PowerCruise, a Holiday Cruise Firm, Recently Offered Its Existing Customers

question 106

Multiple Choice

PowerCruise, a holiday cruise firm, recently offered its existing customers an extension of six months to their membership without any additional charges.By doing this, which competitive strategy did PowerCruise implement?

• A) creation of a new service
• B) product differentiation
• C) locking in of customers
• D) locking in of suppliers

---

Definitions:

Shoeleather Costs

Shoeleather costs are the metaphorical costs of inflation, referring to the time and effort spent trying to avoid holding onto cash as it loses value.

Real Interest Rate

The rate of interest an investor expects to receive after allowing for inflation.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Fisher Effect

A theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates.