Factors Responsible for Success of Tesco's Loyalty Programs

This study examines the factors responsible for the success of Tesco's loyalty programs in contrast to its competitors. It analyzes the concept of loyalty programs, factors contributing to Tesco's success, challenges faced during implementation, and provides recommendations. The study aims to understand the importance of loyalty programs in sustaining customer loyalty and maintaining long-term relationships.

PROJECT PROPOSAL AND
PLAN (B30122)

Table of Contents
INTRODUCTION...........................................................................................................................3
Background.................................................................................................................................3
Aim and objectives......................................................................................................................4
Rationale.....................................................................................................................................4
Scope...........................................................................................................................................4
LITERATURE REVIEW................................................................................................................5
RESEARCH METHODOLOGY.....................................................................................................7
TIME PLAN....................................................................................................................................9
REFERENCES..............................................................................................................................11

Topic: A study of the factors responsible for success of Tesco's loyalty programs in contrast
to that of the competitors' which have not been successful
INTRODUCTION
Background
Entrepreneurial opportunity is defining as a situation where product and services are sold
at greater price in order to increase the performance of the company. In the same way, the
present proposal will help to examine the importance of loyalty programs because it will sustain
the customer’s loyalty and maintain long term relationship as well (Nastasoiu and Vandenbosch,
2019). On the other side, the study will also help to determine various factors which resulted into
gaining success in the contrast of other competitor. In this modern era, most of the company uses
different range of products and services which in turn help to attract customers. Apart from this
there are many companies who uses effective promotional strategies in order to improve the
overall brand image and grab attention of many customers towards it.
The chosen firm for this study is Tesco which is one of the top multinational company
operated in UK and offer range of product and services to their customers. Company also uses
different variety of promotional tools in order to attract the customers such that discount offers,
loyalty programs etc. In addition to this, company faces range of challenges because of its past
acts such that accounting scandal, horse mean scandal and that is why, it is necessary for the
company to implement best loyalty programs and then identify the factors that affect the overall
success. As a result, it will provide an immense opportunity to the firm in near future and this
will help to sustain the brand image at international level too.
Hence, the current proposal will help to examine the factor that contribute to loyalty
programs. As company faces tough competition in market and its rival firm are also uses range
of options which in turn improve the financial performance of the company (Bombaij and
Dekimpe, 2020). Therefore, with the help of study, the key aspects will be determined that
further assist to examine the success of loyalty programs and this in turn provide an opportunity
to Tesco in order to sustain the brand image at global level.

Aim and objectives
Aim: The aim of the study is “To determine the factor responsible for the success of Tesco’s
loyalty programs with contrast to competitors: A study of Tesco”
Objectives
 To understand the concept of loyalty programs.
 To analyze the factors responsible for Tesco’s loyalty programs as compared to its
competitor
 To ascertain the challenges, face by company while implement different loyalty
programs.
 To recommend the best way through which challenges of the company are overcome.
Research questions
 What do you understand by the concept of loyalty programs?
 What are the factors responsible for the success of Tesco’s loyalty programs?
 What are the challenges did company face while introducing loyalty program within a
business?
Rationale
The reason for choosing this specific topic is such that it will help to understand the
concept of loyalty programs in better manner. Along with this, scholar have their own interest in
order to conduct the study and this in turn help to understand the key factor of loyalty programs
which result into success as compared to other competitors as well. Moreover, another reason for
conducting study on this particular topic is such that University provide the topic and that is why,
scholar have to research on the same. This in turn raise the skills and develop a deep
understanding with regards to the topic which is further help in future as well. Hence, by study
on this specific topic will assist researcher to increase the knowledge and identify various factor
that cause direct impact upon the loyalty programs which in turn affect the performance of a firm
as well.
Scope
The present study will help Tesco to examine the factor which result into gaining success
in contrast to its competitor. As the current proposal will help to analyze the challenges face by

the company in order to implement loyalty programs and then recommend the best ways to
overcome such (Rauf and Karjaluoto, 2019). Hence, by using these strategies company will
easily proceed further successfully. Apart from this, the study is also beneficial to the
competitors of Tesco and other companies who operated in the same field to determine the factor
that turn success. Further, many scholars are also uses the study with regards to secondary study
and collect information for their own research and this in turn improve the results of the
company in positive manner.
LITERATURE REVIEW
Theme 1- Concept of loyalty programs
In the views of Hupfeld and Speed (2017) loyalty program is a type of marketing strategy
which is made in order to influence and encourage the consumers to continue to shop at the
company. The loyalty program is an effective method of the attracting the consumer in order to
stay connected with the company for a longer period of time. The loyalty program is a tool which
assist the company in attracting majority of consumers and this is essential because of the reason
that when the consumer uses the loyalty schemes then they have to shop for the product for a
longer period of time. Further in addition to this when the company provides for benefit to the
consumer than this will attract the interest of consumer and will get connected with the company
for a longer period of time.
On the other side Tully (2019) argues that if the company will make use of the loyalty
program than this is good for the company as this will attract more of the consumer. The major
reason for this is that under the loyalty scheme the consumer has to purchase the product of the
company and on this they will be provided with some points. When these point will go beyond
the specified limit then they will get some extra discount or any other benefit. For the purpose of
attracting consumer, the Tesco also makes use of the loyalty card scheme named Tesco
Clubcard. The motive of Tesco clubcard is more saving more rewards (What is a clubcard?
2020). Here the consumer with help of the clubcard collects the point and save on every purchase
which they are doing at the Tesco markets. There are many different types of cards and options
which are provided to the consumer like Biz Clubcard, eMembers, Clubcards and many others.
Theme 2- Factors responsible for the loyalty program of Tesco in comparison with the other
competitors.

As per the views of Lloyd and et.al (2018) there are many different types of factors which
are assistive to company in order to attract the consumers. In addition to this there are several
factors which affect the loyalty program both in positive and in negative manner. This is
particularly because of the reason that when company makes use of the loyalty program then
there are many different types of factors which affect the interest of the consumers.
As per the thinking of the Vuorinen and et.al (2020) major factor which is responsible for
the loyalty program is the expectation of the consumers. This is a major factor because of the
reason that if the expectation of the consumer is high and the loyalty program of the company is
not meeting that then this will not attract the consumer towards the company. This is particularly
due to the reason that when the consumer does not get what they expect then they will not like to
interact with the company again. Thus, if the expectation of the consumer is not met with the
loyalty program then this distract consumer interest.
In contrast to this Umar (2020) argues that reward is also a major factor which is
responsible for the loyalty program. This is particularly because of the reason that when the
rewards are very low then this will not attract the consumers. This is particularly because of the
reason that when company wants consumer loyalty then they must give something big and good
in return to the consumer other than the product and services.
In contrast to this Green and et.al (2020) articulates that there are other competitors as
well who are using the loyalty card schemes for attracting the consumers. For instance,
Sainsbury is also using the loyalty card scheme for influencing the consumers. For this Sainsbury
has become a part of Nectar card loyalty scheme. This is a scheme which provides for the
consumer to pick up one point per £1 which they can spent either in- store or online stores of
company. In the last year this loyalty scheme was revamped and now the consumer will get the
weekly one off and some limited time offers which they can provide to the consumers for the
increase in the number of consumers.
In addition to this The best UK supermarket loyalty schemes: Tesco, Sainsbury’s,
Morrison and more, (2020) states that as compared to the competitors the loyalty card scheme of
Tesco is more effective and attractive. The major reason for this is that Tesco makes the use of
the many different types of loyalty card schemes such as Tesco clubcard, Tesco clubcard plus
and many others. All these card are more effective as compared to the other company’s loyalty
cards.

Theme 3- Challenges faced by the organization at time of implementing various loyalty
program.
As per the opinion of Rybaczewska and Sparks (2019) when a company is using the
loyalty card scheme then they have to face many different types of challenges. This is
particularly for the reason that it is not necessary that the entire consumer gets attracted with the
same type of loyalty program. All the consumers are different and their needs are also different
and it is not possible that with single scheme the company cannot attract a variety of different
consumers.
In the thinking of Joseph and Sharaf (2016) the major challenge in managing and
implementing the different loyalty scheme is that this involves a lot of cost in managing the
loyalty program. This is due to the reason that when the company want to attract the consumer
then they have to incur high cost so that this will attract majority of the people. Along with this
Hassan, Parvez and Ekiz (2019) argues that the major challenge is that sometime these loyalty
programs are very complicated in managing these program. The major reason for this is that
there are many different types of terms and condition covered in the loyalty program and all
these need to be made understood to the consumers. This is particularly because of the reason
that if these points will not be understood by the consumer then this will affect the working of
the company to a great extent.
On the other side Alam and Raut-Roy (2019) argues that the major challenge for the
company at time of managing the loyalty program is that it is very time consuming and tough
work to manage the loyalty scheme. This is particularly because of the reason that when this
loyalty scheme is used by many of the consumers. Thus, for this reason the company has to
record each and every data of every consumer who is on the loyalty card scheme. Thus, this
increases the work pressure of the employees managing the loyalty card scheme for the
company. The reason underlying this is that when the company has this scheme then there are
large number of people using it company has to manage the data that how much points have been
earned by the consumer and how much they have used and what is the balance.
RESEARCH METHODOLOGY
Research type- this is defined as the type of method with which the researcher will
continue and complete the research in successful manner. This is particularly because of the
reason that if the type of research is not good then this will have a great impact over completion

of the research. For completing the research there are generally two methods that is qualitative
and quantitative. For completion of study on factors responsible for the success of Tesco loyalty
program is the use of qualitative study. Researcher will prefer the use of qualitative research as
this will assist them in developing in- depth knowledge relating to the topic of research
(Drawson, Toombs and Mushquash, 2017).
Research approach- for the research to be successful the most important thing is to
carefully select the approach for research. The approach is defined as the various procedures
which includes the assumption pertaining to the selection of the methods of research. There are
generally two type of approach used that is inductive and deductive. The completion of present
research will include the use of inductive approach. The major reason for this is that this
approach involves the framing of aim and objective relating to research topic (Alshurideh and
et.al., 2020).
Research philosophy- this is defined as the various beliefs and the values which are
underlying the selection of any of the research methods. There are two types of philosophy that
is interpretivism and positivism. For the completion of the research over the factors responsible
for success of Tesco loyalty program in comparison with its competitors is use of interpretivism
philosophy. The reason underlying this selection is that this philosophy is that this is more
suitable with the qualitative study.
Data collection- for the research to be successful the most important thing is the data as
the whole research is based over the analysis and evaluation of the data only. Further there is a
lot of data which is present in relation to the research topic (Jennings and et.al., 2018). The data
can be collected from two different sources that is primary and secondary sources of data. For
completion of the research over the factors affecting the loyalty program of Tesco in comparison
with other competitors will use the secondary source of data. The major reason for this is that the
secondary source of data is more reliable as this is already published and used in other researches
as well. Thus, this is more reliable and authenticate source of collecting data.
Data analysis- this is also very essential for the research to be successful that they make
use of the effective method of data analysis. Only the collection of data is not necessary rather
the major importance is that the collected data must be analysed and evaluated in proper and
effective manner (Pruzan, 2016). For this the use of secondary data analysis will take place.
Under these different articles, books, journal and other published sources are used relating to

research topic. Further the themes will be prepared on the basis of the objectives and then data
relating to these themes will be gathered and analysed.
Ethical consideration- for the completion of the research in successful manner it is very
much essential for the successful completion of the research (Park and Park, 2016). This is
particularly because of the reason that when the research is undertaken by keeping in mind the
ethical and moral principles then this will increase the value of the research. Thus, for this the
most important thing is the collection of data from all the authentic and valid sources. Along
with this the researcher must try to keep all the information of safe and secured so that other
people cannot have access to it.
Research limitation- with all the positive aspect some negative aspect is also attached
with the research. The major limitation attached with the completion of research is the time
attached with the completion of the research. This is a limitation is that the time for the
completion of the research is very less but then also the researcher has tried to complete this
research on time (Jennings and et.al., 2018). In addition to this the use of finance was also very
limited as the budget of research was low and then also the researcher managed to complete the
research in the provided budget only. Another major limitation for the research the resources is
also a major limitation of the completion of the research as resources are very limited but then
also the researcher completed research on time.
TIME PLAN
Activities /
week
1 2 3 4 5 6 7 8 9 10 11 12
Selecting the
topic of
research
Development
of the proposal
for the
research
Doing the
literature
review

relating to the
topic of
research
Selecting the
methods for
the research
Making the
questionnaire
Collecting
data with help
of
questionnaire
Analysing the
collected data
Concluding
the findings
Doing
formatting
Taking
feedback from
tutor
Making
changes as per
the feedback

REFERENCES
Books and Journals
Alam, S. and Raut-Roy, U., 2019. Evaluating the Effectiveness of Reward Strategy at Tesco:
Evidence from Selected Stores in UK. Indian Journal of Industrial Relations. 55(1).
Alshurideh, M., Gasaymeh, A., Ahmed, G., Alzoubi, H. and Kurd, B., 2020. Loyalty program
effectiveness: Theoretical reviews and practical proofs. Uncertain Supply Chain
Management, 8(3), pp.599-612.
Bombaij, N.J. and Dekimpe, M.G., 2020. When do loyalty programs work? The moderating role
of design, retailer-strategy, and country characteristics. International Journal of Research in
Marketing, 37(1), pp.175-195.
Drawson, A.S., Toombs, E. and Mushquash, C.J., 2017. Indigenous research methods: A
systematic review. The International Indigenous Policy Journal, 8(2), p.5.
Green, M.A., and et.al, 2020. Comparing supermarket loyalty card data with traditional diet
survey data for understanding how protein is purchased and consumed in older adults for
the UK, 2014–16. Nutrition journal. 19(1). pp.1-10.
Hassan, A., Parvez, M. and Ekiz, E., 2019, July. Technology Induced Loyalty Schemes for
Customer Relationship Management and Positive Purchase Decisions. In 9th ADVANCES
IN HOSPITALITY AND TOURISM MARKETING AND MANAGEMENT CONFERENCE
PROCEEDINGS (p. 241).
Hupfeld, A. and Speed, C., 2017, May. Getting Something for Nothing? A User-Centric
Perspective on Loyalty Card Schemes. In Proceedings of the 2017 CHI Conference on
Human Factors in Computing Systems (pp. 4443-4453).
Joseph, A.M. and Sharaf, J., 2016. Building target corporation's customer loyalty programme
through tesco's club-card scheme. TRANS Asian Journal of Marketing & Management
Research (TAJMMR). 5(12). pp.61-69.
Lloyd, A., and et.al, 2018. The Provenance of Customer Loyalty Card Data. Consumer Data
Research, p.29.
Nastasoiu, A. and Vandenbosch, M., 2019. Competing with loyalty: How to design successful
customer loyalty reward programs. Business Horizons. 62(2). pp.207-214.
Park, J. and Park, M., 2016. Qualitative versus quantitative research methods: Discovery or
justification?. Journal of Marketing Thought, 3(1), pp.1-8.
Rauf, M. and Karjaluoto, H., 2019. 8 The Development of Loyalty Programs in the Retail Sector.
Business Intelligence and Analytics in Small and Medium Enterprises, pp.105-121.
Rybaczewska, M. and Sparks, L., 2019. Place marketing and place based loyalty
schemes. Journal of Enterprising Communities: People and Places in the Global
Economy.
Tully, M., 2019. DO LOYALTY CARD SCHEMES ENCOURAGE PHYSICAL ACTIVITY?
A CLUSTER RCT. National Institute for Health Research.
Umar, A., 2020. The Rise of Fraud in Loyalty Schemes. ITNOW. 62(2). pp.44-45.

Vuorinen, A.L., and et.al, 2020. Characterization and Correction of Bias Due to Nonparticipation
and the Degree of Loyalty in Large-Scale Finnish Loyalty Card Data on Grocery
Purchases: Cohort Study. Journal of medical Internet research. 22(7). p.e18059.
Jennings, H., and et.al., 2018. Best practice framework for Patient and Public Involvement (PPI)
in collaborative data analysis of qualitative mental health research: methodology
development and refinement. BMC psychiatry, 18(1), p.213.
Pruzan, P., 2016. Research methodology: the aims, practices and ethics of science. Springer.
Online
The best UK supermarket loyalty schemes: Tesco, Sainsbury’s, Morrison and more. 2020.
[Online]. Available through: < https://www.lovemoney.com/guides/55593/uk-
supermarket-loyalty-schemes-tesco-sainsburys-asda-iceland-clubcard-
nectar#:~:text=Sainsbury's%20is%20part%20of%20the,which%20will%20arrive%20every
%20Friday.>
What is a clubcard? 2020. [Online]. Available through:
<https://www.tesco.com.my/Clubcard/About-Clubcard/>