Learning objectives Learning outcomes To understand the difference between product trial and repeat purchase. Understand how to maximise repeat purchases through customer loyalty Learning outcomes To explain the different ways businesses encourage customers to trial their products and give examples To explain how customer loyalty can lead to repeat purchase

Business strategies to encourage Advertising Free publicity Free samples Business strategies to encourage product trial User testing Targeting trade buyers Low trial prices

WATCH VIDEO PRODUCT TRIAL AND REPEAT PURCHASE – TAKE NOTES

List examples of different businesses you know and how they encourage product trial

Group activity Thought shower: How might Ford and Marks & Spencer get customers to trial their products? Note responses and feedback

Here are some ways to product trial : Free tastings in supermarkets or where your products are sold. Buy a product and get a trail size of something else for free Refer a friend for a free trial Network with other businesses in your target market e.g. get them to hand out something of yours that relates to their product, like free massage oil at the day spa. Make up packs of trial size products for donations to charities or prize donations for community raffles etc. Free samples eg shampoo in magazines or newspapers Trying out a product is the very best way to see if it fits with personal tastes, lifestyle, and attitudes.

But what can a business do to ensure customers keep coming back?

The Loyalty Effect, Frederick F. Reichheld “ The probability of selling something to a prospective customer is only about 5-20%, while the probability of selling something to an existing customer is 60-70%.” Marketing Metrics “ The ‘80/20 rule’ was observed across retail industries and suggests that almost 82 percent of profits are generated by 20 percent of the firm’s customers.” Zeithaml Survey “ It costs at least five times more to acquire a new customer as it does to retain an existing client.” The Loyalty Effect, Frederick F. Reichheld “ Retailers who take meaningful steps to drive consumer loyalty are 88% more profitable than their competitors who do not.” Deloitte research study – “Serving the Networked Consumer”

Business strategies to encouraging Repeat purchases Changing the price of products can increase sales eg special offers. But not if business wants to retain image of prestige Continue to use above and below the line methods of promotion Price Promotion Business strategies to encouraging Repeat purchases Product Place Ensure available in the right place at the right time Updating products, extension strategies

PRODUCT TRIAL AND REPEAT PURCHASES CASE STUDY – EXAM STYLE QUESTIONS Paired task: read the case study and in pairs, discuss the questions and make notes. Consider how you might answer the questions (look at the marks awarded). What skills are you being asked to demonstrate? Individual task: write up your answers to each question in your exercise book. TO BE COLLECTED IN FOR ASSESSMENT

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