05:Identify and explain two advantages to WKN of maintaining customer loyalty.[6]

[Dania]

WKN sells household goods such as plates and brushes. Last year sales in WKN’s 200 shops increased but profit fell by 80% to $5m. WKN’s Human Resources Director said: ‘All retailers are finding this stage of the business cycle challenging. WKN has to reorganise the business. This will mean redundancy for 1800 shop workers. WKN plans to create 100 new jobs in the marketing department at head office to help maintain customer loyalty.'

05:Identify and explain two advantages to WKN of maintaining customer loyalty.[6]

Possible KN Points:
>Increase sales.
>Easier to match products to existing customer needs.
>Maintain competitiveness.
>Current customers recommend products.
>Cheaper than trying to attract new customers.
>May be able to increase prices and keep customers