Research Project: Customer Loyalty, Reward Schemes, and Behavior

This research project delves into the analysis of customer behavior concerning loyalty cards and reward schemes within organizations. The study begins with an overview, background, aims, objectives, research questions, rationale, and significance of the study. Chapter 2 conducts a thorough literature review, exploring the concept of consumer loyalty, relevant theories, and the role of loyalty cards and reward schemes. The methodology chapter outlines the research philosophy, approach, design, data collection methods, and ethical considerations. The report then presents data analysis in Chapter 4, followed by recommendations and conclusions in Chapter 5. The research aims to understand the impact of loyalty programs on customer behavior, identify key issues, and provide actionable recommendations for enhancing customer retention and loyalty.

Research Project

Table of Contents
INTRODUCTION...........................................................................................................................1
1.1 Overview..........................................................................................................................1
1.2 Background of the research............................................................................................1
1.3 Aim and Objective..........................................................................................................1
1.4 Research questions.........................................................................................................2
1.5 Rationale...........................................................................................................................2
1.6 Significance of the study................................................................................................2
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
2.1 Concept of consumer loyalty ...........................................................................................4
2.2 Theories of consumer loyalty...........................................................................................4
2.3 Concept of loyalty cards and reward schemes ................................................................5
2.4 Relationship between the customer loyalty and rewards schemes ..................................6
2.5 Past studies on the research .............................................................................................6
2.6 Literature gap ...................................................................................................................7
CHAPTER 3: METHODOLY.........................................................................................................8
3.1. Research philosophy-......................................................................................................8
3.2 Research approach..........................................................................................................8
3.3 Research design .............................................................................................................8
3.4 Data collection method...................................................................................................9
3.5 Data analysis tool...........................................................................................................9
3.6 Population and sampling................................................................................................9
3.7 Research gap...................................................................................................................10
3.8 Ethical consideration....................................................................................................10
3.9 Type of investigation......................................................................................................10
3.10 Sampling.......................................................................................................................10
CHAPTHER 4: DATA ANALYSIS.............................................................................................11
CHAPTER 5: RECOMMENDATIONS AND CONCLUSION...................................................18
5.1 Recommendations..........................................................................................................18
5.2 Conclusion......................................................................................................................19

REFERENCES..............................................................................................................................20
APPENDIX....................................................................................................................................21

INTRODUCTION
1.1 Overview
This research proposal will be dealing with analysis of customer behavior with respect to
loyalty cards and reward schemes of an organization. Researcher will develop aim and objectives
of conducting entire research. Developing objectives of this research proposal will also help for
developing literature review. After developing aim and objectives, researcher will develop
literature review for understanding this topic in deeper meaning. After that, researcher will
discuss the selection of appropriate research methodology for gathering information. Moreover,
researcher will prepare a time horizon for representing distribution of task and for estimating
duration of entire research. Finally, this research proposal will be concluded. If organisation is
able to accomplish needs and wants of people as per their demands. Then, they will easily
acquire growth and success. Along with, by taking competitive benefits, they will maintain
sustainability at marketplace for maximum period of time.
1.2 Background of the research
Providing loyalty cards and rewarding scheme for customer is a part of an organization’s
loyalty program (Kang 2015). U.S. merchants started providing loyalty cards and reward
schemes in 1793. They invented the process of giving tokens to customers every time they
purchase products. Customers used to redeem those tokens after collecting a certain amount.
From that time, organizations are using this loyalty program for attracting customers in business
operation. This is a part of marketing strategy of a company. A company offers exciting
discounts for gaining more customers in business operation. Clients are considered as end user
of any product and services. This is must to fulfil their requirements as per their desires so that
they will be loyal for firm for maximum time span. In this manner, affiliation will be able to
maintain their customer base for longer duration. As a result, they will easily take benefits from
their contenders at marketplace. There are many kinds of loyalty programmes will run by
affiliation as this helps to cater them maximum level of satisfaction. This will help to pull
numerous people towards products and services.
1.3 Aim and Objective
Aim-
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Researcher will aim to analyze customer behavior with respect to loyalty cards and
rewards scheme of an organization. Moreover, researcher will also aim for understanding impact
of loyalty cards and reward schemes in order to retain customer loyalty.
Objectives-
 To analyze impact of loyalty cards and reward schemes
 To analyze the impact of loyalty cards and reward schemes in order to gain customer
loyalty.
 To identify issues of loyalty program in the process of gaining customer loyalty
 To provide some recommendation
1.4 Research questions
 What are the impacts of loyalty cards and reward schemes?
 How loyalty cards and reward schemes help in order to retain customer loyalty?
 What are the issues of loyalty programs in order to achieve customer loyalty?
 How those issues can be resolved?
1.5 Rationale
Researcher has observed that in present times most of the companies are unable to retain
customer loyalty in business operation. Moreover, it is also observed that companies are able to
attract customers towards the business operation. That is why, a company needs to develop and
implement loyalty program for retaining customer loyalty. Implementation of loyalty program in
business operation is very much important for gaining more customers and for achieving
customer loyalty (Orel 2014).
1.6 Significance of the study
This research will help for developing loyalty programs for gaining more customers in
business operation. Moreover, this research will help for understanding the issues of the process
of gaining customer loyalty. Additionally, this research will help for understanding the need of
loyalty cards and rewarding system for retaining customer loyalty. Each customer has their own
preferences as well as taste which they want to accomplished. Hence, it is needed for
organisation to offer them items and services accordingly. This will aid them to maintain an
effective brand image at marketplace. Along with this, they will easily compete with rivals in
market. Manager will develop an appropriate plan; thus, people will complete their task
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systematically. This has been examined that, proper planning will aid staff members as this will
work as a guidelines for them.
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CHAPTER 2: LITERATURE REVIEW
2.1 Concept of consumer loyalty
Customer loyalty refers to behaviour and attitude of the customers that prefer any one
brand overall competitive brands. Loyalty of the customers is a willingness of any customer to
buy the services and products of a particular company (Kandampully 2015). Loyalty of the
customers can be come from the positive experience of the consumers that they get from the past
time of purchasing any product. Different company, brand and price of the products can affect
customer loyalty (Flick 2015). The factors that affect the loyalty of the customers are satisfaction
of the customers, trust, habit, company history and emotional bonding.
2.2 Theories of consumer loyalty
There are several articles that have discusses the theories of consumer theory. Motivation
theory like Maslow Hierarchy and theory of reasoned action can help to analyse the consumer
loyalty.
Maslow hierarchy of need
Maslow hierarchy of needs has five levels that fulfil the needs of the persons. First level
shows the basic needs i.e., physiological needs of the people. Level 2 describes the people needs
safety after fulfilment of the physiological needs (Bowden 2015). Nest level is the belonging
needs that state that people need love, family and friendship. The fourth level states that people
need status and recognition in the esteem needs. The last level of this hierarchy shows that self-
actualisation is the final need of the people.
Figure 1: Maslow hierarchy of need
(Source: (Bowden 2015)
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Maslow hierarchy of needs represents the essential needs of the customers. The behaviour of the
customer depends on the fulfilment of needs of this hierarchy. Five levels of Maslow’s hierarchy
of needs is necessary to understand the customer demand regarding products. This theory is
needed to know the product quality and specification. Moreover, this theory motivates the
consumers to be loyal to different brands.
Theory of reasoned action
Theory of reasoned action refers to a theory that recognises the attitude and behavioural intention
of the consumers towards behaviour. This theory is developed by Martin Fishbein that help to
understand the marketing strategy of the consumers related to an attitude.
Figure 2: Theory of Reasoned Action
(Source: (Minnema 2017)
According to this theory, the intention of behaviour of the consumers cannot be determined by
the attitude of the consumers only, but also subjective norm is responsible for this action. The
decision-making process of the customers depends on the satisfactory level of the products. This
theory accurately predicts the behaviour and loyalty of the customers in different conditions.
Consumer loyalty towards a brand can be determined by this reasoned action.
2.3 Concept of loyalty cards and reward schemes
Loyalty programs and reward schemes are the marketing strategies that are taken by any
company to attract the customers towards their organisation. This structure effort can encourage
the buying behaviour and loyalty of the consumers (So 2015). Loyalty cards are marketing
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strategies that are designed by organisation that works as an incentive to encourage the
customers. Loyalty programs are the rebates, discounts, loyalty cards and combination of them.
Reward management theory
This theory is related to the extrinsic rewards like bonuses and intrinsic rewards like respect and
recognition to improve the performance of the company (Kandampully 2015). This theory is one
type of motivation theory that is used to motivate the employees of any company as well the
consumers.
According to this theory, the intrinsic rewards can satisfy the employees of the organisation and
mainly extrinsic rewards are used by an organisation to motivate the customers to buy products
from them. The key reason for this reward program is to attract the customers towards them as
well as make them loyal to this company and improve the psychological circumstances of
organisation.
2.4 Relationship between the customer loyalty and rewards schemes
From the discussion of the above variables, it is observed that loyalty and reward programs are
related to the customer loyalty. The loyalty programs like bonus, discounts and rebates can
attract more customers and the customers become fond of the particular brand (Kang 2015). This
causes a long-term profit for the organisation. The customers can get attracted towards the
particular brands because of these attractive offers. It also increases the number of customers and
improves the position of particular brands in the market.
2.5 Past studies on the research
Several articles have been taken to know the past studies of the impact of loyalty cards and
rewards schemes on the customer loyalty behaviour.
According to the author (Minnema 2017), some short-term actions of the rewards scheme can
create long-term loyalty of the customers and long-term profit for the organisation. The author
focused on the customer loyalty and loyalty scheme and their importance in the business
operation. Long-term rewards schemes attract more customers and reduce the competition. It
also helps to establish a good relationship between the customers and organisation.
According to the author (Orel 2014), customer loyalty is a single that combine the behaviour and
attitude of the customers. Any organisation needs to predict the phenomenon which can satisfy
the customer. As per the author, customer loyalty can be gained by loyalty programs, but they
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are very short-term processes. If the company want to make profit, they should rely on the
customer’s satisfaction that can be got from good quality of the products.
2.6 Literature gap
There is limited number of research articles about the impact of loyalty programs on the
customer loyalty. Most of the articles are old and does not reflects the current condition of the
research. The articles are not relevant to the topic. The number of theories and models are limited
that can help to understand the customer loyalty for reward schemes.
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CHAPTER 3: METHODOLY
3.1. Research philosophy-
This will comprise significant in report because this aid to develop view point of
distinctive authors or writers. Researcher will use research onion for selecting appropriate
research philosophy. Selection of research philosophy will help for collecting information from
various sources and will helps for analyzing data from those collected information. There are
three types of research philosophy Positivism Post positivism
 Realism
Researcher will use positivism research philosophy for conducting this entire research. It
helps for collected information from different sources. Moreover, it also helps for understanding
the study topic in depth. For formulation of this project interpretivism method is used because it
is considered as foremost method to gain positive results in an effective manner.
3.2 Research approach
Selection of appropriate research approach will help conducting this entire research and will help
for collecting information from various sources. There are two types of research approach Inductive research approach
 Deductive research approach
Among this two-research approach, researcher will select deductive research approach.
Researcher will select deductive research approach because it helps for collecting data from
various sources. Moreover, it also helps for accomplishing research objectives. Apart from this,
it also helps for completing the study within time (Sekaran 2016).
3.3 Research design
Selection of research design will help for analyzing and collecting data from various sources.
Moreover, it also helps for analyzing the issues in depth and controlling the impact of the issues.
There are three types of research designs- Descriptive research design Explanatory research design
 Exploratory research design
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Among this, all research design, research will select descriptive research design for analyzing the
study topic in depth (Creswell 2017). Moreover, descriptive research design will help for
identifying the main issue of this research and will help for collecting information with the help
of survey and interviewing process.
3.4 Data collection method
Selection of appropriate data collection method will help for gathering information from various
sources. Moreover, it will also help for understanding the study topic in deeper meaning. There
are two types of data collection method- Primary data collection method
 Secondary data collection method
Primary data collection method is a process of gathering information from various sources with
the help for survey and interviewing session (Orel 2014). For this type of data collection process,
there will be a need for open ended and close-ended questionnaires.
On the other hand, secondary data collection method is a process of gathering information from
past studies. This process includes the process of analyzing journals and articles for collecting
information.
Research will select primary and secondary data collection method for gathering information
from various sources.
3.5 Data analysis tool
A researcher will use a mathematical tool and statistical tool for analyzing data. Researcher will
analyze data with the help qualitative data analysis process and thematic analysis process of case
study. It is required for an organisation to analyse data in an effective manner as this will aid
them to obtain an appropriate decision for business. To gather data, almost two kinds of methods
will be used by them. One is primary (questionnaire, survey, interviews etc.) and another is
secondary (journals, research paper, internet). In this manner, positive outcome will be obtained
by superior in a proper manner.
3.6 Population and sampling
Researcher will organize interview 5 mid-level manager for gathering information. Moreover,
researcher will analyze 60 case studies in this research. That is why the sample size will be 60
and 5. Moreover, researcher used probability-sampling method.
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3.7 Research gap
In this research, there is a chance of not finding enough information for developing literature
review. Moreover, research might face time management problem and might face lack of
funding.
3.8 Ethical consideration
Researcher have shortage of time and funds so execution of survey was difficult task, as
investigator faces various challenges to collect appropriate data for the report. Corporation had
given limited time for executing activities and ascertain information about needs and wants of
people. Organisation don't share confidential data with others as they want to safeguard and
protect important from being altered or theft by other people from rival firms. This also impacts
upon quality of report as investigator will not get accurate and appropriate collected. This impact
on analysis which will be incorrect and wrong assumptions will be made by seniors.
 Researcher will follow Data Protection Act 1998
 Researcher will assure that collected data will not be shared with anyone
 The researcher will assure that collected data will be used for academic purpose only.
3.9 Type of investigation
This is considered as most significant factor which is related to project. Through this
qualitative as well as quantitative data will be gathers; therefore, an accurate figures and facts
will be acquired. This has been analysed that, examiner always want to develop quality report as
this will aid them to acquire right outcome. As a result, effective result will be determine by
organisation. On the other hands, collected data or information will be examined by superior as
this will help them to get proper outcome.
3.10 Sampling
Research need to be done by manager of an organisation; therefore, they will be able to
gain opinion of numerous people. This will aid them into procedure of decision making. But it is
not possible for researcher to take opinion of every people; thus, investigator will select some
people to conduct research. Sampling will be divided into parts, one is known as probability and
another is non – probability. If similar opportunity is providing by researcher to people then this
will be considered as probability. Instead of this, there are some methods which will be used by
investigator in the research. For instance: Consecutive, convenience, quota, snowball,
judgemental sampling etc.
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CHAPTHER 4: DATA ANALYSIS
Theme 1: Customers are much satisfied with products and services of company
Q1. Are you satisfied with products and services of company? Respondents
a) Yes 25
b) No 5
25
5
a) Yes
b) No
Interpretation: It is must for an association to provide products and services to clients
properly as this enables them to fulfil their desires. By doing this, they will take advantages from
rivals at competitive place. From above graphical representation, this has been understood that
almost 25 individuals are favouring above statement but remaining are entirely against of this.
Theme 2: Company is providing after sales services to clients in an appropriate and
significant way
Q2. Is company providing after sales services to clients in an
appropriate and significant way?
Respondents
a) Yes 22
b) No 8
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22
8
a) Yes
b) No
Interpretation: To retain clients loyal for company, it is must for them to cater them after
sales services as well because this will assist in improvisation of revenues. This will help to gain
attention of numerous individuals towards them. From above graphical representation this has
been comprehended that nearly 22 respondents are favouring this argument but remaining are
totally against of this.
Theme 3: Enterprise is able to accomplish requirements and demands of consumers
according to their desires
Q3. As per you, enterprise is able to accomplish requirements and
demands of consumers according to their desires?
Respondents
a) Yes 26
b) No 4
26
4
a) Yes
b) No
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Interpretation: By analysing needs and wants of clients, firm will able to satisfy their
demands within limited period of time. This will aid them to take benefits from rivals at
marketplace. Along with, profits and market share of association will easily get enhanced. From
above graph, this has been understood that almost 26 people are in favour of this but remaining
are totally against of it.
Theme 4: New item and service presentable and effective
Q4. Is any new item and service presentable and effective? Respondents
a) Yes 20
b) No 10
20
10
a) Yes
b) No
Interpretation: To survive at marketplace for maximum period of time, it is must for
them to develop new items and services for people. They will conduct research to examine
requirement of people; thus, they will modify their existing items as well. It assists to improve its
effectiveness and appropriateness. This will help to attract individuals towards products and
services. From above graphical representation this has been examined that almost 20 individuals
are in favour of above described statement but remaining are not in favour of this.
Theme 5: People are recommending about the services of organisation to friends or family
members
Q5. Will you recommend about the services of organisation to
friends or family members?
Respondents
a) Yes 23
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b) No 7
23
7
a) Yes
b) No
Interpretation: As products and services of company is much effective; therefore, many
individuals are satisfied with them. It will help an enterprise to improve their brand image at
marketplace. As a result, they will be able to maintain sustainability in market for maximum time
duration. They refer about them to their families as well as friends. From above graphical
representation, this has been understood that almost 23 people are in favour of this, but
remaining are entirely against of this.
Theme 6: Affiliation is providing discounts or cash back to clients when they buy items or
services from them
Q6. Is affiliation providing discounts or cash back to clients when
they buy items or services from them?
Respondents
a) Yes 21
b) No 9
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21
9
a) Yes
b) No
Interpretation: It is required for an enterprise to cater products and services to customers
in an effective manner. They are providing some offers to their clients, such as discounts and
cash back. This will aid to gain attention of numerous individuals towards them. In this manner,
they will easily enhance client base as well as revenues. This will help them to maintain their
brand image in an effective manner. From above graphical representation this has been
understood that, almost 21 individuals are in favour of company but remaining individuals are
totally against of this.
Theme 7: Quality of services of company are much effective
Q7. Is quality of company's services are effective or significant? Respondents
a) Yes 24
b) No 6
24
6
a) Yes
b) No
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Interpretation: This is fundamental for each organisation to offer qualitative products as
well as services to their customers. This will help them to maintain sustainability at marketplace
for maximum period of time. In this manner, they will easily compete their competitors in
market. From above graphical representation this has been analysed that almost 24 persons are
favouring this statement but remaining are totally against of this. It helps them to gain
competitive benefits in an effective and efficient manner.
Theme 8: Customer loyalty sessions which are organising by company are liked by clients
Q8. Are you like those sessions i.e. customer loyalty which conduct
by firm?
Respondents
a) Yes 22
b) No 8
22
8
a) Yes
b) No
Interpretation: It is required for an association to organise some loyalty programmes for
customers. This will help to obtain feedback from them; in this manner, organisation will be able
to know about those area which require improvements. By getting response from clients they
will easily maintain standard of their items and services. Therefore, from above graphical
representation this has been understood that almost 22 persons are in favour of above argument
but remaining are entirely against of this.
Theme 9: Organisation is using latest methods to conduct marketing activities as this helps
them to take benefits from contenders
Q9. As per you, enterprise utilizing latest methodologies to take Respondents
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advantages from contenders at marketplace?
a) Yes 27
b) No 3
27
3
a) Yes
b) No
Interpretation: In modern era, it is required for an enterprise to utilize latest techniques
and methods as this will help them to develop products and services in an effective and efficient
manner. In addition to this, they have to utilize unique marketing tools as this enables them gain
attention of numerous people towards them. As a result, they will easily take benefits from rivals
at marketplace. They will easily improve profits and market share. From above graphical
representation this has been understood that almost 27 individuals are favouring this statement
but remaining are entirely against of this.
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CHAPTER 5: RECOMMENDATIONS AND CONCLUSION
5.1 Recommendations
Corporations require to improve system and make it capable and effective in respect to
market situations and conditions. Business person require to deliver items and services in respect
to taste and preferences of public to grab attention of large number of customers. Along this,
management even require to take care that quality products are transferred in market. This help
organisation to position themselves higher than rival firms. People visit outlets again only if they
get appropriate things in respect to their demands. Satisfied customers benefit company to
improve market position and reputation; thereby help management to generate appropriate
revenue from business. Marketing team conduct survey which helps them to anticipate people
needs and wants. This helps them to make appropriate changes and provide various schemes,
discounts, vouchers, coupons and offers to retain clients for longer period. Along this, loyalty
cards are adequate tool which help management to capture and pull client again by giving them
benefits and make them feel connected by firm.
Corporations have options to increase customer base, by expanding business from
domestic to setting up outlets in international market. For this, E-commerce is appropriate
technique used by firms to attract people by providing them information through online portals
and websites. Internet provide benefit to customers to compare products of all enterprises,
thereby select appropriate things and take adequate decisions. Management uses online survey to
take feedback from customers across UK; thereby anticipate their thoughts and opinions in
respect to quality of items and services.
Diwali, birthdays, wedding, anniversary and other festivals are various occasions that are
appropriate time to be used by administration to provide appropriate offers such as discounts,
offers or gifts to attract people. It is necessary that firms provide appropriate things and benefits
to compete with competitors. Customer loyalty cards helps marketing team to have accurate
information about clients which are valuable for firm as they are important people. Along this,
members are able attract customers by keeping them connected with enterprise. Apart from this,
Facebook and Instagram are adequate tools used by members to retain customers for longer
period by sending them offers and modifications that are made by them in items. Thus,
salespeople is able to grab attention of large number of people and enhance sales and
profitability.
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5.2 Conclusion
This research proposal concludes that loyalty programs have an impact on consumer
behaviour. The background of the research study, aim and objectives of the research has been
analysed here. It also discusses the significance of the study. Concept and theories of consumer
loyalty and the concept and theories of the loyalty and reward schemes have been described here.
The past studies of the research and literature gap have been described. The research proposal
also analyses which methodology can be used for this research to successfully conduct the
research. Deductive approach and descriptive design can be taken to analyse the data. Data
collection and analysis methods have also been discussed here. This research proposal also
creates a timeline for the research process.
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REFERENCES
Books and Journals
Bowden, JDTAEG 2015, 'Earning Customer Loyalty: The Role of Satisfaction, Trust, Delight,
Commitment and Involvement', In Marketing in Transition: Scarcity, Globalism, &
Sustainability, pp. 362-362.
Creswell, JWAPCN 2017, Qualitative inquiry and research design: Choosing among five
approaches, Sage publications, London.
Flick, U 2015, Introducing research methodology: A beginner's guide to doing a research
project, Sage, London.
Kandampully, JZTABA 2015, 'Customer loyalty: a review and future directions with a special
focus on the hospitality industry', International Journal of Contemporary Hospitality
Management, vol 27, no. 3, pp. 379-414.
Kang, JATBAGMD 2015, 'Customer–company identification and the effectiveness of loyalty
programs', Journal of Business Research, vol 68, no. 2, pp. 464-471.
Minnema, ABTHANMC 2017, 'The impact of instant reward programs and bonus premiums on
consumer purchase behavior', International journal of Research in Marketing, vol 34,
no. 1, pp. 194-211.
Orel, FDAKA 2014, 'Supermarket self-checkout service quality, customer satisfaction, and
loyalty: Empirical evidence from an emerging market', Journal of Retailing and
Consumer Services, vol 21, no. 2, pp. 118-129.
Sekaran, UABR 2016, Research methods for business: A skill building approach, John Wiley &
Sons, New York.
So, JTDTAGS 2015, 'What do customers get and give in return for loyalty program
membership?', Australasian Marketing Journal (AMJ), vol 23, no. 3, pp. 196-206.
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APPENDIX
Questionnaire
Q1. Are you satisfied with products and services of company?
a) Yes
b) No
Q2. Is company providing after sales services to clients in an appropriate and significant
way?
a) Yes
b) No
Q3. As per you, enterprise is able to accomplish requirements and demands of consumers
according to their desires?
a) Yes
b) No
Q4. Is any new item and service presentable and effective?
a) Yes
b) No
Q5. Will you recommend about the services of organisation to friends or family members?
a) Yes
b) No
Q6. Is affiliation providing discounts or cash back to clients when they buy items or
services from them?
a) Yes
b) No
Q7. Is quality of company's services are effective or significant?
a) Yes
b) No
Q8. Are you like those sessions i.e. customer loyalty which conduct by firm?
a) Yes
b) No
Q9. As per you, enterprise utilizing latest methodologies to take advantages from
21

contenders at marketplace?
a) Yes
b) No
Q10. Any further recommendations regarding customer loyalty development and rewards
scheme?
22