Assessing Customer Loyalty and Reward Schemes: Sainsbury's Case Study

This research project investigates the effectiveness of customer loyalty and reward schemes within the context of Sainsbury's supermarket, specifically focusing on its Paternoster Square location in London, UK. The study aims to determine if these schemes are successful in attracting and retaining customers, especially in a highly competitive retail environment. The project includes a research proposal outlining the scope, objectives, and methodology, followed by the research project itself. The research employs a descriptive and qualitative research design, utilizing both primary and secondary data collection methods. Data analysis involves thematic analysis to identify patterns in customer responses. The research also explores the concept of customer loyalty, the importance of reward systems, and the benefits of these schemes for retail businesses, considering factors like customer behavior and market competition. The findings provide recommendations for Sainsbury's to enhance customer loyalty and improve its marketing strategies.

RESEARCH PROJECT
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Table of Contents
TASK 1 RESEARCH PROPOSAL.................................................................................................3
1.1 Introduction............................................................................................................................3
1.2 Scope of the study..................................................................................................................3
1.3 Aim of research......................................................................................................................3
1.4 Objectives of the study..........................................................................................................4
1.5 Problem specification............................................................................................................4
1.6 Limitation of the study...........................................................................................................4
1.7 Research question..................................................................................................................4
1.8 Key benefits...........................................................................................................................4
1.9 Literature review....................................................................................................................5
1.10 Research methodology.........................................................................................................5
TASK 2 RESEARCH PROJECT....................................................................................................6
2.1 Effective utilization of resource to the research questions 5.................................................6
2.2 Undertaking the proposed research........................................................................................7
TASK 3 RESEARCH PROJECT....................................................................................................8
3.1 Evidence of recording and collecting data.............................................................................8
3.2 Interpretation and analysis of the results.............................................................................17
3.3 Evidence of evaluation of investigation...............................................................................20
3.4 Recommendation and justification for further consideration..............................................20
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
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TASK 1 RESEARCH PROPOSAL
1.1 Formulation of process
In the present era, the business environment has become highly competitive and it is
changing at rapid speed. There is presence of several organizations that are competing for the
sake of survival within such environment. The role of customer loyalty as well as reward
schemes has increased to a greater extent as such it offers long term success to the business. This
is one that offers greater attraction to the target market. Reward schemes can be regarded as
major source of motivation for the customers who would make purchase at the retail business.
There is greater need for the business to make adoption of such marketing strategies in order to
promote the customers to make utilization of the services. Through purchasing of such schemes
the customers is able to gain the right to get discount on the current purchase. Customer loyalty
and reward schemes are considered as the unique aspects that are offered by the firm for the sake
of increasing its customer base in an effective manner. In the proposed investigation the
organization that is being taken into account is Sainsbury and the specific area is Paternoster
square in London UK. As the firm is second largest chain of supermarket thus it needs to develop
unique strategies that can work for it in an effective manner.
Scope of the study
The selection of the present research topic has been done by making analysis of the scope
of the subject matter. It has been examined that scope of present investigation is wider. This
implies that carrying out investigation on the present topic would assist the researcher in
attaining effective knowledge that will assist in future course of time. There is presence of less
number of investigation that are being carried out on the particular topic. This reflects that
carrying out research on the particular topic will help the researcher in gaining deeper knowledge
about the phenomenon. Moreover the study will help the retail business in knowing the outcomes
that can be attained through implementation of consumer loyalty and rewards schemes. Along
with this working of this can also be known in an effective manner. The organization would be
able to understand regarding the whether consumer loyalty and rewards schemes actually works.
1.2 Factors contribute
The problem in the present research is to know whether customer loyalty and reward
schemes works or not. The firm is supermarket chain that aims at offering quality products to the
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target market. It is important for the business to attain knowledge regarding how it works so that
it is able to attract the target market in an effective manner. The loyalty of the customer depends
on the kind of schemes that are being provided by the target market to the firm. This assist in
increasing the attractiveness of the target customers to a greater extent.
1.3 Key benefits
The major benefits that would be attained from the present investigation are presented in
the manner as below:
 The researcher would attain the knowledge regarding the investigation
 To determine whether consumer loyalty and rewards schemes works for the retail
business
 To assess the significance of consumer loyalty and rewards schemes
Limitation of the study
There would be presence of greater limitation for the present investigation. It has been
assessed that as the investigation needs to be accomplished within specified duration of time thus
there is presence of certain aspect that are being missed out. This demonstrates that time is
regarded as the main constraint because of which size of sample has been restricted within 100.
Another major limitation of the investigation is towards translating the questions within the
regional language that can take away certain meaning of what is meant by the respondents.
1.4 (Specification) Aim of research
The aim of the present study is: To assess whether consumer loyalty and rewards
schemes actually works: A case of Sainsbury Paternoster square.
Objectives of the study
The Objectives of the present report are enumerated in the manner as under:
 To explore the concept of consumer loyalty and rewards schemes
 To assess the significance of consumer loyalty and rewards schemes
 To determine whether consumer loyalty and rewards schemes works for the retail
business
 To recommend the options that can be used for attracting the target market
Research question
 What is the concept of consumer loyalty and rewards schemes?
 How significant is consumer loyalty and rewards schemes?
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 Do think whether consumer loyalty and rewards schemes works for the retail business ?
 What can be the alternative options that can be used for attracting the target market?
1.5 Literature review
There is greater importance of customer loyalty and reward scheme for the target market.
Such is considered as the kind of discount that is being offered to the customers so that they are
able to develop loyalty for the firm. Along with this it has importance in attracting the target
market to a greater extent. In the present time as there is greater competition thus it is important
for the firm to come up with something new that can increase the attractiveness. This assist the
business in increasing the base of the customer which results in increasing the sales and
profitability of the business to a greater extent.
In accordance with the views of Yoshida, M. and James, J.D., (2010) it has been
examined that customer loyalty and reward scheme works for the customers who are loyal and
make repeat purchases of the organizational product. Along with this such unique aspect assist
the business in getting an edge over the competitors as well. When the customers are provided
with new scheme they feel encouraged to buy the product. In addition to this it has been assessed
that such is regarded as strategy of marketing that increase awareness among the customers to
purchase the products and services. As per the views of Flint, Blocker and Boutin, (2011) this
has been determined that customers `needs are accomplished when they are offered with
schemes which build confidence among them in relation with organization.
Research methodology
There is existence of several tools related with research methodology that are being
utilized in order to conduct the research on specific topic that is whether consumer loyalty and
rewards schemes actually works. The in depth description in relation to all the research methods
utilized are as such. There is presence of several types of research design. In the present study
descriptive research design would be employed as such it assists in detail description regarding
the chosen topic. In addition to this the research type of the present thesis is qualitative. Here the
researcher is involved in assessing the behavior of the customers towards execution of the
customer loyalty as well as reward scheme. Thus such type of investigation is appropriate. The
collection of the data in the present investigation is done through both primary and secondary
sources. This helps in collecting adequate amount of information which can help in gaining
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suitable results. It has been determined that in the present investigation analysis of the data
would be carried out through qualitative technique. Under this thematic method would be
employed where on the basis of responses patterns are developed. The sampling that would be
selected is simple random and 50 respondents will be selected as respondents that includes
customer of Sainsbury.
TASK 2 RESEARCH PROJECT
2.1 Effective utilization of resource to the research questions 5
Concept of customer loyalty and reward schemes
As per the view of Yuksel, A., Yuksel, F. and Bilim, Y., (2010) customer loyalty can increase if
corporation offers attractive rewards to them. Customer behavior is so sensitive and they are
most attract toward such product and services which is available in the offers, discount price,
schemes etc. Customer loyalty refers the process under which customer choose to consistently
purchase the same brand of product and services again and again. Customer loyalty can assist to
business in gaining effective success and profitability because if customer repeatedly purchase
the product and services then company's profitability and sales can also increase. As per the view
of Flint, Blocker and Boutin, (2011) reward system for customer is that gifts which offered by
company in order to attract them toward the organization. It is the best option which helps to
attract the customer for purchasing the product and services from particular organization. Thus, it
can be said that customer loyalty and reward system has direct relationship as if company offers
reward schemes to customer then their customer loyalty can automatically increase. Customer
loyalty assist firm in developing effective brand image in the market and gain large market share.
Importance of consumer loyalty and reward system in the retail business
As per the view of Flint, Blocker and Boutin, (2011) in the retail businesses, attractive schemes
for customer is the best option through which company can attract the large number of customer.
In the present era, customer are mostly attracted toward effective rewards such as gift vouchers,
discount prices, festival schemes, discount sales etc. These all option of reward can very
beneficial for the retail business through which it can develop customer loyalty. Retail business
should offer attractive offers and reward schemes to customer so as they can repeatedly purchase
the product and services from the particular retail organization. As per the view of Yoshida and
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James, (2010) in order to gain effective success and enhance sales and profitability, retail
business needed to consider on the improving customer loyalty and reward system. For
enhancing customer loyalty toward business enterprise, company needs to consider effective
offers, discount, sales offers, gift vouchers etc. In the retail industry, there is high level of
competition available because there is various retail business operated in the UK. In order to
gain effective success and develop its own brand image in the market, reward system is the best
option for company through which customer loyalty can easily develop among the customer and
sales and profitability can automatically increase.
2.2 Undertaking the proposed research
The following research project assist in acquiring the knowledge about the customer loyalty and
reward system works in the retail businesses. In order to conduct the research, investigator have
to consider various methods and approach of research which are as follows-
Research Design- It is an important plan which assist in answering the research question and
meeting the objective of research. In this project, descriptive research design can used in order to
detail analysis of the study (Lushey and Munro, 2015).
Research technique- Research technique is another major part of the research which assists in
collecting and analyzing the research data. There are two type of research techniques that is
qualitative and quantitative (Mackey and Gass, 2015). In the following research project,
qualitative research technique has used because Here the researcher is involved in assessing the
behavior of the customers towards execution of the customer loyalty as well as reward scheme.
Thus such type of investigation is appropriate (Flick, 2015).
Data collection- Data collection is another major method of research through which investigator
can able to collect and analyze the information from various sources. There are two type of data
collection that is primary and secondary (Tarone, Gass and Cohen, 2013). In the following
research project, both primary and secondary data has used by the scholar. In the context of
primary data, investigator has conducted the survey of 50 customers of Sainsbury who regular
purchase the product and services from the company. On the other hand in order to collect the
information from the customer loyalty and reward system, scholar has used various secondary
resources such as books, magazines, newspaper, blogs, internet websites etc.
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Sampling- Sampling is a process under which scholar selects group of people in order to conduct
the survey , interview etc (Dumay and Cai, 2015). In this research project, researcher has used 50
respondent as a sample size.
TASK 3 RESEARCH PROJECT
3.1 Evidence of recording and collecting data
Name:___________________
Age:________________
Occupation:_____________
Sainsbury is one major retail chain in the UK?
 Yes
 No
Loyalty schemes that are prepared by the Sainsbury are effective.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Loyalty schemes prepared by the business firm help it in increasing number of customers in the
business.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Loyalty schemes that are prepared by the business firm are effective and help firm in competing
with Tesco and other rivals?
 Strongly agree
 Agree
 Neutral
 Disagree
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 Strongly disagree
Customer loyalty schemes affects your choice for the retail stores.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Loyalty schemes play a very important role in increasing competition between retail chains in
UK.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Do you think that there is a need to bring changes in the customer loyalty schemes?
 Yes
 No
Loyalty schemes help Sainsbury in competing with Lidl and Aldi.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Which of the below given factor firm must focus to attract target customers through loyalty
schemes?
 Allotment of fixed number of points on every visit to retail store irrespective of sale
 Allotment of points on basis of quantity of purchase
 There must be a difference on allotment of points on basis of offline and online purchase
 Allotment of points product wise
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Thematic analysis
Sainsbury is one major retail chain in the UK?
Yes 35
No 15
Figure 1Sainsbury command in the market
Loyalty schemes that are prepared by the Sainsbury are effective.
Strongly agree 15
Agree 17
Neutral 6
Disagree 7
Strongly disagree 5
Total 50
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Figure 2Effectiveness of loyalty schemes
Loyalty schemes prepared by the business firm help it in increasing number of customers in the
business.
Strongly agree 14
Agree 19
Neutral 5
Disagree 6
Strongly disagree 6
Total 50
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Figure 3Loyalty schemes and enhancement in number of customers
Loyalty schemes that are prepared by the business firm are effective and help firm in competing
with Tesco like giant market players?
Strongly agree 10
Agree 15
Neutral 7
Disagree 8
Strongly disagree 10
Total 50
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