Loyalty card and customer loyalty: case study of Tesco in UK - Dissertation Example

?Loyalty card and loyalty: case study of Tesco in UK (Alder shot location) Table of Contents CHAPTER THREE 3 Research and methodology 3 CHAPTER FOUR: Findings and Analysis 6 CHAPTER FIVE: Conclusions and Recommendation 12 Reference 13 Bibliography 13 Appendix 14 Questionnaire 14 CHAPTER THREE Research and methodology 3.1 Introduction The research and methodology of the project is mainly concerned with the technique and tools used for conducting the research from data collection to understand the behaviour and attitude of the people on the loyalty cards and finding the loyal customers of TESCO in UK. 3.2 Research Approach Research approaches can be of two types- Deductive and Inductive research. Deductive approach is view of relationship with the research and the theory of the study. With proper understanding of the situation the researcher deduces the hypothesis which then is tested with the theory to find its appropriateness. The data should also be collected according to the need of the test and find the analysis from it (Bryman, Bell, 2007, p. 11). On the other hand Inductive research is collecting data and drawing the hypothesis from the data without understanding of the predefined theory or study. Just based on the research data the analysis is done in this kind of research technique (Steinberg, Steinberg, 2006, p. 52). In this research study for TESCO deductive research approach as been taken with testing from the data collected from the questionnaire survey conducted during the study. 3.3 Research Design Research design is the technique of bridging the gap between that study conducted and the performance of the research through proper planning and strategic approach towards the study. Research design can be of two different types- Exploratory and Descriptive research (NewYork University, n.d., p.1). 3.4.1 Exploratory Research The exploratory research emphasizes on ideas and insights of the discovery. For example the decline in sale of a company can be due to various reasons. Exploratory research examines the individual causes of the problems and identifies the problem (Hester, 1996, p. 36). 3.4.2 Description Research Descriptive research is concerned with describing the behaviour accurately. The primary objective of conducting descriptive research is to measure and record the variables of the survey accurately by using representative sample collected (Mitchell, Jolley, 2009, p. 250). In the dissertation the main objective is to find the effectiveness of the customer loyalty card of Tesco at UK (Aldershot location). In this research exploratory research was conducted to understand the effectiveness from the response of the customers about the club cards of Tesco. The research consists of both open and close end questions for the survey questionnaire. 3.5 Data Collection The raw data collected during the survey was collected on questionnaire to find the raw data to analyse the behavioural attitude of the customer. The interview was conducted at UK Aldershot locations and the questionnaire designed consists of nine questions which were filled by the field surveyor. The selection of question in the survey questionnaire is one of the vey important tasks to be performed before the survey conducted. The questions give a direction to the survey. After selection of question finding the source of data is very essential. Improper source will not serve the purpose of the report (Tobey, 2007, p. 4). This research program has been conducted with both Primary and Secondly research techniques. The primary research through questionnaire survey depicts the attitude of the customers of Tesco and the secondary research is conducted from different newspaper, books, website and articles on related items. 3.6 Sampling Plan The main focus of the research is to understand the effectiveness of the loyalty card from Tesco at UK Aldershot location. Thus focus is primarily rendered over the UK customers of different demographic sets like income and occupation patterns. While selecting the target group of sample population the questionnaire is kept in mind to understand the customer behaviour and attitude of the group which represents the whole population at Aldershot location. Based on that interview the finding and analysis is done at later stage. The sample sizes selected during the course consist of 30 customers with different income level and occupation who are willing to or use loyalty card of different shops including Tesco club cards. The sample population helps to great extent to understand the consumer behaviour on the loyalty card and the influence of loyalty from Tesco on the mind of the customers. Selecting a large sample size should have reduced the probability of mistakes and enhance the quality of the project but due to time constraints sample size of 30 was taken to represent the total population at UK Aldershot for research finding process. 3.7 Research instrument Questionnaire is the main research instrument used for this research. The questions designed for this research is mainly focused towards the behaviour of the customers for the club cards of Tesco. Finding the answers from the customers with different forms of open and close ended questions will depict the attitude of the people for the cards and help the company to improve their services for the customers with modification or more innovations on the particular needs of the customers. The survey was conducted by randomly surveying 30 customers at UK Aldershot location during the month of May 2011. 3.8 Validity and Reliability The validity of the research can be divided into two main categories i.e. the internal and external validity. The internal validity of the research is very authentic as the sample customer selected for the research are from the UK Aldershot region and also of different income group which will help to understand the consumer behaviour of the location to great extent. But on the other hand the external validity cannot be confirmed by the behaviour of the sample. With different income level, living pattern and different life style at different parts of the world the data collected is not applicable for all groups at different regions. Reliability is a major threat to validity of the research. Getting the same result over time on every survey conducted is not always possible for many researches (Handley, n.d., p. 1). With time the behaviour of the customers and attitude also changes which increases the risk of reliability of the research survey. The changes in loyalty card schemes can also affect the reliability of the research. CHAPTER FOUR: Findings and Analysis Introduction The findings and analysis section consists of the data result from the questionnaire survey conducted on customer loyalty for the company. The responses of the 30 customers who are interviewed are represented with various statistical tools like pie chart and bar graph. The behavioural attitude of the people can be understood from the responses of the small sample group used for the survey report. The responses of the customers are given below- Do you hold any reward card from any company? From the response of the 30 customers who were interviewed during the survey process it was found that most of the customers at UK Aldershot location are loyalty card holders. Around 70 percent of the interviewed people are holding loyalty cards of different companies. Thus loyalty cards are in good demand amongst the customers from different companies with their different schemes which people are likely to avail for their shopping and different purposes. This gives Tesco good potential to promote loyalty club cards amongst the Tesco visitors. Do you have any card other than Tesco club cards? About 55 % of the interviewed people possess loyalty cards from other companies. Tesco and many other companies provide loyalty club cards on purchase of different goods from their shops. With every purchase the company offers reward points which are utilized by the customers for farther purchase with discounts. These schemes are very competitive from different companies in the market. Customers who are brand loyal are more interested in buying goods from Tesco only but many customers are visiting different companies for their goods and are more interested in price sensitivity factor of the market. Getting lower price from other companies is main reason for possessing cards from different companies in the competitive market. Do Tesco provide good schemes with Loyalty club cards? Most of the responses from the customer in this regard are positive. The company provides great schemes on different purchases and the customers are able to earn points from it. Adding to it the choice of redemption with different club cards like different range of leisure and allied outlets gives great advantage for the company to attract the customers for the purchase. The customers are interested in buying goods and use the reward points on different purchases or on holidays with family and also leisure time with friends at bars. These diversified schemes of Tesco with the allied companies keep it ahead in the race in the competitive environment. Do you face any problem with the club card redemption from Tesco? The response on the redemption technique of Tesco is very favorable for the company. The different technique used by the company is very effective for the customer. The online presence of the redemption facility facilitates the process of redemption for many customers who use the redemption points for online holiday booking and health care etc. The rewards points are used by the customers at ease at different outlets of the company for farther purchases from the company. The reward points earned by the customer on purchases in most of the cases are used for repeated purchase from the stores of Tesco in the mainstream products. Do you feel loyalty card influence customer decision? Customer purchase decision is highly influenced by loyalty cards provided by the company. From the survey conducted amongst 30 customers around 30 percent of the customers do not agree with this point but around 70 percent of the people went to Tesco because of the schemes available from Tesco Club cards. The loyalty cards gives great discount for the customers on different items and influences the purchase decision to great extent increasing the market share for the company. With repeated purchases from the customers the company induces the process of buying products from the company. With the chance to use reward points customers spend even more for next purchases in turn increasing profit margin for the company. Do loyalty club cards add value to the brand for any company? In this context text the response from different customers are in equal ratio. Around 50 percent of the customers think it adds value for the brands. But other believes it’s just a strategy to sell products faster. According to some the loyalty club cards from Tesco helps the company to keep in direct contact with the customers. It helps the company to understand the behavior of the customers and implement new promotional campaigns according to the need of the market. Thus customers get a feel of attachment with the company and increasing the brand value. But on the other hand many feels it’s just because of the promotional schemes from the company they are attracted towards the company. Are you aware of the online presence of the loyalty cards redemption schemes provided by Tesco? With the advancement of technology every company is implementing strategies to reach to the customers with more ease and have greater reach worldwide. Tesco also implemented this strategy to reach to the customer with their online presence and giving the flexibility for the customers to redeem their points on different offers provided by the company. But from the response of the interviewed people it can e said that the company is not promoting its services in an effective manner. Around 60 percent of the samples are not aware of the online presence of loyalty card redemption technique in spite of being technically much upgraded than many more country in the world. Promotional campaigns should be conducted by Tesco to make people aware of the different services they provide for the customers. Do you think that customer loyalty cards increase store visits? In this context the response of the customers are almost in equal ratio. Around 49 % of the customers interviewed responded that they visit Tesco for the quality and service provided by the company. Customer loyalty card is not the main reason for their visit. On the other hand around 51 % of the customer responded that it’s because of the price the company offers with the loyalty card is the main reason for the visit. It can be concluded from the response that loyalty cards are more popular amongst the price sensitive customers than on the customers who are looking for quality only. Will you visit store for Customer loyalty card or for the brand you prefer? Customer loyalty cards help the customers to get discounts on the purchases. Price sensitive customers are not much interested in building brand loyalty. Rather getting lower prices is the primary objective of possessing loyalty cards. But on the other hand Brand loyal customers are not much interested in buying products at lower cost. They are more into quality products. Getting quality products is the most important factor for this segment of customers. CHAPTER FIVE: Conclusions and Recommendation Tesco club cards are very popular amongst the people of UK, Alder shot location. But from the survey conducted to find the behavioral attitude of the customer towards the loyalty cards it was found that there are mixed responses from the customers regarding the club card provided by the company. Many customers are influenced by the cards’ schemes and purchase goods and avail different services from the company. The redemption techniques of the company are very useful and effective for the customers to use the cards. From the study we can see huge percentage of customers use loyalty cards because of the schemes only. Very few think that it’s an effective weapon for building loyalty customers to the company. The price sensitive customers are more interested in using loyalty cards for the discounts they can avail on purchase on future purchases while the brand loyal customers are more interested in quality rather than price. To maintain the brand loyal customers the company should maintain its quality of products. From the survey it is seen that only the price sensitive customers are more interested in using club cards from the company. To attract more customers who are more price sensitive the company should introduce price discount scheme instead of reward points and the company should also promote its online transaction facility for the reward points so that more and more customers are attracted towards the ease of transaction facility provided by Tesco. Reference Bryman, A., Bell, E., (2007). Business research methods. Oxford University Press. Handley, C. (No date). Validity and Reliability in Research. [Pdf]. Available at: http://www.natco1.org/research/files/Validity-ReliabilityResearchArticle_000.pdf. [Accessed on August 2nd 2011]. Hester, E. (1996). Successful marketing research: the complete guide to getting and using essential information about your customers and competitors. John Wiley and Sons. Mitchell, M., Jolley, J. (2009). Research Design Explained. Cengage Learning. NewYork University. (No date). WHAT IS RESEARCH DESIGN?. [Pdf]. Available at: http://www.nyu.edu/classes/bkg/methods/005847ch1.pdf. [Accessed on July 31st 2011]. Steinberg, S., Steinberg, S. (2006). GIS: geographic information systems for the social sciences : investigating space and place. SAGE. Tobey, D. (2007). Data Collection for Needs Assessment. American Society for Training and Development. Bibliography Blythe, J. (2006). Principles & practice of marketing. Cengage Learning EMEA. Humby, C., Hunt, T., Philips, T. (2007). Scoring points: how Tesco continues to win customer loyalty. Kogan Page Publishers. Jobber, D. (2009). Foundations Of Marketing 2E. Tata McGraw-Hill Education. Johansen, B., Johansen, R. (2007). Get there early: sensing the future to compete in the present. Berrett-Koehler Publishers. Appendix Questionnaire 1. Do you hold any reward card from any company? Yes / No 2. Do you have any card other than Tesco club cards? Yes / No 3. Do Tesco provide good schemes with Loyalty club cards? Yes / No 4. Do you face any problem with the club card redemption from Tesco? ------------------------------------------------------------------- 5. Do you feel loyalty card influence customer decision? Yes / No 6. Do loyalty club cards add value to the brand for any company? Yes / No 7. Are you aware of the online presence of the loyalty cards redemption schemes provided by Tesco? Yes / No 8. Do you think that customer loyalty cards increase store visits? Yes / No 9. Will you visit store for Customer loyalty card or for the brand you prefer? ------------------------------------------------------------------ Date: Signature Read More