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Baskins

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Question 2
What are the various types of switching costs?
According to (Investopedia,2015), switching cost can be defined as negative financial and non-financial impacts a customer would endure if they leave a particular brand, organisation or service that has been serving them for a period of time . This is further proven by (BusinessDictionary.com, 2015) where switching costs are costs that a customer need to face when changing to another brand or supplier especially when the previous brand has been fulfilling and satisfying the customers’ needs and wants. Thus, switching to another brand or supplier may prove to be risky as there a chances that the new brand or suppliers would not fulfil the customers’ needs, wants and characteristics.
According to (Olou.L.P, 2014), there are several types of switching costs. This includes search cost, learning cost, financial cost, risk costs and etc. This is further proven by (BuyersMeetingPoint, 2015) whereby emotional costs, psychological risk, search costs and etc. are types of search costs.
There are 3 types of switching costs that are related to Baskins Robins. These are emotional, social and financial costs. Emotional costs can be defined as how interacted and connected are the customers towards a particular brand (Knight.W, 2015). This may include personal experiences or word of mouth. Moreover, according to (Knight.W,2015), there are statistical evidence that customers usually completes a transaction 20% based on intellectual and 80% based on emotional senses. This is very important as different customers have different needs, wants and desires. Only a certain brand or supplier can satisfy their needs and desires. In addition, personal experiences with the particular brand will further create a strong emotional bond with the brand which creates a customer-brand loyalty (SmartInsights, 2012).
According to (BusinessDictionary.com, 2015), social cost can be defined as how the company can give back to the society that has been supporting them. This is whereby the brand or organisation provides opportunity for their customers to create relationships with other fellow users of the particular brand. Moreover, social cost is very significant to the lives of customers. This is because the organisation or brand should not only focus on making profit from the customers, but also plan and organise several meeting or outdoor sessions (Economics.Help,2015). This will lead to happier customers as they realise the brand is more than just being a seller but trying to create a bond between the customers and suppliers.
Financial cost can be defined as rewards or bonuses a customers receive when using a particular brand for a long time which is lost when the customer decides to start using a different brand (Olou.L.P, 2014). This usually occurs when a customer has decided to stop being loyal to a brand when they feel the benefits and rewards offered does not satisfy them. Due to this, customers will switch to other brands competitors which seems more appealing to them.

Question 3
Different switching costs have their own advantages. These switching costs are significant in order to sustain and retain customers eliminating the fear of losing them to the brand competitors. Emotional cost is how emotionally the customers is attracted and connected to the bond. This is an important switching cost as imagine if a customer has been eating Baskin Robbins ice cream his entire life span and he has to suddenly change to a different ice cream brand. This would create an emotional cost especially if the customer and Baskin Robbins shared a personal experience together. For example, the customer could have grown up through his hardship eating Baskin Robbins and this has always made him feel good. This is further proven by (http://isites.harvard.edu/fs/docs/icb.topic730337.files/Final%20Projects/Ice%20Cream%20Shops%20Final%20Paper.pdf,n.d) whereby Baskin Robbins has been around for more than 40 years. Thus, if the customers family has been eating and trusting Baskin Robbins ice-cream throughout those years, it means that the customers trust and believe that Baskin Robbins are the specialist of ice-creams and will always stick with Baskin Robbins. Thus, switching to another brand won’t be ideal as the brand and bond connection between the customer and Baskin Robbins is too strong. Moreover, this emotional cost also leads to customer loyalty. According to (PR Loyalty Solutions, 2012), customers tend to become loyal to a certain brand especially when they have been satisfied with the brand, the service provided has served their wants and needs which creates an emotional bond between the buyer and the seller. Thus, with a strong emotional bond, it is unlikely for the customer to leave Baskin Robbins and switch to a different brand.
Besides that, social cost is where customers of Baskin Robbins can come together and have fun as a family and win prizes. Baskin Robbins has decided to re-launch the Club 31 loyalty program for all their customers. According to (Franchise Business, 2014), Baskin Robbins has hired a new marketing manager to attract more customers and come up with new strategies to retain old customers. This is done via the Club 31 loyalty program. Members and customers of Baskin Robbins can now come together to have competitions and win fun games and prizes through the Club 31 (Baskin Robbins, 2015). This is a good technique to get all the customers and members to come and join in as a big Baskin Robbins family and have a great time with one another. Moreover, Baskin Robbins and Dunkin Donuts collaborate together to create a community foundation that will help the society. This foundation has been serving the community since 2006 (Dunkin Brand, 2015). This foundation organises several tournaments, activities, yard sales and etc. to raise more money and aid to be donated to the needy ones. The customers of Baskin Robbins can join together to help organise the charity fundraiser by volunteering to support the foundation to serve the community better. Thus, by providing more value and the opportunity to serve the community, customers would be optimistic to remain loyal to Baskin Robbins.
In addition, financial cost is an integral element of switching cost. Everyone likes rewards and benefits. Usually, the brand with the most rewards and customers satisfaction will attract the most number of customers. As for Baskin Robbins, there are several rewards and benefits provided which includes the Pink Day, 31% off on every 31st of the month, 10% off for milkshakes, flavour of the month and etc. According to (Brosly, 2013), Baskin Robbins has declared every Wednesday will be a Pink Day. Pink Day is basically where the customer is required to wear something pink in order to get discounts and price deductions. Moreover, by wearing pink, it also symbolises Baskin Robbins partnership with McGrath Foundation to support and increase breast cancer awareness among young women (Franchise Business, 2012). Each likes obtained on Facebook will result in 31cents donated to charity by Baskin Robbins. This shows a connection between financial and social cost. Customers can enjoy the benefits, donating to the society and spreading the breast cancer awareness. Thus, it can be said that Baskin Robbins does not only think about profit, but also cares for their customers and the society.

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