Analysis of Tesco's Loyalty Card Scheme and Customer Loyalty

This report presents an analysis of the relationship between loyalty card schemes and customer loyalty, focusing on Tesco as a case study. The study explores Tesco's various loyalty card schemes, including the Clubcard, and evaluates their effectiveness as relationship marketing tools. The research employs a qualitative approach, primarily relying on secondary data sources such as journals, books, and articles. The findings reveal that loyalty marketing strategies significantly impact customer attraction, foster long-term customer relationships, enhance customer loyalty, and drive purchase decisions. The report also examines the impact of loyalty card schemes on customer retention and provides recommendations for improving these schemes to increase Tesco's customer base. The report includes thematic analysis and a detailed literature review, offering insights into the evolution and effectiveness of loyalty programs in the retail sector.

Analyze relationship between loyalty card schemes
and customer loyalty: case study of Tesco

ACKNOWLEDGMENT
I would like to give my sincere thanks to my mentor who provide me immense support
fro completion of the entire study. He supported me while planning for the data collection
processing and using the collected data in deriving valid outcome in the light of research aim.
Furthermore, I would also like to say thanks to my colleagues who help me during conducting
the study and writing the critical chapter of the study. Finally, I would also like to give thanks to
my friends and other members who give their kind support fro completion of the entire study
successfully.

ABSTRACT
Marketing is the foremost aspect for any corporation which helps to promote products
and services in the marketplace. Present study is based on relationship between loyalty marketing
schema and customer royalty with special reference to Tesco. Such kind of strategies are
proposed at first by Tesco the biggest retail store of UK in order to attract more buyers and retain
them for longer time span. Furthermore, company bring innovation in its marketing strategies as
per the current trend and changing need of buyers. It facilitates to create its unique identify at the
marketplace and increase the customer base of the same. In the current era competition is kept on
increasing due to high level of innovation in the marketplace. Owing to this it is very important
for any corporation to adopt appropriate marketing strategies so as to retain buyers and create
competitive edge of the firm. In this regard, current study has been conducted to examine the
various loyalty marketing strategies of Tesco on its customer loyalty.
In order to conduct the study in structural manner qualitative type for investigation has
been selected. Here, main emphasis has been laid on secondary data so as to assess the
effectiveness of strategies adopted by Tesco. In this regard different sources like journals, books
and articles as well as other published material have used. However, analysis has been done
through preparing themes in accordance with research aim and objectives.
The data analysis has been done as per the qualitative method by focusing on secondary
data only. Here, number of themes are prepared so as the detail explanation can be given for
linkage between loyalty marketing scheme and customer loyalty of Tesco. Furthermore, the main
findings reveals that loyalty marketing has direct impact on the customer attraction and its makes
management able to build long term relationship with same. Furthermore, loyalty marketing
strategies aid to enhance the loyalty of customer and persuade them to take frequently purchase
decision. Also, company increased customer base by implementing such kind of lucrative
strategies in the marketplace.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION...................................................................................................7
1.1 Background............................................................................................................................7
1.2 Rationale of the study............................................................................................................8
1.3 Research aim and objectives..................................................................................................8
1.4 Research questions.................................................................................................................9
CHAPTER 2: LITERATURE REVIEW.......................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Analyzing loyalty card scheme used by the Tesco at UK...................................................10
2.3 effectiveness of club card system of Tesco as relationship marketing tool........................12
2.4 Assessing the impact of loyalty card schemes on customer loyalty in Tesco at UK..........14
2.5Conclusion............................................................................................................................15
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................20
3.1 Introduction..........................................................................................................................20
3.2 Research Paradigm..............................................................................................................20
3.3 Research Approach..............................................................................................................20
3.4 Research design...................................................................................................................21
3. 5Sampling..............................................................................................................................21
3.6 Research type.......................................................................................................................22
3.7 Research Strategy................................................................................................................22
3.8 Data Collection....................................................................................................................22
3.9 Data Analysis......................................................................................................................23
3.10 Ethical Considerations.......................................................................................................24
3.11 Limitation of the study ......................................................................................................24
3.12 Future scope for the study..................................................................................................25
CHAPTER 4: DATA ANALYSIS................................................................................................26
4.1 Introduction..........................................................................................................................26
4.2 Thematic analysis................................................................................................................26
CHAPTER 5: CONCLUSION AND RECOMMENDATION ....................................................34
5.1 Conclusion...........................................................................................................................34
5.2 Recommendations................................................................................................................34
4

REFERENCES..............................................................................................................................36
5

Illustration Index
Illustration 1: Customer loyalty.....................................................................................................10
Illustration 2: Conceptual framework............................................................................................14
6

CHAPTER 1: INTRODUCTION
1.1 Background
Marketing is the foremost aspect which gives upward direction to corporation and
increase customer base for the same. Marketing consists of number of tools and techniques
through which an organization can communicate to customers regarding its offerings. However,
marketing requires number of activities to segregate all customers so that marketing plan can be
formulated accordingly. The aspect relating to marketing plays vital role in growth and
development of an organization (Banasiewicz, 2005). This is because by the use of different
marketing activities make it possible for firm to target right number of buyers and adopt effective
marketing strategy to meet their requirement in an effectual manner. In this regard, loyalty
marketing is also the imperative aspect to attract customers and increase sales turnover of
corporation (Brooks and Simkin, 2012). The main motive behind such type of schemes and
program is to increase attention of customers towards the products and services that are being
offered by firm. Furthermore, loyalty marketing ensure retention of customers and also increases
their level of satisfaction. It proves to be effective in in achieving long term objectives of firm
(Barry, 2006).
The loyalty marketing is one of the imperative aspect of marketing because corporation
an easily boosts its sales turnover in the marketplace (Brooks, 2010). The current study is based
on Tesco, a British multinational grocery and general product retailer that operates in 12
countries across Asia, Europe and UK. Further, it is the grocery market leader in UK which
provides wide range of products with rapid innovation in its system. Tesco has 16m loyalty
scheme members in UK, 14m in Asia and 8m in Europe. Further, Club Card fuel save is one of
the effective scheme of company. Here, potential buyers can get Green Clubcard point are added
in the carries bad of client. Similarly reward card also offered to customers which promote them
for bulk purchase (Customer loyalty schemes, 2014). Apart from this, Tesco credit card is also
offered to customers thereby they can be attracted towards the products and services (Blutt,
2004). It helps to increase loyalty of customer and retain them fro longer time span. This is
unique marketing strategy of company wherein it is shown to buyers that company is loyal
towards the same (Loyalty Programs, 2014). Further, after introduction of loyalty scheme of
Tesco, Sainsbury also launched its Reward card so as to attract buyers. Thus, loyalty marketing
7

is effective tools to communicate about offering of firm in most effective manner. In addition to
this, loyalty marketing determine long run growth as well as resilience of business in the
marketplace (Brink, Odekerken-Schröder and Pauwels, 2006).
1.2 Rationale of the study
The research issue is related to ineffectiveness of loyalty marketing. This is because
Tesco adopting loyalty card scheme for attracting customers and increasing sales turnover.
However, these programs are not meeting requirement of client as per the set standard. This in
turn increases additional cost and create dissatisfaction among customers. However, this issue
has been facing because of improper implementation of schemes in the marketplace. Also,
employees who are working in marketing department do not have appropriate knowledge. Owing
to this, at present company has to face issues related to intense competitions and customers'
loyalty is not ensured effectively. In this regard, current research shed light on effective
management of loyalty program so as to retain customer for longer time span. Furthermore,
emphasis has been laid on improvement in the present strategy in order to get competitive edge
and increase level of motivation among buyers. Apart from this, it has been analyzed that by
implementing loyalty card scheme in accordance with defined standard, company can be able to
retain loyal customers. Thus, relationship between loyalty card scheme and customer loyalty has
been analyzed.
The current on an examination of relationship between loyalty card schemes and
customer loyalty is beneficial for several parties such as scholar, different industries and other
related parties. Here, scholar who are conducting study in the same field will get benefits from
the current research because they will get source of information . Further, retail industry also
come to know about the potential issues behind failure of loyalty marketing scheme so as to
bring improvement in current strategy. In addition to this, analysts can also get information for
developing strong marketing tools in order to attract number of buyers. Other than this, experts
who are related to field of study or literature review will be get in-depth knowledge about the
issues behind failure of marketing strategies.
1.3 Research aim and objectives
The research aim and objectives have been specified as follows thereby researcher can
collect relevant data-
8

Aim
The of present study is to examine the relationship between loyalty card schemes and
customer loyalty: Case study of Tesco. It is helpful for researcher to collect lay emphasis on
loyalty card of scheme of particular organization.
Objectives
 To analyze loyalty card scheme used by the Tesco at UK.
 To examine effectiveness of club card system of Tesco as relationship marketing tool.
 To assess the impact of loyalty card schemes on customer loyalty in Tesco at UK.
 To recommend ways in which the loyalty card schemes can be improved to increase the
customer base of Tesco UK.
The above mentioned objectives are helpful in preparing strong data base for the study. It
assists researcher to analyze the research issue in the light of objectives of the firm. Further,
formulated research objectives examine the aspect of loyalty marketing to bring improvement in
performance of company. In addition to this fulfillment of specified objectives are helpful in
reaching at aim of the study.
1.4 Research questions
The research questions are listed below which has been formulated as per the research
aim and objectives-
 What are different loyalty schemes used by Tesco at UK?
 How effective the club card system of Tesco in building good relationship with
customer?
 What is the impact of loyalty card schemes on customer loyalty in Tesco at UK?
 How loyalty card schemes can be strengthen to increase sales turnover and customer base
of Tesco, provide suggestions?
The aforementioned research questions facilitate scholar to develop deep understanding
regarding loyalty marketing. It helps to define the problem in precise manner and develop valid
outcome fro the same in an effectual manner.
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
The chapter following the introduction is of literature review. It is based of wide range of
secondary studies. It is the most important part of dissertation which serves as the basis for the
present study as it is totally based on secondary information only. Owing to this, literature
review severs as the strong background for the research by which scholar can develop in-depth
understanding for the topic under investigation. Furthermore, views and opinion of different
authors have been included in the current research along with critical review of the same. This in
turn relationship between loyalty card schemes and customer loyalty is assessed in an effectual
manner. Furthermore, literature review is conducted by considering research objectives.
Accordingly, themes are prepared and concept of loyalty marketing is explained in an effectual
manner. At first, loyalty card scheme of Tesco has been explained. Similarly, the second theme
is prepared to examine the effectiveness of Club Card scheme of Tesco in building good
relationship with customers. At last focus has been laid in analyzing the impact of loyalty
marketing on customer loyalty of Tesco. Thus, in the same manner summarize form of literature
review is presented with the help of conceptual framework.
2.2 Analyzing loyalty card scheme used by the Tesco at UK.
Management of customer relationship is one of the crucial aspect behind success of a
retail organization. Promotional strategies refers to different set of activities which are performed
by an organization to attract buyers and increase sales turnover. It is directly associated with
customer behavior, attitude and emotions. It attract buyers and make them able to access wide
range of services that are being offered by firm. Furthermore, loyalty can be referred as active
efforts of organization for developing long lasting relationship with its consumers. The loyalty is
created among customers with “trust” as it is emotional concept where customers seek for
constant source of value. Loyalty card scheme is one of the effective the most effective ways to
increase attention of customers and retain them for longer time span. According to Andy (2005)
customer loyalty assists management of firm to develop shopping habits among customers so
that sales turnover can be increased to a great extent. In this regard, in February 1995 the Tesco
Clubcard was introduced at first time in UK in supermarket as customer reward program. Under
this scheme points were generated for every £5 spent by customers and those points are
10

converted into Clubcard vouchers in every quarter. At this juncture, customers were able to
redeem those points from any store of Tesco. Later on, this scheme was changed where
shoppers/customers gained one point for every £1 spend on their shopping. However, these
points are converted into Clubcard vouchers only when 150 points has added. It facilitates to
give 1% discount to buyers so as to increase their level of satisfaction and persuade them towards
offerings of Tesco.
Banasiewicz (2005) this could be challenged on the basis that high cost is involved in
implementation of loyalty card scheme. This is because new point-of-sale technology was
adopted with Clubcard scheme along with call center so that company can effectively manage
the queries raised by customers. Similarly, other technologies like computer system for recording
keeping as well as human resources in the same area tend to increase cost of production. Thus, at
the initial stage total cost of this scheme was £300 million and approximately 4.5% profitability
of Tesco. After the completion of six months company started to boosts at the marketplace where
customers were accessing the same to a great extent. For example only withing 12 months near
about 8million Clubcard customers started to purchase around 200 million in store products
within a single day.
According Blutt (2004) competitors take less time to adopt such kind of strategy so as to
increase number of customers. It enables them to increase sales turnover and create strong
position in the marketplace. However, it was very challenging for Tesco to maintain its
competitive edge. Yet, competitors strategies did not work well and they shifted their focus
towards cost cutting. At this juncture, Tesco become the strong retailer for attracting buyers
because till 2001 approximate 20 million members associated with Clubcard scheme.
Bose (2010) reported that loyalty card scheme has strong impact on the sales turnover
and brand image of the firm. This is because loyalty defines behavior of customers and
accordingly they take decision related to shopping. It can be critically evaluated that association
of large amount of cost tend to reduce profitability of company to a great extent. However, this
gives long run benefit in turn of high sales turnover and retention of large number of buyers.
Brink, Odekerken-Schröder and Pauwels (2006) commented that loyalty marketing
makes it possible for corporation to cover large market share and change the perception of large
11

number of buyers. This is crucial aspect in determining long run growth of firm with increased
rate of return.
2.3 effectiveness of club card system of Tesco as relationship marketing tool
According to Brooks and Simkin (2012) customer loyalty level changes with loyalty card
scheme and other promotional activities of firm. It enables them to access good quality of
services and increase customer base. Further, impact of loyalty marketing contributes creating
brand image of the corporation. Customer generally perceive loyalty card scheme as the
profitable deal by which they tend to attract towards products and services of Tesco.
Furthermore, Clubcard scheme of Tesco generated positive attitude among customers. It aids to
build brand image of company and also increases overall rate of return of the same. On the other
hand, with the adoption of loyalty card scheme corporation was able treat customers as
individuals so as to retain them for longer time span. A counter argument might be that
competitors also adopt the same kind of strategies with more benefits for customers. This in turn
customers can shift from one to another brand. This again can create barriers in the successful
completion of organizational strategies.
According to Cahill (2006) loyal card scheme is adopted just because to grab strategic
benefits for loyal customers. However, customers who buy products and services of company
regularly accounts for loyalty. This could be challenged on the basis that if customers buy
products and services once a time them firm cannot gain customer loyalty. In addition to this
loyalty process of customers in accordance with following diagram-
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(Source: Blutt, 2004)
The above diagram is showing that when a person do some transaction with organization
at first time then it become customer. After that if he again do the same then he becomes client of
the firm. However, the second transaction take place in case when company give benefit to
customers. After that still customer take decision related to repeat purchase then he covert
himself into supporter then partner. Hence, the last position of buyer is known as real loyal
customer who also serves as referral for the offerings of corporation. Corbae and et.al., (2003)
asserted that emotional and behavioral attachment of a customer with particular brand and his
repeat purchase ensure that he/she is loyal. In such kind of situations loyalty card scheme is the
most effective way to increase attention of customers and make him loyal towards the firm for
longer time span. It can be critically evaluated that competitors strategies may have some impact
on customers. It is questionable whether loyalty scheme is fruitful or not so that company build
positive attitude among large number of buyers.
According to Easterby-Smith, Thorpe and Jackson (2008) because of changing
perception of customers for loyalty card scheme corporation has to suffer form low sales
turnover at the initial stage. It might be said that poor planning of firm can have negative impact
on its overall business strategy. For example at the time of implementing loyalty card scheme
13
Illustration 1: Customer loyalty

corporation might forgot to target on new customers. Instead they just put emphasis to gain
attraction of new customers. Owing to this, it is crucial to target all prospective buyers
effectively and implement strategies by considering them as well. It aids to attract more buyers
and build trust among corporation and client. Fuchs (2002) reported that discount card is helpful
to change behavior and emotions of customers. Here, management need to ensure that timely
information is provided to customers or potential buyers. It contributes in achieving long as well
as short term objectives for retail sector or corporation.
2.4 Assessing the impact of loyalty card schemes on customer loyalty in Tesco at UK
According to Hackney, Grant and Birtwistle (2006) all customers have different
perception towards loyalty card scheme. Their mind set varies from each other towards the
loyalty card scheme. For example some of the customers perceive loyalty card scheme positively
for getting discount whereas some of them may not like to spend money on such kind of
schemes. In the same way impact of loyalty card schemes is not same on consumers because of
their interest areas. Hingley, Sodano and Lindgreen (2008) asserted that loyalty card scheme
facilitates customers to perceive that retailer care for them and listen also they innovating their
services in accordance with customers demand. It also the effective way to make buyers realize
that corporation is concerned about them. In this regard such kinds of loyalty scheme is the
effective way to give something to customers for nothing. However, the main aim behind this
concept is the build trust among buyers and connect them with organization for long time.
Kondo (2001) advocated that loyalty card scheme is like bribe where retailers offer
something to customers in order to gain their attraction. This way buyers can be ready to pay
high for the services offered by the firm. However, many of the customers consider that retailers
increase prices of products and services for implementation of loyalty card schemes. Owing to
this, retailer focuses upon offering good quality of services, charging fair prices and making
long lasting relationship with customers. This is because long term relationship with customers
proves to be effective for firm as it help to reduce marketing cost.
Andy (2005) asserted that mere loyalty card scheme is not effective to make customers
loyal. There are several other factors also considered to build good relationship with them. It aids
to give long term benefits and ensure higher profitability of the firm in the marketplace. An
alternative explanation might be that if customers get satisfaction in what they received then they
14

will be motivated for repeat purchase. It ease to reduce additional expenses of the firm so as to
increase overall rate of return of company in the marketplace.
According to Banasiewicz (2005) loyalty card scheme profit and sales turnover of
company depend on its relationship with buyers. As per the above detail Tesco' customers are
keep on increasing after implementation of loyalty card scheme. Thus, Tesco selected the
effective alternative for need satisfaction of large number of buyers. It contributes towards
meeting expectation of potential buyers and increases overall rate of return of the firm. However,
organization has to put continuous efforts for updating technology and employees for getting
expected results out of loyalty card scheme.
An apparent inconsistency of Tesco was related to competitors like Aldi which provides
huge discount for its customers. Owing to this customers was switching from one to another
brand. At this juncture, in 2009 a new advertisement was introduced by Tesco calling itself
biggest discounter of UK. This resulted in increasing number of buyers though some of the
customers still did not impress with corporation's strategy. Similarly, in 2012 Clubcard scheme
get affected by competitors where some of the customers shifted from Tesco to other brands.
Further, Clubcard scheme was also criticized by as just alternative to increase sales turnover.
With this effect corporation bring modification in its strategy by opening new outlet and making
some changes in other processes as well. Therefore, Clubcard scheme of Tesco gives both
positive as well as negative impact on overall performance of the firm. However, later on
coronation was able to increase both profitability and customer retention rate to a great extent.
2.5Conclusion
The aforementioned literature review concludes that loyalty card schemes is one of the
most effective way to increase sales turnover and profitability of firm in the marketplace. This is
because it attracts buyers and generates positive attitude among them. Also, loyalty card schemes
motivates customers to take frequent purchase decision and get more discount according to the
prevailing discount offers. Further, such kind of schemes serve as reward for customers which in
turn increase their attention towards particulars brand and retain them with the same for longer
time span. It can also be said that loyalty marketing is the foremost way to create competitive
edge of the firm and ensure expansion of firm in the marketplace with increased rate of return.
15

Furthermore, loyalty card scheme plays vital role in building good relationship with potential
buyers and in turn this affect performance of firm in positive manner.
16

The above conceptual framework is representing the relationship between loyalty card
scheme and customer loyalty. Here, Tesco uses various kind marketing strategies in order to
builds good relationship customers. However, present research lays emphasis on loyalty
marketing thereby corporation get high customer base, increase profitability. Although, it aids to
increase number of customers but increase cost of production as well. This is because company
has to lower down margin at the initial stage. In addition to this, achievement of all these specific
factors results in creating competitive edge of the firm and determine long run growth of the
17

firm. Thus, loyalty marketing helps to retain customers and increase overall rate of return of the
firm.
18
Illustration 2: Conceptual framework

CHAPTER 3: RESEARCH METHODOLOGY
3.1 Introduction
The chapter after completion of literature review is of research methodology. It is the
most important chapter of dissertation wherein all methods and techniques used for data
collection and analysis of the same have been described with proper justification. The research
methodology follows particular structure for all the procedures which has been used in deriving
valid conclusion for the study. For current research on examination of relationship between
loyalty card schemes and customer loyalty appropriate methods for data collection have been
selected. Similarly, appropriate research approach and sample size have been taken in order to
produce end results. In addition to this, all the processes and tools have been explained as
follows-
3.2 Research Paradigm
The research paradigm consists of set of assumptions for conducting research in an
appropriate manner. It aids to define ways to conduct research as well as role of scholar in
conducting the study. Basically two types of research paradigm is used in the studies such as
positivism and interpretivism. Here, positivism research paradigm consider that a world is
external and focus is laid on generalization. Furthermore nature of reality adopted in positive
philosophy is objectives and tangible (Bak, 2011). For the current research interpretivism
philosophy has been applied. Under this it has been assumed that researcher has some knowledge
about the topic but still it required to develop sufficient knowledge in order to reach at the aim of
the dissertation (The Interpretivist Paradigm, 2008). Furthermore, by using interpretivism
philosophy researcher adopt flexible structure wherein data can be collected in socially
constructed environment. In addition to this, selected research philosophy is helpful in collecting
large amount of data and drawing meaningful inferences from the same (Interpretivism
(interpretivist), 2015). Apart from this, it might be possible that scholar apply multiple methods
for reflective different issues of study (Bryman, 2008).
3.3 Research Approach
Research approach is effective method to collect data for the study. There are two types
of approaches adopted such as inductive and deductive. Here, deductive approach is used in
quantitative type of research where main aim of the understand the specific issues behind the
19

research problem. Further deductive approach also based on hypothesis in order to analyze
relationship between two variables. On the other hand, inductive research focuses upon
generalization of data and then move towards specific issue of the same. It assists researcher to
develop deep understanding about the topic under investigation (Clark, 2002). This in turn
proves to be effective to generate alternative solutions for the research problem. Further, by
using inductive approach scholar gather general information from range of secondary source for
assessing relationship between loyalty card scheme and customer loyalty of Tesco. It depicts that
for the current study use of inductive approach proves to be effective as it helps to gather data
specific data related to Tesco and general information as well. This is because current study does
not include any kind of hypothesis and objectives are framed as per the research aim.
3.4 Research design
Research design refers to method of presenting findings and discussion of the study.
There are various types of research design are used such as exploratory, explanatory and
descriptive. For the current research descriptive research design has been used. Under this
characteristics of population being studied is analyzed in the light of research aim and objectives.
It contribute towards collecting large amount of data and presenting the same in fruitful manner
(Denzin and Lincoln, 2005). On the other hand, exploratory research is used to understand the
problem in precise manner where explanatory research put emphasis on problem which has not
been discovered yet. It depicts that descriptive research design is most suitable for the present
study so that scholar can effectively derive valid conclusion by identifying relationship between
loyalty card schemes and customer loyalty. Apart from this, descriptive research design is
effective in the qualitative type of study so the selection of this research design is done
accordingly. It contributes towards analyzing the collected data effectively and deriving valid
outcome in the same direction. In addition to this, descriptive research design facilitates to clarify
the findings in the mind of readers (Golafshani, 2003).
3. 5Sampling
Sampling is the most important part of research methodology as it helps to collect data
for the research under investigation. It depicts the individual unit of population which represent
overall population of the study. Basically two types of sampling methods are referred while
collecting data such as probability and non-probability sampling. However, non-probability
20

sampling is used in case of inclusion of experienced people where probability sampling gives
equal chances to all objects to get select in the study. For the present study no any sampling
design has been selected because the research is based on secondary data. However, sampling is
used only to gather primary data. In this regard different factors like sample size, population and
sampling techniques are considered. For example, simple random is applied in case data are
collected from customers. On the other hand, when data are to be collected regarding managerial
decision then purposive sampling is used. In the current study, number of journals referred for
the collection of large amount of data with regards to use of loyalty marketing. These journals
are selected in the study as the evidence which is showing that Tesco's loyalty card is the
effective in term of attraction of customers and creating brand image of the firm in the
marketplace. Furthermore, all the selected journals are appropriate for extracting valid
information and providing justification use of loyalty card scheme in attracting buyers.
Therefore, selected article are appropriate the meet the research aim and objectives. Furthermore,
annual report is also referred in the file so as to get access for the appropriate data.
3.6 Research type
There are two types of research conducted such as qualitative and quantitative. However
the selection of type of investigation is based on the nature and purpose of the study. For
example if the study is based on two variables then researcher tends to use quantitative study. On
the other hand, qualitative study just provides theoretical aspect of the study. For the current
research on an examination of relationship between loyalty card scheme and customer loyalty
qualitative type of research is used (Hartman and Conklin, 2012). The reason behind selecting
this type of investigation that study is based on secondary data only. Owing to this, quantitative
type of research is not used as statistical tools cannot be applied to derive valid conclusion. It
depicts that qualitative type of investigation is the foremost way to analyze the relationship
between loyalty card scheme and customer loyalty. Furthermore, qualitative type of study
enables scholar to produce end results in the light of research objectives and aim. It contributes
towards analyzing the collected data effectively and reach at the aim of the study effectively.
3.7 Research Strategy
Research strategy refers to particular methods and techniques used to conduct study in an
effectual manner. In this regard, for the current study various secondary sources have been
21

considered to collect data (Ireland, Webb and Coombs, 2005). However, at the same time some
specific key terms like loyalty marketing, discount are used while searching for different sources
for collecting of data. Furthermore, appropriate methods for data analysis has been applied so
that valid conclusion can be drawn.
3.8 Data Collection
Data collection is the most important part of any dissertation as it provides basis for the
study. There are two types of data are collected such as primary and secondary. Here, primary
data are collected through fresh sources which have not been accessed yet. On the other hand,
secondary data includes previous studies which has been done by others in the same field. It
assists researcher to collect large amount of data and fulfill the purpose of study in an effectual
manner. For the current study on an examination of relationship between loyalty card scheme
and customer loyalty only secondary data are collected. In this regard, different sources such as
journals, books and online material (Jackson, 2010). All these sources contribute towards
collecting large amount of information and reaching at the aim of the study. Along with that
printed sources, magazines and published case description have been accessed. Furthermore,
study is totally based on secondary data only. Owing to this, appropriate sources of range of
secondary data have been selected. The selected sources are taken into considered as these prove
to be effective in developing strong base for the topic under investigation. For example annual
report is the effective source thereby sufficient data are collected in order produce valid outcome
for the report. It facilitates to derive valid conclusion and produce end results in an effectual
manner.
3.9 Data Analysis
Data analysis is also the crucial part of dissertation because it is the effective means to
analyze the collected data. Basically two types of data analysis methods have been used such as
qualitative and quantitative. Here, quantitative method is that where data are analyzed by using
range of statistical tools. However, this method is used in quantitative type of investigation only.
On the other hand, qualitative method data analysis is used in qualitative study. For the current
research on an investigation on relationship between loyalty card schemes and customer loyalty
qualitative method has been used. Under this, collected data are analyzed by preparing themes on
the basis of each research questions (Lichtman, 2006). It aids to explain the findings and discuss
22

the same in an appropriate manner. In addition to this, quantitative study consists of techniques
like SPSS, regression and correlation. This in turn researcher can present the findings effectively
and derive valid conclusion from the same. Hence, thematic analysis is appropriate for analyzing
the collected data for the study. Furthermore, general pattern is adopted at the time of framing
themes so as to reach at the aim of the study (Golafshani, 2003).
3.10 Ethical Considerations
Ethical aspect of any study is very important and it need to be keep in mind at the time of
collecting and analyzing the data. This aids to complete the whole study in an ethical manner and
fulfill purpose of all related parities effectively. Some of the ethical aspects which have been
considered in the present study are listed as follows-
 The present study on an examination of relationship between loyalty card schemes and
customer loyalty, large amount of secondary have been collected. This is because overall
study is based on secondary data only. At this juncture, some of the sites which have
related studies are restricted to use. Owing to this, prior approval have been taken for
those sites so as to ensure inclusion of all important data in the study (Clark, 2002).
 As the current study is based on secondary data only. In this regard some of the ethical
aspects have been considered while taking information from wide range of secondary
sources. Further, no any data have been copied instead all the information which has been
taken is cited properly.
3.11 Limitation of the study
Research limitations always remain in any study because it is not easy for scholar to
complete the study without any kind of limitations. Further, research limitations of the current
study have been specified as follows-
 The time lag is always major issue which create barriers in completing study on right
time. Completing entire research is not easy task because it consists of several chapter
which require proper time. However, data collection process generally take extensive
time. Thus, due to lack of time it was not possible for researcher to go in-depth in all
aspects. It can be research limitation which is associated with present study. Although,
research was conducted according to the time line (Bryman, 2008).
23

 The current study is totally based on secondary data and its analysis is also based on the
same. Owing to this, wide range of secondary sources have been accessed. However,
some of them were restricted to use. This resulted some of the important information may
not be incorporated in the study. However, most of the sites which were restricted to use
is accessed by taking prior approval.
3.12 Future scope for the study
The current study has been conducted on an examination of relationship between loyalty
card scheme and customer loyalty. It is applicable on retail store to a great extent by which
customer can be attracted and overall rate of return of the corporation can be enhanced.
Furthermore, at the completion of the report research will be able to analyze the effectiveness of
loyalty card scheme used by Tesco and its impact on growth of the corporation. It is also helpful
in identifying several limitations which hamper performance of the organization. It aids
implementing loyalty scheme in successful manner and fulfill purpose of the organization
effectively. This is because recommendations have also been proposed for improvement in Tesco
as well as other corporation. Furthermore, future scope of the study have been explained as
follows-
 The current study will be helpful for those who conducting study in the same field. It will
serve as secondary sources so they can collect large amount of data (Bak, 2011).
 The current study will also be helpful for other industries or organization which are
having problem related to marketing strategies. It enables management of organization
 The topic under investigation proves to be effective for other researcher or analyze in
formulating different marketing strategies by referring recommendations of the same.
 The present dissertation facilitates people who are connected with field of literature
review. This is because study will help them to adopt creative and unique approach in
writing their reviews.
24

CHAPTER 4: DATA ANALYSIS
4.1 Introduction
Data analysis is the another most imperative part of dissertation because it shows
evidence about the findings and accordingly valid conclusion can be drawn. Under this, all the
collected data are analyzed according the research aim and objectives. For the present study on
analysis of loyalty card scheme and customer loyalty, data analysis has been done according to
secondary data only. This proves to be effective to evaluate different types of strategies and
proposing valid suggestions for the management of Tesco. In addition to this, secondary data are
analyzed by making use of qualitative aspect. Under this, themes are prepared according the
research objectives. It enables researcher to reach at the aim of the study and accordingly find the
alternative ways to attract large number of buyers.
4.2 Thematic analysis
Theme 1:Loyalty marketing is the one of the foremost aspect of marketing strategies
The loyalty marketing is the one of the foremost aspect of marketing strategies. However
it is just part of marketing strategies through which customers get attracted towards offerings of
an organization. This helps Tesco to move ahead with increased rate of return and higher level of
satisfaction among customers. Furthermore, with the help of loyalty marketing an organization
can be able to meet expectations of customers in an effectual manner. For example loyalty
marketing strategy enables management of Tesco to identify the right customers as they tend to
take repeat purchase decision. Loyalty marketing or relationship marketing facilitates to
encourage referrals and reduces cost of promotional activities. This is because cost of
promotional activities is generally compensated by attraction of customers and high sales
turnover.
Marketing strategies are formulated for promoting products and services whereas loyalty
marketing directly target customers. Furthermore, selection of loyalty marketing is based on
corporation, its functioning and kind of products provided to buyers. Here, Tesco is the largest
retailer of UK and it aims to cater need of customers. Owing to this, effective means of
marketing is used in order to meet requirement of customers. This aspect of firm makes it
possible to create distinctive image in the marketplace. For example, at present Tesco has 16
million loyalty scheme members in UK and 14 million in Asia. Furthermore, 8 million loyalty
25

members are from Europe. This increasing trend of loyalty marketing facilitate to bring
innovation in the existing marketing strategies and increase the level of satisfaction among
buyers. In addition to this, Tesco always consider the loyalty marketing is the one of the
important factors for the success of firm because greater loyalty delivers increased lifetime value
for both company a well as ultimate users.
Theme 2: Loyalty marketing has direct impact of customer retention strategy of Tesco
According to the collected secondary data, it has been found that loyalty marketing
facilitates to retain customer for longer time span. Here, Tesco adopted effective strategies to
keep buyers with firm for long run. Similarly, loyalty marketing is the one of the alternative
means to increase attention of ultimate users towards the offerings of Tesco. It has also been
found that use of relationship marketing has direct impact on the retention strategy of firm. Here,
company can be better able to focus on number of buyers. Also, addresses their issues by
providing them more facilities. This helps corporation to cater need of customers who are loyal
to customers. Apart from this, club card scheme of Tesco makes it possible for firm to lower the
expenses to be incurred in promotion activities. The main reason behind reduction in cost is
continuous increase in the number of consumers due to club card scheme. As the club card
scheme serves as the positive drives for corporation.
The loyalty marketing affect behavior of consumers and changes their attitude towards
shopping from particular store. This is the reason why customers frequently take decision related
to shopping. Here, customers perceive that they are saving every single penny by holding the
card and in turn also get information related to new products and services which are offered at
discount. Thus, loyalty card scheme of Tesco contributed towards drastic increase in the number
of customers. It leads to increase sales turnover and profitability of the firm in the marketplace.
Apart from this, these kind of lucrative policies persuade buyers and generate positive attitude
among them. Similarly, customer are retained through loyalty marketing because several scheme
play active role in creating psychological effective on buyers and also convert them into loyal
customers.
Theme 3: Loyalty marketing of Tesco targets to build long term relationship with
customers
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According to the collected primary data, it has been found that multichannel offers of
Tesco prove to be effective in building long term relationship with customers. Here, Club card
scheme of Tesco aids to give one point for every £1 spent and holders of card get the detail
information of the card so they can make use of card for further shopping. It also help them to
get huge discount according the terms and conditions. It facilitates company to retain customers
and build long term relationship with them. With this means certainty can be ensured for future
business activities. Furthermore, the aim of company to implement such kind of lucrative
strategies is the gain attraction of customers and persuade them to take quick purchase decision.
Furthermore, loyalty card scheme enables corporation to keep all the relevant data of
buyers with confidentiality. It helps to adopt any other kind of promotional program and provide
the same information among target buyers. This in turn affect them in positive manner and make
them able to shop by using available card or discount scheme of Tesco. Apart from this,
corporation work in accordance with set standard and plan so they can directly persuade buyers.
Also, their detail information is used by corporation to provide personalized services to buyers.
For example, newsletter are sent to targeted buyers who are directly connected with corporation.
This leads to create goodwill of firm in the marketplace with increased rate of return. Apart from
this, long term relationship of company with customers makes it possible for both parties to
determine their won profitability. Therefore, loyalty card and long term relationship are
interrelated through which company can be able to achieve its long as well as short term
objectives in the marketplace.
Theme 4: Various strategies are adopted by Tesco to enhance customer loyalty
According the collection of secondary data, it has been found that several types of
marketing strategies play active role in increasing customer loyalty. Here, Tesco make use of
quality products and services and provide detail information regarding the same to ultimate
buyers. This affect corporation in providing good quality of services to buyers and give first
priority to their interest. Further, management of Tesco make effective plan to utilize its limited
resources effectively by focusing on preferences of buyers. However, company incur cost at the
initial stage just to enhance the customer loyalty. Furthermore, cost cutting strategy, retention
and marketing strategy all facilitates to enhance the loyalty of customers. Similarly, extra efforts
are also made for meeting long as well as short term objectives of firm. For example, loyal
27

customers are provided extra benefits in the form of huge discount. It aids to determine long run
success of the firm.
Similarly, Clubcard, Fuel save and Price promise are costly vehicles which used by
company to enrich the loyalty of buyers. It enables organization to attract more buyers and make
them feel important for company. Also, company value for the money spend by buyers and
ensure that optimum utilization of limited resources. It facilitate to determine well being both
parties like customers and organization. In addition to this, Tesco get feedback of customers on
time to time which provide them opportunity to bring improvement in the environment as per the
requirement. This in turn prove to be profitable for business and meet expectations of number of
stakeholders in an effectual manner. Therefore, different strategies of Tesco facilitates to
enhance the customer loyalty. This is the foremost aspect for giving upward direction to
business.
Theme 5: Loyalty card scheme of Tesco created competitive edge
According the collection of primary data, it has been found that loyalty card scheme of
Tesco facilitate to create competitive edge. This is because management make combine efforts to
address issues which are being faced by customers and then resolve the same by making use of
appropriate strategies. Furthermore, loyalty card scheme play significant role n increasing
number of customers and switching customers from one to another brand. For example,
ClubCard scheme of Tesco make lasting impact on overall UK market and during the time
customer started to shift. It facilitates to increase market share as well as sales turnover of the
firm. On the other side, Green Club Card points are also earned by regular visitors of Tesco
which promote them to do shopping very frequently. It has direct impact on the brand image of
the firm because of high level of customer satisfaction and constant increase in the products and
services of company.
Furthermore, by implementing such kind of attractive scheme company gegenrate good
amount of database of the buyers. It helps organization in many ways so they can be able to
access good quality of products and services. For example each time management of Tesco make
use of database in providing information related to new products and services along with
attractive discount. Furthermore, company maintain good relationship with all its stakeholders
and accordingly plan for its expansion and growth. This in turn shareholders also get motivation
28

for further investment. Apart from this, extensive growth of Tesco also attract other investors
thereby corporation can create competitive edge in the marketplace. In addition to this, effective
strategies of promotion makes clear cut communication flow between company and ultimate
users of products and services. It is again helpful for consistent growth and high rate of return.
Theme 6: Tesco do remember of quality products and services for implementing Loyalty
marketing
According to the collection of primary data, it has been found that Tesco not only focuses
on attracting customers but also considers preferences of buyers. In this regard all buyers are
provided good quality of products and services which prove to be effective in generating
posti8ve attitude among them. It shows that company has long term aim and want to retain
buyers by providing them best services in comparison to other retailers. Not only this,
corporation has unique plan to get views of customers and accordingly plan for meeting their
requirement. It makes Tesco unique from others and create its competitive edge in the term of
high level of customer satisfaction as well as increased sales turnover. It can also be said that,
club card scheme of Tesco facilitates to provide high quality of extra benefits like eating out,
entertainment and learning. These aspect has significant impact on the emotional drives of
buyers. It is the reason they tend to spent their money on Tesco by making frequent purchase
decision.
The collected secondary data also show that loyalty card scheme determines overall
growth and effectiveness of Tesco. It facilitates firm to cooperate with customers and persuade
them towards lucrative offers given to them. In addition to this, loyalty card scheme have
multiple benefits thereby corporation can ensure inclusion of satisfied customers. Also, these
customers get chance the get services in accordance with their requirements. Therefore, Tesco
focuses on quality for giving higher level of satisfaction among buyers. In addition to this,
loyalty card scheme makes company different from others just because of behaving ethical and
catering need of customers in an effectual manner. Furthermore, product quality is also amended
according the preferences of buyers which determine long run growth and success.
Theme 7: Loyalty card scheme of Tesco has positive impact on its brand image
The collected secondary data reveals that loyalty card scheme of Tesco has positive
impact on its brand image. It is because number of evidence such as high customer, competitive
29

edge and increased market share of company. However, meanwhile corporation need to bear
negative attitude of other retailers which were not happy with strategy of firm. It forces company
to bring innovation in its strategy and keep customer retain for longer time span. Furthermore,
loyalty card scheme facilitates to bring drastic changes in the slow growth of firm. It is because
suddenly customer started to buy products and services. It enables corporation to cope up with
changing scenario. Apart from this, it has also been found that large number of UK residents are
associated with loyalty card scheme of the firm. However, Tesco was the first corporation to
launch such kind of scheme in the marketplace. It brought several changes in the marketplace
and leg behind other retailers.
(Source: TESCO, 2014)
However, due to negative impact on the performance of corporation, management of
Tesco re-launched Club card in 2009 (Is Tesco Clubcard still relevant?, 2015). At that time,
customers were provided double benefits by using such kinds of scheme. It helps organization to
retain and satisfy existing buyers and attract them towards products and services. On the other
hand, for getting competitive edge in the marketplace and other related forces corporation
introduced biggest discounter of Britain. It again increased attention of buyers and made them
purchase the products and services which are being offered by Tesco. In addition to this, loyalty
marketing facilitates management to bring innovation in the products and services for increasing
30

level of satisfaction among buyers. Similarly, company presented itself as the most innovative
and leading at the UK marketplace along with several other areas like Asia and Europe.
Theme 8: Loyalty marketing is the appropriate way for future growth of Tesco
According the collected data it can be said that loyalty marketing is the foremost way to
determine future growth of Tesco. In this regard corporation brought innovation in the
marketplace and changes its way to attract buyers. Similarly, effective way to reduce cost of
marketing have been introduced so as to save cost and increase profitability. Furthermore, with
the help of relationship or online marketing its has created good position in different
geographical areas. This is because use of social media and online availability of products and
services made it possible for Tesco to associate number of customers with its brand. With this
effect, corporation created goodwill in the marketplace and started to expand itself in the number
of areas. Furthermore, lucrative marketing strategies enhance demand of Tesco in several areas
and thereby it get opportunity to expand itself. This way organization has shifted its focus to
increase overall rate of return and reduce the cost of production. Owing to this, cost cutting has
been started by making changes in the supply policies and other related activities. In addition to
this, relationship marketing made it possible for company to create strong database for the
customers and accordingly it has made plan for the growth and success of the firm. However, the
plan was directly made in accordance with preferences of customers which aid to reduce
uncertainty and determine long run success of company in the marketplace. Apart from this,
future growth of firm is easily ensured with the help of good relation with customers. Here, it has
already been observed that company put active efforts to build long term relationship prospects
and covert them into regular customers.
Theme 9: Loyalty marketing has both negative and positive aspect for Tesco
According the secondary it has been revealed that Tesco's sales turnover was increased
by 5.96% to £21.8bn in the UK in 2010. It has found that corporation has outperformed market
performance which indicate overall good performance of firm in term of competitors and other
rivalries. At that time, the main motivate of company was to enhance the loyalty of customers by
helping them to spend less. Owing to this, it need to spend high expenses on implementing of
attractive strategies. Similarly, it has been found that company need to spend more than £500
million on Club card only in each year (NEWBERY, 2015). However, Tesco bank added near
31

about 200000 customer account during 2010 at the initial phase of loyalty marketing (Club card)
(TESCO, 2014).
It shows that organization need to incur high monetary as well as non-monetary cost of
the operation. It affects overall performance to a great extent. However, the negative review
assisted management to change the current policies and accordingly bring new plan so as to cater
need of customers in an effectual manner. Apart from this, non food sales of UK grest by 2.4%
to 4.4bn pound in 2010 (Customer loyalty boosts Tesco results, 2015). It depicts that loyalty card
scheme has positive impact on most of the buyers and they started to shift from other brands to
Tesco. Therefore, loyalty card scheme affected performance of Tesco both in negative and
positive manner and accordingly management of corporation took right action.
Theme 10: Tesco' loyalty program has long term goals rather than just immediate
gratification
According the collection of secondary data, it has been observed that loyalty card scheme
of Tesco play vital role in attracting customers. This is because company not only implement
such kind of strategies to attract customer but also value for their money by focusing on long
term goal. This is the reason behind growth and success of the firm. Furthermore, Tesco find
itself as the biggest retailer in term of number of customers just because of appropriate policies
and regulation for catering their need effectively.
It has also been found that management of Tesco focuses on long term goals like high
rate of return, well known position of the firm and to become leading corporation in term of
quality and high level of satisfaction among buyers. However, loyalty marketing is proposed to
increase attention of customers in the marketplace. But meanwhile corporation also shifted its
focus to deliver good quality of services to them and enhance their level of satisfaction.
Furthermore, this long term goals and plan makes it possible for corporation to bring innovation
in the marketplace with increased rate of return. Thus, loyalty marketing program of Tesco are
long term oriented which generally aim to increase customer base and increase overall rate of
return of the firm.
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CHAPTER 5: CONCLUSION AND RECOMMENDATION
5.1 Conclusion
Objectives 1: analysis loyalty card scheme used by the Tesco at UK
The entire study being carried out has supported in identifying the relationship between
loyalty card schemes and overall customer loaylty. Further, the entire range of loaylty schemes
introduced by Tesco in the market are effective and through this firm is able to satisfy need of its
target market. Clubcard scheme of Tesco is considered to be unique and it provides additional
benefits to target market and in turn customers prefer to become brand loyal towards the
company. Moreover, company like Tesco is operating in the market since past and its customer
base is also wide which is the real outcome of loyalty schemes. In short loyalty schemes of other
organizations are not at all effective. The scheme point of business has been generated for every
£5 spent by customers and organization provides benefit to company to convert Clubcard
vouchers in every quarter. Facility is granted to target market and they can redeem points at any
store of company. Due to this basic reason Clubcard scheme of Tesco is much more effective
and it has provided base to company in dealing with the issue of rise in competition level in the
market.
Various authors and experts have said that Tesco is operating in environment where large
number of challenges are present and through introduction of loyalty schemes firm is able to
comply with actual need and requirement of its target market. Additional discounts are provided
to customers on purchase of commodities which directly acts as source of attraction. Apart from
this, it is well known fact that cost of implementing loyalty scheme is high and company like
Tesco can easily afford introduction of such schemes. It has directly supported organization in
enhancing overall sales volume along with profitability. At present Tesco is considered as one of
the strongest retailer for attracting buyers in the market and 20 million customers are present
who are associated with Clubcard scheme.
Objectives 2: Effectiveness of club card system of Tesco as relationship marketing tool
All the loyalty schemes introduced by organization in the market provides value for
money experience to the target market which is beneficial for them in every possible manner.
Organization has introduced Clubcard boost which assist customers in doubling the value of
points especially at the time of occasions. Main advantage of this scheme involves biggest point
33

per pound offer, 4% discount, long expiry time etc. Main competitor of Tesco in the market is
Salisbury but firm is not able to operate efficiently as Clubcard scheme of Tesco is much more
better as compared with Sainsbury. Apart from this, in the modern era majority of the customers
prefer to buy commodities from company which is providing monetary benefits to them in the
form of discount etc. So, Tesco is effective and capable enough in meeting with actual
requirement of its target market. Time to time modifications are made in the schemes of
company so that more customers can be easily retained for longer period of time through this and
it is advantageous for firm also. Clubcard scheme of Tesco is effective relationship marketing
tool and this has enhanced awareness of product range in the market.
Objective 3: impact of loyalty card schemes on customer loyalty in Tesco at UK
Majority of the customers are purchasing products of company due to presence of
effective loyalty schemes and this has supported firm in gaining competitive advantage. Apart
from this customers only prefer to indulge into activities of repeat purchase if they are provided
additional benefits such as discounts and points on regular purchase. Further, it becomes easy for
enterprise to target new customers who may prefer to purchase competitors product. On the other
hand products sold by retail organizations are close substitute of each other and due to this
specific reason firm has to take support of loyalty schemes while targeting its customers.
Schemes introduced by management are capable enough of changing behaviour and overall
perception of target market which can be regarded as one of the major reason behind success of
company in the market. Due to presence of discount and other offers customers are spending
more on purchasing goods of company and this has enhanced overall performance of Tesco in
the market. Further, rise in prices of products also does not affects customers as they are
benefited through loyalty schemes which is favourable for business also. Therefore, company is
able to maintain long term relationship with its target market. On the other hand, loyalty schemes
of other organizations are not at all effective due to which companies are losing their market
share. Tesco is able to survive in the competitive market due to presence of effective loyalty
schemes and this is acting as an development tool. Apart from this various opportunities are
present in the business environment which company like Tesco is able to grab through this
stronger customer base. It is acting as an promotional tool and awareness is rapidly increasing in
the market in relation with products and services of Tesco. Customers of Tesco are having proper
34

knowledge regarding products of company and due to this basic reason demand for entire range
of products in the market is high. Furthermore, Tesco through the help of this Clubcard scheme
encouraging and influencing people to buy more and more products from the stores so that they
can contribute in enhancing business volume. However, the main purpose behind this loyalty
programme is that it will help the course of company at long term prospects rather than in
immediate gratification. Along with this, it focuses mainly on future growth as operating in such
a competitive environment it is important for Tesco to promote such loyalty programme so that
large number of audience can be attracted. Thus, it is essential for every organisation to develop
effective loyalty scheme so that they can retain loyal customers life time.
5.2 Recommendations
The completion of entire study reveals some of the key aspects where corporation need to
focus. However, Tesco adopt most effective methods for implementing innovative marketing
strategies in order to attract customer and to meet their expectations in an effectual manner.
There are some of the areas where management of Tesco need to work with actively so as to
bring improvement in the overall performance of corporation. These are explained as follows- Revise the schemes on right time- Under this Tesco should revise its loyalty marketing
plan on time to time. It can be dine by taking feedback from customers or staff members.
It facilitates to retain buyers and implement the right strategy on right time in the
marketplace. It helps to bring improvement in the current business environment and
boosts up productivity. Apart from this, existing scheme can be modified by focusing on
existing flaws and reviews from research and development department. Cope up with changing scenario-Tesco should modify its plan according the
competitor's strategy. This will help to boosts morale of customers and make them able to
take quick purchase decision. In this regard, marketing department of corporation need to
review policies and action of competitors like Sainsbury and Jown Lewis partnership.
This in turn prove to be effective for creating competitive edge and creating distinctive
image in the marketplace. Here, Tesco need to conduct competitors analysis for getting
in-depth knowledge about their strategies. It leads to revise the strategy accordingly so as
to increase profitability and productivity.
35

 Cost cutting-It is the most appropriate method to enhance the profitability of organization
in the marketplace. This is because company need to revise its plan and accordingly
modifications need to be made for ensuring optimum utilization of limited resources. In
addition to this, corporation need to follow the budget strictly so as to reduce the cost of
production. For example, it has been found that, Tesco needed to spend 500 million
pound for Club Card scheme which is too costly in term competitors. Thus, company
need to bring something new which is unique as well as innovative. Thus, it should not
merely focus on marketing of products and services but also need to adopt effective cost
cutting strategy. This will reduce the cost of production and meet the expectation of
number of customers or buyers. Reward scheme-Updated reward scheme need to be introduced in the marketplace by
which organization can increase the level of motivation. However, company already
adopt this strategy but up-to the certain extent. Owing to this, management need to
implement several attractive offers by assessing the needs of buyers. Here, survey can be
conducted to analyze the preferences of buyers in term of new reward scheme. It serves
as the guideline by which company can easily take decision related to its promotional
strategies. Along with that, reward scheme can also be implemented for employees after
achieve the set target. This will generate positive attitude among them and makes it
possible for them to contribute towards growth and success of corporation. Staff development-Under this, management of Tesco should pay attention of staff
members. It is because staff members are the only members who directly interact with
buyers and resolve their issues. This aspect makes it possible for corporation to influence
behavior, emotional and inner feelings of buyers. In this regard, customers need to be
provided training on right time thereby they can easily cope up with changing scenario
and work in the direction of growth and success of Tesco. In addition to this, reviews can
also be taken after providing training among staff members. It is the right way to
determine long run success of the firm with increased rate of return. Apart from this, staff
can be provided guidelines as per the motivation which leads cater need of customers in
an appropriate manner. Similarly, target should be made for providing training to
36

employees in accordance with feedback of customer. This leads to achieve the set
objectives and get competitive advantage.
Limitations and future research
The limitation in the present research can be related to collection of data. This is because
overall data are collected through number of secondary sources which consists of journals, books
and online material. Here, many of the sources were restricted to use. However prior information
was taken for the same but still it might be possible that some of the information remain left to
incorporate in the file. In addition to this, primary data are not collected for the study. Although,
it might be helpful to ensure inclusion of views and ideas of managers by collecting primary
data. But still, use of secondary information proved to be effective in creating strong database for
effectiveness of loyalty marketing in influencing customers.
Furthermore, research can be done in other sector like hospitality and automobile. It
facilitates to assess the impact of marketing strategies on organizational growth. Apart from this,
research can also be done to analyze the impact of internet marketing on motivation of
workforce. It aids to retain workforce for longer time span and increase the effectiveness as well
as efficiency of corporation.
37

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