Analyzing Zara's Customer Loyalty Through Reward Programs

This research project investigates the impact of reward schemes and promotional offers on customer loyalty, using Zara as a case study. The report begins with an overview of the study, outlining the research aims, objectives, and the rationale for examining customer loyalty in the context of Zara's business. A comprehensive literature review explores the significance of customer loyalty, the role of promotional offers, and their relationship. The methodology section details the research approach, design, data collection methods, and sampling techniques. The findings are presented, followed by conclusions and recommendations for Zara to enhance customer loyalty. The report also includes a reflective section and references to support the analysis. The study aims to understand how Zara's reward programs influence customer decision-making and provide insights for improving customer retention strategies. The research considers various aspects of customer loyalty toward Zara products, aiming to identify effective methods for attracting and satisfying customers through promotional offers and reward schemes. The project also addresses the limitations of the research and provides background information on Zara, highlighting its position as a major player in the clothing retail industry.

RESEARCH PROJECT

Table of Contents
CHAPTER1: INTRODUCTION.....................................................................................................1
1.1Overview of the study.................................................................................................................1
1.2 Research aims and objectives...........................................................................................1
1.5 Rationality of the study....................................................................................................2
1.6: Limitations of Research...................................................................................................2
1.7: Company background......................................................................................................2
1.8 Conclusion........................................................................................................................2
CHAPTER 2: LITERATURE REVIEW.........................................................................................3
2.1 Introduction......................................................................................................................3
2.2 Customer loyalty and its significance...............................................................................3
2.2 Promotional offers and customer loyalty.........................................................................4
2.3 Relationship between promotional offers and customer loyalty......................................6
2.4 Conclusion........................................................................................................................6
CHAPTER 3: RESEARCH METHODLOGY................................................................................7
1.1: Introduction.....................................................................................................................7
1.2: Research aims and objectives..........................................................................................7
1.4: Research philosophy:....................................................................................................8
1.5: Research approach...........................................................................................................9
1.6: Research Design:.........................................................................................................10
1.7: Data collection method:.................................................................................................10
1.8: Research method...........................................................................................................10
1.8 Sampling technique and size..........................................................................................11
1.9: Data Analysis................................................................................................................11
1.10 Research ethics.............................................................................................................11
1.11 Conclusion....................................................................................................................12
CHAPTER 4: DATA ANALYSIS AND FINDINGS...................................................................13
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................19
5.1 Conclusion......................................................................................................................19
5.2 Recommendations..........................................................................................................19
CHAPTER 6: REFLECTIVE........................................................................................................21

REFERENCES..............................................................................................................................22
APPENDIX....................................................................................................................................25

CHAPTER1: INTRODUCTION
Topic: To analyze the impact of reward schemes and promotional offers on customers loyalty:
A case study on ZARA
1.1Overview of the study
Customer loyalty and satisfaction is an important aspect of any business that is to be
considered by any company. They are contributing valuable contribution to there profitability. It
has been observed as customers are integral part of organisation because they are playing vital
role is fulfilment of objectives by using appropriate demand of products and services those are
being offered by company. Under this research project one of the major companies in clothing
sector is taken as to know about customer loyalty toward their products and how company is
going reward them form their services. Under this project research various aspect of customer
loyalty toward Zara company products are being discuses. It will help to improvise various tools
and techniques used by Zara to fulfil the needs and wants of the customers by providing various
products. Under this process various methods or attracting customer satisfaction toward brand
loyalty of Zara is being taken as important source. Further, going in research various sources of
data collection is being used to identify how demands of customers can be satisfied. The research
will shed light on the aspect of evaluating customer effectiveness through providing best quality
product to their regular customers.
1.2 Research aims and objectives
The main purpose of this project research is to know about customer loyalty toward other
brand and the product of Zara. In that respect is company is availing any kind of reward schemes
to attract more customers towards their brand. On the basis of such aim following objectives
have been drafted:
 To develop understanding about the concept of customer loyalty and its significance.
 To investigate the impact of reward schemes and promotional offers provided by ZARA
on customers decision making.
 To analyze the relationship between reward schemes and customer loyalty.
 To recommend the suitable ways to ZARA for enhancing customer loyalty.

1.5 Rationality of the study
The researcherare considered to identify the objectives of research project in the manner
in which research is going to be conducting. It is into consideration with regard as important in
nature when it contains various objective of research. It is valuable to know about rationality
behind conducting this kind of project as gaining customer attention toward their product. It is
conducted so as to evaluate effectiveness and thinking of customer perception toward Zara
company. A wide range of survey is being conducted in order to reduce literature gap those are
arises in customer point of views. It will help to identify its prospect customers those are more in
favour of company because they are attracting by offering various schemes and offers.
1.6: Limitations of Research
As this research is based on customer loyalty toward branded products and how they are
reward by the company. But because of limited resources in this project report is only those are
under control of researcher. They are said to be rely on shortcoming conditions those are
influences and restricted under chosen research project. There are various aspects which
includes:
 Formulation of research aims and objectives.
 Choice of data collection.
 Implementation of right data collection methods
1.7: Company background
In this research project one of the major clothing company is taken into consideration
known as Zara. It is founded in 1975 by Amancio Ortega. It is most known as one of the largest
apparel retailer.
1.8 Conclusion
In this section, it can be concluded that customer loyalty is one of the main aspects that
have significant impact on sales and profitability aspect of firm. Thus, scholar will analyze the
extent to which reward schemes positively contributes in ZARA’s customer loyalty.

CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
In literature review, scholar develops understanding about the topic or issue by making
evaluation of articles, books and related journals. Thus, in this, brief thesis has been prepared by
the researcher on customer loyalty reward or promotional schemes and associated relationship.
Such secondary data assessment has been undertaken by the researcher for analyzing the views
of respondents in an appropriate manner.
2.2 Customer loyalty and its significance
According to the views of Jeong, Cha and Jang (2016) customer loyalty is when individual
selects and purchase specific product over others. Hence, when customers stick to specific
supplier on certain aspects or basis then it is considered as loyalty. In the recent times, several
options are available in front of customers regarding making purchase of products or services.
Further, Hapsari and et.al., (2017) depicted that customer loyalty may be served as a both
attitudinal and behavioural tendency. It shows that when customer satisfies from the products or
services of specific retailer then they favour such brand to a great extent. Thus, customer loyalty
aspect shows the extent to which customers feel comfortable with the particular brand.
In accordance with Shaw and Hamilton (2016), customer loyalty enhances word of
mouth publicity to the significant level. The reason behind this satisfied people shares their
experiences with others and thereby influences their decision making. In this way, customer
loyalty aspect places positive impact on the sales and profitability aspect of firm. However, on
the critical note, Wang and et.al., (2016) mentioned that loyalty aspect does not help in making
appropriate forecast of demand. Loyalty is not only associated with the aspect of repeat purchase.
By giving positive comments about the product of specific brand and participating in any
campaign related to the same customers can show their loyalty. Thus, it is not possible for the
retailer to make clear and appropriate forecast about the sales aspect. Along with this, Russo and
et.al., (2016) found that customer loyalty helps in reducing the level of marketing and service
cost to the large extent. Hence, it enables firm to enhance brand image and eliminate the level of
competition significantly. Thus, business unit gets several benefits from customer loyalty in both
financial and non-financial terms.

2.2 Promotional offers and customer loyalty
Stathopoulou and Balabanis (2016) stated that sales promotion is one of the most effectual
tools of marketing communication which in turn helps in developing awareness among the
customers. In addition to this, promotional plans are highly significant which in turn closely
influences the decision making aspect of customers regarding purchase. Thus, it can be said that
promotional offers encourage individuals to stick with their desired brand. However, it is to be
critically evaluated by Bilgihan (2016) that promotional plans do not have significant impact on
the all type of customers come in the category of loyal. Moreover, loyal customers can be
distinguished into two types such as brand switcher and hard core loyal. Hence, hard core loyal
customers are the one who always ready to purchase product at both normal and premium price
level. Hence, promotional offers do not have significant impact on loyalty and purchasing
decision of customers. Hapsari and et.al., (2017) mentioned in their study that promotional plans
play a significant role in attracting or influencing the decision making aspect of brand switchers.
Moreover, brands switchers lay high level of emphasis on price at which products or services
offered. Thus, it can be presented that company can attract brand switchers by making focus on
promotional aspects.
The important aspect of choosing the consumer loyalty whether it will made an impact on
the growth and the productivity of the organisation. It will determine the consumer taste and
preferences towards the brand available in the market. The choice is in the hand of the consumer
that which brand has to be more effective and that will make them satisfy their needs and wants.
The decision are made on the basis of the services getting from the product . The proper
planning has to be done before making the categories of the related consumer of the particular
brand. The most important thing can be done by dividing the consumer into different segment on
the basis of the demographic situation (Ma and et. al., 2012). The gives the clear idea about the
income and the age group who are able to buy the services of the company.
The upper class of the consumer are pretty much brand conscious they can not switch
from the other easily but the middle class people are sometimes switch their brand. The major
problem is associated with the low class people who are not depend on the single brand they
always trying to go for the other brand. This will create difficulties for the team management to
maintain their customer for the single product the long period.
The factors influence the consumer loyalty is:

1. Convenience : The product that the consumer is buying has to be simply and convenience
in use.
2. Customer services: The loyal consumer are mostly rely on the type of the services they
are getting from the company has to be appropriate.
3. Individual relationship: The relation between the retailer and the supplier are made in
good manner so that the loyalty of the customer cant break in between.
Proposal for the consumer loyalty and reward
In the above research we have done a principle analysis on the factors that are
distinctions among the quality of the satisfaction, commitment and the loyalty of the consumer
towards the quality of the products.
The proposal is based on the certain points like :
1. Quality: The consumer looks first the type of brand they are going to use are to be
appropriate quality which help the company to maintain their loyal customer for the long
process. The impact of the business and the company goodwill is also depend on the
quality of the service(Matthews and Ross 2014).
2. Satisfaction: The another important that influence is the satisfaction from the product use
by the consumer. Is it able to meet the demand of the consumer or changes are required in
them.
3. Cost of switching: The research is based on how to manage the cost of losing the loyal
customer when they are going for the other brand by getting the more valuable facility
from the other brands (McNeill and et. al., 2012).
4. Trust: Another important point to be consider is about to maintain the trust of the
consumer for the particular brand in the minds . The loyal consumer are not easily switch
from the other brand.
5. Commitment: The commitment of the company for delivering better quality of the
product and the services to the consumer has to be followed properly.
On the basis of the above mentioned point the researcher can used to make the certain
change in their process of maintain the loyalty of the guest foe the longer period of the time. The
best way is to provide reward to them in the form of discount and the membership card which
they feel motivated and attracted toward the single brand in the next time when they using the
services of the same company.

2.3 Relationship between promotional offers and customer loyalty
By doing investigation, Jeong, Cha and Jang (2016) identified that both promotional offers
and customer loyalty are highly associated with each other. Moreover, promotional offers
encourage individuals such as brand switchers to make purchase of the similar brand and tend to
stick with it. Hence, promotional offers provide high level of assistance to the business
organization in retaining customers for long time frame. On the other side, Nyadzayo and
Khajehzadeh (2016) claimed that sometimes promotional offers place negative impact on
perception and viewpoints of hard core loyal customers. The rationale behind this, individuals
make comparison of price with the quality of products or service offered. Thus, when heavy
discounts are offered by the company then individuals consider the quality of product as cheap.
Further, Fathoni and Wulan (2016) argued that promotional offers helps company in enhancing
customer retention and thereby sales as well as profitability. Moreover, promotional plans offer
opportunity to the customers to make use of product or service repeatedly. In this way, by
providing customers with quality products or services company can enhance their satisfaction
and thereby would become able to get the desired level of outcome or success.
2.4 Conclusion
From the above assessment, it can be inferred that significant relationship takes place
between promotional offers and customer loyalty. It can be summarized from the literature
review section that customer loyalty aspect offers high level of benefits to the firm in terms of
high customer base, productivity and profitability.

CHAPTER 3: RESEARCH METHODLOGY
1.1: Introduction
The research project is all about consumer loyalty toward the product and services of the
company and reward schemes are actually suitable for them. It includes the various research
process and the factors associated in selecting the customer behaviour. The basic thing to seen in
this research that positive and the negative aspects of the consumer loyalty toward the each and
every business organisation. The methodologies chapter begun with aims and objectives those
are followed by various philosophy and consideration of various research approaches.
The project contains the research proposal about the consumer loyalty that how much
they are brand conscious and aware about the products of the company. This is the thing which
helps the company to retain the customer for the long period of time toward the common brand.
The organisation is the planning to make the use of the customer perception to attain the desire
result as output.
The next thing explains about the implementation of the research in the various event and
they provide relevant information of the collected data to take as the base of the project in
selecting the proposal for the business. The research is done through making the questionnaire
from the 20 respondents in the research data.
1.2: Research aims and objectives
The project Plan is about the customer loyalty towards the products and services they
used to purchase and will they are able to get rewards to their work performance. It also explain
about the brand they are going to use for their satisfaction and how they are beneficial for them.
If the customers are loyal to a particular brand then they are able to get rewards to their choice.
Such proposal contains the basis knowledge about the taste of the customers.
 To develop understanding about the concept of customer loyalty and its significance.
 To investigate the impact of reward schemes and promotional offers provided by ZARA
on customers decision making.
 To analyze the relationship between reward schemes and customer loyalty.
 To recommend the suitable ways to ZARA for enhancing customer loyalty.
1.3: Research process

The important outline of the research is began with the consumer loyalty toward the
product they are using of the various brand (Flick, 2015). The first of the main thing which must
be know to everyone is the consumer that an independent person who uses the services or goods
for the personal use. The utility of the consumer are made on the decision that they are able buy
that product or not.
The positive attachment and the physical attribute for the satisfaction which are
consistence under the experience creating loyalty in the minds of the company and the various
organisation. Loyalty is mostly depend on the attitude of the consumer in the favour of the one
brand which can satisfy the them. Their convenience and the performance of the products and the
comfort(Bell 2014) . To maintain the loyalty of the consumer they have to create a positive
relationship between the retailer and the supplier.
They must communicate with them regarding the specification of the products and the
services that are available of the different brand which can make then feel comfortable to use it
for the long period of the time. The reward or incentives can be provided to the regular customer
so that they can able to gain some point while shopping which make them value for the next time
when they able to purchase the product they have the option of the discount (Hesse-Biber, ed.,
2013) .
The most issues are seen toward the consumer while choosing the brand is the reward
system of the company are not appropriate which leads to the change of the minds of the
consumer towards the other brand. The retain the consumer they must have the option to offer
reward make them loyal toward their brand (Ma and et. al., 2012).
there are various types of research process that has to be followed:
1.4: Research philosophy:
The aim of this research is to be fulfilled through proper knowledge and skills and
growth contained by research philosophy. It includes various assumption about consumer
behaviour towards the product and services they are getting from the company. There are mainly
three ways which can be taken under this:
 Positivism: It is associated with real truth and faith that a consumer need to from other
side of the company regarding product they are offering to them. It can be identified
through survey and experiments about customer perception by applying quantitative
methods.

 Realism: It is a kind of challenge that is come in front of organisation that signifies
positivist and interpretive positions within social science. It provide huge opportunity to
have efficiency while conducting a research.
 Interpretative: Social reality is looks after manufacturing products of its nature that a
customer demand from the company. It is an important aspect of customer and the
company that hey experience in their daily course of activities. It includes people opinion
about their product.
 Justification: It is a kind of theoretical data about research aim and objectives that has
been explain earlier. It is done to linked reality with the current situations.
Factors determining the research project
There are various factors which influence the research project regarding the consumer
behaviour and the loyalty toward the products they are going to choose of a particular brand. It
can be classify into two parts: Qualitative research and the quantitative research.
Under the qualitative research the information is based on the observation, interviews and the
filling the questionnaire form from the consumer (Matthews and Ross, 2014).
The quantitative methods comprises of the past data of the consumer available with the
company that which one is to be target by the company to sale the product and their base loyalty
can also be judged at the same time.
1.5: Research approach
There are two approaches of research that includes deductive and inductive.
 Deductive approaches: Various theories are explained by deductive approach they are
base of study. It means that validity of research is tested and reviews accordingly. It is not
based on observation and experiences.
 Inductive approaches: It includes various analysis and that analysis collected through
reducing predictions and take it as hypotheses. It includes experiments, group project and
individual project results. It is based on past experiments.
 Justification: It can only be possible through differentiate these though by collecting
quantitative data from deductive and qualitative data from inductive approaches.
1.6: Research Design:
It is based on various research techniques which includes: