Analysis of Sainsbury's Loyalty Card Scheme and Customer Loyalty

This report analyzes the relationship between loyalty card schemes and customer loyalty, with a specific focus on Sainsbury's. The study explores the significance of customer loyalty in the retail sector, examining how loyalty card schemes influence customer behavior and purchasing patterns. The methodology includes a descriptive research design, utilizing both primary data collected from Sainsbury's customers through questionnaires and secondary data from academic sources. The report investigates the link between loyalty card schemes and customer loyalty, aiming to identify effective strategies for Sainsbury's to enhance customer loyalty. It also provides a project management plan outlining the timeline, costs, and contingency measures for the research. The findings are presented using qualitative analysis techniques and visual aids such as charts and graphs. The study concludes by summarizing the key findings, offering recommendations for Sainsbury's, and highlighting the implications for both academic research and business practices.

Analyse relationship between loyalty
card scheme and customer loyalty, case
study of Sainsburys
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TABLE OF CONTENTS
1 Title...............................................................................................................................................4
2 Terms of reference........................................................................................................................4
Purpose:.......................................................................................................................................4
Methods.......................................................................................................................................4
Expected outcomes......................................................................................................................4
3 Background and context...............................................................................................................4
3.1 Academic area and general business context of the problem................................................4
3.2 Business context of the problem............................................................................................5
3.3 Purpose of the proposed study...............................................................................................5
3.3.1 Research questions..............................................................................................................5
3.3.2 Research aim.......................................................................................................................6
3.3.3 Research objectives............................................................................................................6
3.4 Significance of proposed study..............................................................................................6
4.0 Summary of relevant theory......................................................................................................6
4.1 Introduction............................................................................................................................6
4.2 Significance of customer loyalty in retail sector...................................................................6
4.3 Conclusion.............................................................................................................................7
5.0 Methodology..............................................................................................................................7
5.1 Research philosophy..............................................................................................................7
5.2 Research design.....................................................................................................................7
5.3 Data collection, analysis and presentation of results.............................................................7
Conclusion...................................................................................................................................8
6 Project management......................................................................................................................8
6.1 Introduction............................................................................................................................8
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6.2 Timing....................................................................................................................................8
6.3 Cost......................................................................................................................................10
6.4 Contingency plan.................................................................................................................10
6.5 Conclusion...........................................................................................................................10
REFERENCES..............................................................................................................................11
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1 Title
Analyze the relationship between loyalty card scheme and customer loyalty: A study on
Sainsbury UK
2 Terms of reference
Purpose:
The main reason behind carrying out this study will be “To analyze the relationship
between loyalty card scheme and customer loyalty” where Sainsbury will be chosen as one of the
organization which operates in retail sector and well known in the market for range of products it
offers to its target market. Further, in the modern era due to rise in level of competition in the
market it has become difficult for enterprise to sustain in the market and it acts as hurdle in
accomplishment of overall aims and objectives. Effective loyalty schemes are introduced by
every business so as to attract customers and through this monetary benefits are provided to
target market.
Methods
For conducting research in effective manner various methods will be employed for
accomplishing overall aims and objectives. Descriptive design will be used through which in-
depth analysis of the topic being chosen is possible. Primary information will be gathered from
40 customers of Sainsbury and secondary from books, journals and online articles. Technique of
random sampling will be used and data will be analyzed using qualitative tool. Further, inductive
approach will be employed and interpretivism philosophy will be used for conducting research.
Expected outcomes
From the entire study it will be expected that relationship between loyalty card scheme
and customer loyalty. When organization develops effective loyalty scheme for its target market
then it encourages customers to be loyal towards particular brand and in turn they prefer to
purchase products on continuous basis. Further, the study will support in knowing what are the
effective loyalty schemes for enhancing brand loyalty in the market and this can support
company in accomplishment of overall aims and objectives.
3 Background and context
3.1 Academic area and general business context of the problem
The main problem from academic point of view in the present study will be to know the
direct relationship between loyalty card scheme and customer loyalty. Further, this problem will
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better support in knowing whether presence of effective loyalty schemes can be fruitful for the
business or not. Apart from this, it can allow business to perform efficiently in the market and
can act as development tool. From academic point of view it will become easy to understand
about the concept of loyalty scheme which is developed for customers and this enhances their
satisfaction level in the market. Apart from this, learners will be able to know about the concept
of customer loyalty in proper manner.
3.2 Business context of the problem
The main problem associated with the business is to know what are the most appropriate
ways through which appropriate loyalty schemes can be introduced with the motive to enhance
customer loyalty, Further, companies are surviving in the market where level of competition is
quite high and to retain the most loyalty customers has become one of the most challenging task
for businesses. Therefore, the study will assist large number of companies to know about the
appropriate ways through which they can develop effective loyalty schemes for providing large
number of benefits to its target market. Through loyalty schemes monetary benefits are delivered
to customers as per expectations and this allows business to grab large number of opportunities
present in the market such as rise in profitability level along with market share.
3.3 Purpose of the proposed study
The main purpose of the proposed study will be to determine the relationship between
loyalty card scheme and customer loyalty. Further, it will support in understanding the
appropriate ways through which companies can develop effective schemes. The entire study will
be based on Sainsbury where firm is well known for the range of loyalty scheme developed and
this allows to satisfy need of the target market in efficient manner. The main purpose of the study
will be satisfied by adopting various tools and techniques undertaken and this will be beneficial
for entire research.
3.3.1 Research questions
 How important is customer loyalty in the retail sector?
 What is the link between loyalty card scheme and customer loyalty?
 What are the ways through which Sainsbury can build effective loyalty scheme for
enhancing customer loyalty?
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3.3.2 Research aim
The main aim of the present study will be “To analyze the relationship between loyalty card
scheme and customer loyalty: A study on Sainsbury UK ”
3.3.3 Research objectives
Following will be the objectives for the present research
 To determine the significance of customer loyalty in retail sector
 To understand the link between loyalty card scheme and customer loyalty within
Sainsbury
 To recommend the effective ways through which Sainsbury can build effective loyalty
scheme for enhancing customer loyalty
3.4 Significance of proposed study
The entire study being carried out will be beneficial at both academic and corporate level.
At academic level students and other type of learners can consider the findings of the study and
on the basis of this they can know about the concept of loyalty card scheme and how it supports
in enhancing the level of customer loyalty. Further, it will also be beneficial at corporate level
where with the help of findings companies can develop more effective loyalty schemes.
4.0 Summary of relevant theory
4.1 Introduction
Literature review supports in conducting research in appropriate manner where views of
different authors and experts are considered for in-depth analysis. Further, various themes are
formed which are associated with the topic and it leads to accomplishment of overall aims and
objectives of the study.
4.2 Significance of customer loyalty in retail sector
As per view of Flavian, Cristobal and Guinaliu (2008) in the modern era due to rise in
level of competition in retail sector every organization has started to search for effective ways
through which they can built customer loyalty (Flavian, Cristobal and Guinaliu, 2008).
Moreover, different effective ways are present which can assist firm to encourage customers to
repurchase products on continuous basis (Andy, 2005). Apart from this, firms have started to
built effective loyalty card schemes through which monetary benefits are delivered to target
market and this is effective enough in raising the level of customer loyalty. However argued
Szwarc (2005) that every firm applies larger efforts in developing loyalty scheme but the most
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effective one must be capable enough of attracting target market towards the range of customers
in the market (Szwarc, 2005).
Link between loyalty card scheme and customer loyalty
According to Butscher (2002) their exist direct relationship between loyalty card scheme
and customer loyalty as development of effective schemes encourages customers to repurchase
the products of company on continuous basis (Butscher, 2002). In short additional benefits are
provided to target market through loyalty card schemes and in turn enhances customer base of
the business. It supports business in gaining competitive advantage and sustainability issues can
be easily faced by organization in the market (Berg, 2013). Further, loyalty schemes enhance
satisfaction level of target market which is necessary in the modern era.
4.3 Conclusion
The literature review carried out will support in knowing the direct relationship between
loyalty scheme and customer satisfaction. Further, it will highlight view of different authors and
experts which is necessary for accomplishing overall aim of the study.
5.0 Methodology
5.1 Research philosophy
It is regarded as the belief about the way in which information obtained can be gathered,
analyzed and used (Bak, 2011). Two type of philosophies are present named interpretivism and
positivism. For conducting the present study interpretivsim philosophy will be used where
researcher will interpret results.
5.2 Research design
It supports in knowing the nature of the study. Different type of research designs are exploratory,
descriptive, explanatory etc (Bryman, 2008). In the present study exploratory design will be
adopted through which in-depth analysis of the topic is possible,
5.3 Data collection, analysis and presentation of results
For conducting the present study data will be collected from both primary and secondary
sources. Primary information will be collected with the help of questionnaire designed and
secondary information will be gathered with the help of books, journals and online articles
(Clark, 2002)
For analyzing information qualitative technique will be used where different themes will
be formed which will show overall response of respondents.
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Results will be presented with the help of charts, bar graphs and other diagrams.
Sample size of 40 customers of Sainsbury will be chosen and technique of random sampling will
be employed so as to obtained appropriate information for conducting the research in appropriate
manner (Denzin and Lincoln, 2005). Further, ethical issues will be considered for the protection
of research participants where information obtained from them will not be shared with others and
they will be secured in separate place.
Conclusion
The range of tools along with techniques employed will support in accomplishment of
aim of the study and they will be selected on the basis of nature of research. Further, the sources
of data collection considered will support in obtaining accurate information from customers of
Sainsbury.
6 Project management
6.1 Introduction
Technique of project management will highlight all the major activities of the project
along with the time and cost required in its accomplishment. Further, it will support in knowing
the time period in which entire project can be completed.
6.2 Timing
Task Task Name Duration Start Finish Predecessors
1 Preparing for Introduction 2 wks Fri 01-01-16 Thu 14-01-16
2 Literature Review 4 wks Fri 15-01-16 Thu 11-02-16 1
3 Accessing of Secondary Data 2 wks Fri 15-01-16 Thu 28-01-16 1
4 Review and draft submission 1 wk Fri 12-02-16 Thu 18-02-16 2,3
5 Modification 1 wk Fri 19-02-16 Thu 25-02-16 4
6 Research Methodology 3 wks Fri 15-01-16 Thu 04-02-16 1
7 Collection of Primary Data 6 wks Fri 05-02-16 Thu 17-03-16 6
8 Data analysis 5 wks Fri 18-03-16 Thu 21-04-16 6,7
9 Conclusions and
Recommendations 3 wks Fri 22-04-16 Thu 12-05-16 8
10 Completion of remaining work 2 wks Fri 22-04-16 Thu 05-05-16 5,8
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11 Revise and draft 2 wks Fri 06-05-16 Thu 19-05-16 10
12 Final Submission 1 wk Fri 20-05-16 Thu 26-05-16 8,9,11
Figure 1: Network Diagram
Figure 2: Critical Path
6.3 Cost
Activities Cost (£)
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Questionnaire 10
Travel 100
Printing & Stationary 50
Secondary data collection 200
Other expenses 50
Total Expenses 410
6.4 Contingency plan
In context to contingency plan, if the researcher will unable to collect the data from the
customers of Sainsbury in sufficient manner from store of Sainsbury, then researcher has also
option to access the data from other stores of company. Another risk may arrive in the research is
related to sufficient amount of fund for secondary data, this risk can be minimized by accessing
data from free websites and journals.
6.5 Conclusion
From the project management plan it is concluded that different activities of research
work will be completed within time and also as per the estimated cost. Completion of activities
within the specified time and with proper checking will enable the researcher to complete the
project on better manner.
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REFERENCES
Andy, W., 2005. Loyalty — What can it really tell you?. Journal of Database Marketing and
Customer Strategy Management. 13 (1). pp.55-63.
Bak, O., 2011. The Role of Qualitative Research in a Mixed Methods Study - Assessing the e-
Business Enabled Transformation in a Strategic Business Unit. Qualitative Research
Journal. 11(2). pp.76 – 84.
Berg, B., 2013. etail Branding and Store Loyalty: Analysis in the Context of Reciprocity, Store
Accessibility, and Retail Formats. Springer Science & Business Media.
Bryman, A., 2008. Of methods and methodology. Qualitative Research in Organizations and
Management: An International Journal. 3(2). pp.159 – 168.
Butscher, A. S., 2002. Customer Loyalty Programmes and Clubs. Gower Publishing, Ltd.
Clark, A. M., 2002. The qualitative-quantitative debate: moving from positivism and
confrontation to post-positivism and reconciliation. Journal of Advanced Nursing. 27(6).
pp.1242-1249.
Denzin, N. and Lincoln, Y., 2005. Handbook of Qualitative Research. 3rd Edition. Thousand
Flavian, C., Cristobal, E., and Guinaliu, M., 2008. Perceived quality PeSQ: Measurement
validation and effects on consumer satisfaction and web site loyalty. Managing Service
Quality. 17(3). pp.317–340.
Szwarc, P., 2005. Researching Customer Satisfaction & Loyalty: How to Find Out what People
Really Think. Kogan Page Publishers.
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