Buy essay online: TESCO CLUB CARD: IDENTIFY RELATIONSHIP BETWEEN CUSTOMER LOYALTY AND CUSTOMER SATISFACTION

. Data selection and analysis
This section presents the study developed to test for the proposed hypotheses.
While doing the research, we began with reviewing international studies in peer-reviewed scholarly journals and added the relevant questionnaire information to our survey. After that, we analyzed questionnaires in order to systematize the information from the customers of Tesco in the UK.
Qualitative method
The qualitative research is aimed to make a deeper and more meaningful conceptual understanding of the research about the loyalty program introduced by Tesco, according to the sources such as Tesco web sites, Tesco brochures, case study of Tesco, magazines, journals, news articles, interviews, thesis, information from internet, business news etc.
It is known that to attract new customers is very expensive, and to keep existing customers is very profitable. From year to year more and more companies realize this fact, and use a proliferation of ‘loyalty schemes’.
The organizations understand that customers satisfaction is the best and the main loyalty scheme. It can be possible by ‘doing best what matters most to customers’, using different bonus points, tokens and other loyalty schemes making only a little difference. The right way to satisfy the customer is to give the information that helps managers to make the right decisions in order to maximize client satisfaction and therefore improve client retention more.
The concept of loyalty can be considered from different points of view. In the case when we study changes in the behaviour of the buyer, it does not indicate the factors causing these changes, saying the transaction loyalty. Examples of numerical expressions of this type of loyalty is the share of buyers of their total number, which makes re-purchase, and share
gross revenue from these repeat purchases.
In the case when the primary loyalty is a subjective factor of expression of client’s satisfaction – it is a perceptional loyalty. And this kind of loyalty is more important and informative than the transactional loyalty, because it can help shape a loyalty program and find out customer opinions on the proposed product or service.
Numerical indicators of customer loyalty is the proportion of all buyers who are in the survey agree with statements like “I am fully satisfied with the goods of this brand” or “if this product is not in the store, I’m ready to go to another shop for the goods of this brand,” etc.
To determine more accurately the level of customer loyalty of Tesco loyalty programs we are using a combination of transactional and loyalty perceptional called integrated loyalty. In this case, a matrix of loyalty/satisfaction, reflecting both looks at this notion. Table 1 has information in the form of matrix.
Table1. Matrix “Loyalty / Satisfaction”
Satisfaction Low loyalty High loyalty
Numerous purchases at the store True loyalty False loyalty
Buying at the competitive store Hidden loyalty Lack of loyalty

As a result, we have received four types of loyalty. online
5.True loyalty. The customers are satisfied with Tesco store and buy goods there. This is the most stable part of the clientele that is not so sensitive to the competitors` actions (lower prices, the introduction of additional amenities, etc.)
6.False loyalty. The customer is not satisfied with the store, but he makes shopping there – for reasons not related to the emotional commitment to the brand, for example, due to seasonal or cumulative discounts, temporary unavailability of competitive brands, the high cost of transition to another shop, a lack of awareness about alternative proposals etc. These are buyers who will go to the competitors at the slightest changes in the market.
7.Hidden loyalties. The customers are satisfied with a shop (or, perhaps, appreciates it, focusing on advertising, image and recommendations), but does not make purchases there for whatever reasons (for example due to high prices or distance).
8.Lack of loyalty. The buyer is not satisfied with the store and do not shop there.
These are the factors of higher profitability of loyal customers, according to loyalty programs of Tesco. Thus loyal customers:
• Longer remain with the company
• Buy more
• Easier (cheaper) to maintain, because understand the procedure of service
• Less sensitive to price
• Provide oral recommendations
It is important to note not close connection between customer satisfaction and their behaviour (shopping). A satisfied customer does not necessarily make a purchase – only satisfaction is enough. Monitoring programs of satisfaction only ignore the behavioural aspect and as a result – lead to incorrect conclusions about what must change in marketing strategy and tactics of the company.
In statistical models of relationship between satisfaction and consumer behaviour associated with the re-purchase does not exceed 30% and is usually at the level of 10-20%, which is extremely small.
Investigation of relationships between loyalty and level of repeat purchases shows that the relationship of these variables is typically 60-80%. This suggests that there is little to achieve customer satisfaction – to try to tie him to her as a loyal (and not just satisfaction) the consumer is likely to come to us once again that the evidence in favour of the effectiveness of
loyalty programs as a tool for customer retention.

While carrying out the literature review it was noticed that there was a recognition and admiration for the Tesco Clubcard scheme. But, despite such positive praise there feels the lack of proof that it has really a created loyalty. Humby and Hunt (2004, pg 17) don’t agree that it should be said that card‐based customer reward programs are credible alternatives because they offer the best service, advanced products and services or the best price. All these facts can develop loyalty in customers. A big part of the literature argues that loyalty is developed and influenced by some other factors such as price, coupons, location, staff assistance, various coupons and range of products.
Tesco has been attentive to all these factors and the requirements of their clients, so they implemented of the mentioned above strategies and additionally they provided the Clubcard customer reward program. Hence, there is a need of primary research in order to determine and establish if the Clubcard has really influenced the creation of loyalty. If it actually has, so there is a need to determine the factors that made the customers loyal towards Tesco; whether it was the customer reward program or actually the Clubcard brand itself?
There is the opinion that Tesco provided the Clubcard as a kind of reward “thank you” to their clients and it is “designed to give you something back for shopping with Tesco” (www.tesco.com).
Nevertheless, it means that customers can be less interested and attentive to rewards, but instead be more interested in being appreciated and recognized by Tesco. The point that is discussed here is that Tesco communicates with its clients using the specific magazine topics or quarterly mailings.
The program of customer reward that is currently implemented by the company is called the Clubcard model. It isn’t unique with Seth and Randall (2001, pg 39) mentioning that Tesco “did not invent the card nor were they a first mover”.
Additionally the research showed that clients have used to expect some kind of reward in their previous routine shopping activity (Parker and Worthington, 2000, pg 491).
After the conduction of literature review, there were was a feeling that some other objectives were not solved also. It means that the objectives of current research are:
1) Study client opinions and perception on the Tesco Clubcard; make analyse of customer’s opinions and mind set.
2) Assess and analyze the effectiveness of how the obtained information from the Tesco Clubcard is used.
3) Find out and identify the top customers of the Tesco Clubcard Scheme.
4) Determine if the Tesco Clubcard has actually created loyalty and ascertain what customers are loyal towards.
5) Identify if the Tesco Clubcard is actually required, provided the number of loyalty initiatives currently employed by Tesco to provide client satisfaction.
The questions mentioned above will be thoroughly studied in quantitative research. Analyzing the methodology research, it becomes vivid that there are some points and areas that need to be studied. It required the analysis to be separated into several sections in order to achieve every single objective.