Analysing Consumer Loyalty and Rewards Schemes: Amazon UK Case Study

This research project analyzes the effectiveness of consumer loyalty and reward schemes, specifically focusing on their impact on organizational performance and productivity, using Amazon UK as a case study. The report begins with an introduction that outlines the research's overview, background, significance, objectives, and research questions. Chapter 2 delves into a literature review, exploring essential factors in consumer loyalty and reward schemes, effective elements within Amazon's programs, the importance of customer loyalty in developing organizational performance, and strategies for long-term customer retention. Chapter 3 details the research methodology, including the types of investigation, research design, philosophy, approach, sampling, data analysis, and ethical considerations. The findings are presented in Chapter 4, followed by recommendations and a conclusion in Chapter 5. The research examines how Amazon utilizes loyalty schemes to enhance customer satisfaction, increase sales, and maintain a competitive edge in the e-commerce market, considering factors such as convenience, customer service, rewards, and reputation. The project aims to identify the essential elements of successful loyalty programs and provide insights into sustaining customer loyalty within a competitive market environment.

RESEARCH
PROJECT

Table of Contents
TITLE: ............................................................................................................................................1
CHAPTER 1: INTRODUCTION ...................................................................................................1
Over view of the Research ....................................................................................................1
Back Ground of the Research ................................................................................................1
Significance of the research....................................................................................................2
Research Objectives...............................................................................................................2
Research Question .................................................................................................................3
CHAPTER 2: LITERATURE REVIEW ........................................................................................3
2.1 The various factors that are essential in the process of consumer loyalty and rewards
schemes...................................................................................................................................3
2.2 The effective elements that are related with consumer loyalty and reward schemes within
Amazon...................................................................................................................................4
2.3 The importance of customers loyalty in developing organisational performance..........6
2.4 The essential ways by which Amazon can sustain customers for long time....................7
CHAPTER 3: RESEARCH METHODOLOGY ...........................................................................9
Types of Investigation............................................................................................................9
Research Design.....................................................................................................................9
Research philosophy...............................................................................................................9
Research Approach.................................................................................................................9
Research Sampling...............................................................................................................10
Data Analysis........................................................................................................................10
Ethical consideration............................................................................................................10
CHAPTER 4: DATA ANALYSIS ...............................................................................................10
CHAPTER 5: RECOMMENDATION AND CONCLUSION ....................................................21
5.1 Recommendation ...........................................................................................................21
5.2 Conclusion .....................................................................................................................21
REFERENCES..............................................................................................................................23

TITLE:
To analyse the effectiveness of consumer loyalty or rewards schemes and its impact on
developing organisational performance and productivity of firm. A case study of Amazon, United
Kingdom.
CHAPTER 1: INTRODUCTION
Over view of the Research
Today in competitive market environment, every business organisation needs to retain its
consumer to accomplish its objectives and goals in the future. As consumers are the most
important key factor to affect the business of the company in the long term,they should be
motivated to purchases the same of particular company .For this continuity , every business
organisation adapt many types of methods and tactics to retain its consumers (Bijmolt, Dorotic
and Verhoef, 2011). In the following report it will be discussed that different consumer loyalty
and reward programmes are used by enterprises especially in retail market of United Kingdom.
The fundamental purpose of each business organisation is to attaining high growth and success at
market place through offering variety of goods and services to their significant buyers. There are
some objectives of using the reward and loyalty programmes which are explained as followings.
The loyalty and reward programmes to make consumer experience strong in a positive way so
that mire sales of the product can be possible in the long term. For consumer satisfaction, the
organisation needs to support any query at any time. The rewards and loyalty programmes are
used to show to the consumers that they are important for the business and they will not feel less
satisfied after purchase at Amazon. As most rated marketing is the word of mouth. So the
company makes effort in consumer loyalty programmes to increase more new consumers by its
current costumers reference.
Back Ground of the Research
Amazon company of UK is biggest online shopping company which deals with selling
various types of goods. Besides this Amazon implement various types of loyalty schemes and
reward system for its customers to increase the performance of the company. Customer loyalty
schemes reflect the willingness of customer to buy product from the Amazon resulting
positiveness in the effectiveness of performance of the company (Blut, Beatty and Brock,
2014). It shows customer satisfaction level and value of the products or services. Amazon give
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loyalty points to his loyal customer which aid to increase the customer satisfaction level, and
increase the profitability of company by these loyalty program and it also enhance the rate of
selling of the products on Amazon. Customer redeem that loyalty point for discount on different
types of products, which maximize the profit and also enhance the performance of the company.
Significance of the research
This project research can make it clear that how its competitor and consumers are having
preferences. Amazon is one of the finest commerce organisation of United Kingdom. Being a
famous brand, it needs to maintain its image and position in the market. The basic purpose of
selecting the topic of customers loyalty and rewards schemes is that it helps in enhancing the
skills and knowledge of learner through analysing various elements that are related with
consumers loyalty and its importance on developing organisational performance and productivity
(Blut, Beatty and Brock, 2014). In the following research project many different programmes
related to long time loyalty ans reward for consumers. There are some factor which affect the
results and to control the negative effects, the company make some appropriate plan and
procedures for the best results. To have positive impact on the consumer by these
programmes ,some efficient resource can also be used in future. Techniques of loyalty
programmes help in evaluating the performance of the company like Amazon. This research
project includes different benefits on the choice of the consumers toward product.
Research Objectives
One of the most common reason to conduct research project on loyalty and rewards
schemes is that they play a vital role in success of the business organisation in any industry
(Castañeda, 2011). By this research company performance can be evaluated on regular basis to
obtain its objectives and targets related to its purchase. Some essential objectives are evaluated as
below:
 To identify various factors that are essential in the process of consumer loyalty and
rewards schemes.
 To evaluate different elements that are related with consumer loyalty and reward schemes
within Amazon.
 To determine the importance of customers loyalty in developing organisational
performance.
 To suggest various ways by which Amazon can sustain customers for long time.
2

Research Question
This also considered as an essential part of research project as it helps in providing proper
assistance to the researcher for effectively implementing the section of literature review (Chen
and Pearcy, 2010). Some important question are described as below:
 What are the various factors that are essential in the process of consumer loyalty and
rewards schemes?
 What are the effective elements that are related with consumer loyalty and reward
schemes within Amazon?
 What are the importance of customers loyalty in developing organisational performance?
 What are the essential ways by which Amazon can sustain customers for long time?
CHAPTER 2: LITERATURE REVIEW
2.1 The various factors that are essential in the process of consumer loyalty and rewards
schemes.
As per the view point of Cook, 2012, Amazon, being a leading E commerce business
organisation, complete the process of loyalty and reward schemes. As per the market
environment as well as consumers change their choice and preferences time to time. So the
company has to consider external and internal factors which fluctuate the loyalty of consumers.
These factor are Convenience, Expectations, Customer Service,Personal
Relationships,Rewards,Reputation and community outreach . These factors can be explained as
followings. Expectations-The product which is the main key for consumers loyalty to the same
brand has to fulfil expectation of costumers. It should be best in quality and price sop
that maximum consumers can buy the product in the long term. If the product is not upto
the expectation of consumers then it can weaken there sales and retention of consumers
in future. Customer services-This the most important factor which affect the loyalty of consumer
in the long term. If the costumer services are good then more positive image will be
established. On the other hand, if the costumer services are not effective , it can disturb
the business in the future.
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 Rewards-For Amazon , rewards are highly affecting the preference and retention for the
same product. If the company wants to continue its business at high rate then it should
consider this factor also (De Chernatony, 2010). If other organisations offer more reward
than Amazon, then the consumers might switch the brand to purchase online. Personal relationship-Representatives , sales man and customer care executive affect the
future retention of consumers. If they do not treat them well then the costumers can
discontinue with the same brand for purchase .On the other hand, if the relationship and
treatment is good then the consumer will be retained for long time in future. Reputation-The reputation is called as goodwill of the company in market. As Amazon
has a huge goodwill in the sight of its costumers as well as in the market of E commerce
benefits the company to sustain the costumers in the long term. On the other hand bad
reputation of enterprise can affect costumer retention in a negative way. Convenience-This is also an important factor which affects the costumers loyalty for
future time. If the costumer does not feel convenient towards product then no loyalty and
reward schemes can increase the sales of the product and no retention can be done .
 Community outreach-When the business organisation like Amazon tries to take more
participation in social activity to create a strong bong with its consumers then the loyalty
of costumer is increase. The company can target some causes which are important for its
costumers. It can lead to more retention of the online costumers in comparison to other E
commerce brands in United Kingdom (Dorotic, Bijmolt and Verhoef, 2012).
Thus there are many different factors which can increaser as well as decrease the
consumer loyalty for future. Today there is a cut throat competition in online shopping sites as
they are more convenient ,so the mentioned organisation must consider these above game
changer aspects.
2.2 The effective elements that are related with consumer loyalty and reward schemes within
Amazon.
As per the opinion of Gómez, Arranz and Cillán, 2012, Consumer loyalty is the
continuity in purchase by the same consumer in the long term. This is the result of consistently
positive emotional experience, physical attribute-based satisfaction and perceived value of an
experience related to product and services by Amazon. To maintain these costumers for E
4

commerce market, the business organisation uses some loyalty schemes which help in
increasing sales and competitive advantage in market.
Types of customers loyalty schemes-The loyalty schemes contribute in gaining success for the
company. There are some crucial types of schemes like Purely Point Based Loyalty
Systems,Hybrid Loyalty Programs,Coalition Programs,Community Based Programs,Tier Based
Affinity Program and Pure Lifestyle Loyalty Programs as following: Purely Point Based Loyalty Systems-This is the most useful scheme through which
customer retention can be done. Amazon gives the points on the basis of the purchase by
consumers. These points are redeemed by consumer in next purchase as discount or any
other free gifts (Kaur and Soch, 2012) .This makes them more motivated to purchase
more product in the future. This system include some gold points which are given to
costumers on huge purchase amount. Some benefits of this loyalty scheme is that it
encourages consumers to buy new product instead of the old one to get more discount
on next buy. There are some exclusive offers in which only pints will be added to the
purchase. Hybrid Loyalty Programs- This is the second type of loyalty scheme which is used by
Amazon to increase its sales in the long term. This is the combination of various
methods to retention the consumers. Loyalty box is an important tool in which the
company utilize s. This makes interest in company product which consequently benefits
the organisation in E commerce. Coalition Programs-These schemes play a vital role in consumer loyalty programmes.
These programs include some other brand points which can be used by costumers in
future (Khaligh,Miremadi and Aminilari, 2012). For example Amazon gives some points
on purchase to redeem at petrol pump or mobile recharges. Community Based Programs- These types of schemes include some social connectivity
implications which are use by costumer to have discounts at next time purchase
(Henderson, Beck and Palmatier, 2011). For example,the mentioned business
organisation gives some loyalty pint in some particular country only which increase the
sales as well as retention of current customers in the future. Tier Based Affinity Program-This type of loyalty scheme which is use by organisations
includes patronage, accumulated points or paying a membership fee. By paying some
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amount of money special and huge discount can be achieved by costumers in next buy of
the product. It is called gold and silver coin membership which is based on fee amount
by consumers. Pure Lifestyle Loyalty Programs-This consumer loyalty scheme includes some
strategies like niche marketing. For example the company gives some special offers top
women and youngsters .It can target their lifestyle product on special discount. It can
lead to more purchase and sustain of costumers in the long term in comparison to other E
commerce companies in United Kingdom (Meyer,Benavent and Castéran, 2013). Thus
these above costumer loyalty scheme make profit for company as well as its future
retention of consumers.
Reward schemes:
Consumers are also play a vital role in increasing future retention of costumers in e-
commerce market environment of United Kingdom. Rewards are the some gifts or discount or
other special services which are provide to customers on the basis of their purchases from the
same company. On e of the most common reward scheme is cash back which is used by online
shopping sites all over the world. In this scheme, the consumer is given some cash on purchase
which can be used in next buying of the product from then same site (Kaur, and Soch, 2012). For
example, a customer buys a watch of 200 euro then he will be provided a cashback of 50
euro .This reward scheme helps in making maximum purchase and minimise the switch to
another E commerce brand. Thus these two schemes are most profitable methods for the
company to gain competitive advantages in United Kingdom.
2.3 The importance of customers loyalty in developing organisational performance.
According to the opinion of Khaligh, Miremadi and Aminilari, 2012, Organisation must
care and cultivate for customer recurring, engaging them in a loyalty of a customers programs
and give them with incentives frequently. These are discuss the following importance of
customer loyalty are as follows: Customers loyalty are easier to sell: Customers who are loyal are more familiars with
their organisations business. They inclined to try a menu items, recommendations and
new products. Organisation can put same amount of effort but except the success of
higher.
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 Customer loyalty can act as brand ambassadors: Brand ambassadors, they are a loyal
consumers can reinforce their values to other consumers. They are likely to share their
positive experience with others- in a form of social media praise, reviews and
recommendations. They are inclined to speak their brand in daily basis conversation
with their words-of-mouth marketing. New customers are more expensive: Research are shown that new customers are six to
seven expensive for continuing a loyal customers. Each tasks are very costly.
 Loyal customers protect their business from competition: Newer customers are more
likely to switch with competitors and their sales. They reduce their risk of sensitivity
price. It help business to retain their customers.
2.4 The essential ways by which Amazon can sustain customers for long time.
There are various by which company gain the attention of customers as to sustain them
for long time and this also create value in attaining high growth and success at market place.
Some essential elements which are applied by Amazon as to sustaining customers for long time
are evaluated as below: Get rid of motivation killers: A perfect manager will carefully observe their work
environment in finding a area problem that affect adversely on motivation of
employees. Motivation killers which are typical such as abrasive personalities, toxic
people, absence of opportunity for developing professional and lack of vision of a
company. Gamification motivation: Employees which are unmotivated get bored when they are
dealing with routines of monotonous ( Meyer-Waarden, Benavent and Castéran, 2013).
Lack of motivating they are not having enthusiasm for completing a challenging tasks.
Tasks such as ideas contributing and reports completing of projects and change a
policies which are gamified to make more interesting and appealing. Clear goals are set and give feedback: Having a goals and objectives of a company
vision gives proper guidance to everyone. Important for providing feedbacks or
employees show that they are being supervised.
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 Use technology responsibly: Leverage of refusing technology can considered a mistake
of grave for any organisation. Many technologies increases a productivity in a place
where they work. Using technology is just not having internet and computers in a
workplace. It is also important for studying and different hardware are utilized.
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CHAPTER 3: RESEARCH METHODOLOGY
Types of Investigation
It is the most important part of the research project. The major role of researcher involve
finding out the research type whether it qualitative in nature or quantitative. Under qualitative
Research quality of Data obtained by researcher are taken into main consideration & in
Quantitative research Quantity of the Data obtained are taken into main consideration. In this
Research report Qualitative approach will be taken to analyse data and information(Namkung,
Jang and Choi, 2011).
Research Design
It Provides the framework to the researcher to carry out the research in an efficient
manner and to carry out research in the right direction. There are different types of research
design like Experimental,Exploratory,& Descriptive. For preparation of this Report Descriptive
form of Research Design has been taken.
Research philosophy
It is the most Valuable Part of the Research Design. Under Research Philosophy view
points of various authors and writers are presented to provide information in the report. There are
two types of philosophy Interpretivism and Positivism. For formation of this Research Report
Interpretivism philosophy is been taken into consideration.
Research Approach
Research approach is required to get a relevant hypothesis which is very necessary for
any study. Mainly it is categorised into two inductive: which is also known as inductive
reasoning. This approach is based on observation and theories to get a better results. Deductive:
in this approach researcher develop a hypothesis which are based on existing theory and design
so that they can test their hypothesis. In this report investigator is using inductive kind of
approach as this is qualitative in nature as it is authentic and not any other resources are used in
that. Empirical data is provided which are not used in any of the report. This approach is also
refereed as “bottom-up” approach (Namkung, Jang, and Choi, 2011). It is an important tool Of
Research Report. There are two types of Research Approach Inductive and Deductive. Th
9

Research here is based on qualitative types and therefore Inductive approach will be used by
Researcher.
Research Sampling
Research sampling is an important method where a sample is collected from a subset of
population. It is consider as a fairly generalized method because answers which are given by
respondents are not biased. It can be classified into two segments i.e. probabilistic sampling: it is
a kind of random sampling where there is a possibility of being chosen equally. Non-
probabilistic sampling: in this approach it doesn't provide all individuals with equal chance of
being selected. Researcher is considering latter approach because it provides with straight data to
investigator (Omar, Wel and Nazri, 2010). It is categorised into further categories which includes
consecutive, convenience, quota, snowball, judgemental sampling etc., thus, this is a purposive
kind of sampling and information which are provided are qualitative in nature.
Data Analysis
As the name suggests analysing of data which means transforming and modifying related
details. Certain tools and techniques are used to determine descriptive purpose of this report.
Under this primary and secondary data are used. Former is utilise so as to prepare questionnaire
and it done by the individual himself no other sources are included in this whereas latter one is
taken into consideration for making literature review which is very important for conducting any
research (Ou, Shih and Wang, 2011).
Ethical consideration
While evaluating this research, researcher faced many difficulties like time and cost.
Investigator was having specific time period under which report has to be concluded and it was
high on rates. For prior study full consent is required. Their data should be protected and private
so that no other researcher can use them.
CHAPTER 4: DATA ANALYSIS
Questionnaire
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Theme 1: Delivery of products are fast and less time consuming.
1. Interpretation:
From the above response it can be interpreted that 45 consumers were found satisfied on
the timely delivery of the product by the organisation which benefits the organisation in the long
term to retain the costumers. On the hand hand, 5 consumer out of 50 gave negative response as
they think that the company is not able to do timely delivery of product. So it can be said that the
delivery process is above average but a few rectification s are required to get it better in future.
11
45
5
A Yes
B No

Theme 2: Company provide effective after sales services to their significant buyers.
Interpretation: From the above question , 40 of the respondents think that company provides a
good service after the product is purchase and delivered. This kind of facility makes more profit
in term of consumer loyalty in future in E commerce business of United Kingdom. On the hand
hand, 10 of the customers think that they have not received a good or satisfactory after sales
services by the company. So it can said that there is lot of scope of improvement in after sales
services to the consumers.
12
40
10
A Yes
B No

Theme 3: As per the opinion of customer available products in companied stock are effective in
fulfilling the needs and wants of customers.
Interpretation:
From the above question response it can be interpreted that 50 people want the
organisation to add so me rare antiques which can be bought easily from all over the world.
On the other hand, a few people or consumers demand for sport car to be sold online by the
company which can lead to more costumer satisfaction in future. So it can be said that the
mentioned E commerce organisation might add some more rare antiques to increase the number
of new customers.
13
48
2
A Yes
B No

Theme 4: Customer receive proper presentation or demonstration about the exclusive products
and services which are offered by Amazon.
Interpretation:
From the above response it can be interpreted that 35 people out of 50 are agreed that the
company provides a fine demonstration of the product to the customer.
So that he can choose wisely whether to buy or not. On the other hand, 15 consumers did not
received proper demonstration of product which lead some dissatisfaction in their sight towards
company. So it can said that there is need to provide better demonstration of complicated or
technical product.
14
35
15
1
2

Theme 5: Consumers are highly satisfied with the offered products and services of Amazon.
Interpretation:
From the above response it can be interpreted that 49 people out of 50 think that they
recommend the product to their friends and relatives as they are fully satisfied with the product
as well as the service delivery of company.
On then other hand,only 1 consumers said that they do not want to recommend the particular
product as they are not fully satisfied with it. Some it can be said that customer retention is quite
high in Amazon.
15
49
1
A Yes
B No

Theme 6: Buyers get better discounts from in-store promotions than loyalty schemes.
Interpretation:
From the above response it can be said that most of the people out of 50 get more and
better discount on the purchase of product at online site. On the other hand only 40 people think
that store in same industry offer better discount than online or E commerce stores in United
Kingdom.
16
40
10
A Yes
B No

Theme 7: Loyalty scheme is worthwhile and company is willing to provide various offered and
vouchers to their regular customers.
Interpretation:
From the above response it can be interpreted that 15 consumers are agreed that the
loyalty scheme of the company is useful.
On the other hand, 18 consumers are not agreed with that. Only 17 people are neutral on giving
personal details. So it can be said that loyalty scheme are useful and famous among consumer of
Amazon.
17
15
18
17
A Agree
B Disagree
C May be

Theme 8: Company is widely concern on providing technical support to the specific use of
particular product.
Interpretation:
From the above response it can be interpreted that 30 consumers require technical support
by the organisation related to its product. On then other hand, 10 consumer do not advise so.10
consumers out of 50 are of neutral opinion. So it can be said that the organisation should monitor
the technical support service after the delivery.
18
30 10
10
A Agree
B Disagree
C May be

Theme 9: Customers are continuously recommend various products to their friends and family.
Interpretation:
From the above response it can be interpreted that almost all the consumers think that
some recommendation will be done to friends and family which leads to consumer retention.
On the other hand, only 15 people think that they will not recommend the product. So it can be
said that the brand is recommendable in the market.
19
35
15
A Yes
B No

Theme 10: Customers use the products of Amazon since a long duration of time.
Interpretation:
On the other hand, 15 consumers are the more than one but less than three years loyal
costumers.10 consumer have been loyal consumers from three to five years and only 5
consumers have been from five to ten years. A big part of the consumers are more than ten years
5 out of 50 consumers.
20
15
15
10
55
A Less than one year
B One to under three years
C Three to under five year
D Five to under ten years
E Ten years or more

CHAPTER 5: RECOMMENDATION AND CONCLUSION
5.1 Recommendation
There are Scope of improvement which should be followed by the business organisation.
One of the most important recommendation is that the mentioned businesses organisation should
ficus more on customer satisfaction. To gain customer satisfaction, the company should show
gratitude to its consumers for maximum profit and a leading position in the E commerce market.
Another recommendation for better consumer loyalty is that it should treat costumers like a boss
so that they feel good being a part of the company for long time. To gain more consumers
satisfaction,there should be time to time online survey all over the United Kingdom to evaluate
gap between expected and real attained customer loyalty. After that, appropriate actions or steps
should be taken in future.
Another recommendation is that the mentioned business organisation should offer
special gifts or discount on special occasions like birthdays, wedding anniversary or any other
occasion. This can lead to more satisfaction on the part of consumers and they will be stick to the
brand for online shopping. Recommendation can include addressing every single feedback
related to complaint of consumer about product and services. The company should use email as
it is an online organisation. By email ,the organization should send greeting and necessary
information about any changes in term and condition or products to make consumers aware for
future. Social media is the best way to increase consumer loyalty. Through these methods like
Facebook, Instagram, the company should promote its product and satisfy its current customers
in the long term.
5.2 Conclusion
From the above report it can be concluded that there are many different kind of
programmes which are used by the business organisation for sustain the current consumers to
achieve its objectives and goals of profit maximisation and revenue generating in future. These
programmes make it easy for the organisation like Amazon to drive more sales and gain
competitive advantage in comparison of other companies in the same industry. Without these
above mentioned schemes , no company can retain its current costumer for long which can
weaken its image in e commerce market of United Kingdom. For the long time loyalty from the
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consumers, the company has to monitor the result and take appropriate actions in case of gap
between desired and real attained results.
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