A Critical Review of Rewards and Consumer Loyalty Schemes in UK Retail Sector: A Case Study of Primark

University
A CRITICAL REVIEW OF THE EFFECTIVENESS OF
REWARDS AND CONSUMER LOYALTY SCHEMES IN
ACQUIRING AND RETAINING CUSTOMERS IN UK RETAIL
SECTOR: A CASE STUDY OF PRIMARK
Name
ID
Unit Title
Code Number
Lecturer’s name

Consumer behaviour
Executive summary
This study is the amalgamation of a research proposal and a research project. While in the first
tasks plan for the project along with theoretical conception has been provided the following tasks
focus on implementation of the plan and evaluating the data. This entire study has been
conducted on the aspects of loyalty schemes, rewards and their effect on the purchase behaviour
and loyalty of customers, with examples from Primark. Completion of the study has provided the
researcher with an understanding of the strategic changes the organisation needs to make in its
reward and loyalty programmes to retain preferences of customers.
Page 2 of 25

Consumer behaviour
Table of content
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................4
1.1 Possible research project outline specification..........................................................................4
1.2 Factors contribution to selection of research project.................................................................5
1.3 Critical review of key references...............................................................................................5
1.4 Research project specification...................................................................................................7
1.5 Plan and procedure for research project specification...............................................................8
Task 2...............................................................................................................................................9
2.1 Matching resources with research question...............................................................................9
2.2 Undertaking research investigation...........................................................................................9
2.3 Data presentation.....................................................................................................................10
Task 3.............................................................................................................................................20
3.1 Choice of appropriate research evaluation technique..............................................................20
3.2 Analysis and interpretation......................................................................................................20
3.3 Recommendation and future scope for research......................................................................21
Task 4.............................................................................................................................................23
4.1 Presentation of result and recommendation.............................................................................23
Conclusion.....................................................................................................................................23
References:....................................................................................................................................24
Page 3 of 25

Consumer behaviour
Introduction
In oligopoly market structure, such as the structure of retail market of the United Kingdom,
business organisations need to work considerably hard for acquiring and retaining preference of
customers. Soderlund and Colliander (2015) pointed out that acquiring new customer in
considerably more difficult and expensive that retaining the existing one. Therefore business
organisations of the current time put considerable effort in retaining their existing customers for
which they use different loyalty and reward schemes are the applicable on a certain amount of
purchase or remaining loyal to a company for certain period. Such marketing strategies served
considerably well in fashion retail sectors as consumers tend to prefer such products from
reliable sources. This issue has been discussed in this particular study with practical examples
from Primark. Primark is a well-known British business organisation that operates through over
315 stores and employs 68,000 people across the world (Primark.com, 2017).
Task 1
1.1 Possible research project outline specification
Researcher has aimed at underlining the impact of different customer loyalty schemes and
rewards for improving the customer retention, loyalty, and acquisition and marketing strategy.
Therefore, researcher has produced following research question helpful in understanding and
achieving the study objective.
Question 1: what is importance of loyalty schemes and rewards in retaining and achieving the
consumer in UK retail industry?
Question 2: how loyalty schemes and rewards are contributing organisational achievement of
Primark?
Question 3: what are the issues raising due to the loyalty schemes and rewards in Primark?
Question 4: how Primark can overcome from the identified issues due to loyalty schemes and
rewards?
Page 4 of 25

Consumer behaviour
1.2 Factors contribution to selection of research project
Many organisations are predominantly planning and developing their marketing strategy for
gaining the competitive advantage in global market. Due to the active participation in latest
trends of marketing, business environment is getting more complex and putting excessive
pressure on management for leading the market. Organisations are in the competition of
producing effective loyalty schemes and rewards to attract worldwide customers. The varied
usage of this trend is enabling and management to distinguish the brand. Therefore, researcher
has chosen the particular topic for conducting the research in order to explore in-depth
knowledge about how customer loyalty schemes and rewards are affecting improvement in
consumer retention and attainment.
1.3 Critical review of key references
In order to acquire the relevant information and data about research topic, annotated bibliography
has been taken into consideration. Various articles have been used in this section such as
Journals, books and news articles for exploring in-depth knowledge about research topic.
"Implications of loyalty program membership and service experiences for customer retention
and value”
In this article, authors have focused on intentions of an organisation for resourcing the loyalty
reward programs. However, the consequences of offering loyalty rewards are measured with
long term customer relationship and positive impact over customer behaviour and evaluation. A
significant aspect of loyalty programs has been underlined with probability of exposure of
continuum from service experiences. The reason behind moving on to another service provider is
also considered as deep impact of over continuous customer relation with an organisation.
“Relationship marketing management: Its importance in private label extension”
In order to establish effective customer relationship, authors have referred private label in the
traditional category as a significant tool. However, use of relationship marketing has been
suggested for generating the long-term relationship with partners such as consumers and
shareholders. This article concentrates at building of improved customer loyalty deriving from
consumer satisfaction, trust, experience and commitment. However, due to the excessive
Page 5 of 25

Consumer behaviour
involvement of customer in organisational loyalty programs might hamper the customer
expectation because their expectation level noticeably increases with terms of usage duration.
“Mobile marketing: a contemporary strategic perspective”
Authors have coined the mobile marketing as latest communication channels of direct marketing
that significantly affects the beneficial rate of organisational offers made to consumers and
partners. The mobile marketing incorporating values are investigated with marketing mix and
practices of direct marketing for identifying the benefit from offers of mobile channels. Authors
have underlined the SoLoMo (Social, Local and Mobile) marketing as multi-channel of
marketing strategy effective in enhancing the long-term customer relationship and purchase.
“The influence of loyalty programs and short-term promotions on customer retention”
The cumulative over time purchasing is considered while delivering the customer loyalty
rewards and measuring the impact of implemented loyalty program by an organisation. Authors
have mentioned that loyalty programs motivate a customer for repetitive purchasing decision-
making rather than single periodic decision making about purchase from the organisation.
However, the excessive policy experiments and empirical output have been highlighted as big
phenomena for decreased customer relationship thus leading to customer move on to another
organisation or service providers for fulfilling their basic needs.
“The customer loyalty solution: What works (and what doesn't) in customer loyalty programs”
This particular book has represented the impact of database marketing over marketing program
of an organisation in terms of enhancing the customer loyalty schemes. The author has pointed
the traditional thinking and antiquated technologies as major issue for deriving failed research
project over evaluation of customer loyalty program. Apart from that, this book cover the
evaluation of case study with mentioned research topic on different organisations such as
StrideRite, FedEx, Cingular and Cendant for exploring the different ways to enhance their
market-proven program in order to track the activity of consumer; building strong loyalty
program and consider the communication of customer as profit centre.
“Marketing Is No Longer a One-Way Street”
Page 6 of 25