StarMart is a retail chain with more than 120 stores spread across the country. The company is keen to enter into a co-branding agreement with Axiom Financial Services. Under this agreement, StarMart's customers will be provided with an Axiom-Star credit card entitling them to reward points every time they swipe their credit cards at StarMart. Cardholders will be able to redeem points for special discounts, free merchandise, and exclusive services. StarMart is planning on a targeted direct marketing campaign using StarMart's knowledge of consumer buying patterns and Axiom's access to financial information. A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart. Which of the following would be the least effective measure StarMart could take to address this potential problem?

Question

Quizplus · Accepted Answer

Increasing the value of the promotional items that attract new credit card customers may not effectively address the potential problem of negative perception associated with credit card debt. Instead, it may encourage customers to spend more and potentially accumulate more debt, which could exacerbate the problem. A better approach would be to focus on educating customers about responsible credit card use and offering resources such as debt counselling.

StarMart Is a Retail Chain with More Than 120 Stores