Your company launched an upgrade to your most popular product. Demand exceeds the Inventory or stock of products you have.
You can supply only 50 customers. 100 of them want to place an order. That includes:
- 48 new clients. Some of those clients you have been trying to get for them for the last ten years. This is your only chance to get these new clients.
- 48 old clients. They have been with your firm since the beginning. They will be offended if they don’t get it. One of them is a buyer you see when you go watch your niece’s soccer games, she is always there.
- One new client and one old client who is nice. They will understand if they don’t get it.
Whom should you prioritize?
My comments are for IBM. The exact sale unit number is hard to find. But still, we can know how to prioritize our customers. Firstly, IBM’s inventory should focus on Cloud & Cognitive Software, this is the core of IBM’s business, and it’s increasingly important all these years. Followed by Global Technology Services and Global Business Services. As for the region, IBM should focus the inventory on the Asia Pacific and Europe, which were only facing a smaller revenue fall during the pandemic, and they are highly potential.
In a situation like this, I believe you should prioritize your existing customers over new customers. Customer retention is one of the most important parts of business, especially when acquiring a new customer can be so expensive for a company, when switching costs are so expensive. If you were to go after all the new customers, you leave yourself in a gamble, because there is no guarantee that the customers are going to fully commit to your brand, and your existing customers may become so frustrated that they leave your brand. Because we have one old customer who is nice and won’t care if they aren’t included this month, that is the only opportunity present to introduce a new customer to the brand. We are also able to supply one more new customer to total up to the supply of 50 that we have. In summary we supply: 48 existing customers + 2 new customers. In the future it is important to increase supply as the demand is increasing to be able to provide to the newer customers that approach the brand.
Under this specific situation, I will recommend the company prioritize the existing/old customers. Old customers have stayed with the company for so many years, and their loyalty is important for its continuous growth. Furthermore, getting new customers is expensive, and there is no guarantee that the company can get all 48 new customers. However, since one of the old customers will understand the situation that the company faced, I will suggest giving that spot to a new customer. Therefore, my recommendation will be 47 old customers with three new customers.
The company that I am working on is Disney, and I’d like to share some thoughts on that too. Disneyland is so popular worldwide, and it always gets super crowded during the peak tourist period. Such crowded not only generate heavy work for the park, but also influence visitors’ experience in the park. At this point, Disney is facing the situation of prioritizing visitors. In my opinion, I will suggest Disney prioritize its VIP customers first. After its VIP customers, all customers will have the same chance to reserve their spot for visiting the park on the Disneyland calendar.
In my opinion, the company should definitely prioritize those 48 new clients. One important note from the question is that “This is your only chance to get these new clients”, which means if you prioritize those new clients when the demand exceeds the inventory, they are going to be your customers. I used to study about consumer behavior in my undergraduate school, that you need to make 3 times more effort to get a new customer than retain an existing customer, and right here we have the chance to make the same effort to get a new customer with retaining a existing customer, so why not catch the chance?
Moreover, one important characteristic of the new customer is that they are potentially going to advertise your product, mainly by word-of-mouth. Undoubtedly the old customers also can tell their friends about how good your shoes are, but it is limited, since they have limit amounts of friends to talk about, and to break the limit we need to “hire” those new customers.
I would suggest the company to prioritize old customers over new ones in a situation like this. Old customers have long history of repeated purchasing record and they are very likely to stay with the company for the future, whereas new customers are not guaranteed to make another purchase since they might just want to try out a new brand, and it happens to be you. In addition, taking care of old ones help the company to build reputation and gain credits.
A possible solution: Since it’s the only chance get these new clients, If the company wants to try its best to please both sides, they should sell the 50 pairs to the new clients first, which left us with 2 pairs that we can sell it to the 2 nice guys. Then, we promise the old customers that we will send them a pair once its in stock with discount. It’s something very common in ecommerce where if something is out of stock, but the store still allows consumers to place an order under the premise that consumers will have to expect their products to arrive in weeks rather than days.
In this situation, the organization should prioritize supplying the product to existing clients. Customer loyalty can greatly influence a business and its future. Stephan Butscher assessed the necessity and importance of customer loyalty programs. He determined that the basis of utilizing client loyalty is to increase profit and customer retention (Butscher 6). In order to accomplish this, a positive relationship between the organization and the client must be created. Additionally, supporting client loyalty programs can win the organization new clients (Butscher 6). Therefore, prioritizing existing clients versus gaining new clients during a product roll out can end up gaining the organization the new clients they feared they would lose.
It is a risk to prioritize existing clients over new clients. The business will lose the opportunity to gain long desired clients. However, should new clients be prioritized over existing clients, the loyalty of those existing clients is in jeopardy. The benefits of prioritizing existing clients versus new clients outweigh the risks. The loyalty of existing clients should be rewarded for their continued support, and since loyalty is already established, it is the best choice.
I personally think the company should prioritize its new clients. Assuming that this company has provided good products and services throughout the business over the past few years, I think this is a great opportunity for this company to earn more potential customers. You may think it is a risk to prioritize new clients over old clients because retaining your client is important. However, just because they are prioritized does not guarantee that they will be faithful to your brand and will not switch to another brand. Even if you seem to lose old clients at the moment, by reaching out to new clients, the brand could expand its consumer markets and get higher brand awareness in the long run. And If your brand or your business is reliable and has a strong presence in the market, your old customers could be loyal to you and patiently wait for you. For example, if I am a loyal customer of Coca-Cola. Just because Coca-Cola ran out of stock or can’t get a specific product for some reason, I wouldn’t abandon the Coca-Cola brand right on the spot and transfer directly to another brand. I may purchase other brands such as Pepsi for the moment, but just until inventory comes back. This doesn’t mean that I totally just forget about the brand, but I will buy them again when Coca-Cola stock is filled and are available to me.
In this case, my advice is to give priority to old customers with limited inventory. It takes more effort and time to develop one new customer than it does to maintain several old ones, since the company has not yet established a relationship of trust with the new customer and will not build that trust by selling them a popular product at this time. In addition, new customers do not bring higher benefits than old customers. On the contrary, the cost of retaining old customers is much lower. When a company has a large number of loyal customers, the company could spend less money on product promotion and brand awareness. And the cost invested in customer support can be greatly reduced since the customers are already familiar with our products and services. More importantly, if a company chooses to prioritize maintaining relationships with existing customers, the trust with them will be stronger, which will benefit the company in the long run. But it doesn’t mean that the company don’t develop new customers at all. In this case, I suggest that we offer 40 of our 50 inventories to old customers and 10 to new ones.
I belong to the Coca Cola group. While introducing an upgrade in the hero product of Coca Cola, the brand should place this product in the retail stores only as that is where most of our buyers are and should prioritize everyone (new and old)It should sell the product on first come, first serve basis and label it as a “limited edition” and only keep a few bottles/cans in every store. This would benefit the brand in two ways – First, it would lead to consumers wanting more as they would feel like they did not get to try the beverage. Second – It would also let Coca Cola know how many consumers were interested in buying a product that is an upgrade in our hero product because they have seen in the past that launching a new product has not brought in as many sales as the original/hero product does. To increase the demand in the new product even more, Coca Cola should spend more on marketing strategies for this beverage while still labelling it as “LIMITED EDITION” deliberately knowing that they will face issues in supplying it to all it’s new and old consumers. Consumers tend to fall for the word “limited edition” or “limited offer” when it comes to selling any product. Generally, in marketing we have also witnessed that launching an exclusive item surges the demand of the product even more amongst the consumers as it creates curiosity. When they realize they could not get their hands on it, they would feel like they missed out on something. During this time period, Coca Cola can work towards increasing the supply of this new launch internally. Once Coca Cola knows it has left their consumers wanting more of the product, they should create another round of a campaign which should talk about how Coca Cola values all it’s consumers and is bringing the newly launched product once again but this time with enough supply for all.
I would suggest the company needs to prioritize old clients. Since the productivity is limited, it makes the upgraded product become somehow “Limited Edition” or “exclusive”. By prioritizing old clients in this situation, the company builds a sense of exclusivity for their old clients. The company cannot ignore the potential of repeat customers from whom the company can get word-of-mouth advertising. Old clients are more likely to recommend the product to others. This is where familiarity plays an important role. When people feel personally invested in a brand, they feel valued, which is likely to turn into customers telling their friends about their experience with the brand. In addition, repeat customers tend to spend much more than new customers. Therefore, I suggest: 48 for old clients and the rest for new clients (2)
I’m from the Nike team. In this particular situation,Because we don’t have the ability to make all customers get what they want, but maybe we can do our best to make customers less disappointed. I think Nike needs to do as much as possible to satisfy both parties. I will split the 50 pairs in half, 25 pairs will be sold to old customers and 25 pairs will be sold to new customers. But Nike will not take a first-come, first-served basis, so customers may think that Nike is hyping, so as not to increase the bad influence. 50 new customers and 50 old customers will get a number that used to win the chance to buy this new products, but we want to ensure that the probability of each customer getting the shoes is the same and maintain a certain fairness. We can use Nike’s online app SNKRS or offline flagship store for this activity, I think this way customers may attribute it to unlucky.
I think it is more important to maintain old customers, new customers have great instability and need a lot of human, material and financial resources, time and energy to meet the needs of new customers. But old customers are different, you know the needs of old customers, so it is easier to ensure a continuous and stable inflow of benefits. Therefore, I will first meet the needs of old customers and develop two new customers. I am very grateful to the two clients who can understand my current predicament and I am looking forward to working with them next time.
I come from the Apple Team. My option is the new customers for the reason that expanding customer resources is more important to me. Firstly, old customers are inherent and they got used to using Apple’s system and they even have many Apple products which are connecting each other. Even if they can not buy the new product now, they will buy it in the future, because the cost to change all your habits on electronic devices is much higher than the cost of waiting time. Secondly, new customers need to be developed and there is a great development cost in it. Therefore, if my new products can please my new customers especially those I have been fighting for a long time, my customer resources will become 50 old customers + 50 new customers = 100 customers.
In this case, from my point of view, I will prioritize new customers. According to the stated condition, the new clients are those whom I’ve been trying to get for the last decade and this will be my only chance to get them. The primary reason for prioritizing new clients is that if I had missed this opportunity, I might not have had the chance to get these clients again, and gaining these new clients will make my efforts in the last 10 years pay off. Moreover, new clients are the bridge to more customer resources, and it’s likely for us to develop these new clients into loyal customers in the future. For the old clients, I will select around 10 clients who are the worthiest among the 48 to keep supplying my products, and for the rest of the old clients I will try to make some compensations to win them back.
As the decision maker for Pfizer’s COVID-19 vaccine, my choice is to prioritize expanding to new customers, because expanding to new markets is very important for Pfizer given the competitive environment and huge potential market. On the one hand, the global potential market for COVID-19 vaccines is huge, and Pfizer needs to spend more to seize it. Therefore, it is urgent to gain new customers. Furthermore, due to the special nature of vaccines, regular customers choose Pfizer as booster based on product performance rather than marketing. On the other hand, Pfizer continues to invest in R&D to update the COVID-19 vaccine for more and more variants, so it is necessary to get the latest market feedback from new customers.
This answer is for Disney. Disney’s main businesses are in three categories: subscription fees for digital media, theme park tickets and related services, and merchandise sales.
First, for digital media-related business, Disney’s borderline costs can be low. In other words, for this business, there is no budgetary limit for Disney, and it is a matter of more and more, so there is no problem of choosing between new and old customers.
Second, for theme park tickets and related services. Since the load of the service industry is finite, in many peak seasons there will be a situation where demand far exceeds supply. Even in most cases, the loyalty and enterprise value of regular customers is much greater than that of new guests. However, Disney should also take into account the issue of corporate fairness. Therefore, first-come, first-served is a good solution. Disney can open an exclusive online reservation portal for returning guests, and timely email reminders have helped returning customers to complete their online applications more efficiently.
Finally, merchandising has this typical inventory problem. Disney needs to take into account both the loss of repeat customers and the acquisition of new guests that are important to business growth. Therefore, I suggest learning from Qatar Airways’ pricing mechanism. Disney could offer an additional discount (about 10%) to guests who have a history of making purchases. On the one hand, this can strengthen the goodwill of the old customers towards the business. On the other hand, this could discourage new customers to a certain extent, so that the limited inventory can satisfy more consumers in need.
For Disney, the customer prioritization problem usually happens on Disney theme park tickets when it comes to tourism season and Disney merchandise, especially new character merchandise or seasonal/limited editions. As Disney’s 100 years celebration is coming, the 100th-anniversary limited edition merchandise may get demands exceeding the inventory. In this case, I would suggest prioritizing old clients with a certain level of Disney membership to purchase the limited product. However, we should also give new clients a chance to purchase in order to expand our customers.
The strategy I came up with is to provide priority access to old customers, giving them an early bird purchase chance, such as two hours before the official release to everyone. For this early sale, we would use 30% of our inventory. After the early sale ends, everyone will have access to purchase the product during the official release. The rest 70% of the inventory and what has left from the early sale will all be sold at this point, and it’s a first-come-first-serve mode.
By operating this strategy, we can strengthen customer loyalty among old clients, and also expand our market to new customers. In addition, providing priority to old clients with high-level membership can be a way to encourage people to spend at Disney. If they want to get priority, they will try to become old clients of Disney, which enhance customer loyalty.
In this case, I think Jenny should stick to the new customers for two reasons.
Firstly, every company should seize the chance of grabbing new customers into their business. New customers will always bring new energy to a business. Moreover, in a business like selling shoes, old customers might not have as high demand as new customer because they already have one.
Secondly, Jenny is selling her shoes on the plane to New York city. Many people on the plane are in need of new shoes becase of various reasons, such as traveling or coming into a new city. This is her good opportunity to boost the sales.
Moreover, Jenny is running a small business. More people mean more profit, which can make her business larger. And then, she can have more resources and power to maintain her old customers.
In this case, I would recommend prioritizing old customers with limited inventory. Old customers have a long history of making purchases from us, so we can be sure that they are committed to the brand and are trusted customers. When a new product is launched, in order to keep a positive trust relationship, we must first introduce it to our long-term customers since they have been with us for a long period of time, we are more like friends than customers. Moreover, prioritizing old customers does not imply that you will never get new customers. If we think this way, an old customer has a repeated purchases history and she/he shows a strong passion for us, I believe she/he will introduce our brand to friends and families, in this way, we will also gain new customers. Old customers will assist the brand in generating positive feedback from friends and family, which will be more convincing. In this way, compared to those products promoted by people they don’t know well, these new customers are more easily persuaded and more likely to believe in the brand’s products.
Personally, I suppose new customers are as important as existing customers, so the best choice is maybe to randomly select the 50 customers out of 100, which is a fairer approach to all of customers. If the customer is lucky to get the chance to have the shoes this time, it’s excellent. If they are not, we can provide more inventories next time after we checking the popularity of shoes. Those who don’t buy the shoes this time, maybe they can wait for the next time and are randomly selected, which is also likely to increased the brand awareness and appeal to more customers participate in it.
My company is Nike, and I think for this time it’s more important to maintain old customers. For Nike, there are some premium Jordan shoes that are always popular and hard to get, and my old clients may have waited for a long time to have the chance to purchase, thus it will ruin the customer loyalty if the company choose not to supply them. Therefore, all of my old clients will get the company’s supply, because they support the company for a long time, and they are the best group to promote our brand to surrounding people. For the other two products, I will distribute them to two of the new clients, and I will analyze my new clients to find out who have the potential to be my loyal customer since then, and these products will be supplied to them.
In my opinion, I would like to choose to prioritize the new customer. The rationale behind this is the rule that is it can cost five times more to get a new customer than it did to keep an existing customer and the question is specific that “This is only one chance to get these new clients”. So you have to catch the opportunity that you get and this can create the new word of mouth. However this decision might affect the existing customer, and the company can create a campaign that helps to retain the company’s repetition. For example, if the campaign that 50 products for new customers only, this campaign can gain new customers and not make the existing ones feel offended.
Moreover, if some old still feel frustrated we can provide extra promotion such as a discount or making special product for the existing customer for next product launching.
In this specific scenario, I would prioritize existing clients over new clients by the ratio of 70:30, meaning 35 existing clients and 15 new clients who will get the product. It is important to recognize and reward existing clients who have been supporting the business since the beginning. This would strengthen customer relationship and establish greater brand loyalty while creating strong brand advocates who will spread positive word of mouth in their circle of family and friends. As a result, this could potentially lead to acquiring new customers in the future as well. Lastly, for the existing clients who missed out on the opportunity to purchase the product, the company could either offer them exclusive passes to be the first ones to purchase the next time or special discounts voucher for their next purchase. This would help maintain long-term customer relationship. On the other hand, the company has to expand its customer base; therefore, the firm could not neglect the opportunity to secure new clients. For those new clients who missed out, the company could ask for their contact information to notify the next available purchase. This would also allow the company to collect leads and leverage them in the future as well.
Disneyland focuses on customer engagement and creating unique experiences for customers; therefore, prioritizing old customers are as important as new customers. But I would choose to launch new products toward old customers since they have more knowledge about our company as well as other products like the streaming services. The newly launched products could receive stronger publicity after being noticed among old customers. Clearly, the data from Disney’s balance sheet, there is 50% of property, plant, and equipment, and a 5% inventory. A low inventory is caused by Disney’s most popular products are parks itself as well as online services. From a target customer research, Disneyland embodies the full human care and Disney is good at alleviating customers’ moods, which reflects old customers’ loyalty really helps Disney to build a strong market share. And more positive reviews bring more customers. Impressions are very important because they are the primary factor that determines the changing course of a company’s relationship with its customers. Customers form their own opinion every time they have contact with your company in any way. Disney’s business philosophy is to make sure that everything that the public or customers can see is carefully choreographed and presented. Connection builds rapport relationship with the customer. It is much more far-reaching than mere communication and represents the way we build trust, confidence, and loyalty by laying the foundation for a long relationship.
In my opinion, we should supply our new upgraded products to the old clients as priority. There are two reasons, First, they are loyal customers. I understand that the aim for upgrading the most popular product is to expand the market share. However, it is more important to maintain the market share we already had. Loyal customers are more likely to keep purchasing our products after experiencing the upgrading of the product. We do not want to lose their loyalty by offending them. In short term, we can price this upgraded product higher to make more profit. In long term, we want the potential clients to see the benefit of being our loyal customers, which is to be served as priority. So that we can attract more customers to purchase our product in the future. This also leads to the second reason for suppling the old clients first. There are more ways to expand to new markets. Maybe we will be ablet to build up our supply chains to in crease the supply after collecting the profit of this 50 products, so we can sell to more clients in the future.
In such a case, I would reorganize the customers, without distinguishing whether they are old or new customers, because both old and old customers pay for customer acquisition costs, and from this perspective, they are all the same. Also whichever side is chosen the other side will be very angry and may have more unpredictable consequences, for example if new customers are chosen, the old customers will group together on social media to denounce our behavior. Or if we choose the old customer, the new customer will feel disrespected and never choose the company’s products again, and even influence others. So from the above two points of view, no matter which side is chosen will not be a good choice.
To solve the problem we are facing now, I would prefer to open the reservation channel, determine the pre-sale quota, and sell in the order of reservation. The rest of the customers who didn’t grab the pre-sale quota will be registered and visited, and those who didn’t buy the product will be notified in time after the product is restocked, so as to do a good job of customer maintenance.
I think this is better way, which is fairer, and more acceptable and understandable for customers.
According to this case, I would increase the product’s price to make the demand equal to the supply. Since we only have 50 merchandises in stock. We need to maximize our profit, and also this is the way all companies do. For example, the lack of automobile chips causes the MSRP of the vehicle price to increase. Also, I do not agree that the increase in the price will cause old customers to be upset. For example, the premier MileagePlus United Airlines member will also spend more when buying a ticket during a holiday.
In addition, I would use the method of first come first serve. No matter whether you are an old or new customer, everyone should be treated equally. I believe we always need to absorb new customers as a company wants to survive in the market for a long time. If a company always serves the same customer group, the good thing is they have great brand loyalty. However, this company would lose competitiveness in the long term.
In this particular case, I would give priority to new customers over existing ones. From what we know, new customers are the ones we have been fighting for the last ten years and this is our only chance. If we prioritize old clients, we will lose this “only” possibility to expand our customer base. If we can get 48 new clients through this opportunity, it will do more good than harm for the company. And the company will be rewarded for its efforts over the past ten years.
On the other hand, old clients are highly loyal to the company, but it would be difficult to grow if the company only continued to be responsible for these old clients. At the same time, I don’t think that repeat customers will abandon the brand because their needs are not met once. Since I come from the Coca-Cola group, I will use Coca-Cola as an example. As a big Coca-Cola fan, I would not abandon the brand because I didn’t get the latest Coca-Cola one time, instead, I would choose the next opportunity to buy this new product. Overall, I would allocate 48 out of 50 orders to new customers and 2 to existing customers. Of course, I will provide some compensation to the old customers to make up for the company’s choice this time and retain the existing customers to a greater extent.
In this case, I recommend prioritizing older customers with limited inventory. Old customers have long-term buying history with us, so we can be sure that they are trustworthy customers because of their love for the brand and user stickiness. Moreover, for a retail or any kind of selling business the reputation of a business is very important, and old customers always have the right to speak of a company’s reputation. At the same time, old customers have spent so many years in the company, and their loyalty is very important to the sustainable development of the company. Acquiring new customers is also costly and the uncertainty is too risky.
I am from Apple’s marketing team and I think this needs to be analyzed comprehensively from multiple perspectives. I would divide the 50 inventory volume into several parts, 20 to Apple Store customers, whether they are new or existing, on a first-come, first-served basis. The remaining 30 are divided into Wholesalers and Retailers to select the most suitable partner based on the size of their orders, the degree of scale of the platform they are on, the advertising they can provide to Apple, human resources, etc., and the length of the contract signed by both parties.
I choose to comment on the first problem: Prioritizing customers. I am from the Coca-Cola team, I prioritize new customers. Because our old customers have already established business with us and have a high level of customer loyalty, even if we don’t meet their needs this time, we won’t lose them forever. Moreover, Coca-Cola, as a leading company with over 40% market share, large retailers, restaurants, and consumers are very sticky to us. However, new customers have always been the basis of our market expansion, and we need to keep attracting new customers as an FMCG brand. At the same time, Coca-Cola is a large company that has the capacity and space to expand the brand. However, emotional appeasement and compensation for old customers should also be in place. We will only claim to the public that it is our problem that led to the lack of stock and issues a 50% discount on the next order to 50 old customers so that they can feel our sincerity and hold on to old customers.
I think it’s more important to think about existing customers. According to the current business philosophy of my company, McDonald’s, the use of big data tracking of consumers and the convenience of the app to place orders drives repeat purchases. Because of the ease of ordering and our sophisticated data tracking, we have a very high level of customer loyalty. In addition to our own hardware, customer loyalty is closely related to corporate values and the emotional link between the company and the consumer. The number of repeat purchases from repeat customers is definitely much higher than the number of purchases after acquiring a new customer. This is because there is a loyalty and a good emotional link to maintain and cultivate after acquiring new customers. And new products, even if they are left to the old customers, will cause the market to grab. Nowadays, many brands’ users have consumption records, and many limited products are only given to old customers, which is how brands want to give priority to old customers. I think McDonald’s has enough customer base, to avoid the risk of offering new products only to new customers and thus being boycotted by old customers, I prefer to leave the products to old customers.
I will prioritize my old clients more and leave them 35 products. Because for a company’s long-term development, customer loyalty is very important and I need to keep my loyal clients. I will probably rank them by how many products they have bought from me and the first 35 customers can get those new products. For the rest of 15 consumers, I will explain the situation (like tell them because of the supply chain issue we don’t have enough products for sale), give them 8% off coupon to conciliate them and promise they can get the new products next time.
For the new clients, I will leave them 15 products. Although they have never bought my products before, they stand for a huge potential market, so if I want to expand my business, I cannot ignore them. I think limited products can be a good chance if I use proper marketing campaign, because ‘out of stock’ means the products are popular and people will always chase the things they cannot own. Therefore, though most of them cannot get the products this time, they will still place the order next time. And if they try my products and think they are excellent, they will recommend them to their friends and family, hence I can have more customers in the future.
In this case, I will choose a conservative strategy to expand new customers to seek future development while retaining most of the old customers. For this strategy, I would split the 50 inventory among 30 old customers and 20 new customers. For both new and old customers who understand me I will choose not to assign products to them at this time.
When I allocate 30 inventory to regular customers, I will make a reasonable explanation for the remaining 28 customers who do not get inventory. I will attest that this time stock is limited and not everyone has access to it. Secondly, I will explain that the inventory allocation this time is random, and I will provide corresponding compensation to the old customers who do not get the inventory, such as a 10% discount coupon for the next purchase.
Likewise, for the 38 customers who didn’t get stock, I would explain the same to them and give them a 5% discount on their next purchase. By doing this, I think I can gain their understanding and increase the likelihood that they will shop in the future
As for the coca-cola group, I will prioritize new clients for the short term, because acquiring new customers means new growth in the market. If a company wants to develop, it will inevitably require new market space and growth space brought by new customers. Besides, in the coca-cola case, since the old client is already satisfied and loyal to the product, the upgrade might not be as meaningful as it is for them compared to new consumers. As we have our regular product in stock, the demand from old clients would still be covered. However, the upgrade would be a new promotion strategy for the new client to try the product and start to build a relationship with the brand.
But at the same time, it is still important for us to keep an intimate relationship with the old clients in the long term. One strategy is that the brand could explain to their clients that access to the new product is not limited to the old client, but they will get more discounts if they wait. For example, post an announcement explaining that the upgraded product is selling at a regular price for market testing and all clients could buy them in our store, but if you are an old client who has accumulated purchasing credit or has subscribed for the delivery of our product, you could get a free trial of the upgraded product in the next time we release the stock. Or, the old client could get a discount for the next purchase if they invite their friend, the new client, to try on the limited upgraded product. With the strategies, they will understand if they don’t get the new product.
I think in this case it is necessary to give priority to new customers. Because this is the only opportunity to acquire new customers, and there are many ways to make up for offending old customers. A company’s products must continue to attract new consumers in order to provide higher marginal benefits for the entire consumer group, especially in such a situation that it is very difficult to attract new customers. For old customers, the short supply of our company’s products also releases a signal of higher product recognition, and we can appropriately give old customers discounts or more targeted services to make up for it.
In this case, I think I will choose to give priority to those 47 old customers, because loyal customers are treasures, and I will personally explain to her and apologize to her for the old customer I met in the game. I will send the remaining three places to new customers to meet the needs of new customers. Those new customers may or may not be our repeat customers, but those old customers are already our repeat customers. In order to express our gratitude and respect for their continued following with us, I think we should give priority to meeting the needs of our old customers and then try our best to meet the needs of new customers. Customers who are loyal to our brand are our most important customers, old and new.
From this case, I would like to give the priority to those 48 new customers. There are two reasons for supporting.
First of all, those new customer is pretty hard for us to get connected. It’s a good opportunity to let them try our products. If some of them tries and love our products, they will be our brands’ fans and will be a future old customer to our branding. Thus, attracting more new customers is much more important.
Secondly, those 48 old consumers are really familiar with our products and branding. They must love our brands so much. Thus, if we cannot offer them just one time, they will forgive us since they love our products and still buy it in the future.
I think the most important thing about this question is to consider the situation of your company. Because the importance of new users and old customers may be different for different companies. For example, if I open a nail salon, I will pay more attention to old customers, because nails need to be replaced, and old customers will always need them. In other words, their customer lifetime value is very high. But for some companies, like Disney, my favorite, I’d go for new customers. The reason is that Disney is not a necessity for many customers, and it is not a place that they will frequent. So Disney may be in great need of new customers, customers who haven’t been to Disneyland (especially kids).
For JPMorgan Chase Bank, Customers who generate more revenue or profit for the bank are usually considered more valuable and are therefore prioritized. Objectively, we screen for valuable clients who have been active with JPMorgan Bank for a long time and have a relatively high volume of transactions. We do not consider new customers or old customers at all in terms of Customer Prioritization. However, we will focus on old customers for this question. There are some reasons why we say so.
Typically, old customers are considered to be more valuable than new customers, because they already have an established relationship with the bank and are more likely to generate ongoing revenue. Old customers have already had many more transactions in the past than new customers, so they are far more valuable and loyal than new customers. According to my research, many banks have customer loyalty programs or retention programs designed to reward and retain old customers. These programs may offer incentives such as lower fees, higher interest rates, or exclusive offers to long-term customers.
In conclusion, we prefer to provide service and products to old customers in this situation. Old customers are considered to be more valuable than new customers because they are more loyal, had more transitions, had generated more revenue for banks before. Moreover, we are willing to provide some customer loyalty programs or retention programs to keep our old consumers.
I think McDFonald should focus on old customer’s feeling because they spend more money than new customer.Research shows that over time, old customers tend to spend about 300 percent more than new customers. Old customers are also likely to trust your recommendations and buy your more expensive product or service. Second reason is saving cost.Old customers are great brand ambassadors, so you can save on marketing costs; They also recommend 50 per cent more people than one-off buyers. Retaining customers helps build a solid business. A 5% increase in customer retention leads to an average 75% increase in profitability.
In my opinion, McDonald’s should consider old customers. As a brand and company, old customers mean they trust you. 48 old customers have high brand loyalty to your company and trust your products more, which is important for product sales. I can sell products to old customers more easily without more promotion and marketing. In addition, the relationship between old customers and the company is essential. The company has established a connection with old customers to ensure the purchase of products. If I sell burgers to new customers, half of the 48 new customers may not buy, because for them, you are a strange company, and they will not choose to buy a burger which they do not know. Moreover, I need to spend more cost and time promoting products to new customers and finding potential customers, which needs to be considered. Therefore, McDonald‘s should sell new products to old customers, which will help the company’s sales opportunities, strengthen customer relations and establish a strong brand image.
In this case, I think JP Morgan should prioritize its existing customers, which is the first option 48 old clients. As a financial services company, I think its main revenue comes from the loyalty of old customers to them, which also depends on the customer’s service satisfaction with Chase. For example, I recently received an invitation from Chase. If I can deposit $100,000 in time deposits, I will get a 4% annual interest rate. I think it’s very impressive compared to other banks. And that seems to be the prerogative of old customers. So I ended up closing the deal. At the same time, retaining existing customers is often more cost-effective than getting new customers. Because it also involves the competitive advantage with other financial companies like BOA or CITI. Therefore, old customers are more important.
In this scenario, I recommend prioritizing old customers to maintain those loyal customers. It is crucial to establish a sustainable connection with consumers. Prioritizing old customers conveys that we are grateful for their trust, time, and money, it delivers an attitude. And for sure, it helps encourage loyal customers to keep staying with us in the future. However, it is important to explain to new customers that the old customers are prioritized because we want to show appreciation. A sincere apology to new customers is essential as well. While it can be a great loss that we may fail to expand the customer basis this time, potential customers interested in buying the product will also see how much we care about loyal customers. Some may recognize our attitude and come back to purchase in the future.
I also have a bold idea that we can do it randomly (this option is not given in the prompts but was given in the class). We can make it a campaign because the scenario given in the class is a holiday. It can be a special day to place orders on a “first come first serve” basis, and that can make things more interesting and less offensive to old customers. The products can be priced lower than the regular price because this is a holiday event, and we want to make people happy. The campaign may be effective in engaging consumers and helping them understand the brand.
In this case, I think Unilever should first prioritize old customers to keep customer loyalty.
In order to maintain a good relationship with old customers, we can give priority to satisfying their orders. Although giving priority to maintaining the relationship with old customers may lead to fail to attract new customers, Unilever is one of the companies with a large market share in the global fast-moving consumer goods market, so expanding market share is no longer Unilever’s priority goal. Although we choose to develop old customers first, we should also evaluate the important of orders first, because some new customers may benefit more from their orders and have the potential to reach long-term cooperation in the future. At the same time, we should also fully communicate and coordinate with new customers to explain the situation about cannot provide their products first. For example, we can offer some discounts to new customers (such as a 15% discount coupon or a sample of Unilever’s new products)
Apple has been known for its innovative and visually appealing marketing campaigns. The company typically invests heavily in various channels to promote its products and build its brand. Apple uses online channels extensively for marketing. This includes social media platforms, online advertising, and content marketing. The company maintains a strong presence on platforms like Twitter, Facebook, Instagram, and YouTube.
In this case, I believe Nvidia should prioritize its largest firm customers, specifically the 48 loyal clients. These key clients represent significant revenue streams and have been essential to Nvidia’s growth and market dominance. Retaining these large firms is critical, their loyalty not only ensures consistent sales but also strengthens Nvidia’s reputation in the industry.
While there may be potential customers, such as emerging tech companies or large enterprises in sectors like healthcare and automotive, Nvidia’s current market share already covers many of the biggest players in the GPU market. Losing established relationships with its largest clients could threaten Nvidia’s competitive position, especially when these firms often hold substantial purchasing power. Therefore, make sure these important clients receive their orders should be the top priority. By doing this, Nvidia would be able to maintain strong ties with its largest customers while still exploring opportunities with new clients in the future.
I will be using the Disney Store as an example. In this case, I believe Walt Disney should prioritize the 48 new clients in order to help it drive long-term growth. For example, when Disney releases a new hit animation movie and opens a new product line for the new movie, it is very important to attract the new movie fans to buy our product and make them become our loyal customers. Also, prioritizing new customers will help Disney capture emerging customers, especially the younger generation who might not grow up with the traditional Disney content but are drawn to Disney’s new product lines or Disney’s streaming platform. Capturing these new customers’s attention will help Disney provide the new growth opportunities. I believe prioritizing new customers to expand its customer base will help Disney maintain a long-term financial sustainable.
I would prioritize the new clients and provide them the service since this is the only chance to get those new clients . Getting these new clients could open doors to new opportunities and it also open the scope of word of mouth . I would allocate 40 to the new client segment . Then i would try to satisfy as many of the old customers i can with the remaining units . Like i would provide a unit to the lady who i meet at my niece’s soccer game so that there is no awkwardness when i meet her inevitably . i would give the remaining 9 to loyal customers that i have a relationship with and would like to continue have a relationship with in the future . Lastly , i would explain the situation to the remaining clients with honesty as being loyal customers they are more likely to still continue buying my products in the future despite not receiving the product immediately .