An Analysis of Factors Influencing Customer Loyalty & Reward Scheme

This report investigates the factors influencing customer loyalty and reward schemes within the food product sector, addressing the increasing competition and the need for businesses to gain a competitive edge. The study aims to assess these factors, understand the concept of customer loyalty, identify its effects on business sales, and recommend options for influencing customer loyalty. It employs both quantitative and qualitative methodologies, using primary research through questionnaires and secondary data sources to analyze the effectiveness of various factors. The research highlights the importance of core offers, customer satisfaction, and flexible reward programs in fostering customer loyalty and ultimately driving business success, concluding that customer loyalty programs significantly impact food businesses and are essential for maintaining a competitive position.

RESEARCH PROJECT

Table of Contents
CHAPTER 1: RESEARCH PROPOSAL .......................................................................................3
1.1 Research Background.......................................................................................................3
1.2 Problem statement............................................................................................................3
1.3 Research Aim and objectives...........................................................................................4
1.4 Objectives of the study.....................................................................................................4
1.5 Rationale of the study.......................................................................................................4
CHAPTER 2: Literature Review.....................................................................................................5
2.1: Factors which makes consumer loyal..............................................................................5
2.2: Concept of customer loyalty............................................................................................5
2.3: The effectiveness of customer loyalty in business sector................................................6
2.4: Factors that influence customer loyalty and reward scheme...........................................6
CHAPTER 3: PROPOSAL .............................................................................................................7
Chapter 4 .......................................................................................................................................10
4.1: Action plan- The research is required to be plan carefully in term of time and resources as
all the resources associated with the study are time projected. The gantt chart is useful as it is
a basic tool that depicts time as a for of bar or a line on a chart. ........................................10
4.2: Conclusion and Recommendation ................................................................................10
Questionnaire.................................................................................................................................11

CHAPTER 1: RESEARCH PROPOSAL
1.1 Research Background
In the present scenario of food products the competition is getting
fierce and it is unpredictably changing at rapid speed. There are various
organizations are there in the food sector which are competing with each
other for making a place for themselves in these particular environment.
Organization are looking for various options where they can get competitive
advantage over their rivals companies. These is where customer loyalty and
reward scheme came into existence as these tools are considered as
techniques which can provide a long term success to the food business.
Reward schemes refers to loyalty programme offered by a company to their
customers who most often make purchases by them. Reward scheme may
provide a customer access to company's new product, free merchandise and
special sales coupons. Reward scheme has a significant impact on the
customer loyalty which influence attitudinal and behavioural perspective of
customer to favour one brand over others. In the proposed investigation the
main area of concern taken into account is factors which influence the
customer loyalty and reward scheme for the specific are of food products.
(Flick, 2015)
1.2 Problem statement
The problem lies in the present research is to understand that whether
various factors related to customer have influence on the customer loyalty
and reward scheme or not. The sector chosen is food products that focused
on offering hygienic and quality products to their potential customers. As it is
important for the food products organization to figure out that what are the
factors which have influence on the customer loyalty and reward scheme so
that they can process the reward scheme in an effective manner. The
customer loyalty and the reward schemes are depends on the various factors
which offered by the organization to their potential customers.

1.3 Research Aim and objectives
The aim of the present study is: To assess the factors that influence
customer loyalty and reward scheme for food products .
1.4 Objectives of the study
The Objectives of the present report are specified in the manner as under:
 To understand the concept of customer loyalty
 To identify the effect of customer loyalty on business sales
 To identify the factors that influence customer loyalty and reward
scheme for food products
 To recommend the options that can be used for influence customer
loyalty for food products
1.5 Rationale of the study
The present research topic selection work has been done after the
analysis of the scope related to subject. It has evaluated that the scope of
the present research is huge. This indicates that lifting out the investigation
on the on the topic would help the researcher in attaining efficient
knowledge and understanding which will assist in future course of time.
There is no so many investigations carrying out on the present topic that
indicate that carrying out an investigation on the present topic will be helpful
for the researcher to attaining the knowledge about the particular topic.
Furthermore the study will enlighten the companies indulge in food product
business about the outcome that can be produce after implementing
customer loyalty and reward scheme in the business. The organization will
also get to know that what are the various different factors which influence
customer loyalty and reward scheme.

CHAPTER 2: Literature Review
The major focus of the food industries on attracting the new customers
whether it is done by offering various excited offers. There are various
factors available which considers as the elements regarding influence the
customer loyalty and reward schemes such as the core offer of the business,
satisfaction level of the customer, elasticity of the offer, market place, and
demographics of particular market.
2.0: Literature review
2.1: Factors which makes consumer loyal
As per the the views of Gast, D. L. and Ledford, J. R., 2014 it has been
examine that customer loyalty is depends upon the various factors. The core
offer provided by the product or the brand have the capacity to retain the
consumer for the long time and simultaneously it increase the level of the
loyalty. In accordance to Yoshida and James, (2010) satisfaction gain by the
using of the product makes a consumer loyal towards that particular brand.
Marketplace in which product is available is also consider as a factor which
influence the loyalty of a consumer towards as particular brand.
2.2: Concept of customer loyalty
According to Leary, M. R., 2016 the concept of customer loyalty it is a
tendency of favouring a brand or product over others with the influence of
attitudinal and behavioural approach. There are various factors which can
influence the customer loyalty such as satisfaction with the product or
service, product convenience or performance, familiarity and comfort with
the product and so on. Customer loyalty guides the business in attaining the
level of success and profitability because of the reason of that its customers
are consistently buying their product and they are loyal toward it which
works as the result of positive word of mouth. As per the view of Lushey
and Munro, 2015 customer relationship and reward system is helpful in the
term of increasing customer loyalty as if company offers effective rewards to
their customers than automatically the loyalty of customer increases.

Customer loyalty is well effective tool for any organization in order to create
strong market image and gaining fancy market share.
2.3: The effectiveness of customer loyalty in business sector
As per the view of Mackey and Gass, (2015) in chosen food business
the the customer loyalty is considered as backbone. The customer loyalty is
very advantageous for the business sector as it proves its effectiveness
through various elements. Word of mouth which achieve by the use of
customer loyalty programme bring the large amount of success and
profitability towards it. Organizations working hard on establishing the
loyalty programme because it is so important as it will eventually turn into
positive word of mouth which makes broader opportunities for the
organization. As per the view of Simonsohn, Nelson and Simmons, (2017 )
customer loyalty programmes are beneficial for the organizations as it can
push the business loyalty programmes from a good level to glorified level. It
makes ample of benefits for the business sector some of the most desirable
benefits given by customers loyalty programmes to their respected
businesses are brand advocacy, price insensitivity, direct referrals to new
customers and more focused support by customer side.
2.4: Factors that influence customer loyalty and reward scheme
As per the view of Tarone, Gass and Cohen, (2013) Customer loyalty is
consider as one of the most crucial and critical factor for the business
success. Customer loyalty and reward schemes are take as successful when
customers had feel great experience by it and its leads them to future
benefits. Loyal customers can influence a business is many ways such as
they will return in the future, refer friends and family to particular business,
spread positive comments about the company and even advertise the
business on the various platform such as social media. AS per the view of
Yoshida and James, (2010) there are various factors of customer loyalty and
reward scheme which can influence the business. Loyalty programmes
consider as the core offer itself which will influence as how long a customer

will stay with the particular business. The level of satisfaction of customer
with the reward scheme offered by the business is surely influence the core
business. The scheme or loyalty programme should be in flexible manner so
that customer will entertain themselves with the benefits which they get out
of it.
CHAPTER 3: PROPOSAL
RESEARCH METHODOLOGY
3.1: Data collection
There are various tools and techniques existed regarding the data
collection for utilizing the various aspects of the research on the specific
topic of customer loyalty and reward scheme. In the present study
descriptive research design is being in use as it will provide a detailed
description about the topic which is chosen. The quantitative and qualitative
methodology is being used to create a better understanding. Questionnaire
method is being used to evaluate and determine the effectiveness of various
factors. The work of collection of the data is done by using both primary and
Illustration 1: Research process onion

secondary sources. For identifying the effect of customer loyalty on the food
business sector qualitative research is being used.
3.2: PrimaryResearch :
The entire research is dependent on the primary research. There are
two methods of data collection in any research i.e. primary and secondary.
Primary involves the use of questionnaire and interviews for analysing the
response and developing the outcomes while secondary research involves
the use or reference to publications like books, journals, articles, reports, etc.
for collecting information (Simonsohn, Nelson and Simmons, 2017). The
present research is a primary research research where data collection is
done by taking the interview of 300 customers with help of 10 different
questions.
3.3: Data analysis:
There are certain methodologies and techniques which need to
be adopted for collecting, analysing and interpreting the required
information. Qualitative and quantitative research techniques have been
used for understanding the behavioural attributes of loyal customers with
respect to M&S. The present research includes the use of qualitative data
and thematic analysis scheme. In the quantitative data analysis technique
the collected information is in the numerical form where it is provide a clear
sense of the collected information. Quantitative tools makes comparison
easy when the information is in a large size.
3.4: Research Design:
Illustration 2: Quantitative analysis diagram
(Source: Sanuders and et.al, 2009)

The research design is an attribute which helps in creating the correct
research questions and defining the correct resources for further facilitation
of the project. The present research is based on the descriptive design
technique with detailed analysis of the information so collected (Mackey and
Gass, 2015).
3.5: Sampling:
Random sampling technique is used for selecting the customer groups
through which information has to be collected for the present research. 300
loyal customers are selected for the purpose and whose response will be
completely analysed to get accurate outcomes (Tarone, Gass and Cohen,
2013).
3.6:Limitations of the study
There are ample of limitations associated with the present investigation. The
investigation has to be done in a specified time duration thus there is
presence of certain factors which are being missing out. There are various
factors available which positively and negatively influence the customer
loyalty and reward scheme.

Chapter 4
4.1: Action plan- The research is required to be plan carefully in term of
time and resources as all the resources associated with the study are
time projected. The gantt chart is useful as it is a basic tool that depicts
time as a for of bar or a line on a chart.
4.2: Conclusion and Recommendation
On the basis of the above investigation it can be concluded that the
reward system and customer loyalty programmes have a huge impact on the
food businesses. These are also more important because it is must for
businesses to use these in order to make tough competition for the rival
firms. Other then this organizations should develop the customer loyalty
programmes and reward schemes after the intense evaluation of these. Up-
gradation should be make within the loyalty and reward scheme so that
there will be something new always which will attract the customer. It can
be said that customer loyalty programmes and reward schemes are
Illustration 1: Gantt chart for research time line
(Source: Sanuders and et.al, 2009)

backbone of the businesses, in the absence of these business will no longer
survive in the long term perspective.
From the investigation of various factors of customer loyalty and
reward scheme it is recommended to the food business that they have to
focus on their loyalties schemes and programmes because by doing so they
can strengthen their customer base more rapidly compare to any other
technique. With the efficient and effective use of reward system and
customer loyalty programmes more customer will be motivate to make
purchase in the food businesses. The reward system and loyalty programmes
should be managed in an ethical manner otherwise it can generate adverse
effect for the organization also.
Questionnaire
Questionnaire
Name:

Age:
Gender:
1) Do you consider Marks and Spencer a brand organisation?
 Yes
 No
2) How likely would you recommend products of M&S to your closed ones?
 Extremely likely
 Quite likely
 Neutral
 Not at all
3) You have been the customer of M&S since
 1-3 months
 6 -12 months
 1-3 years
 more than 3 years
4) What is your preference when considering the quality of products developed by M&S?
 Excellent
 Good
 Neutral
 Bad
 Very bad
Mark the level of agreement for the following statements.
5) Loyalty schemes is a customer centric approach of the company.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
6) M&S can experience benefits when considering the launch or introduction of loyalty
schemes.
 Strongly agree

 Agree
 Neutral
 Disagree
 Strongly disagree
7) The market position of the company in terms of competition is strengthened through social
media.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
8) What do you consider is the reason for your shopping of food products?
 Loneliness
 Hunger spans
 Just for satisfaction
 According to need and requirement
 others, Please specify______________
9) Should company introduce changes in the loyalty schemes for customers?
 Yes
 No
10) What according to you most influences customers for making a purchase at M&S?
 Quality
 Price
 Marketing
 Customer loyalty schemes
When the above questionnaire was formulated amongst the sample of 30 customers, then
following data was recorded.
Theme 1: Consideration of M&S as a brand organisation

Yes No
0
5
10
15
20
25
Column B
Illustration 2: Theme 1
Theme 2: Recommendation level by the customer to closed ones
Extremely
likely
Quite likely
Neutral
Not at all
Illustration 3: Theme 2
Theme 3: The time period of customer loyalty for M&S

1-3 months
6 -12 months
1-3 years
more than 3 years
0
2
4
6
8
10
12
14
16
18
20
Column B
Illustration 4: Theme 3
Theme 4: Preferences when considering the quality of products developed by M&S
Excellent Good Neutral Bad Very bad
0
2
4
6
8
10
12
14
16
Column B
Illustration 5: Theme 4
Theme 5: Loyalty schemes is a customer centric approach of the company

Strongly agree
Agree
Neutral
Disagree
Strongly disagree
0
2
4
6
8
10
12
14
16
18
Column B
Illustration 6: Theme 5
Theme 6: M&S can experience benefits when considering the launch or introduction of
loyalty schemes
Strongly agree
Agree
Neutral
Disagree
Strongly
disagree
Illustration 7: Theme 6
Theme 7: Market position of the company in terms of competition is strengthened through
social media

Strongly agree
Agree
Neutral
Disagree
Strongly disagree
Illustration 8: Theme 7
Theme 8: Reason for your shopping of food products
LonelinessHunger spansJust for satisfactionAccording to need and requirementothers
0
2
4
6
8
10
12
14
16
Column C
Illustration 9: Theme 8
Theme 9: Company introduce changes in the loyalty schemes for customers

Yes No
0
2
4
6
8
10
12
14
16
18
20
Column B
Illustration 10: Theme 9
Theme 10: Most influences customers for making a purchase at M&S
Quality Price Marketing
0
5
10
15
20
Column B
Illustration 11: Theme 10

Theme 1:
It can be reflected from the study that there are 210 respondents who assesses that M&S are
considered as a brand organisation. While, there are 90 respondents who evaluates that M&S
does not consider as a brand organization.
Theme 2:
It can be assessed from the diagram that there are 168 respondents who assesses that they
extremely likely to and thus they wish to recommend M&S to their closed ones. While, there are
100 respondents who evaluates that they quite likely recommend products to their closed ones.
There are 3 respondents who assesses that they are at neutral position and thus only 32
respondent assesses that they would not at all recommend products of firm to their relatives.
Theme 3:
It can be reflected from the bar diagram there are 2 respondents who have been shopping with
M&S since 1-3 months. While, there are 7 respondents who evaluates that they have been
shopping with the firm from 6-12 months. Also, there are 3 and 18 respondent who carries out
shopping experience with firm from 1-3 years and more than 3 years.
Theme 4:
It can be reflected from the diagram that 138 respondents assesses that excellent quality products
have been developed by firm. While, there are 4 respondents who states that good and 1 is at
neutral position. Also, there are 3 and 1 respondents who assesses that quality of products are
bad and very bad.
Theme 5:
It can be stated from the figure that 200 customers respondents stated that loyalty schemes are
considered as customer centric approach. While, 100 respondents strongly disagree to the
statement. Also, there is 1 respondent who lies at neutral position.
Theme 6:

It can be reflected that 150 respondents assesses that M&S experience benefits when considering
the launch or introduction of loyalty schemes. Also, there are 100 respondents who evaluates that
they do not think that it experiences benefits when considering the launch of introduction of
loyalty schemes. Also, there is 50 respondent who assesses that they are at neutral position.
Theme 7:
It can be evaluated from the research that 250 respondents assesses that they are strongly agree to
the statement that market position of firm in terms of competition is strengthened through using
social media. Also, there are 50 respondents who evaluates that they do not agree to the fact.
While, 1 respondent is at neutral position.
Theme 8:
It can be reflected that 1 respondent assesses that loneliness is the reason for shopping of food
products. While, 120 respondents thinks that hunger spans is the reason for creating shopping of
food products. Also, there are 140 respondents who shop food at M&S for just for satisfaction.
While, there majority of the respondents i.e. 40 who assesses that as per the need and
requirements is the reason for shopping of food products. Also, 300 respondents assesses that
others is the reason for shopping of food products.
Theme 9:
It can be reflected that 190 respondents assesses that M&S should introduce changes in the
loyalty schemes for customers. Therefore, it is essential for firm to bring necessary changes.
While, there are 110 respondents who evaluates that firm do not need to bring changes in loyalty
schemes for customers.
Theme 10:
There are 160 respondents who reflects that quality is the main factor that influences customers
for making a purchase at M&S. While, there are 110 respondents who assesses that price is also
one of the crucial factor that influence clients. There are 30 respondents who states that
marketing is the factor that influences them.