Customer Loyalty and Reward Scheme : Case Study on Tesco

RESEARCH PROJECT

Table of Contents
PROJECT TITLE.............................................................................................................................1
INTRODUCTION...........................................................................................................................1
Background of the research....................................................................................................1
AIM AND OBJECTIVES................................................................................................................1
LITERATURE REVIEW................................................................................................................2
RESEARCH METHODOLOGY.....................................................................................................4
EXPECTED OUTCOMES..............................................................................................................6
TASK 2............................................................................................................................................6
2.1 (A) Resources that are required to carry research ...........................................................6
(B) Relationship between research resources and research questions....................................7
2.2 Undertake the proposed research investigation................................................................7
2.3 Record and collect required data......................................................................................7
TASK 3..........................................................................................................................................10
3.1 Research evaluation techniques......................................................................................10
3.2 Interpret and analyse results in term of original research specification.........................10
3.3 Make recommendation to justify areas for further research ..........................................16
TASK 4..........................................................................................................................................16
4.1 Results and recommendations........................................................................................16
REFERENCES..............................................................................................................................17
APPENDIX....................................................................................................................................19

PROJECT TITLE
“To assess that whether customer loyalty and reward scheme work actually or not - A
case study on Tesco”.
INTRODUCTION
Within the competitive market, customer satisfaction is very important concept in retail
industry. In this aspect, they can serve their products and services according to customers’
demand and requirement. Nowadays, customer loyalty and reward scheme increasing very fast.
Thus, it is important to assess reason that how to satisfy them (Kim, Lee and Johnson, 2013).
Main aim of the enterprise is to serve effective services so that they can easily get loyalty
through providing them rewards. If the company is unable to serve effective services, their
goodwill will be reduced which create negative impact on people to whom they served.
Therefore, the present report covers discussion to assess customer loyalty and reward scheme to
people of Tesco that leading in retail sector of the UK market.
Background of the research
From last several years, it has been observed that customer is effectively engaged in
different types of loyalty programs. In this context, retail sector of UK market has been selected
that faces many issues and problems to switch towards new customer or dealing with another
competitor (Floh, Zauner and Rusch, 2014). It is the main reason in current era which is crucial
for retailers. Hence, loyalty program initiatives have been taken which retained to the long-term
objectives and survive in the market. With reference to Tesco, present study is assessing whether
consumer loyalty and reward scheme actually work or not.
AIM AND OBJECTIVES
Aim – To assess that whether customer loyalty and rewards schemes actually work or not – a
case study on Tesco.
Objectives
 To explain the concepts of consumer loyalty and rewards schemes used in Tesco
 To evaluate the importance of consumer loyalty and rewards schemes for Tesco
 To assess the benefits that Tesco can gain through consumer loyalty and rewards schemes
 To recommend the ways for improving consumer loyalty and rewards schemes in Tesco
Research questions
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 What is consumer loyalty and rewards schemes used in Tesco?
 What is the importance of consumer loyalty and rewards schemes for Tesco?
 What are the benefits that Tesco can gain through consumer loyalty and rewards
schemes?
 How consumer loyalty and rewards schemes can be improved in Tesco?
LITERATURE REVIEW
Concept of customer loyalty and reward scheme
As per the point of Kumar, Sharma and Rajan, (2013), it can be stated that customer
loyalty defines as trust of the people towards products and services of the organisation. It assists
to gain effective customer satisfaction for long term in the enterprise. There are several methods
through business easily get customer loyalty at workplace. In this aspect, it can be critically
analysed that customer loyalty is very essential for the enterprise to ascertain long run surviving
within the organisation. However, Kang, Alejandro and Groza, (2015), stated that reward play
very important role for the firm to develop results and profitability in successful manner. In this
way, customer can be targeted to raise their morality at workplace. In respect to ultimate leading,
high revenue need to be generated that assists to achieve competitive advantages. With the help
of earning more amount of revenue and profits, the business can also diversify their operations
and functions in different areas of market.
According to Watson, Beck and Palmatier, (2015), it can be argued that when enterprise
not offering reward schemes to customers, they are unable to earn more profits within the
environment. Therefore, no more customers at workplace attracts which assists to promote
profitability in successful aspect. In respect to target the people, high revenue need to be
generated at workplace that assists to gain competitive edge that overcome problems and issues
in effective manner. On the other hand, Yoo and Bai, (2013) critically evaluates that customer
loyalty and reward scheme are two different parameters of same coin. Thus, it cannot easily be
implemented at workplace of retail business. Reputation of the business boost in high extend
which make effective position and operations at workplace. Generation of high profits could be
maintained through attaining sustainable objectives and goals which beating to results.
As per the point of Bowen and Chen McCain, (2015), it can be stated that operations and
functions of Tesco assists to measure reward scheme towards customers. The chosen enterprise
is dealing with retail store sector and provides products and services in online and offline stores.
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This system assists to attain competitive advantages so that customers are feeling very safe to use
different types of goods. It also creates value towards them and they are giving longer time to
retain at workplace. In order to target people, business need to concentrate on their products and
services with effective quality and profitability. On the contrary, according to McCall and
McMahon, (2016), there are several advantages take place due to implementing of loyalty and
reward scheme that increase profits and revenue. It also enhances market share of the company
which aids in to make goodwill and increase customer spirit level and stakeholders as well.
There are several methods through customer satisfaction can be attain at workplace with
implementing of reward scheme such as vouchers, free coupons, membership and cards, etc. It
also reduces cost of the enterprise and improves profits for diversify operations and functions.
With the help of increasing selling of products and services, the chosen enterprise can compare
existing customer with new and cost as well.
Factors Affect Customer Loyalty
As per the view Zakaria, Rahman and Osman, (2014), there are many factors which
affect customer loyalty. It includes convenience, expectations, customer services, personal
relationships, reward, etc. due to customer change their taste and preferences. When customer
purchase any product or service, they are likely see towards previous loyalty of product. Due to
price, their shopping habit may be change so that it is essential to look previous buying. It is the
opportunity to Tesco to create the highest loyalty to make effective products and services.
However, Tanford and Malek, (2015) argued that when customer buying any product or service
many loyal people regularly buy products according to their convenience. They are also
preferring brand in specific stock when they have no time. In addition to this, expectations also
relate to enhance continue to live up with delivering brand promise and remain relevant through
price, value and availability. Customers mainly attracts through some consideration so that
chosen enterprise need to especially provide it with options. Hereafter, customer never go
towards another organisation.
According to the point of Söderlund and Colliander, (2015), reputation of products and
services of the organisation plays many important role in success. In this aspect, commercial and
social elements influence long term relationship with customers. With the help of resources of
financial, labour and sourcing practices scrutiny to increasing transparent world. When the
enterprise looks towards support of customer, it is very important to take participation from
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