The Role of Loyalty Scheme in Selling Directly to the Customer in the Case of Tesco - Research Paper Example

Research Proposal The role of Loyalty Scheme in selling directly to the customer – The Case of Tesco Table of Contents Introduction 2 Research Objectives 2 Literature Review 3 Methodology 4 Timescale 5 Conclusion 5 References 6 Introduction Over the past decade organizations throughout the world have come up with several innovative ideas in order to attract more number of customers and increase the sales volume. Introduction of loyalty scheme is one of such effective innovative strategies. UK based Tesco which is one of the largest companies in the global supermarket industry has been greatly relying on its loyalty scheme over the years. Considering the success of Tesco and other companies that are using various loyalty schemes, it can be assumed that such schemes play crucial part in determining the sales of the companies’ products. This paper includes the proposal of the research on the topic - “The role of Loyalty Scheme in selling directly to the customer – The Case of Tesco”. Over the past few years researches have been conducted on loyalty programs but very few of them are ‘company specific’ and that is why this research is worth conducting. The proposal includes the overall structure of the actual research. A clear picture can be obtained regarding the main objectives of the research, the method of data collection and the literature review from this proposal. Research Objectives The prime objective of this research is to identify the role of ‘customer loyalty schemes’ in the process of selling the products and services directly to the target customers. The main research questions as well as the objectives are presented below. 1. What is the role of loyalty schemes in selling the products directly to the customers? 2. How Tesco has used loyalty programs to sell its products and services? 3. How effective are the loyalty schemes over the other marketing tools in increasing the sales? Based on these three main questions three main objectives of this research are developed and these are – 1. Identifying the impact or influence of loyalty schemes while selling the products directly to the target customers. 2. Identifying the loyalty schemes that are introduced by Tesco and analyzing the strategies that are adopted by the company while using the schemes in selling the products. 3. Identifying the other marketing tools that can be used as alternatives of loyalty schemes and comparing the effectiveness of them. Answers of the three major research questions are likely to meet the above mentioned objectives to a great extent. The entire research process including the search for literature and collection of primary data will be carried out keeping these three questions and objectives in mind. Literature Review Literature review will be the backbone of this research. It will be containing the theoretical aspects of the subject. The focus of this section will be on the main theories behind the emergence of loyalty programs. The literature regarding the history and background of several of such programs will be properly identified and explained in this section. The section will also include the description regarding the way in which consumer behavior is influenced by the loyalty schemes. A preliminary study shows that the loyalty schemes have been very effective during the last two-three years especially during the period of recession (Marketing Clout, 2010). They have helped the organizations in retaining their key customers and thereby improving the brand equity. Over the past decade retail industry in UK has become more competitive. Major players now, look for innovative strategies regarding relationship marketing for increasing their sales and maintaining the existing customer base (Stone, M. et al. 2003). Loyalty schemes are actually the result of intense competition among the retailers. This research will try to find out the theoretical aspect behind such outcomes. Furthermore, many consider loyalty schemes as the tool of direct marketing or relationship marketing. Literature regarding these two aspects will also be searched. The relationship between the brand image and loyalty schemes will be explained in the literature review section. The data required regarding the literature will be collected from various secondary sources like books, journal articles and research papers that are prepared in the past. Both physical and online libraries will be used for accessing these sources. Considering the nature of the data, qualitative analysis will be conducted. Methodology The entire research process will be conducted by following a properly defined method. It starts with the defining the research objectives which are already mentioned earlier. The second most important part is the data collection. Primary data will be gathered by conducting focus-group interview. As per Lederman, a focus group interview is “a technique involving the use of in-depth group interviews in which participants are selected because they are a purposive and ‘focused’ on a given topic” (Rabiee, 2004). ‘Focus groups’ are likely to provide information regarding different subject matters. In case of this research interviews will be conducted of both consumers as well as the employees of Tesco. A proper questionnaire will be developed. The sample size will be limited to 20-25 as anything more than this will require more time and cost. Basically primary research is costlier and more time taking as compared to secondary research (Kelly, n.d.). Once, the data collection process is completed analysis process will be started. In this process data will be properly analyzed so that the three main research objectives are appropriately attained. As far as the research design goes, this research will be a ‘deductive’ type of research. According to Hussey a deductive research is “a study in which a conceptual and theoretical structure is developed which is then tested by empirical observation; thus particular instances are deducted from general influences” (University of Pretoria, n.d.). Timescale Each and every research must be completed within the previously defined deadline. This research has to be completed within the next six months. During the first two months all the secondary research will be done for preparing the literature review. Primary research that will include focus group interview will be completed in the next two months. Rest of the time will be spent for analyzing the data and preparing the research reports. Conclusion This research proposal is developed with the objective of providing a clear overview regarding the actual research that will be carried out very soon. Three major research questions along with the objectives are properly defined in this proposal. The literature searching process in the actual research will involve secondary research. Literatures regarding loyalty schemes and related aspects of marketing and branding will be mainly searched from various books and journals. Focus group interview will be conducted for gathering the primary data. References Kelly, M. No Date, Primary and Secondary Data, McKinnon Secondary College, [Online] Available at: http://www.mckinnonsc.vic.edu.au/vceit/infodata/primarysecondary.htm [Accessed on June 6, 2011] Marketing Clout, 2010, Marketing News: Loyalty schemes prove to be recession busters and position firms for the upturn, [online] Available at: http://www.marketinguk.co.uk/Direct-Marketing/Loyalty-schemes-prove-to-be-recession-busters-and-position-firms-for-the-upturn.asp Accessed on June 6, 2011. Rabiee, F. 2004, Focus-group interview and data analysis, University of Central England, [online] Available at: http://journals.cambridge.org/download.php?file=%2FPNS%2FPNS63_04%2FS0029665104000874a.pdf&code=bed44b7adb29a0520e528452fc6608c7 [Accessed on June 6, 2011]. Stone, M. et al. 2003, The Effect of Retail Customer Loyalty Schemes, Alternative Minds, [online] Available at: http://www.alternativeminds.co.uk/DG1.pdf [Accessed on June 6, 2011]. University of Pretoria, No Date, Deductive / Inductive, Research methodology, [Online] Available at: http://upetd.up.ac.za/thesis/available/etd-07302006-065725/unrestricted/05chapter5.pdf [Accessed on June 6, 2011] Read More