Custom essays on TESCO CLUB CARD: IDENTIFY RELATIONSHIP BETWEEN CUSTOMER LOYALTY AND CUSTOMER SATISFACTION

Aims and objectives
The aim of the work is to examine the concept of loyalty in retail make a research and identify the relationship between customer loyalty and customer satisfaction.
The aim is to determine customer loyalty, as well as the formation method of analysis of indicators of satisfaction and loyalty to making effective management decisions to implement the strategy. In keeping with the purpose of the study makes the following objectives:
1) To analyse and define the concept of loyalty, programs of loyalty.
2) To identify the relationship between customer loyalty and customer satisfaction.
3) To analyse the role of loyalty programs in creating customers loyalty and satisfaction.
4) Evaluate the loyalty marketing of TESCO and evaluate the importance of loyalty programs in it’s success.
5) To evaluate the importance of loyalty marketing in retail firm’s overall business strategy.
6) Give recommendation based on the research.

Rationale

In recent years, many firms in UK and other countries choose improved customer satisfaction and loyalty as part of their marketing strategy. As part of this strategy they began to engage in monitoring customer satisfaction and customer loyalty, introduce a system CRM (customer relationship management), conduct surveys of consumers. But often organizations do not set up to monitor customer satisfaction and loyalty of an individual control system, which would have been an integral part of their management, company do not attach much importance to how the results of monitoring customer satisfaction and loyalty fit into an existing firm in the method of decision-making in the first place – strategic . As a result, the monitoring system of satisfaction and loyalty, as well as analysis of the results, may not be able to provide management with information that is vital for the formation and implementation of the strategy. A system of monitoring customer satisfaction and loyalty is gradually losing its importance if does not become part of the organization.

Nevertheless, some aspects remain unexplored. Among them – the construction of an integrated process control system monitoring the satisfaction and loyalty (which is an integral part of the overall process of the company), as well as the choice of the reference limit (the threshold of response), which would permit taking into account the variability of responses to determine when a customer is dissatisfied (or disloyal), and the discontent caused by the special, non-systemic factors, which should be immediately addressed. This work aims to develop such a methodology.
All this provides the relevance of the topic chosen for any company interested in establishing a system of monitoring customer satisfaction and customer loyalty and obtain scientific data from consumers for managerial decision making both strategic and tactical plan.

 
Theoretical background
Loyalty program – is a marketing tool, aimed at optimizing the relationship with
customers. Loyalty means “faithfulness”, thus, speaking of loyalty, we are talking about their
commitment and loyalty to particular product or brand. The program of customers loyalty demonstrate firms desire to do everything possible to bring to customers these
feelings.
To achieve loyalty, ensure the financial interest of consumers in cooperation with the organization and its positive emotional perception of the company, loyalty program must contain both tangible and intangible benefits for consumers. Customer loyalty programs are a systems of rewards and incentives aimed at further customer relationships with the company based on emotional satisfaction of a customer of the buying process, and the services provided. This special relationship is expressed primarily in the buyer’s commitment
to the intangible, emotional features of the purchase.
The successful loyalty program is based on a deep and personal knowledge of customers to be able to do them the right offer at the right time, with the right price and on the correct channel. It is direct marketing that is the mechanism by which to ensure control over the system of relationships with customers of the enterprise.
The most famous and most popular tool for loyalty programs is a discount program that provide customer benefits in the form of return of the paid-up value of the goods
directly in the time of purchase. The second, also quite common variant – is a lottery among the buyers who have made some purchases in a given period of time. And even if the prize is not quite need thing, all the same emotions about the prize leave a positive impression of the company. Another variant, that is recently gaining more popularity – the cumulative discount programs. The benefit directly depends on the customer: the more often and more valuable purchases he makes, the more benefit he receives. And the fourth type is the bonus program, when the customer gets some conventional points while shopping, and having a certain number of which he is entitled to exchange them for goods or services.
Also important indicators of customer loyalty programs are gift certificates in the form of a plastic card. This version is much more practical and presentable than usual, the paper certificate. Such a loyalty program is used by customers of Tesco supermarkets.
Limitations
A limitation of this study is that an actual behavior of consumers is not measured. This would make the study richer and provide a further test of the relation between customers loyalty and satisfaction. Nevertheless, the focus of this study is on the relation between determinants of loyalty and satisfaction of customers. Understanding this aspect of loyalty is important as many academics and practitioners use customer forecasts and not actual behavior to measure loyalty, draw conclusions, and make decisions.
The second limitation comes from the sample, both in terms of the small sample size as well as the population. The hypotheses would need to be tested using a broader population and a bigger sample. Nevertheless, as the effects are found within such a small group, it is proposed that they are also present in the broader population.
Another important limitation is that only switching behavior was studied. Zeithaml 1996) have proposed that in order to gain the full picture of relevant factors in customer relationship management, one needs to study a broader set of behaviors: such as positive and a negative word of mouth, complaining, cross, and up-selling. In addition to this, effects of other determinants of loyalty would need to be explored, such as value for money, quality, cost, length of relationship, and customer characteristics (e.g. gender or age).