services. It will also help Fly Buys to minimize the promotional cost for inducing more people to avail the services. Furthermore, I have identified that the case study highlighted that Fly Buys possess 71% share of the New Zealand household market. Therefore, it established the fact that the Fly Buys is extremely popular in providing loyalty services to the customers. Thus, I believe that the selected strategy of Chris is extremely effective to increase the popularity of the loyalty program.
However, I feel Fly Buys can also choose to introduce new brand for enhancing the popularity in the market. However, I do believe that Fly Buys have to go through proper planning and analysis procedure in order to launch a new brand successfully in the market. I believe that development of new brand will help to face the future challenges in a much more effective way. Therefore, I believe that managers of Fly Buys will have to make quality decision in order to fulfill the objective of launching new brand in the market (Rosenbaum-Elliott et al., 2015). I feel that if managers of Fly Buys can actually evaluate the present market situation in a proper way, new brand develop can actually provide more consumers for the organization. I also feel that development of new brand can actually allow Fly Buys to utilize innovative ideas to for the penetrating the market in a proper way. Furthermore, utilization of proper market analysis will allow Fly Buys to develop the brand in a much more effective way (Albrecht et al., 2013). I feel that if Fly Buys select new brand development strategies then the company can maintain two different databases for the two brands. Therefore, it will be easier for the company to identify the effectiveness of the implemented strategy.
From the above discussion, it can be assess that both the options have their own benefits for the organization. For instance, if Fly Buys select Chris’s option of brand stretching then it will minimize the risk in the market. However, same brand name does not provide too much advantage in developing new customers (Abosag, Roper & Hind, 2012). On the other hand, if Fly Buys chooses to implement new brand development strategy, then the company will have to invest more on the promotional campaign. However, I believe development of new brand will help to grab the attention of the new customer. In present complex business environment, I feel every organization has to focus on continues development of customer base. Otherwise, it can create huge amount of negative impact on the sustainability in the market. Therefore, I believe utilizing new brand will be comparatively more beneficial for the Fly Buys.
From the above case study, I have assessed that Fly Buys have huge amount of popularity in the New Zealand market. Therefore, it is expected that the brand have their own base of customers. As a result, utilization of brand stretching strategy will help to implement same strategy for the development of the popularity (Spiggle, Nguyen & Caravella, 2012). However, Fly Buys are present in the market for a long period of time. Therefore, the brand has very little area for penetration. Furthermore, Fly Buys is continuously utilizing same strategies for maintaining its position in the market. As per the article by Kapferer (2012), organizations have to utilize innovative strategies for developing strong attachment with the customers. Therefore, if Fly Buys utilize new brand development strategy, it will definitely create positive impact on the customer loyalty program. In addition, development of new brand actually allows Fly Buys to utilize innovative loyalty program strategies like youth card and senior card (He, Li & Harris, 2012). Furthermore, it is expected that importance of loyalty card will increase in future. Therefore, new brand development actually increases the effectiveness of market segmentation that eventually creates positive impact on the positioning of the new brand (Stobart, 2016). On the other hand, I believe brand stretching can actually create huge amount of negative impact if one of the product or service failed in the market. Since, I believe that brand stretching actually carries the reputation of the entire organization. Therefore, when one product or service failed in the market, it creates negative perception on other product and services as well.
As per the article by Ferguson et al. (2016), new brand development is extremely crucial for sustaining growth in the market. However, I do believe that development of strong brand depends on the clear mission and vision of the organization. Otherwise, it might not able to provide same level of benefits. The implications of the recommended option are as follows:
Earn loyalty of new customers:
I believe if Fly Buys can able to evaluate the need of the market properly, brand development strategy will create positive impact on the customer loyalty. I also feel that introduction of new brand will increase curiosity of the people that eventually influence them to stay associated with the organization.
Gain competitive advantage:
I feel utilization of more than one brand can actually help Fly Buys to improve its level of acceptance in the marketplaces. Thus, it actually helps Fly Buys to gain competitive advantage in the market. Furthermore, I think if one brand loses its penetration, Fly Buys can utilize other options to maintain its option in the market.
Focus on delivering value:
I feel that if Fly Buys can create a unique value proposition for the new brand, it will help to improve its position in the market. Furthermore, I believe that unique value proposition will allow Fly Buys to focus less on convincing the customers.
Protect against price undercutting and economic change:
I feel that utilization of more than one brand actually will help Fly Buys to implement different pricing structure at the time of economic change. Therefore, it will help consumers of Fly Buys to remain associated with the organization.
Conclusion and recommendation:
The above discussion highlights the fact that both the options have certain benefits. On the other hand, both the options have to consider several factors in order to get successful in the market. However, I feel that brand stretching involves too much risk as it actually risks entire reputation of the organization. Therefore, I will recommend Fly Buys to utilize new brand development strategy to maintain the loyalty level of the consumers. However, I will also recommend Fly Buys to evaluate the market needs properly before the introduction of new brand in the market.
References:
Abosag, I., Roper, S., & Hind, D. (2012). Examining the relationship between brand emotion and brand extension among supporters of professional football clubs. European Journal of marketing, 46(9), 1233-1251.
Albrecht, C. M., Backhaus, C., Gurzki, H., & Woisetschläger, D. M. (2013). Drivers of brand extension success: What really matters for luxury brands.Psychology & Marketing, 30(8), 647-659.
Ferguson, G., Ferguson, G., Lau, K. C., Lau, K. C., Phau, I., & Phau, I. (2016). Brand personality as a direct cause of brand extension success: does self-monitoring matter?. Journal of Consumer Marketing, 33(5), 343-353.
He, H., Li, Y., & Harris, L. (2012). Social identity perspective on brand loyalty. Journal of Business Research, 65(5), 648-657.
Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic thinking. Kogan page publishers.
New Zealand’s #1 loyalty programme.. (2016). Fly Buys. Retrieved 10 August 2016, from https://www.flybuys.co.nz
Rosenbaum-Elliott, R., Percy, L., Elliott, R. H., & Pervan, S. (2015).Strategic brand management. Oxford University Press, USA.
Singh, D. (2013). The brand personality component of brand goodwill: some antecedents and consequences. Brand equity & advertising: Advertising’s role in building strong brands, 83.
Spiggle, S., Nguyen, H. T., & Caravella, M. (2012). More than fit: brand extension authenticity. Journal of Marketing Research, 49(6), 967-983.
Stobart, P. (Ed.). (2016). Brand power. Springer.
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