Analyzing Consumer Loyalty: Do Rewards Schemes Buy Loyalty?

This report explores the efficacy of consumer loyalty and rewards schemes in truly 'buying' consumer loyalty, particularly within the context of Morrison's company in the UK. It delves into the significance of loyalty programs and reward systems in retaining and attracting customers, aiming to determine if these schemes genuinely foster customer loyalty or merely incentivize short-term behavior. The research objectives include identifying the importance of loyalty and rewards systems, evaluating factors that build customer loyalty, and understanding the relationship between reward systems and customer loyalties within Morrison's. The study employs a questionnaire survey method for primary data collection, supplemented by secondary data from literature reviews, books, and online sources. Qualitative analysis is used to analyze the collected data, focusing on themes related to customer satisfaction, trust, and loyalty. The report also outlines a timeline for the research activities, covering proposal development, data collection, analysis, and interpretation.

Do consumer loyalty and rewards schemes
actually, buy consumer loyalty?
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Contents
Introduction.........................................................................................................................................3
Proposal................................................................................................................................................4
1. Introduction.....................................................................................................................................4
1.1 Research background................................................................................................................4
1.2 Rational study............................................................................................................................6
2. Literature Review............................................................................................................................8
1.3 Short literature review..............................................................................................................8
3. Methodology...................................................................................................................................10
1.4 Research methodology.............................................................................................................10
4. Timeline..........................................................................................................................................11
1.5 Timeline of research activities................................................................................................11
5. References......................................................................................................................................13
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Introduction
Consumer loyalty is one of the major factors that help to retain and attract customers towards
the offerings of the company. It is very necessary at the present time to use this promotional
tool so that the client can be able to get attracted more and will build loyalty for the company.
There is a great need for the customer loyalty programs by the organisations in the UK. The
loyalty program is having a great impact on the consumers at the present time (Bowen and
Chen McCain, 2015). The rewards system is also a tool that draws the attention of people
towards the company’s products and offerings. The different companies are very
appropriately targeting the customers with the help of loyalty programs and reward system. In
this proposal, the major concern will be done on relation and link between the customer
loyalty/rewards system and retained clients.
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Proposal
1. Introduction
1.1 Research background
Topic- Does consumer loyalty and rewards schemes actually buy consumer loyalty?
Background
Customer retention is very necessary for the organisation to consider at the recent time as
with the help of this the company will be able to increase its profitability and also get the
sustainability in the market. The loyalty program is basically a method that is been used by
Morrison's company which promotes the offerings to customers (Bowen and Chen McCain,
2015). The firm will be getting the opportunity to attract the new prospects towards the use of
its offerings. The loyalty program will be providing several benefits and advantages to the
customers which play a vital role to retain them for the long trim period.
Research aim
The aim of this particular study is to determine the significance of loyalty and rewards system
in Morrison to retain and build the customers loyalty.
Research objective
 To identify the importance of loyalty and rewards system.
 To evaluate the factors that will build customers loyalty.
 To understand the relationship between the reward system and customers loyalties in
Morrison's company.
Research hypothesis
H0- The impact of implementing the loyalty programs and reward system in the company
will be positive for it and will help in building customers loyalty.
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H1- There might be a negative impact on the company if it will be practising the loyalty
program and reward system.
The key aspects
The key element of this particular research is the loyalty programs. The company uses
different programs which will be helping the company to attract the customers and to retain
its existing clients. The program that company adopts must be very supportive as with its
assistance the firm can be able to get sustainability in a competitive market. The firm will
also be able to manage the work in the best possible manner.
Research question
 What is the significance of loyalty programs in Morrison's company at the present time?
 How can the company take initiatives to build customers loyalty?
 Is there any relationship between the loyalty/reward system and retention of customers?
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1.2 Rational study
What is the issue?
The issue that company is facing is the numbers of customers are less and are comparatively
decreasing. There is a large number of competitors in the market which provides the
customers with different choices. The loyalty of the customers is unable to get build in an
effective way which is creating issues and problems. Numerous options can be available for
the customers which are providing various benefits and advantages to the customers.
Henceforth this is the issue for Morrisons to sustain and retain its customers for long period
of time (Sheehan, 2016).
Why is it an issue?
It is an issue because the market is very open for all, henceforth there are many organisations
which is taking entry into the market. The competition has increased and every organisation
is putting its best effort to make reach the services and vales to the customers. The company
is facing different issue due to this the performance and services are also getting affected very
adversely. Morrisons Company is struggling to retain its customers because of this.
Why is it an issue now?
At the present time, it is an issue because the effective and appropriate loyalty programs and
reward schemes are not used by the company as per the needs and requirements. It has
become an essential tool for the company, which is not planned by it in the required way that
is why it is facing the issue at the present time as well (Martínez and del Bosque, 2013).
What the study shed light upon?
The research study will be focusing on the factors that are creating issues for the company
and the remedies that it can use so as to overcome the drawbacks and pitfalls. The loyalty
programs and its impact on the customer’s retention will be considered in this study. The
research will shed light on the relationship between the rewards schemes and consumer
loyalty towards a particular brand.
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Reason for selecting the topic
Customers are said to be as the king of the market. One of the biggest achievement that any
organisation will attain is when the customers or the people whom it is serving will get
satisfied. The main objective to select this specific topic is that the company will be able to
know the drawbacks and pitfalls that it is having which is creating issue and problems. With
the help of this study, the readers will be getting knowledge about the loyalty programs and
the rewards system that will be used by the company to enhance its sales volume. Practically
the company will be getting benefits from this research as well as this will be guiding the
students to enhance their skills and knowledge.
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2. Literature Review
1.3 Short literature review
According to Lee, et. al. (2014), loyalty and reward system is one of the marketing tools that
are used by the company so as to promote its goods and services. This will help the
organisation to retain the customers and also to increase the profitability as well as aid in
sustainability in the market. These programs make the customers be in touch with the
company and its offerings. The loyalty and reward system play as a customer’s relationship
program which will be used by the company in an effective way so that the clients will retain
and use the products and services of the stated organisation. It is an essential part to be
focused much on by the company as it will be providing numerous benefits to the company.
These programs help the company to get the growth and development opportunity in the
market. Along with that, there are various more benefits that can be attained by the company
as well as the customers.
The viewpoint of Blackmore (2015), the loyalty initiatives are taken by Morrisons Company
in an effective and appropriate manner will help the company to maintain its position in the
market along with that the long-term sustainability can also be obtained in an effective and
desired way. It will help and motivate the customers to so a repetitive purchase forms the
company along with that the company will get to know that customers are getting satisfied. It
has become very necessary for the company to make its customers satisfied so that they can
visit the retail stores again and again. This will provide a guide to the company as well to
know what all are the areas which it needs to improve so that customers can get delighted.
Match and more loyalty rewards schemes are the initiatives that are been taken by Morrison's
company for promoting the products and its offerings.
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Marketing tactic Customers satisfaction
and Customers trust Customers loyalty

Source: (Author, 2018)
As asserted by Bernazzani (2018), the loyalty program of the company is basically the
marketing tactic that is used as a promotional tool to make the customers aware about what
actually the company is offering and what all are the benefits that the customers will be
getting. Understanding this, the clients will be using the products and will get satisfied. The
level of satisfaction when gets grow then the customers will start trusting the company and its
products which is a very good sign for the firm. The trust factor is very necessary for the
company as this will be helping in building the customer’s loyalty. There are numerous
benefits that needed to be analysed and has to be understood by the customers this can only
be done when the company will promote them in an effective and appropriate manner. There
is a great scope for business expansion if the company will be adopting the right loyalty
programs and rewards schemes.
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3. Methodology
1.4 Research methodology
 Research technique- The research technique is very important as to gather reliable and valid
information. The Morrison’s company need to focus on the right technique to gather the
information so that the research could get reach to the set standards and aims. It is very must
that the technique that is been used by the company for the data collection to be suitable
enough to resolve the issues and problems that is presently faced by it (Miles, et. al., 2013).
The questionnaire survey method is the major technique that will be used by Morrison's
company. This is basically a form of data collection which is very reliable as the people or
respondents will be met directly and data will be gathered by communicating with them.
 Data collection procedure- This is a method through which company will be gathering data
as well as information. There are some set standards and objectives that are needed to be met
with the help of research. Henceforth data is playing a vital role in resolving them. The
primary source, as well as secondary source of data, is required to be considered. In this
study, the method which has been used identifies relevancy and accuracy could be able to get
attained (Terrell, 2012). The company will be using both as a primary method where the
respondents are met directly and collect the information. At the same time, it will also be
using a secondary source where the literature study will have done also, books and online
sites will be referred so as to attain reliability and accuracy. The aims and framed standards
will be met accordingly with the help of these tools and techniques.
 Analysis tool- The data and information that researchers of the company have gathered
should be managed and analysed so that the actual things that are been perceived by people
about the company’s offerings and services will get to know. It is very necessary for the
company as with its assistance Morrison’s company will be able to know its pitfalls and can
make effective strategies and plan the firm will be able to manage its operations and
activities. The qualitative analysis and quantitative research analyses methods are there which
is bee used by the company so that it can analyse the data as per the requirement (Ohgaki and
Kleihues, 2013). In this study, qualitative methods are used where the themes were formed
and analysis will get done to attain effectiveness in the study along with that to meet the aims
and objectives of the research.
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4. Timeline
1.5 Timeline of research activities
Action plan
Tasks Start date End date Duration
Proposing Research topic 1.2.2018 1.2.2018 1 day
Setting up of standards and aim 2.2.2018 2.2.2018 1 day
Framing the questions and hypothesis 3.2.2018 4.2.2018 2 days
Preparation of research proposal 5.2.2018 10.2.2018 6 days
Collecting data (secondary) 11.2.2018 14.2.2018 4 days
Questionnaire study (primary) 15.2.2018 16.2.2018 2 days
Analysing and interpretation 17.2.2018 24.2.2018 8 days
Drawing conclusion and
recommendation
25.2.2018 26.2.2018 2 days
Submission 27.2.2018 27.2.2018 1 day
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Gantt chart
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5. References
1. Bernazzani, S., 2018. Customer Loyalty: The Ultimate Guide. [Online]. Hubspot.
Available at: https://blog.hubspot.com/customer-success/customer-loyalty. [Accessed:
14th March 2018].
2. Blackmore, N., 2015. How Morrisons is changing its 'Match & More' loyalty scheme.
[Online]. Telegraph. Available at:
https://www.telegraph.co.uk/finance/personalfinance/household-bills/11913949/How-
Morrisons-is-changing-its-Match-and-More-loyalty-scheme.html. [Accessed: 14th
March 2018].
3. Bowen, J.T. and Chen McCain, S.L., 2015. Transitioning loyalty programs: a
commentary on “the relationship between customer loyalty and customer
satisfaction”. International Journal of Contemporary Hospitality Management, 27(3),
pp.415-430.
4. Lee, J.J., Capella, M.L., Taylor, C.R. and Gabler, C.B., 2014. The financial impact of
loyalty programs in the hotel industry: A social exchange theory perspective. Journal
of Business Research, 67(10), pp.2139-2146.
5. Magatef, S.G., and Tomalieh, E.F., 2015. The impact of customer loyalty programs
on customer retention. International Journal of Business and Social Science, 6(8),
pp.78-93.
6. Martínez, P. and del Bosque, I.R., 2013. CSR and customer loyalty: The roles of trust,
customer identification with the company and satisfaction. International Journal of
Hospitality Management, 35, pp.89-99.
7. Miles, M.B., Huberman, A.M., and Saldana, J., 2013. Qualitative data analysis. Sage.
8. Ohgaki, H. and Kleihues, P., 2013. The definition of primary and secondary
glioblastoma. Clinical cancer research, 19(4), pp.764-772.
9. Sheehan, A., 2016. Customer Loyalty Programs: Why Retailers Need Them (and
How to Create One). [Online]. Shopify. Available at:
https://www.shopify.com/retail/customer-loyalty-program-why-retailers-need-one-
and-how-to-build-one-of-your-own. [Accessed: 14th March 2018].
10. Terrell, S.R., 2012. Mixed-methods research methodologies. The qualitative
report, 17(1), pp.254-280.
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