In today's economic climate consumers are now more than ever inclined to cut back on spending on frivolous materials and have developed the philosophy that if the consumer does not absolutely need the item than he or she will not purchase the item. Consumers are more timid about spending as a result of economic uncertainty, which is why organizations are compelled to entice consumers with reduced product offerings, increased discounts, and promotions that enable a consumer to spend less and save even more. Currently consumers are using the internet as their source of searching for bargains and the lowest prices from well known e-retailers or retailers in general. However, there is one problem with this philosophy. Although consumers are finding deals that are cost effective, in most cases, consumers sacrifice quality for cost effectiveness in other words, "you get what you pay for." In any event consumers will purchase something that is lease expensive than most name brand items, however, the quality of the item will determine if the consumers loyalty is guaranteed.

There are several organizations that prepare products and sell them in bulk, thus causing a consumer to purchase the item and a few days later the consumer is totally unsatisfied with the product. The consumer then has two choices, he or she could (a) return the item to the retailer and have them ship another product of the same make and model and risk receiving another subpar product. Or the consumer could (b) cut his losses and go to another retailer, and spend more money to purchase a product of adequate quality. The consumer may choose the latter option because the first organization already lost the consumers trust, thus causing him or her to feel devalued as a consumer and cheated. The consumer will inevitably terminate his or her relationship with the company and look elsewhere. Cost advantages are linked to consumer loyalty when the organization is reputable and is known for providing high quality products in spite of all price reductions and promotions.

Discuss how customer loyalty is linked to competitive advantage.

Discuss how cost advantage is linked to customer loyalty.

Discuss how differentiation advantage is linked to customer loyalty.

Explain how your company can better compete in the social networking market if its customer loyalty is top notch.

Give recommendations of how to improve customer loyalty.

Give recommendations of how your company can sustain customer loyalty.