Loyalty Programmes in Hotels - Essay Example

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This paper begins with a literature review, which discusses the concept of loyalty, why it is important, how loyalty programmes are designed and what factors impact their success and failure. This is followed by the final section on conclusion and recommendations…
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Loyalty Programmes in Hotels
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Download file to see previous pages This research attempts to achieve an insight into the value of loyalty programmes to businesses and more specifically examine the value of loyalty programmes to hotels. Review of secondary data is applied to understand the value of loyalty programmes to businesses while a survey among hotels is conducted to examine its value to the hotels. Loyalty Programmes are defined as “schemes offering delayed, accumulating economic benefits to consumers who buy the brand”. Satisfaction does not equal loyalty. A customer can be very satisfied with the product, but still be not loyal towards it. In order to encourage loyalty, firms develop loyalty programs. Typically, in a Loyalty Program, customers accumulate assets, points or rewards by accumulating their purchases from a local firm which is either exchanged for goods or the services, though not always associated with the firm. This generally adopts the system of points wherein the points can be exchanged for a variety of benefits such as free flyer points, gifts, trips, etc. “Airline frequent-flier programs have been a prototype for many of the schemes”. Such schemes are based on the concept of repeat purchase, and in most businesses today, a large part of sales results from repeat purchase. This fact is being increasingly recognized by enterprises that are implementing loyalty programmes to encourage such purchase pattern. ...
The literature in general helped in understanding various factors and concepts associated with loyalty programme and then those had to be applied to the hotel industry for the research. 34
3.4 Research Approach 36
3.5 Research Strategy 38
3.6 Sample selection 41
3.6.1 Administering the questionnaire 41
3.6.2 Analyzing the responses 43
3.7 Time Horizon 43
3.9.1 Reliability 47
3.9.2 Validity 48
Limitations 49
50
Ethical Considerations 50
4. Analysis and Discussion of Findings 51
4.1 Hotels' definition of loyal customers 52
4.2 Reason for launching loyalty programme 53
4.3 Target segment and benefits offered 55
4.4 Designing loyalty program for corporate segment 58
4.5 Loyalty programmes that attract maximum guests and justify expenses 59
4.6 Objective of loyalty programs 61
4.7 Managing loyalty programme 63
4.8 Delivery mechanism 64
4.9 Involving staff 65
4.10 Assessing the success of loyalty programme 66
4.11 Failure of loyalty programme 70
5. Recommendations 72



Introduction
Brief overview and background

This research attempts to achieve an insight into the value of loyalty programmes to businesses and more specifically examine the value of loyalty programmes to hotels. Review of secondary data is applied to understand the value of loyalty programmes to businesses while a survey among hotels is conducted to examine its value to the hotels.
Loyalty Programmes are defined as "schemes offering delayed, accumulating economic benefits to consumers who buy the brand". Satisfaction does not equal loyalty. A customer can be very satisfied with the product, but still be not loyal towards it (Charles and Lamb, 2008).In order to encourage loyalty, firms ...Download file to see next pagesRead More
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