(Doc) Customer Loyalty and Customer Loyalty Programs

Analyze relationship between loyalty card schemes
and customer loyalty: case study of Tesco

ACKNOWLEDGMENT
I would like to give my sincere thanks to my mentor who provide me immense support
fro completion of the entire study. He supported me while planning for the data collection
processing and using the collected data in deriving valid outcome in the light of research aim.
Furthermore, I would also like to say thanks to my colleagues who help me during conducting
the study and writing the critical chapter of the study. Finally, I would also like to give thanks to
my friends and other members who give their kind support fro completion of the entire study
successfully.

ABSTRACT
Marketing is the foremost aspect for any corporation which helps to promote products
and services in the marketplace. Present study is based on relationship between loyalty marketing
schema and customer royalty with special reference to Tesco. Such kind of strategies are
proposed at first by Tesco the biggest retail store of UK in order to attract more buyers and retain
them for longer time span. Furthermore, company bring innovation in its marketing strategies as
per the current trend and changing need of buyers. It facilitates to create its unique identify at the
marketplace and increase the customer base of the same. In the current era competition is kept on
increasing due to high level of innovation in the marketplace. Owing to this it is very important
for any corporation to adopt appropriate marketing strategies so as to retain buyers and create
competitive edge of the firm. In this regard, current study has been conducted to examine the
various loyalty marketing strategies of Tesco on its customer loyalty.
In order to conduct the study in structural manner qualitative type for investigation has
been selected. Here, main emphasis has been laid on secondary data so as to assess the
effectiveness of strategies adopted by Tesco. In this regard different sources like journals, books
and articles as well as other published material have used. However, analysis has been done
through preparing themes in accordance with research aim and objectives.
The data analysis has been done as per the qualitative method by focusing on secondary
data only. Here, number of themes are prepared so as the detail explanation can be given for
linkage between loyalty marketing scheme and customer loyalty of Tesco. Furthermore, the main
findings reveals that loyalty marketing has direct impact on the customer attraction and its makes
management able to build long term relationship with same. Furthermore, loyalty marketing
strategies aid to enhance the loyalty of customer and persuade them to take frequently purchase
decision. Also, company increased customer base by implementing such kind of lucrative
strategies in the marketplace.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION...................................................................................................7
1.1 Background............................................................................................................................7
1.2 Rationale of the study............................................................................................................8
1.3 Research aim and objectives..................................................................................................8
1.4 Research questions.................................................................................................................9
CHAPTER 2: LITERATURE REVIEW.......................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Analyzing loyalty card scheme used by the Tesco at UK...................................................10
2.3 effectiveness of club card system of Tesco as relationship marketing tool........................12
2.4 Assessing the impact of loyalty card schemes on customer loyalty in Tesco at UK..........14
2.5Conclusion............................................................................................................................15
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................20
3.1 Introduction..........................................................................................................................20
3.2 Research Paradigm..............................................................................................................20
3.3 Research Approach..............................................................................................................20
3.4 Research design...................................................................................................................21
3. 5Sampling..............................................................................................................................21
3.6 Research type.......................................................................................................................22
3.7 Research Strategy................................................................................................................22
3.8 Data Collection....................................................................................................................22
3.9 Data Analysis......................................................................................................................23
3.10 Ethical Considerations.......................................................................................................24
3.11 Limitation of the study ......................................................................................................24
3.12 Future scope for the study..................................................................................................25
CHAPTER 4: DATA ANALYSIS................................................................................................26
4.1 Introduction..........................................................................................................................26
4.2 Thematic analysis................................................................................................................26
CHAPTER 5: CONCLUSION AND RECOMMENDATION ....................................................34
5.1 Conclusion...........................................................................................................................34
5.2 Recommendations................................................................................................................34
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REFERENCES..............................................................................................................................36
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Illustration Index
Illustration 1: Customer loyalty.....................................................................................................10
Illustration 2: Conceptual framework............................................................................................14
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CHAPTER 1: INTRODUCTION
1.1 Background
Marketing is the foremost aspect which gives upward direction to corporation and
increase customer base for the same. Marketing consists of number of tools and techniques
through which an organization can communicate to customers regarding its offerings. However,
marketing requires number of activities to segregate all customers so that marketing plan can be
formulated accordingly. The aspect relating to marketing plays vital role in growth and
development of an organization (Banasiewicz, 2005). This is because by the use of different
marketing activities make it possible for firm to target right number of buyers and adopt effective
marketing strategy to meet their requirement in an effectual manner. In this regard, loyalty
marketing is also the imperative aspect to attract customers and increase sales turnover of
corporation (Brooks and Simkin, 2012). The main motive behind such type of schemes and
program is to increase attention of customers towards the products and services that are being
offered by firm. Furthermore, loyalty marketing ensure retention of customers and also increases
their level of satisfaction. It proves to be effective in in achieving long term objectives of firm
(Barry, 2006).
The loyalty marketing is one of the imperative aspect of marketing because corporation
an easily boosts its sales turnover in the marketplace (Brooks, 2010). The current study is based
on Tesco, a British multinational grocery and general product retailer that operates in 12
countries across Asia, Europe and UK. Further, it is the grocery market leader in UK which
provides wide range of products with rapid innovation in its system. Tesco has 16m loyalty
scheme members in UK, 14m in Asia and 8m in Europe. Further, Club Card fuel save is one of
the effective scheme of company. Here, potential buyers can get Green Clubcard point are added
in the carries bad of client. Similarly reward card also offered to customers which promote them
for bulk purchase (Customer loyalty schemes, 2014). Apart from this, Tesco credit card is also
offered to customers thereby they can be attracted towards the products and services (Blutt,
2004). It helps to increase loyalty of customer and retain them fro longer time span. This is
unique marketing strategy of company wherein it is shown to buyers that company is loyal
towards the same (Loyalty Programs, 2014). Further, after introduction of loyalty scheme of
Tesco, Sainsbury also launched its Reward card so as to attract buyers. Thus, loyalty marketing
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is effective tools to communicate about offering of firm in most effective manner. In addition to
this, loyalty marketing determine long run growth as well as resilience of business in the
marketplace (Brink, Odekerken-Schröder and Pauwels, 2006).
1.2 Rationale of the study
The research issue is related to ineffectiveness of loyalty marketing. This is because
Tesco adopting loyalty card scheme for attracting customers and increasing sales turnover.
However, these programs are not meeting requirement of client as per the set standard. This in
turn increases additional cost and create dissatisfaction among customers. However, this issue
has been facing because of improper implementation of schemes in the marketplace. Also,
employees who are working in marketing department do not have appropriate knowledge. Owing
to this, at present company has to face issues related to intense competitions and customers'
loyalty is not ensured effectively. In this regard, current research shed light on effective
management of loyalty program so as to retain customer for longer time span. Furthermore,
emphasis has been laid on improvement in the present strategy in order to get competitive edge
and increase level of motivation among buyers. Apart from this, it has been analyzed that by
implementing loyalty card scheme in accordance with defined standard, company can be able to
retain loyal customers. Thus, relationship between loyalty card scheme and customer loyalty has
been analyzed.
The current on an examination of relationship between loyalty card schemes and
customer loyalty is beneficial for several parties such as scholar, different industries and other
related parties. Here, scholar who are conducting study in the same field will get benefits from
the current research because they will get source of information . Further, retail industry also
come to know about the potential issues behind failure of loyalty marketing scheme so as to
bring improvement in current strategy. In addition to this, analysts can also get information for
developing strong marketing tools in order to attract number of buyers. Other than this, experts
who are related to field of study or literature review will be get in-depth knowledge about the
issues behind failure of marketing strategies.
1.3 Research aim and objectives
The research aim and objectives have been specified as follows thereby researcher can
collect relevant data-
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