Consumer Behaviour Analysis: Loyalty Programs and Market Competition

This report delves into the realm of consumer behavior, specifically examining the influence of customer loyalty programs on market dynamics and brand image. The study begins with an introduction to consumer behavior, exploring various factors that influence purchasing decisions. It then outlines the research methodology, including the project outline, influential factors, and both positive and negative aspects of consumer behavior. A research proposal is presented, detailing the purpose, philosophical function, and procedures for data collection and analysis. The research involves questionnaires distributed to respondents to gather data on loyalty programs and their effects. The report includes a frequency table of collected data, research evaluation techniques, and data analysis, culminating in recommendations and conclusions regarding the effectiveness of loyalty programs and areas for further research. The analysis focuses on a retail outlet chain, Morrisons, to provide real-world insights into consumer behavior.

Consumer behaviour

Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1) Research project outline are-..........................................................................................................3
1.2) Influentional factors affecting for the selection of the topic..........................................................4
1.3) Positive and negative factor of consumer behaviour ....................................................................5
1.4) Research Project Proposal..............................................................................................................6
1.5) Procedures and planning to for the research presented in tabular form to show the main
activities/ stages of research
and how long each activity would take to complete............................................................................6
TASK 2 ......................................................................................................................................................7
2.1) Sources required to carry out your research and what is the relationship between research
resources’ and the ‘research question or hypothesis’?..........................................................................7
2.2)Design and distribute a ‘Questionnaire’ among at least 20
respondents to collect data on your research topic...............................................................................8
2.3)Collected data from participants in the form of a frequency
table that shows the aggregation for each question..............................................................................9
TASK 3.....................................................................................................................................................11
3.1) Research evaluation techniques...................................................................................................11
3.2) Data analysis................................................................................................................................12
3.3) Justify areas for further research..................................................................................................13
TASK 4.....................................................................................................................................................13
Recommendation...................................................................................................................................13
CONCLUSION .......................................................................................................................................14
REFERENCES.........................................................................................................................................15

INTRODUCTION
Customer loyalty programs are made in order to provide additional benefits to loyal customers
of an organization which provide a major share of revenue to them. These kind of programs are made
in order to get more share of customer retention for organization and make more customers loyal
twords our brand . These schemes include various additional benefits depending upon the expenditure
incurred by them as a motivational factor for customers to incurr more pruchases whenever there is a
sale on product and by providing additional benefits an organization motivate customer to pruchase
more . Sometimes they pick anything in order to complete the discount pricing policy of the company.
This have a direct impact on the revenue generation of the company as they are foucsing more on sales
by collection revenue on sale of product rather then generating on sale of same product with more cost.
This kind of schemes is beneficial for both customer as well as company . But there are few schemes
which are advertised by the company but have an adverse effect on them as inspite of customer
attraction they dilute the brand value of the company . In this projectwe would study on various
schemes that are offered by various companies in the market and their effect on the company as well as
customers in the market.
TASK 1
1.1) Research project outline are-
This include various topics which has been discussed in the research in the reference of chosen
topic which is to study the result of customer loyalty program these topics are mainly
 Introduction about the topic: In this we would like to discuss the base of this topic that is
consumer behaviour . This include various behaviour of the person whenever they go for
purchasing of the product in the market . There is a huge difference in various buying behaviour
of the customers depending upon various factors such as budget, type of product, type of
customer etc(Oliver1999).

 Research methord : This report in mainly about the behaviouir of people twords a particular
brand which can only be calculated by asking people so we have collected the data about
various sales promotion schemes, benefits that are avilable in the market and the actual number
of customers that are taking benefits from these kind of schemes of a company . By selecting a
particular company, recording about various offers provided by them and how many customers
are taking benefits of that.
 Return on inverstment : This is one of the major topic that has to be discussed as a company is
doing business in order to generate profit more than doing social work in the market so they
have to calculate return on investment(RustandZahorik 1993) . In this report we would also see
the various ways trough which a company can make their profit with the introduction of various
schemes by them in the market .
 Different type of offers: In this we would study the various offers that has been provided in a
particular market segment by various companies in orderc to incur more sale and caputure more
market share then their competitors in the market. For this we would also study about the
schemes trough which most of the customers were attracted and these schemes are dependent
upon time like short term schemes which are based of offers on various festival and second is
long term schemes like providing special card to a selected group of customer that provide them
additional benefits. On the pruchase of produccts other than additional discopunt like pruchase
from store's application avilabe online etc(Oliver1999).
1.2) Influentional factors affecting for the selection of the topic.
There are various influentional factors that are responsible for the selection of the topic which
are :
 Effect of the topic : under this heading we would like to see the effect of the customer loyalty
program on the market competition as well as on the
company(GerpottRamsandSchindler2001) . As the main objective of the company is to generate
profit so by providing sale on the cost of the product company manages to generate revenue by
incurring more number of sales on the product.
 Market competition : It is amoung the main influencial factors for choosing this topic as every
company has to face market competition because of other brands producing same product so it's
the behaviour of the customer and the brand image in his mind that help them choose the
product of specific brand . Every customer have one or two companies in his mind in order to

purchase a particular product but what make him choose that company is important which helps
a company to make money(Agustin and Singh 2005).
 Customer retention : This is a major point for a company as include the amount of customer a
company can retain. It is very important for a company to keep an eye on this topic because
when a company is starting losing it's customer then they would loose their market share also
and a time will come when they would hace to shut down their company . Customer retentions
is easy by generating loyal customers twords the company.
 Impact on brand image : The purchasing behaviour of the customer would have an impact on
the brand image of the company as more satisfied customer would spread a good word of mouth
in the market which would increase the brand image amoung the competitors but if a company
is loseing it's customers then it would be difficult for them to survive in the market . By
applying various schemes a company can easily attract new customer which could be converted
into loyal customer with time(Lewis2004).
1.3) Positive and negative factor of consumer behaviour .
There is both positive as well as negative factor for choosing consumer behavious by
considering working of loyalty schemes and rewards
 Positive factor : The main positive factor of consumer behaviour is that it is really very
beneficial for both customers as well as for the company in terms of finance as well as image in
the market . Positive factor for the customer is that they are getting good quality of product in
cheaper cost because of the various promotional schemes by the brand and customers are also
linked to various schemes which have additional cost benefits which is the main reason of
customer attraction twords the product of the company . It has a positive impact on the brand
also as more number of customers are getting attached to their loyalty progam they are slowly
captureing the market share of their product and has a good image amoung customers . By
capturing market share company is able to generate more profits by selling their products in
bulk and have very few profit margin on sale of single product to their customers(Singh2006).
 Negative factor: the main negative factor is that it is a hypothetical study which is dependent
upon the choice and behaviour of various customers, which may be satisfied or dissatisfied
depending on their personal point of view tword the company so this dozen't have a 100%
guarantee that this report is 100% reliable . This report is just the calculation of data that has
been gathered from the cusstomer analysis of the market with reference to a particular company

and it's image in the market.Another negative factor is that customers are segrigated according
to their pocket share in the market so a company has to see whom to target . The biggest reason
of customer dissatisfaction is the product of the company is not as per to their market
environment for example a burger form Mcdonalds US would not be same in Mcdonalds
India(AgustinandSingh2005).
1.4) Research Project Proposal
The research project proposal of the topic of working of customer loyalty schemes and reward
programs with relevance to a company is
 Introduction : this will include 3 major things which will help in knowing the basic detail about
the research . According to the topic “working of customer loyalty scheme and reward
programs” we will include 3 major things to be introduced in introduction. Frist is consumer
behaviour . We would provide a breif introduction aboout customer behaviour . Second is
customer loyalty program's effect on the company as well as on the market competition . Third
is “the ways trough which company is able to manage to earn profit while applying loyalty
program and sales advantage(GerpottRamsandSchindler2001) .
 Purpose : the main purpose of this study is to determine the various progarms that a company is
offereing in the perfect market, type of customer loyalty programs, and weather this kind of
schemes are really beneficials for the company and how? For this study we have used randon
sampling methord and collected our data from various customers linked trough various kind of
loyalty programs .at the end we have provided a conclusion depending upon the answers that
we have collected(Singh 2006).
 Philosophical function :This would include the various philosophies that has been given by
different writers in the relevance of our chosen topic for the research as they have done their
part of work earlier on the topic.
1.5) Procedures and planning to for the research presented in tabular form to show the main activities/
stages of research
and how long each activity would take to complete.
S no. Activities Time consumed in the process in days

1 introduction 1
2 Literature review 4
3 Data collection 7
4 Data analysis 4
5 conclusion 2
In this research we have plan to do the following research on the topics with reference to
Morrison a big retail outlet chain . In the introduction part of our research we need atleast one day in
order in give a proper, specified and breif knowledge about various thinds that are included in our
research . This introduction has to be short and simple . Literature review will take atleast four days as
we have to know various factor on consumer behavior , we should have knowledge about the market
type and the various competitors inside the retail market. Then we would study about the various
schemes that are provided by the companies depending upon the working duration in the market as
some schemes are on festivals and some schemes are for a longer duration of time which include
proper card which is provided by the company(Chen and Hitt 2002). Data collection is one of the most
time taking job done in this research as people would not have enough time to fill the questionnaire and
the customer which have a loyalty card under Morrisons are also limited in number which are not easy
to find oor contact. Data analysis is good as researcher has to collect the data and analyse it . The result
of it is may or may not be favour of our hypothesis that we have created . Conclusion is the last part on
this report which include the final answer of our research which can be in favour to our topic or may be
against our topic depending upon the outcome which we get after data analysis.
TASK 2
2.1) Sources required to carry out your research and what is the relationship between research
resources’ and the ‘research question or hypothesis’?
There are various resources required to carry out the resesarch mainly
 Information about various schemes : there are various schemes which are avilable in the market
in order to get customer attraction for the company that they offer in the open market and
advertise them through various means like newspaper, social media etc(Ennewand Binks 1996).
which finally reaches to the consumer so it would be easy to collect the information of various
schemes from the market as well as various service providers of the brand in their retail outlet,
there are various schemes which are shared on some specific customers holding precious cards

of a brand such as ferarri whose products are really very expansive and they do not even
advertise about the product.
 Information about the market: researcher should have a breif knowledge about the market and
marketing condition like type of market red or blue, major competitors of the market. The
researcher should have a good knowledge about various brands who do not have manufacturing
of that product but give the product as a gift to special guests(Verhoef2003) .
 Research resource consists of that information form where a researcher has collected their data.
In this research data is collected from two sources both primary and secondary for the primary
data collection we have produced a questionnaire and asked people to fill that and in secondary
section data is collected from internet and various other social websites. Research hypothesis is
a hypothetical question which a researcher has to answer. The main difference between both is
that for very research there is a hypothesis that has to be answered by the researcher whereas
research resource is the resource of collection of data in order to prove the hypothesis(Chen
and Hitt 2002).
2.2)Design and distribute a ‘Questionnaire’ among at least 20
respondents to collect data on your research topic.
Q1) Do you have a loyalty card ?
 Yes
 no
 Expierd
 Earlier but not now.
Q2)How often do you use a loyalty card?
 No
 Occasionally (as per the time of validity)
 Sometimes
 Rarely
Q3) Do you like the services provided by the firm?

 Yes
 Satisfied
 No
 Very happy
Q4) How many cards do you have?
 2
 4
 6
 0
Q5) Frequancy of offers provided on that card?
 A Week
 A moth
 no
 Frequantly
2.3)Collected data from participants in the form of a frequency
table that shows the aggregation for each question.
1)
1 2 3 4
0
5
10
15
20
25
30

2)
3)
4)
1 2 3 4
0
5
10
15
20
25
30
yes satisfied no very happy
0
2
4
6
8
10
12
14
16
18
1 2 3 4
0
2
4
6
8
10
12
14
16
18
20

5)
TASK 3
3.1) Research evaluation techniques
According to the research Morrison company should use summative approach that can help in
the aspect of better research process that plays an important role. If there would be summative
approach in the research aspect this can create a better results and hence by this process objectives can
be achieved that is the main aspect of business function as well. Summative approach tells the whole
aspect that is purpose of research, who are the target audience and many more that plays an important
role for increase in business aspect. Summative approach of research tells about the basic idea that are
used in the research process that can create a better impact. Hence by this approach the basic idea can
be generated and hence according to that aspects it can form a better impact in research as well.
Summative approach would be better that can create a research more effective and efficient and uses of
this particular research would be more functional for better growth that is the main purpose. Summative
research would generate a primary research aspect and hence this can create a better research that is the
main aspect for positive results that plays an important role. Summative research approach would tell
all essential aspects in the business process that can help in the aspect of creating research more
effective and efficient. These research would be conducted by a particular researcher that can help in
making the research in accordance to better goals that is the main purpose of research. Summative
research also tells about the basic functions that the customer thinks about a particular topic and hence
according tom that the research would be successful and reliable for growth as well. By this purpose
the main purpose of research can be generated and hence research would be successful.
a week a month a year frequantly
0
5
10
15
20
25

3.2) Data analysis
 In the first question that has been asked form the customers almost 50% of the customers have
used a loyalty card of some of the company in which they have a habbit to purchase their
regular products on daily basis . Almost 26% of the customer have never used a card in their life
which means that they have never utelised an offer by the company . There may be various
reasons behind this like customers might not be loyal to any perticular companyor any other
reasin that could be considered(Verhoef 2003) . On the opposite hand 16% and 8% of the
customers have used the card but they are not using them now and there can be few reasons
behind this like the scheme of the company has been expiered etc.
 Second This graphical repersentation shows that the use of loyalty card as per the times of use
which says that 26% of the customers do not use their loyalty card again they have only used at
the time when their card was issued and from then they haven't used the card . There may be
few reasons behind this like they forget about the card or they do not have visited that store for
long time(Ennewand Binks 1996) . But on the other hand 54% of the person have used their
card again in order to enjoy the services which are provided by the store where as the rest of the
remaining share customers have used sometines or rarely whenever they visit to the store of that
area.
 Third In the above chart we have shown that how many people were happy about the extra
service that has been provided by the store according to this question 24% of the customers
were happy about the services that they get extra by the use of these card and 32% of the
customer are satisfied as they were used to such kind of offers.18%of the customers were
unhappy due to the level of service provided by the store. Last 26% of the customersvery
happy about the services that they will be getting for free(Chen and Hitt2002).
 Fourth In the above graph 18% of the customer have more than 2 card with then which they
uses as per the avilability of the offers in the market which means that they are loyal to limited
number of companies in the market whereas 32% of the customer have 4 card with them which
easily state that they are loyal toward more number of brands in the market this also state that
there are various companies that provide loyalty programs in the market so they have a tough
competition in the market . 14% of the customers had more than 6 cards which may be either
expired or not used for a long period of time . 36% of the customer dozen't have any loyalty
card with them as this kind of the customers are not at all brand loyal and they easily switch
product easily(Ennewand Binks 1996).

 Fifth Above graph shows that 26% of the companies re issue their card within the first week of
their expansion in order to keep their customers attracted and loyal twords their product. 8% of
the company renew their cards within the first week of finish of their loyalty schemes 40% of
the companies do not update their schemes and customers are also not updated regarding the
shuting down of various schemes.whereas 26% of the companies frequalty update their cards in
order to the generate loyal customers.
3.3) Justify areas for further research.
There are other various areas for the research under this topic which is customer loyalty and
reward schemes actually work . The other area can be what percentage of customer is a company able
to convert from regular customer to loyal customer as most of people don't want or they are unaware
about these kind of schemes of the company which can be used by them . The other type is that
customer who have stoped using the scheme because of poor quality of service . This is a big topic to
be research as for every action there is a equal and opposite reaction which means that if the customers
are attracted then most of the customers stop using a good companies product just because of the wrong
promotional factors used by the companies(Ennewand Binks 1996).
TASK 4
Recommendation
Seeing the case it is clear that customer loyalty is must. It enhances the reputation of the
organisation. Here Morrison group is a big retail business. It should be taken care that the customer
remain loyal towards the company. It can be seen that various techniques and strategies has to be used
to to retain their customers. If this is not done then problems can arise in poor sales of the products of
Morrison. Here we can see that Morrison needs to use following strategies or ways in order to retain
there customers -
1.Customer wishes must be known – The wishes of the customer must be known and they should be
taken care of. Morrison should use this strategy to make there customers happy. If Morrison will work
on researching and gathering information about the needs and requirements of the customers then a lot
of problems can be solved out(Rauyruen and Miller2007).
2.Taking the feedback from the customers – Feedbacks are the major way to calculate the requirements
of the products and to know the current problems that is going on in the market. Morrison has to take
care of the employees and keep them happy(Agustin and Singh 2005). These feedbacks vary from

customer to customer. It involves using the current schemes very well and to know the current
problems due to which loss occurs to the organisation.
3.Speeding up the service – Speeding up the service of delivery to the customers is a sure way of
enhancing then customer loyalty. Customers don't like to wait a lot instead they want everything to be
quick and of use(Hallowell1996). If the service provided to the customers is of good value and quality
then obviously they will be happy and Morrison can make profits in the future too. So speeding the
service helps a lot in time.
CONCLUSION
Customer loyalty is a big function in nowadays. Everything that is happening is due to the
customers itself. Without them nothing is possible. The schemes which are used to retain the customers
of any organisation are of great help and results come when these are used in an efficient way. It can be
seen that by providing some benefits to the customers a change in scenario is experienced. The
customers are the main source of sales for a company. They are the reason for which the company is
making its products and is selling it to them. If they are not taken seriously then the customer itself
moves away from the company. We can see that by providing constant discounts,offers,cash
benefits,events,parties,invitations etc. to the customer it creates a good feeling to the customer that they
have chosen the right company and is delivering them products which are beneficial to them. No body
in this world wants to feel neglected or cheated. Every person is looking for their own profit and takes
steps and actions which are of their interest. Customer loyalty schemes are of various types and of uses.
Not every technique can be used to retain a customer. A person who uses a certain mode of platform to
buy product has to be dealt in that way only. It should be noted that these schemes have to be present
everywhere since a customer always looks at the additional benefits associated with the brand. Yes, it is
true that by using by using these schemes the customer can be retained and profits can be made from
the given scheme. It also helps in marketing the firms because any good deed for the customers will
result in spreading of the information to other customers and increase in sales.

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