Impact of Loyalty Schemes on Customer Satisfaction: A Study on Marks and Spencer

This research proposal aims to investigate the impact of different loyalty schemes programs upon customer satisfaction within UK retail industry, with a focus on Marks and Spencer. The proposal includes a literature review, proposed data type and collection techniques, methodology, and a report on the results of the study.

Research proposal

Table of Contents
PART 1............................................................................................................................................3
Background..................................................................................................................................3
Literature review..........................................................................................................................4
Proposed data type and collection techniques.............................................................................5
Methodology................................................................................................................................6
Part 2................................................................................................................................................7
1. Development and Interpretation of Scatter diagram................................................................7
2. Computation of sample correlation coefficient.......................................................................8
3. Determination of whether the given data are poorly correlated or having a close association
.....................................................................................................................................................8
4. Development of least square regression equation for the given data......................................8
5. Computation of Coefficient of Determination and recommendation of regression model for
the purpose of estimation.............................................................................................................9
REFERENCES................................................................................................................................1

PART 1
Title: To investigate the impact of different loyalty schemes programs upon customer
satisfaction within UK retail industry: A study on Marks and Spencer
Aims: To evaluate the impact of various loyalty schemes programs upon Marks and Spencer
customers satisfaction level.
Objectives:
 To understand the concept of loyalty scheme programs.
 To evaluate various loyalty programme offered by Marks and Spencer (M&S) to attract
customer.
 To analyse the relationship between customer satisfaction and loyalty scheme
programme.
 To recommend the best ways to solution to the company so that it can cope up with the
challenges.
Background
Due to pandemic there has been negative impact on the retail sector as they were shut down for
several months. Along with this, one of the key issue that company face in dynamic business
environment is keeping their customer satisfied. This problem has been raising at fast pace due to
high competition in the market and various alternative available for the product. So it is
important for the organization to attract their customer by offering them various benefits like
loyalty programme. In addition to this, the rationale behind choosing this topic is that it will help
in knowing about the various ways through which retail company can keep their customer satisfy
as well as to understand the needs and demands of them (El-Adly, 2019). Although this, topic

will also cover about the details regarding customer satisfaction and its importance in increasing
the growth of the business. Moreover, this study will also help other scholar in using this as
secondary evidence in the research. Along with this, the present research will be based on
Marks and Spencer which has one of the most famous British retailer in clothing, home and food
product. The headquarter of the company is situated at London and it has various store all across
market of UK.
Literature review
Theme 1: To understand the concept of loyalty scheme programs.
Arora and Narula, (2018) has define that customer loyalty programme is a scheme launch by the
company which include various benefit of the customer in order to attract them. It is basically a
reward system which has been used by the company so that it can garb an opportunity to excel in
the market area. They are basically designed to encourage business and offer people reward and
brand loyalty. The more customer is prioritizing the more it will spend and the brand name will
also have developed. In addition to this, Rangriz and Bayrami Shahrivar, (2019) has argued that
making use of customer loyalty programme can be disadvantageous as there are many companies
which may be using identical programme so organization need to conduct market research.
However, it is difficult for the company to find loyal customer. Budur and Poturak, (2021) has
stated that loyalty programme is beneficial for the firm as it not only develops customer
satisfaction but also contribute in finding relevant information on purchase cycle of audience as
well as their taste and preferences. Moreover, the loyalty programme includes advance notice of
the early access of new products, early access to sales. Special service like free shipping and
members discount. Although to join loyalty program the company has to register their personal
information so that unique identifier like numerical ID and membership card which can be used
by making purchase.
Theme 2: To evaluate various loyalty programme offered by Marks and Spencer (M&S) to
attract customer.
According to Koo and et.al., (2020) Marks and Spencer is one of the most iconic brand of
multinational retail which is grounded in deep British Heritage. The company has recently
introduced a loyalty programme called Sparks. It is a member club which is designed to give
customer more from M&S like tailor made offer, seasonal buying discount. This has been

designed for people and it is human centric approach which allow customer to make use of
personalised experience offered by company. Although there ae several strategies that is used by
the company in this programme. Such as when the member joins the programme it has been
given chance to select the charity it wants to donate. The company also conduct meeting of the
manager so that it can discuss about the new product and services. Along with this, it helps in
rewarding more to their customer as compare to spend for writing review and shopping with
them. In addition to this, Chen and et.al., (2021) has define that company also give discount to
their audience on their birthday or anniversary. Although in big festival it offers discount on the
clothing and other sector both in online or store facilities.
Theme3: To analyse the relationship between customer satisfaction and loyalty scheme
programme.
Hollebeek and et.al., (2021) has stated that implementing customer loyalty is the best part of the
business as maintaining customer will help in increasing the profitability of the frim. In addition
to this, the customer loyalty programmes are capable of developing the healthy relation with
them and make them consistent with the company. That contributes in reappearing them in the
store for the purchase. Alshurideh, (2019) has also define that if customer have good experience
with the organization they would be more loyal towards it. However, customer loyalty
programme is one of the most current trend going in the market as many company have aim to
preferred customer centric in order to enhance their brand image. Hwang and Choi, (2020) has
argued that impact of such schemes can be positive as well as negative on the brand which may
lead to huge loss like efficiency in business operations and low sales scale. The organization is
able to sustain their customer by rewarding and complimenting them on every purchase. Bruneau
and et.al., (2018) has identified that a well-structured or well established customer l loyalty
programme allow fashion industry to be more customer oriented which helps in increasing the
overall growth of firm. It also helps in gathering the information regarding the elimination of
non – profitable groups of customer that only focus on discounted products and v avoid premium
ranges.
Proposed data type and collection techniques
The data collection approach is known as technique used for gathering information through
various sources in order to make the study authentic. In the present study the scholar will make
use of both primary and secondary method for collecting qualitative and quantities data as it will

help in completing the study more conveniently. Moreover, the scholar has collected primary
data through making use of survey of 30 customers of M&S in order to get their opinions on the
programme conducted by them (Septianto and et.al., 2019).Whereas, for secondary data
investigator will be collecting information through articles, books and journal related to relation
of customer satisfaction and loyalty programme. This will help in finding the theories pertaining
to customer satisfaction and make the qualitative data relevant.
Methodology
Research design:
It is one of the most important area that helps in gathering relevant information for the study. In
the present study the scholar will make use of descriptive design which will apply to collect
relevant data relating to customer satisfaction through loyalty programme (Steinhoff and Zondag,
2021). The main motive behind making use of this method is it helps in describing the situation
and the occurrence of group. Thus, it will encourage the scholar to know about the ways how
loyalty card encourage audience to purchase more from the store.
Research Type: It is known as broad assumption of plan and procedure which is used to collect
detailed data. There two ways of collecting the information such as qualitative and quantities
method (Khairawati, 2020). In the current method the qualitative method has been used by the
scholar in order to find relevant theories and articles related to customer satisfaction and loyalty
programme.
Research Philosophy: This helps in knowing the way information has been gathered and the
way it can be utilised for qualitative report (Zhang and Wei, 2020). In the current study
researcher has made use of interpretivism method has been used in order evaluate qualitative
data. This approach will also contribute in finding real time data regarding the objectives as well
as find the key points that will make the study better.
Research Approach: There are two methods in this such as inductive and deductive. In the
present study the investigator will be making use of inductive approach as it will make the
qualitative study more relevant and authentic (El-Adly, 2019). Which will help in finding
effective result that contribute to answer the research question.
Sampling: There are two ways of sampling such as probabilistic and non - probabilistic. In the
current study the scholar will opt for simple random method under probabilistic. In this 30

customer will be selected in order to share their views with regard to loyalty programme
conducted by M&S.
Data analysis: For representing the primary data, data analysis will be used by scholar and the
information will be analysed through themes or SPSS. However, researcher has used for
thematic approach in order interpreted the key findings.
Ethical consideration:
In order to complete research without any flaw it is important to follow the ethics while
conducting the research (Arora and Narula, 2018). The study will strictly have complied with
data protection act of 1998 for maintain the privacy of participant. The research has ensured that
the research is performed with solely for academic purpose and does not have any personal
motive.
Part 2
1. Development and Interpretation of Scatter diagram
Figure 1: Closing price of DJIA and S&P 500 for 10 weeks from 11th February 2000 to 14th
April 2000
Interpretation: The scatter diagram drawn above shows relationship between two variables that
is, Dow Jones Industrial Averages and Standard & Poor (S&P) 500 index and accordingly, it can
be seen that the plots the showing upward slope (Goss-Sampson, 2019). Therefore, it can be said

that there lies direct or strong positive relationship between the two variables that is, DJIA and
S&P 500 index.
2. Computation of sample correlation coefficient
Dow
Jones
S&P 500
Dow
Jones
1 0.91727
1
S&P 500 0.91727
1
1
3. Determination of whether the given data are poorly correlated or having a close association
On the basis of correlation coefficient determined above, it can be said that there is a
close association between the two variables in a given data set because the resultant degree of
correlation falls in the range of 0.9 – 1. This degree indicates that there is a very high correlation
between the variables and thus there is a strong relationship between the two variables that is,
DJIA and S&P 500 index (Vogt, Marten and Braun, 2018).
4. Development of least square regression equation for the given data
Regression Statistics
Multiple R 0.917
R Square 0.841
Adjusted R Square 0.822
Standard Error 30.715
Observations 10.000
ANOVA
df SS MS F Significanc
e F
Regression 1.00
0
40034.956 40034.
956
42.43
7
0.000
Residual 8.00
0
7547.144 943.39
3
Total 9.00
0
47582.100
Coefficients Standard
Error
t Stat P-value
Intercept -137.629 239.809 -0.574 0.582
Dow Jones 0.149 0.023 6.514 0.000

Least square regression equation = Y = a + bx
Y = Dependent variable (S&P 500)
a = Intercept = 137.63
b = Slope (change in dependent variable due to changes in independent variable) = 0.149
x = independent variable
Y = 137.63 + 0.149x
5. Computation of Coefficient of Determination and recommendation of regression model for the
purpose of estimation
Coefficient of determination = R2 = 1 – RSS / TSS
RSS = Sum of Squares of Residuals = 7547.144
TSS = Total Sum of Squares = 47582.10
R2 = 1 – 7547.144 / 47582.10
R2 = 1 – 0.1586
R2 = 0.8414
The value of R – square indicates the ability of the regression model in explaining the
data that has been observed. In other words, value of r – square determines how much the overall
variation that has been taken place in the dependent variables can be explained by the
independent variable (Xia, Sun and Chen, 2018). Therefore, in the given case, a value of 0.8414
or 84% obtained for r – square shows that 84% of the total variation taking place in S&P 500
index can be explained by Dow Jones Industrial Average. Accordingly, it can be said that “Yes”,
the given model should be recommended for the purpose of estimation as the higher value of r –
square means better prediction for the future events is possible with the help of this regression
model.

REFERENCES
Books and journals
Alshurideh, D. M., 2019. Do electronic loyalty programs still drive customer choice and repeat
purchase behaviour?. International Journal of Electronic Customer Relationship
Management. 12(1). pp.40-57.
Arora, P. and Narula, S., 2018. Linkages between service quality, customer satisfaction and
customer loyalty: A literature review. IUP Journal of Marketing Management. 17(4).
Bruneau, V. and et.al., 2018. Are loyalty program members really engaged? Measuring customer
engagement with loyalty programs. Journal of Business Research. 91. pp.144-158.
Budur, T. and Poturak, M., 2021. Employee performance and customer loyalty: Mediation effect
of customer satisfaction. Middle East Journal of Management. 8(5). pp.453-474.
Chen, Y. and et.al., 2021. Three decades of research on loyalty programs: A literature review and
future research agenda. Journal of Business Research. 124. pp.179-197.
El-Adly, M. I., 2019. Modelling the relationship between hotel perceived value, customer
satisfaction, and customer loyalty. Journal of Retailing and Consumer Services. 50. pp.322-332.
Goss-Sampson, M., 2019. Statistical analysis in JASP: A guide for students.
Hollebeek, L. D. and et.al., 2021. Game on! How gamified loyalty programs boost customer
engagement value. International journal of information management. 61. p.102308.
Hwang, J. and Choi, L., 2020. Having fun while receiving rewards?: Exploration of gamification
in loyalty programs for consumer loyalty. Journal of Business Research. 106. pp.365-376.
Khairawati, S., 2020. Effect of customer loyalty program on customer satisfaction and its impact
on customer loyalty. International Journal of Research in Business and Social Science (2147-
4478). 9(1). pp.15-23.
Koo, B. and et.al., 2020. The role of loyalty programs in boosting hotel guest loyalty: Impact of
switching barriers. International Journal of Hospitality Management. 84. p.102328.
Rangriz, H. and Bayrami Shahrivar, Z., 2019. The impact of E-CRM on customer loyalty using
data mining techniques. BI Management Studies. 7(27). pp.175-205.
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Septianto, F. and et.al., 2019. The similar versus divergent effects of pride and happiness on the
effectiveness of loyalty programs. Journal of Business Research. 99. pp.12-22.
Steinhoff, L. and Zondag, M. M., 2021. Loyalty programs as travel companions: Complementary
service features across customer journey stages. Journal of Business Research. 129. pp.70-82.
Vogt, M., Marten, F. and Braun, M., 2018. A survey and statistical analysis of smart grid co-
simulations. Applied energy, 222, pp.67-78.
Xia, Y., Sun, J. and Chen, D. G., 2018. Statistical analysis of microbiome data with R (Vol. 847).
Singapore: Springer.
Zhang, Q. and Wei, B., 2020. Customer Loyalty Programs in Shopping Malls. Frontiers in
Economics and Management.1(10). pp.1-5.
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