Question

Callie Crystal owns and operates one of the most successful local coffee shops in Denver, called The Edgewater Café. Each time a customer purchases their 100th cup of coffee at The Edgewater Café, they receive a free pound of coffee of their choice. What is Callie attempting to create with her unique "Free Pound of Coffee" marketing program?

A. Reducing buyer power with a loyalty program.
B. Increasing buyer power with a loyalty program.
C. Decreasing supplier power with a differentiated product.
D. Creating a substitute product.

Answer 1

B. Increasing buyer power with a loyalty program.

Step-by-step explanation:

Businesses use many ways for customer retention. One of them is loyalty program. Loyalty program is a form of customer retention program which rewards customer for purchasing up to a particular units of goods and service. The major benefit of this program to customers is that it will increase their purchasing power.

Callie Crystal offering customer a free pound of coffee of their choice is an attempt to increase buyer power. So increasing buyer power with a loyalty program is correct.

Option A is wrong because loyalty program increases buyer power. Option C & D are not relevant in answering the question.

Only option B is correct.