Question

Customer satisfaction is important to retailers for the following reason:

1) Customer satisfaction is an integral part of the retailer's mission statement and must be constantly assessed.
2) It costs the average retailer five times as much money to get a new customer into the store as it does to make a sale to current customers.
3) Customer satisfaction has a direct impact on customer segments.
4) Population, social and economic trends are crucial to a customer's overall shopping experience.
5) Satisfied customers will positively affect market segmentation.

Answer 1

Customer satisfaction is key for retailers as it helps attract repeat customers, build a strong reputation, and justifies higher pricing. It saves costs on acquiring new customers and is integral to market dynamics and segmentation.

Step-by-step explanation:

Customer satisfaction is pivotal to retailers because it underpins their success in attracting and retaining customers, which is an integral part of their mission statement. Firms are highly invested in garnering repeat customers and a good reputation, as these lead to recommendations and a reduced need to attract new customers, which is often costlier.

A retailer with a strong reputation for quality can command higher prices and worry less about buyers questioning the quality of their products.

However, when information is imperfect or unclear, it can lead to buyer's remorse or hesitation to make future purchases.

Therefore, ensuring customer satisfaction plays a critical role in market dynamics, impacting customer segments and market segmentation.