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Blekinge Institute of Technology
The accuracy of customer reward program as loyalty marketing tool
Supervisor: Anders Hederstierna
Thesis for the Master’s degree in Business Administration Fall/Spring 2008
Relationship marketing is perceived as a leading trend in marketing and twenty‐first century consumers have evolved into becoming ‘increasingly promotion‐literate’ (Harlow, 1997 cited in Egan 2001, pg 381). The knock on effect of this is a decrease in reliance on traditional and most frequently used methods for building customer relationships. For over a decade, supermarkets have transformed the shopping experience through the creation of out of town locations which can accommodate the development of considerable sized outlets, extensive product ranges expanding beyond food. Offering a wide range of services one would not normally associate with a supermarket such as telecommunications, finance and insurance, and with this the additional incentive of customers collecting and redeeming points through customer loyalty programs. Categorically today Tesco is not only the UK’s largest grocer, but also the world’s most successful internet supermarket (Humby and Hunt, 2004, pg 1). The Tesco Clubcard is widely considered to be a pioneer and success story in loyalty marketing, helping to propel Tesco to be the number one supermarket retailer in the UK (Tapp, 2005, pg 176). By carrying out a literature review on previously published materials and the use of a quantitative survey, this study aims to uncover and identify the value of the Clubcard scheme and how significant it is it in creating true customer loyalty to Tesco.
The findings of the study revealed consumers place greater importance upon store location, value for money and product range rather than loyalty card schemes, in‐ store magazines and vouchers. The results revealed that although respondents aspired to gain points and redeem the rewards offer by the Tesco Clubcard, they also showed that today’s consumer is more in touch and has a greater knowledge of the schemes and as such consumers tastes, perceptions, attitudes and demands have 1
evolved. Furthermore, it was revealed that consumers are effectively manipulating suppliers to their own ends as the findings exposed that consumers are shopping around for the best deals and they own and actively use more than one loyalty card. The primary research revealed the failure to evolve the Tesco Clubcard scheme into what today’s consumer demand has brought the Clubcard proposal to a unique crossroad. It is recommended that the Clubcard model evolves to adapt to the new tastes, attitudes and demands of the new generation of consumers. An understanding of the 21st century consumers will help ensure a loyal customer base. Areas such as lowering prices shall help sustain a competitive advantage within the supermarket industry. Further consideration should be given to giving customers an instant rebate at the point and time of sale rather than rewarding them through the collection of points. The current image of the Clubcard feels dated and as such a revision and re‐launch may give it a much needed boost and help motivate and excite consumers. 2
Finally I would like to thank Tesco for allowing and helping with the research of this dissertation. attention and guidance throughout the writing of this thesis.Acknowledgements ACKNOWLEDGEMENTS I would like to give thanks to the following people for their help and support in the completion of this study. Philip Law . First and foremost I would like to give great thanks to my family and friends who have supported me through my studies. Special thanks to my partner Jenny for all her help and support during my course and the writing of this thesis ‐ I couldn’t have done it without you! I would like to thank my tutor Anders Hederstierna for his time.
4 1.0 CHAPTER ONE – INTRODUCTION 1.6 Characteristics of Customer Relationship Management (CRM) The Clubcard Phenomenon Defining Loyalty Loyalty Marketing 2.4 2.1 The Customer Loyalty Ladder 2.5 1.1 The Tesco Timeline 2.0 CHAPTER TWO – LITERATURE REVIEW 2.2.3 1.2 1.9 The Tesco Clubcard as a Loyalty Marketing Tool The Relationship between Satisfaction and Loyalty Does Loyalty Result to Profit? .6.3 2.1 1.Table of Contents TABLE OF CONTENTS Abstract Acknowledgements Table of Contents Table of Figures 1.8 2.6 The Rise of Tesco The Background to the Study The Scope of the Study Purpose Objectives Summary 7 8 9 10 10 11 2.2 Introduction The Tesco Story 13 13 17 20 21 23 26 29 31 34 36 2.7 2.1 2.5 2.
3.7 Summary 4.5 3.5 Interviewer Versus Respondent Completion 3. Limitations and Validity 3.2 3.1 3.1 126.96.36.199 Analysis of Data 3.3 Introduction 48 48 50 52 54 54 55 56 56 57 58 58 59 60 60 61 62 62 Research Objectives Selection of Research Methods 3.6 Coding 3.6.1 The Eight‐step Questionnaire Construction Procedure 3.3 Question Types and Wording 3.6.1 Strengths 188.8.131.52 User Profile of Tesco Clubcard Respondents 4.11 Conclusion 39 43 3.3 Validity 184.108.40.206 Features of Qualitative and Quantitative Research 3.0 CHAPTER FOUR – RESEARCH FINDINGS AND ANALYSIS 4.4 Questionnaire Design 3.2.10 Do Customer Reward Programs Deliver Long Term? 2.2 Introduction Analysis 64 64 64 67 2 4.4.4 Questionnaire Layout 3.6 Sample Selection Procedure and Sample Characteristics Strengths.4.Table of Contents 2.2 Justification of Questions 3.0 CHAPTER THREE – METHODOLOGY 3.6.2 Customer Perceptions on Tesco Clubcard .2 Limitations 3.
5 Has the Tesco Clubcard Created Loyalty? 4.3 Conclusion 5.3 5.Table of Contents 4.2.6 Are consumers Manipulating Suppliers? 4.1 5.4 Tesco's Efficiency and use of the Information Gained from Clubcard 73 75 76 79 82 4.2 5.3 Loyalty and Satisfaction 72 4.2.4 Introduction 85 85 89 90 Conclusion of the Study Recommendations Limitations and further research REFERENCES 93 BIBLIOGRAPHY 103 Appendix A ‐ Questionnaire Justification Appendix B – Questionnaire 105 107 110 114 Appendix C ‐ SPSS Coded Questionnaire Results Appendix D ‐ SPSS Frequency Tables for Questionnaire Results 3 .0 CHAPTER FIVE ‐ CONCLUSION 5.2.7 Does Tesco Really Need the Clubcard? 4.2.2.
2.1.2. Would you Still Continue to Shop There? 68 4.1 Frequency table: Gender of Respondents 65 4.0 CHAPTER TWO – LITERATURE REVIEW 220.127.116.11.3 Cross tabulation: Please Indicate Which Age Group You Fall Into * I Trust Tesco Products and Their Image 66 4.2 Cross tabulation: Please Indicate Which Age Group You Fall Into * If Tesco Did Not Have the Clubcard Scheme.3.1 The Tesco Timeline 2.2.1 Frequency table: Please Indicate How Often You Use Your Clubcard When You Purchase Goods or Services with Tesco 67 4.2. Would you Still Continue to shop there? * I Expect Rewards to be a part of my Normal Shopping Experience 70 .2.0 CHAPTER THREE – METHODOLOGY 3.5 Cross tabulation: If Tesco did not have the Clubcard scheme.2.6.3 Cross tabulation: I Think Tesco is Very Innovative * I Feel More Could be Done to Increase my Loyalty 69 4.1 The Eight‐Step Questionnaire Construction Procedure 52 55 18.104.22.168 Customer Loyalty Ladder 17 29 3.1.1 Features of Qualitative and Quantitative Research 22.214.171.124.1.0 CHAPTER FOUR – RESEARCH FINDINGS AND ANALYSIS 4.2.2 Cross tabulation: Please Choose your Gender * Please Indicate Which Age Group You Fall Into 65 4.4 Cross tabulation: I Trust Tesco Products and Their Image * I Feel 4 More Could be Done to Increase my Loyalty 69 4.Table of Figures TABLE OF FIGURES 2.
7.2 Frequency table: I Usually Shop Around to get the Best Deals 4.1 Frequency table: Do you read Clubcard Magazine? 126.96.36.199.188.8.131.52.2.1 Frequency table: Apart from Clubcard.184.108.40.206.2 Cross tabulation: Do you read Clubcard Magazine? * If "yes" or "sometimes" Please Indicate what you think of the Magazine 74 4.5.1 Table: The Importance Respondents Placed upon Factors that Influence Loyalty 79 220.127.116.11 Frequency table: What more could Tesco do to make you more Loyal? 81 5 .2. do you own and regularly use other store loyalty cards? Please indicate how many 76 77 18.104.22.168 Frequency table: I Expect Rewards to be a part of my Normal Shopping Experience 78 4.Table of Figures 4.4 Cross tabulation: Please Indicate which age group you fall into: * Do you know how many Clubcard Points you gain for every £1 you spend in store? 79 4.1 Cross tabulation: Does the Collection of Points Influence you to buy more or to buy specific/alternative Promotional Products? * Location Of Store Importance 75 22.214.171.124 Cross tabulation: Importance of Loyalty Card Schemes * Have you Redeemed any Rewards from the Clubcard Scheme within the last 12 Months? 71 4.2.1 Cross tabulation: Would you Describe Yourself as Being Loyal to Tesco? * Would you Describe Yourself to be a Satisfied Customer of Tesco? 72 74 4.
Chapter One ‐ Introduction Chapter One Introduction 6 .
8% rise in underlying annual profits for 2007 to £2. 2005.1 The Rise Of Tesco Categorically today Tesco is not only the UK’s largest grocer. allowing the company to understand each customer’s value to the company and how it may be able to increase that value or prevent loss” (Tapp. “Before Clubcard. 2008). 2006.846bn. Individual‐level data has been systematically gathered on most of Tesco’s 12 million customers. “The big success story of database driven management is Tesco. pg 1) and as commented by Tapp (2005. 2008). pg 1). Arguably one of the world’s most successful advocates of Customer Relationship Management (CRM) (Humby and Hunt. and when to let it go its own way. 2004. pg 192). the retailer has managed to ascertain a sound reputation for innovation using imagination and technology to constantly deliver customer value resulting in increased sales and customer retention in the ferociously competitive food retailing industry. It has revolutionised the way a multi‐ billion pound industry is run. Tesco claims nearly £1 of every £7 spent on the high street (Hawkes. but also the world’s most successful internet supermarket (Humby and Hunt.Chapter One ‐ Introduction 1. 2004. 7 .0 CHAPTER ONE – INTRODUCTION 1. pg 176). In April 2008 “Tesco has reported an 11. Tesco was stuck as the UK’s second‐ranking supermarket” (Humby and Hunt. pg 1). Tesco and the Tesco Clubcard are seen as “the key player in the UK and one of the most important schemes in commercial history …. when to go with a hunch based on experience and when to question conventional wisdoms). meeting analysts’ forecasts” (BBC Business News. It seems to understand when to closely manage the analysis. Since the introduction of the Tesco Clubcard scheme in 1995.
there is a CRM revolution underway among businesses. pg 381).Chapter One ‐ Introduction What this thesis will investigate is how significant and instrumental the Clubcard scheme has been in building the success of Tesco’s rise to dominance. 2004. Having transformed the shopping experience and changed the way 8 .3 billion by 2012. With other supermarkets offering similar schemes. Barry stressed that the aim is to transform indifferent customers into loyal ones and solidify the relationship. why exactly do customers constantly return and not defect to rival stores? What is the true value of the Clubcard scheme to Tesco? Given the current position that Tesco are in and offering so much to customers it could be disputed if Tesco really need the Clubcard scheme. pg 6). 2008). All businesses will be embracing CRM sooner or later.9 billion in 2008 and is forecasted to reach $13. with varying degrees of enthusiasm and success” (Peppers and Rogers. It represents an inevitable – literally irresistible – movement. With this setting in mind I would like to initiate the concept of Customer Relationship Management (CRM). (CRMToday. This argument is further enforced that twenty‐first century consumers have evolved into becoming ‘increasingly promotion‐ literate’ (Harlow 1997 cited in Egan 2001. CRM has become a major management growth tool of the last decade (Gilles. Berry and Parasuraman. Righby and Reichheld 2002) and research has shown that the market for the worldwide customer relationship management (CRM) software is projected to surpass $8.com. “Today. (1991) have commented that in order for an organisation to sustain a relationship with its customers it needs to offer benefits that are important to them and at the same time difficult for competitors to replicate.2 The Background to the Study The evolution of supermarket shopping has advanced at an expediential rate over the last decade. 1.
3 The Scope of the Study The study of this dissertation will commence with focusing on secondary data. Primary research is essential in order to complete the objectives that this thesis sets out to achieve. These loyalty cards are key to an organisation’s marketing activity as it allows marketers to interact directly to the people who will benefit the most with tailor made offers and communication. However. the methodology will explain the conditions into how the primary research was conducted before an analysis of the results attained. 1. a wide range of services one would not normally associate with a supermarket such as telecommunications. some studies have suggested that the loyalty card scheme are at a crossroad and do not work as shoppers attitudes have changed and they prefer to pay less for their groceries than earn points on their purchases. With this the additional incentive of customers collecting and redeeming points through customer reward programs. the concepts and theories that are to be investigated and to provide an example on how others have embarked upon this subject area. finance and insurance. The motivation for this is that it shall provide a depth of understanding. 9 . extensive product ranges expanding beyond food. Subsequently. Approximately 85% of households in the UK had at least one active loyalty card (Mintel. The closing stages of this study will then be concluded and recommendations will be made.Chapter One ‐ Introduction in which we shop through the creation of out of town locations which can accommodate the development of considerable sized outlets. 2004). The trend and interest in using loyalty cards is undeniable. in the form of a literature review. therefore the findings of the literature review will direct the author into the construction of a primary research tool in the shape of a questionnaire to address areas where there maybe gaps.
1. Recognise the factors that affect the significance of a customer reward program and their roles within the supermarket sector. 10 . 5). Analyse and obtain the importance of the scheme to customers and ascertain just how significant the scheme is in keeping them loyal. Chronicle Tesco’s rise to power and being the number one supermarket retailer within the UK. The tool may assist in the aid of repeat purchases but does the scheme demonstrate and create true loyalty. Establish the real value and significance of the Clubcard reward program to Tesco. 3). 4).5 Objectives 1). Define loyalty and loyalty marketing. 2).4 Purpose The intention of the thesis is to uncover if Tesco truly need their Clubcard scheme any longer to keep customers loyal due to the sheer amount of effort they currently use to keep customers loyal and given the position that they are in. Discover the general attitude of Tesco customers towards the Clubcard reward program. 6). Question how instrumental the Clubcard reward program is in building the success of Tesco to where it is today and its role as a marketing tool.Chapter One ‐ Introduction 1.
11 . The motivation of the subject and a brief background to Tesco and its Clubcard scheme has provided a solid foundation for advancing to examine secondary research.6 Summary From establishing the aim of this study the reader is conscious to the scope of the investigation and what it sets out to accomplish.Chapter One ‐ Introduction 1. The literature review follows in the next chapter.
Chapter Two – Literature Review Chapter Two Literature Review .
Realise the issues that may affect the value of a customer reward program and recognise the importance within the supermarket industry. 3).0 CHAPTER TWO – LITERATURE REVIEW 2. Given Tesco’s current range of loyalty marketing strategies. 5). Determine if the Tesco Clubcard has generated loyalty and what factors customers are loyal to. followed with defining the fundamental terms with a focused discussion.2 The Tesco Story Recent work from Reference for Business (2007) and the European Foundation for the Improvement of Living and Working Conditions (2007) have chronicled the history of Tesco. 6). It is with allusion to these bodies of work that this section is based upon. 13 1). Chronicle the history and rise of Tesco.Chapter Two – Literature Review 2. Define Loyalty and Loyalty Marketing. examine if the Tesco Clubcard is really needed. 2. It will conclude with a summary of the main points mentioned.1 Introduction This chapter aims to provide a background to the study and seeks to carry out the following objectives of the dissertation: The literature review will commence with the charting of Tesco’s background story. Understand the concept of CRM. . 2). 4).
Cohen realised his dream and opened the first Tesco self‐service store in Hertfordshire. John Edward Cohen invested £30 into a small grocery stall in the East End of London. 14 . Thus began Cohen’s career as a market trader after serving in the Royal Flying Corp. However. the public were not ready for such a radical approach and it failed to capture the interest of British shoppers. It was also during this period that the company completed construction on a 90. The name was a based on a private label tea that Cohen bought and sold from a merchant which used the initials T. In 1935 Cohen was invited by several key American suppliers to the United States to witness and learn the American food retailing system. Within 8 years. This term not only referred to the actual size of the store but also the immense selection of food and non‐food items available within it. Tesco range of products diversified. selling whatever could be housed in the tiny stall.000 square‐foot warehouse. During the 1960’s. With the opening of a 40. Cohen expanded his operation and opened more than 100 small stores in the London area. Helped by the acquisition of smaller grocery chains Tesco rapidly expanded over the next two decades and in 1956 the first Tesco supermarket to carry fresh foods in addition to more traditional dried goods was opened. Not deterred by this Cohen reopened the shop one year later to a warmer reception from the great British public. Non‐food merchandise and household items were now being sold and with it came a higher margin. On returning to the UK from his visit. By 1947.Chapter Two – Literature Review In 1919.000 square‐foot store the term “superstore” was born.E. the end result was that the store closed in 1948. Stockwell and by adding the first two letters of his surname – TESCO was born. Cohen wanted to take the American self‐service supermarket vision and implement it in the UK. Cohen officially founded Tesco Stores Limited. By 1932.
consumers were spending less money on food purchases and Tesco profits were lower as customers’ tastes were changing and they had more disposable income. The sheer nature of the American supermarket vision of ‘pile it high. This was another American idea. however the diminishing image of Tesco was still apparent. The food industry and consumers were evolving and Tesco were guilty of missing the vital signs of change in the market and that consumers were demanding quality over quantity. The amount of stamps given reflected on how much customers spent. The majority of Tesco stores were poorly staffed with inadequate 15 . In addition.Chapter Two – Literature Review In 1963. Initially the new strategy worked. The American food retailing system that Cohen had introduced resulted in Tesco operating approximately 900 supermarkets and superstores throughout the UK by 1976. increase sales and gain more market share the Green Shield Stamp scheme was scrapped in 1973 and prices were cut across the board. Once the customers had collected sufficient stamps and stuck them into a Green Shield collector’s book. where the theory of the scheme was that retail organisations would purchase these stamps and then give them away as a bonus to customers for every purchase they made. The outcome of this was customer loyalty as shoppers congregated on stores offering stamps. the Tesco brand began to look slightly jaded and was suffering an image quandary. sell it cheap’ did not lend itself to generous profit margins and the firms management established that this strategy had not aged well and in fact was deteriorating. During the 1970’s. Tesco signed up to the Green Shield stamps scheme. the shoppers could then exchange this for merchandise from a catalogue or shop. consequently causing an image problem among consumers. In an attempt to win back shoppers.
Sainsbury. The knock on effect of this was a renewed price war between Tesco and J. Tesco made a considerable investment to not only improve its stores physically but also to provide the higher quality merchandise that consumers desired. Cosmetic and practical changes such as widening aisles and enhanced lighting were used and the main focus of Tesco was on the superstore concept. Tesco had become one of the top three food retailers in the UK. an extensive modernisation program was undertaken and 500 unprofitable stores were closed. In order to encourage more sales and customer loyalty Tesco began an application which cut prices on approximately 1.Chapter Two – Literature Review customer service and merchandise selection.500 food items.000 square feet but eventually expanded to as large as 65. The upshot was prevalent upgrading and enlargement of smaller cramped stores. During the late 1970’s and early 1980’s the UK food sales market was in a slump. The average superstore covered 25. Tesco also introduced its own label product lines which had been developed through extensive Research and Development (R&D) programs. Throughout the rest of the 1980’s Tesco continued to expand into Ireland and in 1985 the 100th superstore was opened. encompassing 371 stores in Great Britain in addition to becoming the largest independent gasoline retailer in the UK. the Czech Republic and Slovakia. two new formats of store were experimented. The first was the Tesco Express format. By 1989 the company had spent £500 million on building 29 new stores. In order to recuperate. To further reinforce the innovation at Tesco. By the beginning of the 1990’s. It was also during this period that Tesco expanded into new countries acquiring store chains in Poland. To compliment the new high‐quality and service‐oriented image of these new stores.000 square feet. which combined a petrol 16 . In order to improve efficiency the original distribution systems were computerised and restructured.
2. in 1997. Tesco branched out into financial services creating a Tesco Visa card. in‐store banks. 2. 17 . His first day's profit was 1 pound on sales of 4 pounds. The strength and diversification of Tesco’s own brand products is indisputably impressive.Chapter Two – Literature Review station and small convenience store into one. Tesco stands as a genuine retail giant. it has consistently out performed rivals and increased market share. The aim was to turn the non‐food side of the business to be as strong as the food side. Expansion in the UK and abroad is continuing and industry observers can find little to fault the company’s operations. toys. the Tesco Clubcard was introduced. By the millennium Tesco. Malaysia and China. loans and insurance. In September 2002 Tesco introduced its own line of clothing. Two years later. In February 1995. Taiwan. South Korea. International operations were also developing as Tesco entered Asia opening stores in Thailand. savings accounts.1 The Tesco Timeline Timeline on the growth of Tesco: 1919 ‐ Founder Jack Cohen begins selling surplus groceries from a store in the East End of London. Today. The Tesco Extra format expanded the non‐food departments. launched its e‐commerce business and turned to developing its non‐food business. sports equipment and general household goods and furnishings. Stores now carried extensive electronic products.
and CO from Cohen's surname. and track it’s customers. 18 . 1961 ‐ Tesco Leicester enters Guinness Book of Records as the largest store in Europe. The name came from the initials of TE Stockwell. a partner in the firm of tea suppliers. the innovation set to transform the store’s fortunes. 1956 ‐ First Tesco self‐service supermarket opens in a converted cinema in Maldon. 1939 ‐ Tesco has around 100 branches. 1987 ‐ Tesco has 377 stores – far fewer than before. 1979 ‐ Annual sales reach 1 billion pounds. Tesco Clubcard customer rewards scheme is launched. 1982 ‐ Annual sales exceed 2 billion pounds.Chapter Two – Literature Review 1924 ‐ Cohen's first own‐brand product is called Tesco Tea. but each store is larger. Tesco enters Hungary. 1991 ‐ Becomes Britain's biggest independent petrol retailer. 1995 ‐ Becomes Britain’s market‐leading food retailer. 1947 ‐ Tesco Stores (Holdings) Ltd floats on London Stock Exchange with share price of 25 pence. 1963 ‐ Introduction of Green Shield Stamps scheme. 1960 ‐ Takes over chain of 212 stores in North of England and adds another 144 stores in 1964 and 1965.
S.com launched and goes live. November 8. Slovakia and Northern Ireland. 2002 ‐ Tesco has 730 stores in the UK. Czech Republic. 19 . Enters music download market. 1997 ‐ Terry Leahy becomes chief executive. store near Los Angeles. 2000 ‐ Tesco.879 UK stores and controls approximately one‐third of the UK grocery market. Enters Czech Republic and Slovakia through Carrefour asset swap and exits Taiwan 2006 ‐ Tesco has a total of 1. Launches own brand Fairtrade range.com model to United States. 2007 ‐ Opens first U. 2001 ‐ Strategic relationship with U. Tesco broadband launched. Tesco moves to capture share of loan and personal finance market as Tesco Personal Finance is launched.Chapter Two – Literature Review 1996 ‐ Tesco spreads to Poland. Enters Malaysia. 2003 ‐ Tesco enters Japan and Turkey. Announces non‐food store trial. 1998 ‐ Enters Taiwan and Thailand 1999 ‐ Mobile phones go on sale in Tesco stores.S. supermarket Safeway to take Tesco. launches online bookstore and online banking. Company launches 24‐hour trading as the first of many Tesco Extra Hypermarkets open. 2005 ‐ Makes 2 billion pounds of annual profits. Enters South Korea. 2004 ‐ Enters China.
Chapter Two – Literature Review Adopted from Sanderson (2007) and Simm (2007. pg 6) back up this claim citing that “there is a CRM revolution underway among businesses”. “Customers don’t want to be treated equally. pg 92). not for them” (Gordon.” In the modern marketplace customers continue to gain vigour. Despite the fact that CRM is essentially rooted within information technology it is more than just a technology. Peppers and Rogers (2004. CRM is designed to create and continuously improve the relationship between an organisation and its customers in real‐time transactions. 2004. CRM can be thought of as a set of business practices 20 Characteristics of Customer Relationship Management (CRM) . it is vital that an understanding of them is undertaken to provide personalised value. as commented by Goodroe (2005. pg 17). 2. They want to be treated individually” (Newell 2003. 1998. the end result is “value is thus created with customers. and in some cases abused…often by the very people who strive to define it.3 “The past decade has seen many firms (re)adopt a customer focus – often through a formal program of customer relationship management (CRM)” (Uncles. largely misused. Despite becoming one of the most intensive and important developments of the business climate there is no specific definition for CRM. Clearly CRM involves much more than marketing and “in its most generalised form. Dowling and Hammond. It draws from traditional marketing principles and key to this process is the recognition and definition of what customers deem as value and delivering it. pg 9). cited in Wylie). pg 116‐117). “CRM is difficult to define. It’s somewhat misunderstood. Through the use of an elaborate process arbitrated by information technology. What can be established is that the CRM process suffers when it is not adequately understood or implemented.
It involves the understanding. For the case of the Tesco Clubcard. simply to put an enterprise into closer and closer touch with its customers. to make them happier and the company richer”. pg 6). 1998. Originally piloted in twelve stores. Humby and Hunt (2004. In order for an organisation to truly engage the customer it is essential that companies can exceed consumers expectations. it is about how we demonstrate our loyalty to them”. in order to learn more about each one. the inspiration of the card was to gain an insight into shopping habits of customers and 21 . The following excerpt will be used to define CRM: “Relationship Marketing is the ongoing process of identifying and creating new values with individual customers and then sharing the benefits from this over a life time. 2005. Lord MacLaurin. with the overall goal of making each one more valuable to the firm” (Peppers and Rogers. focusing and management of ongoing collaboration between suppliers and selected customers for mutual value creation and sharing interdependence and organisational alignment” (Gordon. 2. therefore any definition of CRM would be fundamentally wrong if it didn’t start with the customer in mind. the Tesco Clubcard was launched and it became the UK’s first supermarket customer reward program.4 The Clubcard Phenomenon “Customer loyalty is not about how customers demonstrate their loyalty to us. Chairman of Tesco In February 1995.Chapter Two – Literature Review designed. pg 9). pg 16) have cited that “the definition of CRM is best summarised as: to improve our performance at every point of contact with our customers.
The Green Shield stamp scheme cost £12 million annually. Additional points could also be connected at 10 Clubcard partner companies (Papworth. they can be “swapped for AirMiles or Clubcard Deals such as days out.5% of Tesco profits to run the scheme. The Clubcard scheme introduced new point‐of‐sale (POS) technology as well a call centre to handle customer queries and a vast supporting computer system to record and analyse the Clubcard information.Chapter Two – Literature Review give something back to them. However this scheme was later changed when it was realised that pensioners and students were not fully benefiting due to the small frequent purchases they made (Louis. In total it cost Tesco £300 million over the first three years and approximately 4. shoppers gained one point for every £1 spent on goods in‐ store. restaurant meals. For example a year’s magazine subscription to Cosmopolitan magazine which normally costs £34. pg 5). Tesco Personal Finance products and Tesco Telecoms. with over eight million Clubcard customers purchasing some 200 million in‐store 22 . These deals are priced at four times the in‐store redemption value of the vouchers. on Tesco Petrol forecourts. To add further value to the vouchers. The costs associated with running a loyalty program are notoriously high. Under the new scheme. Less than 12 months after the launch. holidays and flights. online. thus giving an effective discount of 1%. costs £8.55 in Clubcard vouchers” (Papworth. 2005). film hire. Points would be accumulated for every £5 spent and in turn the points would be converted every quarter into Clubcard vouchers which the customer could redeem in any Tesco store.20. Once the customer has accumulated 150 points the points are converted into Clubcard vouchers at an exchange rate of 1p to one point. Within six months of the introduction of Clubcard. 2005). magazine subscriptions. Tesco’s share of the UK retail grocery trade had increased from 15% to 18%. 2002.
Chapter Two – Literature Review products per day. there is an overwhelming amount of research focused on the definition and term for the notion of loyalty. of which over ten million card holders were active users. ASDA. With this in mind. 2001).5 In order to investigate the value of the Tesco Clubcard scheme. the concept of loyalty may initially appear to be rather simplistic. pg 39) have commented that Tesco “did not invent the card nor were they a first mover. Tesco was now propelled to being the number one retailer in the UK (Peppers and Martha. 2001). Seth and Randall (2001. It is usually characterised as activities carried out by an organisation for the development of a long‐term relationship with its customers. 2006). One retailer. Customer loyalty is acknowledged as a key concept whose importance has been recognised by many academics and practitioners. It was assessed that in 2001 the Clubcard scheme had managed to attract approximately 20 million members in the UK. However. it is vital that an understanding and definition of loyalty is established. Following the success. “Questions about how to define loyalty were addressed more than 20 years ago” (Grisaffe. In the context of retail marketing loyalty can be perceived as “a combination of customer behaviour and attitude” (Fraoch Marketing. 2. getting the timing right”. but in retrospect they executed its introduction bravely and brilliantly. Upon further investigation and reading it can be seen that there is a 23 Defining Loyalty . some competitors launched rival schemes although these were later scrapped. did resist the trend of loyalty cards and focused primarily on its competitiveness and reducing costs.
price. East (1997. this is easily replicated by competitors. pg 491) it is a “complex phenomenon”.Chapter Two – Literature Review lot more to the notion and as commented by Parker and Worthington (2000. Fader and 24 . It has been suggested by scholars that loyalty is an emotional concept. functional loyalty can’t be very long lasting (Barnes. Neal (2000 cited in Grisaffe 2001). distribution. pg 116) resists defining loyalty in behavioural terms and notes the concept of loyalty as “the reflection of a customer’s subconscious emotional and psychological need to find a constant source of value. states that “loyalty is a behaviour”. Humby and Hunt (2004. This advocates that loyalty is an emotional concept created by trust. Key to understanding this is the correlation between behaviour and attitude. 2002). Jenkinson (1995. pg 539) comments “other variables such as social and physical environment as well as the personal abilities have been found to pre‐empt action”. To further the ideology and recognition that thoughts and feelings are active. this is “arguably the most controversial (view) but the best supported by data. 1998. cited in Rowley. satisfaction and identity”. pg 17) have commented that “loyalty is an emotional response based on empathy”. One of the most distinguished insights into loyalty was provided by Dick and Basu (1994. thus the creation of functional value only offers a short‐lived competitive advantage. The controversy comes about because loyalty is this model is defined mainly with reference to the pattern of past purchases with only secondary regard to underlying consumer motivations or commitment to the brand” (Ehrenberg. pg 102). Conversely this view could be seen as being “functionally loyal” (Barnes 2002) whereby customers are only loyal to a company due to convenience. However. However this is not significantly sufficient as the perception could ascertain changes in behaviour and attitudes in the future. convenience or through different loyalty programs providing a tangible reason to prefer certain suppliers. Functional loyalty is often created by functional values such as quality. who cited loyalty as “the strength between relative attitude and repeat patronage”.
Many businesses continue to define loyalty in behavioural terms”.e.. cited in Uncles. pg 94). Shapiro and Varian (1998. Then the customer switches to show repeat purchase of A. The consumer buys the same brand again. Until brand A enters the market at a lower price. 2004. Furthermore Barnes (2002) also cites that. Massey et al. until market prices change again. and brand B is always lowest. pg 128) believe that loyalty is concerned with repeat purchase or buying largely and exclusively from a single vendor. Kahn et al. pg 94). researchers “have found that few consumers are ‘monogamous’ (100 percent loyal) or ‘promiscuous’ (no loyalty to any brand). frequency of visits. 1988. but because it is not worth the time and trouble to search for an alternative” (Uncles. 1999. most people are ‘polygamous’ (i. Dowling and Hammond. Rather. To which are they loyal. 1970 as cited in Uncles. Loyalty is essentially an emotional concept. total spend. 1994 (as cited in Uncles. share of 25 . 2004. and yet many firms seem not to understand or appreciate this. like relationships. comments that after extensive studies of data and purchase pattern. Barnes (2002) claims that “repeat buying does not make loyalty …. loyal to a portfolio of brands in a product category)”. loyalty is defined as an ongoing propensity to buy the brand. 1996. Grisaffe (2001) argues that loyalty is not just about behaviour. pg 94). Dowling and Hammond.Chapter Two – Literature Review Hardie. or the decision rule? True loyalty is not just behavioural”. 2004. Uncles et al. Dowling and Hammond. Dowling and Hammond. pg 94). “There is a great tendency in business to measure or define loyalty entirely in behavioural terms ‐ number of visits. not because of any strongly‐held prior attitude or deeply‐held commitment. Essentially “from this perspective.. they look behaviourally loyal to B over time. 2004. “Loyalty to the brand (measured by repeat purchase) is the result of repeated satisfaction that in turn leads to weak commitment. usually as one of several” (Ehrenberg and Scriven. “If a buyer has a cognitive rule.. the brands. ‘buy the lowest priced brand’.
Retention is a behavioural concept. To obtain a list of our most ‘loyal’ customers. 2005). an incremental shift in buying behaviour”. Why. the appropriate term should be loyalty marketing as “loyalty is the business objective. etc. 2. Loyalty defined behaviourally is also a much easier concept to understand. pg 9). a slight margin of preference. In comparison retail loyalty implies on “looking to achieve a little extra goodwill.Chapter Two – Literature Review category spend. In fact.6 “Loyalty marketing can be defined as the management process of identifying ‘best customers’ and utilising customer data and insight to create. then. retain and grow profitable relationships” (ICLP. Of the various definitions. There is a tendency to confuse loyalty with retention ‐ two concepts that are related. A focus on retention creates a high‐risk situation where a company may think its customers are a lot more loyal than they really are. number of years as a customer. However as commented by Duffy (1998. the characterisation deemed to be the most appropriate when discussing the Tesco Clubcard has been cited by Humby and Hunt (2004. customer‐centric marketing and frequency marketing. without having to get into all that consumer psychology”. we simply request the information from the customer database. Loyalty marketing is often expressed in a manner of ways. What we seek to achieve here is loyalty”. but certainly not the same thing. pg 435). loyalty is not. It has been suggested that day‐to‐day life loyalty suggests “emotional commitment” and “monogamy: one choice above all else”. do some businesses define loyalty primarily if not exclusively in behavioural terms? The answer is often as simple as that’s what we are able to measure most easily. such as relationship marketing. many companies today capture such information automatically every time a customer interacts with the firm. one‐to‐one marketing. 26 Loyalty Marketing .
2002. pg 431). define specific marketing strategies for finite customer segments. Uncles. pg 461). and customer magazines to customer panels” (Wright and Sparks. (2004. has criticised loyalty marketing as programs that “typically result in another piece of plastic in your wallet to encourage more customer patronage”. A second aim is more defensive – by building a closer bond between the brand and current customers it is hoped to maintain the current customer base”. pg 92) claim that the “two aims of customer loyalty programs stand out. special services. 2006. One is to increase sales revenue by raising purchase/usage levels. “They allow marketers to capture detailed transactional and preference customer databases.Chapter Two – Literature Review Regardless of the idiom. “several kinds of scheme are currently run in the retail industry. Repeat purchase is rewarded and a channel of communication with customers is facilitated to encourage further repeat purchase. Gordon (1998. pg 459). and/or increase the range of products bought from the supplier. and model customer attrition and intervention strategies” (Lacey and Sneath. pg 355). 27 . membership based marketing activities designed to enhance the building of continued marketing exchanges among pre‐ identified customers toward a sponsoring brand or firm. These databases can be used to determine customer value. from card schemes. 1999. Loyalty programs use targeted communications and customise the delivery of branded goods and services to build stronger bonds with the sponsoring brand/firm that would result without such programs. loyalty marketing is an approach based on strategic marketing and has been expressed as the “sine qua non of an effective business strategy” (Heskett. pg 20). 2006. The fundamental aim is to define profitable behaviour and consequently manage this relationship by designing a range of initiatives to maintain and influence profitable behaviour. However. Often based on cumulative brand purchases. loyalty programs enhance value proposition offerings to preserve active customer status” (Lacey and Sneath. Dowling and Hammond. “Customer loyalty programs are coordinated.
Chapter Two – Literature Review Of the above excerpts it can be empathised that the most frequent used customer reward programs employed are loyalty cards. innovative products and services or the right price. Operant conditioning is based on the concept that “if a given bit of behaviour has a consequence of a special sort. It can be remarked that this behaviour is not generic amongst all consumers and that some customers are not affected or influenced by the prospect of rewards. Rayner (1996. have commented that “loyalty programs are set apart from other forms of promotions by their long‐term nature and deliberate emphasis on preserving customer retention and intensifying purchase frequency”. They work by using a process of operant conditioning theory. pg 8) identifies customer reward programs as a “mechanism for identifying and rewarding loyal customers”. It relies on two basic assumptions about human experience and psychology: (1) a particular act results in an experience that is a consequence of that act and (2) the perceived quality of an act’s consequence affects future behaviour” (Heil. 2006). points and the incentives offered all act to influence and strengthen consumers’ behaviour. Tapp (2005. given their ability to identify frequent buyers and segment the market. pg 459). 126) has 28 . cited in Lacey and Sneath 2006. 1978. the knock on effect is they will choose to reiterate to buy products that fulfil their own needs. Sharp and Sharp (1997. Applied to retail organisations. it is more likely to occur again upon similar occasions” (Skinner. Implemented customer reward programs. pg. pg 17) have argued that it should not be contended that card‐based customer reward programs are credible alternatives to being offered excellent service. Operant conditioning deals with learned and not reflexive behaviour and the procedure occurs as individuals learn to perform behaviours that produce positive outcomes. “The important point is that these initiatives and a card‐based loyalty scheme are not mutually exclusive”. over time consumers associate with companies that reward them. Humby and Hunt (2004. “Operant conditioning refers to a systematic program of rewards and punishments to influence behaviour or bring about desired behaviour …. pg 19). All of which can develop loyalty.
1998 as cited in Uncles. Payne (1994. pg 95). “given the hue and cry about loyalty over the last decade. 2000. companies need to move “customers up a ‘loyalty ladder’ through image‐based or persuasive advertising and personal service (recovery) programs are frequently used tactics” (Brown.6. Dowling and Hammond. Dowling and Hammond. 2004. 2. (2004. Uncles. pg 95) claim that “to increase sales by enhancing beliefs about the brand and strengthen emotional commitment of customers to their brand”. let us be clear ‐ the prevailing evidence is that absolute loyalty cannot be regarded as the norm in most markets”. White and Schneider.1 The Customer Loyalty Ladder 29 . pg 29‐30). has constructed the “Customer Loyalty Ladder” which illustrated that the goal of loyalty marketing is “keeping and improving the relationship with the customer”.Chapter Two – Literature Review commented.
pg 126) asserts that. in that customers retain a basket of brands which they jump between in a ‘polygamous’ fashion …. 2002. pg 102). Payne has observed that companies need to focus on improving their relationship with each customer and “progress them up the ladder” rather than converge on individual sale (Payne. any benefit gained is likely to be ephemeral”. stable. 2005. Furthermore Reichheld (cited in Tapp. Dowling and Hammond. (2004. Uncles. The clear conclusion from these pieces of work is that exclusive brand loyalty cannot be regarded as the norm in most markets”. claim that “when widespread copying happens. 2005). supermarket goods) is based on ‘repertoire’ purchasing. “a lot of frequent‐purchase behaviour (e. 1994. The number and similarity of loyalty programs employed today has caused concern and rather than creating or adding towards customer loyalty it can argued that they are actually causing confusion and apathy and stimulating “loyalty overload” (Tapp. Dowling and Hammond (2004.g. Reichheld (cited in Finnie and Randall.Chapter Two – Literature Review From the above diagram each rung of the ladder shows the priority in which tasks should be undertaken in order to accomplish loyalty. Uncles. Additionally. Additionally. Loyalty marketing is not undertaken by every organisation. pg 30). profitable customers”. 30 . pg 172) construes that. pg 26) has commented that some companies do not view loyalty marketing as an “objective. Tapp (2005. pg 95) conclude by claiming “loyalty programs are also designed to strengthen commitment and create velvet handcuffs to bond the customer to the brand”. but a duty and a must”. “ultimately the key to profitability was the high retention of the firm’s existing.
whereby consumers are willing to exchange their personal information in order to obtain other resources.7 The Tesco Clubcard as a Loyalty Marketing Tool “Loyalty schemes tend to be most useful in frequent purchase markets …. the customer receives points that can be used in full or part payment for products or services” (Rowley. The average consumer participates in three schemes. In the grocery market. 1980). When a customer joins a customer reward program their details are entered into a database in which further transactions of their purchases are recorded building a profile of purchasing habits. Mauri (2003. 2006. pg 274). pg 195). participating customers are offered an enhanced value proposition. (2001) suggests that there is over 150 such schemes currently in the UK with a result of approximately 40 million cards in current circulation. In the case of loyalty programs. pg 461). And also commonly found in markets where the core product is a commodity and companies have great difficulty differentiating themselves” (Tapp. “Around 80 per cent of UK households participate in at least one customer loyalty scheme. 2005. pg 13‐14) has commented that. Tesco claims a 'first mover advantage' not in the sense of having a scheme but in the sense of being the first where the scheme is a strong part of a transformed marketing approach”. 2005. “the technology of loyalty cards allow retailers to transform cold data on consumer behaviour into warm relationships and 31 . “In exchange for registration.Chapter Two – Literature Review 2. Byrom et al. such as monetary savings or enhanced services …. The amount of customer reward programs that has been introduced by retailers and service providers has become more widespread in recent years. Stone (2004. “Historically information has been linked to exchange theory (Hirschman. pg 192) comments that. and in return firms will be given access to personal information that can be used to further refine strategies and tactics” (Lacey and Sneath.
As the UK’s largest retailer and given the considerable customer base. shoppers use a Clubcard. There are in the region of 25 million Clubcards in existence which represents 14 million households. It is estimated that on eight of every ten trips to Tesco. the time they shop. As commented by Jenkinson (1995). A prologue with regards to the Tesco Clubcard has already been covered in section 2.tesco. pg 458).Chapter Two – Literature Review eventually into a genuine loyalty founded on mutual understanding and trust. Langenderfer and Cook (2004. “The Clubcard enables Tesco to keep a record of each holders name. the Tesco Clubcard accumulates and records information on a sizable population of the UK on an astounding basis. the retailer is recording the entire transaction in detail: from the name of the shopper. have raised the issue that “for customers who participate in loyalty programmes. the shop they visited and the entire contents of their trolley (Field 1997). It keeps track of exactly everything a cardholder has ever bought. or threw a party at the weekend. and the precise date and time of each purchase. pg 198).3 of this thesis. The Clubcard is viewed by Tesco as a way of saying thank you to its customers by allowing them to earn points through “meeting everyday needs and undertaking everyday activities” (Rowley. “in a bonus program. the bonus is the price for the information that I get. resulting in more than 11 million active cards (Simm. “Clubcard is designed to give you something back for shopping with Tesco” (http://www. address. I buy knowledge through it. A warm relationship is also a learning relationship”. 2005. cited in Lacey and Sneath.com). It will know if you have a drink problem. 2007). age. telephone number and email. not loyalty. buy 32 . With every swipe of a loyalty card at a point of sale. because loyalty is not purchasable”. loyalty cards are also about the collection of customer data. there is potential for increased concern about the misuse of personal information and loss of control over how information is being collected and disseminated”. Tesco can guess whether you had a lonely singles night in. 2006. The company knows each holders dietary preferences and the make‐up of their family. From the data. Simm (2007) remarks. from which store.
The information helps Tesco to typecast its customers by analysing their ‘life stage’. 33 . Being able to classify groups in this way has helped Tesco become the UK’s dominant retailer”. “An important component of many loyalty programs is the cope for cross‐selling. Swaminathan and Reddy (2000 as cited by Lacey and Sneath. 2004. Due to the success of the Clubcard scheme. With the vast range of product offerings from Tesco such as finance. by spending and loyalty. pg 100). young family or retired. The strength of the Tesco Clubcard image was highlighted in the Powergen Corporate Responsibility Report (2003) which notes. addition multiple brands such as Avis and Powergen/E. 2006. Powergen joined Tesco’s Clubcard scheme as a key facet to our approach to customer loyalty.Chapter Two – Literature Review condoms. In essence. 1997). rather than market share (Peppers and Rogers. whether you're a junk‐food addict. Dowling and Hammond. It works out if they are ‘upmarket’. 2005. Tesco Clubcard demonstrates our focus on customers”. as Tesco euphemistically calls this category. whether student. the message is “Tesco is an everyday experience” (Rowley. the loyalty program is seen as a brand extension” (Uncles. in an attempt to increase share‐of‐wallet. insurance. The card will keep a record of any complaints made or other communication with the store. “In 2003. or have an undue fondness for tinned pineapple. and any additional market research you have taken part in. pg 459) have mentioned that “loyalty programs supported by multiple participants offer increased customer value by accommodating a broader scope of business and organisational value due to the sharing of program costs”. pg 199). Loyalty‐program members are encouraged to buy products they would not normally have bought from that provider. ‘market’ or poor (or. It assesses how much they are worth to them. ‘cost‐ conscious’. hooked on painkillers.ON energy have joined to align themselves with the Clubcard brand. mobile phone services in conjunction with core food and non‐food products.
8 Much research has been carried out by scholars into the importance of customer satisfaction. this hypothesis has remained largely unsubstantiated and is far from robust. The Relationship between Loyalty and Satisfaction 34 . However. Kotler (2000) defined satisfaction as “a person’s feelings of pleasure or disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectations”. “just as a shopper expects to be offered trolleys at the entrance to a supermarket he/she will expect some sort of ‘reward’ to be offered at the check‐out”. “extending beyond the simple relationship between Tesco and their customers” (Rowley 2005. with all this added value and as commented by Parker and Worthington (2000.Chapter Two – Literature Review Capizzi and Ferguson (2005. but it’s not now”. pg 30) who claims that customers today demand more that “simple satisfaction” for their loyalty and that “most companies think a ‘satisfied customer’ will be a loyal customer. pg 72) describe the loyalty marketing industry as having “the telltale characteristics of a mature market”. pg 381). 2. Reichheld (1996. The Clubcard model although not unique has firmly embedded itself as a customer reward program with multiple relationships. in‐store magazines or value added approaches in service or store layout are all utilised. It should also be mentioned that in addition to the Clubcard scheme. principally in the UK where “programmes look the same everywhere”. Approaches such as lower prices on key products. That may have been true at one time. Tesco also employ other marketing tools to create loyalty. pg 198). pg 491). views that “customer satisfaction is the key to securing customer loyalty”. As argued by Newell (2000.
pg 36) believes satisfaction is a starting point. and positive word of mouth exposure (Hoyer and MacInnis. Söderlund (1998). In addition gauging dissatisfied customers can be difficult since many customers will not complain and also to differences in the industry sectors. brand loyalty. but additionally observing that “increasing satisfaction does not produce an equal increase in loyalty for all customers”. However. It is vital that the distinction between satisfaction and loyalty is noted since the two are clearly different. but it’s no longer enough to make you a winner”. 1971). The importance of satisfaction should not be overlooked and the consequences of not satisfying customers can have severe consequences to businesses. loyalty and retention.Chapter Two – Literature Review What can be established is that satisfaction can lead customers to “treat their primary store as a safe bet in their attempt to reduce their perceived risk of disappointment when shopping” (Reselius. expands on this theory by accepting for a positive association between loyalty and satisfaction. ‘Customer satisfaction leads. by linear progression. Satisfaction does not continually produce in retention. Zairi (2000) has commented on numerous studies that have been carried out to examine the impact of customer satisfaction on repeat purchase. 35 . The end result is they all suggest a similar message in that: satisfied customers are likely to share their positive experience with approximately five or six people and dissatisfied customers are likely to tell another ten people of their unhappiness. Duffy (2001. satisfied customers can help form the base of any successful business and result to repeat purchases. with satisfied customers still defecting. There is no evidence to suggest that satisfaction alone is a significant factor in influencing loyalty. to retention/loyalty and ultimately to profitability’ (Hallowell. similarly dissatisfaction does not necessarily result in defection. remarking that “it is essential to get you in the race. 1996). What this demonstrates is that the correlation between customer satisfaction and customer loyalty is neither clear‐cut nor linear. 2001).
2004. However. level of service. as commented by Best (2005. This is especially significant to any business operating in a highly competitive market with many choices and low customer switching costs. pg 101) Does Loyalty Result to Profit? 36 . pg 230) sustains that loyalty does not result from satisfaction alone. In other words. travel distance and reward programs. and bank customers can switch quickly if they are not completely satisfied”. it is purely that the store did not insulate them adequately from switching. it is simply that it did not insulate them sufficiently from switching”. Dowling and Hammond.9 “Firms employing loyalty programs should expect them to be profitable. “Grocery store. we can have satisfaction without loyalty. restaurant. “satisfaction influences repurchase intentions whereas dissatisfaction has been seen as a primary reason for customer defection or discontinuation of purchase”. McIlroy and Barnett (2000) argue. but it is hard to have loyalty without satisfaction”. Satisfaction is a necessary but not a sufficient condition to loyalty. convenience or quality elsewhere ….Chapter Two – Literature Review The importance of customer satisfaction has been reinforced by La Barbera and Mazursky (1983) who commented that. On the cost side of the profit equation. Miranda et al (2005. 2. accurate estimates are difficult to obtain – even within corporations” (Uncles. pg 16). This area has been considered in chapter four of this thesis. “even if customers are satisfied with the service they will continue to defect if they believe they can get better value. It is the authors belief that defecting customers may not have been dissatisfied with the service they received from their primary store. It was discovered that loyalty was influenced by several factors such as price. “Breakaway customers may not have been dissatisfied with the service provided from their primary store.
Such schemes can take years to establish and if successful can reap dividends to an organisation. The increased profit comes from reduced marketing costs.Chapter Two – Literature Review The costs involved with executing and sustaining a customer reward program are notoriously high. powered by: increased purchases of the existing product. The sheer competitiveness of the food retailing industry ensures that maintaining market share and increasing profit is an invariable and gruelling campaign among major players. They even serve as part‐time employees. pg 147) has noted that “if it is well planned and aimed at the right customers. in part because they know the product and require less information. marketers are seeking information on how to build customer loyalty. Investment in technology means millions are being spent on software. Bowen and Chen (2001) have stated “It is commonly known that there is a positive relationship between customer loyalty and profitability. pg 3). Today. Clarke (1997. “When you can increase customer loyalty a beneficial ‘flywheel’ kicks in. has noted that “although there are thousands of programmes in existence. loyal customers cost less to serve. price premium due to appreciation of your added‐value services. Therefore loyal customers not only require less information themselves. Butscher (2002. hardware and personnel. very few create real loyalty and devotion”. cross‐purchasing of your other products. Anton (1996) states. Reichheld and Sasser (1990) concluded that as a customer’s relationship with a company extends then profits rise. 37 . increased sales and reduced operational costs. The association between loyalty and profit and the economics of customer loyalty has been recognised by numerous scholars and studies. reduced operating cost because of familiarity with your service system and positive word‐of‐ mouth in terms of referring other customers to your company”. they also serve as an information source for other customers”. it can pay for itself many times over”. Finally. However.
Today’s consumers know the fundamental messages and aims of promotions designed to get them to part with their cash.Chapter Two – Literature Review To further the union between loyalty and profit. of which loyalty is one” (Dowling and Uncles 1997). the substance and worth of word of mouth communication is essential. “Loyalty is a consequence of creating value for customers and profit is a consequence of loyalty” (Tapp 2005. the internet has allowed an increase in suppliers of goods and services to be utilised and all manner of price comparison websites and forums to appear where members post deals for all variety of goods and services resulting in sensitive price conscience consumers. 38 . stating “that consumers are smarter than marketers generally perceive. 1997 cited in Egan 2001. pg 347) notes. pg 381) argues that consumers are taking advantage of suppliers and jumping from one to another to get the best deal they can. pg 173). most importantly generate extra business through referrals”. Egan (2001. Haywood (1989. “Profitability is determined by margins that depend on a wide mix of factors. Clarke (1997. With this perception the customers themselves are a marketing resource through referrals. However as mentioned. cited in McIlory and Barnett 2000. The connection between loyalty and profit is apparent and may initially appear to be rather simplistic. “The Internet makes a buyers search more efficient and encourages rational shopping versus a more emotional shopping in brick and mortar store. will pay premium prices and. consumers are becoming increasingly more savvy. family or colleagues are perceived as a more reliable form of endorsement and assurance. pg 381). buy more. and are actively manipulating suppliers for their own ends”. pg 146) points out that making customers more loyal will facilitate them to “remain as customers for longer. which appeals to our senses” (Trehan 2006). In a “generation of increasingly promotion‐literate customers” (Harlow. Khan (1998) is of the same opinion. “building customer loyalty has a direct impact on profitability and past research has claimed that it can be five times more expensive to obtain a new customer than to retain one”. Personal recommendations from friends.
pg 140). 2000. “Consumers are most likely to participate in programs they believe offer equitable relationships and will. pg 100) claim that “only a truly exceptional program will change the purchasing behaviour of customers to increase sales revenues significantly”. 1999. Achieving rewards is related with purchasing frequency. pg 462). Arranz and Cillán 2006.. Bell and Lall. In addition customer preferences and circumstances change over time. pg 387). ultimately. 2002) or reward programs (Kopalla et al. pg 14) state “there have been more loyalty programmes that have failed than succeeded”. Given the popularity of loyalty programmes and as suggested by Byrom et al. Despite the considerable growth in customer reward programs. 1999. Kim et al. Humby and Hunt (2004. so this type of program are also called frequent purchase programs (Shoemaker and Lewis. 2001)” (Gómez. Dowling and Hammond (2004. 2006. There are many factors at play such as how one can “totally isolate the effect of one stimulus from all other factors that could have influenced the target factor” (Butscher.. promotion and other loyalty programmes. Uncles. 2002.Chapter Two – Literature Review 2. (2001) that there are over 150 such schemes currently in the UK. one of the most debated areas is just how successful are loyalty programmes in delivering and do they actually create value to either businesses or consumers. Long and Schiffman. 39 . base their decision to participate in loyalty programs according to their perceptions of fairness” (Lacey and Sneath. as well as being exposed to a whole host of advertisement.10 Do Customer Reward Programs Deliver Long Term? “Loyalty programs are a marketing strategy based on offering an incentive with the aim of securing customer loyalty to a retailer. Determining the success of a customer reward program is very subjective in that it depends on the goals that were set and what echelon of achievement is a loyalty programme considered to be a success.
Chapter Two – Literature Review
As mentioned, Tesco is the number one supermarket retailer in the UK and Humby and Hunt (2004, pg 3) have commented that “Tesco may well have got to this enviable position without Clubcard – but it could not be done so as quickly or as cheaply as it has done without the customer data and insight that Clubcard provides. The information has guided almost all of the key decisions the management team have made in recent times, reducing the risk of taking bold new initiatives”. Many critics and scholars believe the customer reward program phenomenon to be a bribe. Parker and Worthington (2000, pg 496) have commented that the term ‘loyalty card’ is a misnomer and that the customer’s loyalty is not for sale. It cannot be bought by organisations or deals. To further this argument, Egan (2001, pg 382) declared “loyalty is fleeting and cannot be bought”. Reichheld (1996 cited in Tapp, pg 170), raises the issue that “loyal customers ignore vouchers and coupons, and are less price sensitive on individual items than new customers. There is an interesting irony here: many companies have ‘loyalty schemes’ which offer lower prices via points systems in return for loyal custom; but companies whose customers only stay with them because of the customer reward program don’t have genuinely loyal customers”. Reichheld (1996) found that ‘old’ customers pay higher prices than new ones because fundamentally they are happy with the value they are getting from the company. Reichheld (2002, cited in Finnie and Randall), also argues that loyalty programmes can assist in reducing business costs and increasing profit as “return customers tend to buy more from a company over time”, “refer others to your company” and “pay a premium to continue to do business with you rather than switch to a competitor who they are neither familiar nor comfortable”. Reichheld (1996) has constantly maintained that companies can’t buy loyalty. They can only earn it through consistently creating superior value for their customers. There has been much criticism of customer reward programs and that “most studies claim lower prices, rather than loyalty schemes, will keep customers coming back for more” (Matheson, 2003). Additionally, loyalty programs have faced “mounting 40
Chapter Two – Literature Review
pressure concerning their use as a facilitator of specific customer information and potential to discriminate against non‐member customers because of greater marketing resource allocations shifted toward selective customers” (Lacey and Sneath, 2006, pg 462). When considering the success of loyalty programmes “some indices are easy to measure, such as number of members, increase in expenditure on loyalty programme products, and response to special offers. Indices that are more difficult to measure include a member’s repeat purchase behaviour or increase in brand loyalty” (Butscher, 2002, pg 143). “Perhaps the greatest benefit obtained from loyalty programs resides in the data mining and knowledge base that firms can use to develop statistical models to improve customer loyalty, support customer service, and develop new offerings to help reduce defection and increase customer lifetime value” (Wansink, 2003, cited in Lacey and Sneath, 2006, pg 461). Equipped with this specific information, organisations can design specific communications and product mix offerings. “Loyalty programs represent an alternative to mass‐market promotion since firms have the ability to more precisely target an increasingly fragmented customer base, and communicate customised and relevant vale propositions and marketing messages to individual customers” (Lacey and Sneath, 2006, pg 461). What can be established is that loyalty programmes can provide retailers with a mechanism and justification for individual customer data. In such fiercely competitive markets, as commented by Stone (1994, pg 37), “knowing who the best customers are, what they buy, and how often provides a secret weapon”. It is estimated that as a result of the Clubcard scheme Tesco has approximately 100,000 different promotional messages which reflect the buying habits and preferences of its customers.
Chapter Two – Literature Review
Pressey and Matthews (cited in Tapp, 2005, pg 171), argue that “despite the recent use of loyalty cards and database marketing techniques by UK retailers, most transactions are ‘discrete, short‐term, one‐off acts”. Customer reward programs can also direct businesses to overlook divisions of the business which may need attention, as noted by Fill (2002, pg 672), “in 2000, the number of in‐store promotions fell from 700 to just 200, reflecting the need to provide for those whom are price sensitive”. Although it is clear that customer reward programs can create value through personalisation, they are increasingly attracting negative remarks. O’Malley (1998, pg 52) describes them as “little more than sophisticated sales promotion”. Humby and Hunt (2004, pg 13) profess that customer reward programs can destroy value and encourage “a ‘Big Brother’ culture” implying that “the relationship isn’t trust, it is bullying on behalf of corporate giants who won’t give discounts unless you give up your right to privacy”. This hints that “loyalty relationships are more appropriate to business to business markets rather than consumer markets (Dowling and Uncles, 1997). To further this perception, “The notion of customer loyalty is important to marketing people but not, on the whole, to customers. Customers don’t see why they should accept a good offer from a new supplier just because they are satisfied with their present one” (McCorkell, 1997 cited in Tapp, 2005, pg 172). From the above critique and given the fact customer reward programs are “costly compared to other promotions” (Dowling and Uncles, 1997). One may question that perhaps the marketing budget funds are better spent elsewhere. This is palpable in the market place today with many businesses projecting funds into lowering prices, developing own brands and branching out into other markets and services. Given the sheer number of organisations participating and operating their own customer reward programs and consumers owning more than one loyalty card, it is evident that achieving loyalty is increasingly difficult.
2006. pg 459). 1997 cited in Lacey and Sneath. Barnes (2002) also concurs that. 1999. “the ultimate marketing objective behind loyalty programs is their use as a primary data‐gathering platform that can help improve the efficiency and effectiveness of a firm’s marketing initiative”. Moreover. However. the rewards are largely intrinsic. They create barriers to exit. due to their inability to benefit from those programs” (Downling and Uncles. pg 459). 2006. an incremental shift in buying behaviour (Humby and Hunt. It never meets. but they don’t often lead to true loyalty”. Such programs often lock customers in. pg 461) states. ‘free’ merchandise or trips.11 It was suggested that there was a difference in every day loyalty and retail loyalty. loyalty programs can be used to convey prestige to customers and make them feel special. Uncles et al. “The basic premise behind such programs is to reward customers for giving the company a greater share of their business. 2003. 2. a slight margin of preference. Tesco have always maintained that the Clubcard was a simple “thank you” for customers who shop at their stores and as such offered the promise of rewards to them. One shopper recently observed in an interview that the frequent‐shopper ‘club’ of which he is a member feels nothing like any other club to which he has belonged. customers who participate in the program might become frustrated. (2003. The rewards are extrinsic ‐ points. behavioural or attitudinal and defined as “looking to achieve a little extra goodwill. Despite the criticism. In actuality they are “effectively locking them into the loyalty programme and preventing them from moving to a competitor brand” (Fill.. cited in Lacey and Sneath 2006.. Where true loyalty exists. 2000 cited in Lacey and Sneath. “Loyalty 43 Conclusion . loyalty programmes if executed properly and maintained can be hugely beneficial to the retailer. Loyalty was recognised as being emotional. “However the effect on the firm’s non‐participating customers can lead to dissatisfaction and alienation with the firm. He rarely gets to associate with other members. important and appreciated” (Morgan et al. and perhaps even disenfranchised.Chapter Two – Literature Review “Clearly. pg 9). pg 563).
pg 27) argues that some loyalty programmes are “just gimmicks to get the maximum value extracted from a customer base”. pf 52). 2006. pg 355). Parker and Worthington (2000. 2002. Loyalty programs are “designed to accommodate individual consumers in the form of added products or enhanced customer service options not generally presented to all of the firm’s customers” (Lacey and Sneath. However the literature surrounding the subject implies that loyalty schemes/ customer reward programs are manipulative and controlling and are “little more than sophisticated sales promotion” (O’Malley (1998. Additionally. While Parker and Worthington (2000. pg 496) raise the issue of a new strain of customers known as “points junkies” who are desperate to gain and save points in order to redeem them for free products or services. 1999. Loyalty marketing was also identified as a “business strategy” (Heskett. which transpires through the theory of operant conditioning. pg 458). pg 459). 2005). Additionally. the long‐term benefits of a customer reward program and if it creates value was analysed. retain and grow profitable relationships” (ICLP. These schemes can offer many benefits to the retailer and act as a mechanism and justification for accumulating personal data of customers and increasing switching costs “effectively locking them into the loyalty programme and preventing them for moving to a competitor brand (Fill. It is widely regarded that loyalty is established through trust. Reichheld (2002. 44 . pg 563). What was found was the perception that loyalty could actually lead to customers manipulating suppliers by jumping between organisations to get the best deal.Chapter Two – Literature Review marketing can be defined as the management process of identifying ‘best customers’ and utilising customer data and insight to create. Despite this “loyalty programs continue to be used by organisations as marketing tools to support their customer relationship management (CRM) strategies” (Lacey and Sneath. pg 496) commented on the knowledge of consumers by questioning “how ethical is a reward scheme that relies on maintaining the ignorance of the very customers that it wants to see exhibiting loyal behaviour”. 2006.
And also commonly found in markets where the core product is a commodity and companies have great difficulty differentiating themselves” (Tapp. The theory is that customers will aspire to collect and redeem more points and thus increase spending.Chapter Two – Literature Review From the literature review it is apparent that satisfaction and loyalty is not the same thing and they are not mutually exclusive. ”Loyalty schemes tend to be most useful in frequent purchase markets …. “the oft‐cited success of Tesco’s loyalty scheme is difficult to determine because it was introduced as part of a much broader program of new business development and store acquisition” (East and Hogg. 45 . By exploring the Tesco Clubcard model we gain a hypothetical insight into how Tesco are providing an “everyday experience” (Rowley. pg 274). specifically “lifestyle themed rewards that appeal to a members’ dream”. 2005. it is vital that retailers are more innovative and creative with the rewards they offer. 2004. 1994) determined how marketing tasks should be prioritised in order for an organisation to accomplish the target of loyalty. Capizzi and Ferguson (2005. It was also determined that organisations operating in market sectors where there is intense competition and similar competitors necessitate the use of loyalty marketing. 2005. 1997 cited in Uncles. pg 199) to their customers. pg 78) imply that some loyalty card members view the rewards they gain as being opportunities of a lifetime which they have complete control over having commented that the rewards given to customers must appeal on a different level and that customer reward program participants are “embracing the idea of redeeming points for an once‐in‐a‐lifetime experience”. The use of the “Customer Loyalty Ladder” (Payne. Dowling and Hammond. pg 102). Due to the sheer number of customer reward programs being offered to customers. However. The focus addressed issues that would affect the value of a customer reward program and illustrates the need for an organisation to steer satisfied customers into loyal customers.
46 . However there are areas which have been identified and do require further investigation. the customer reward programs itself and Tesco. The main issues is a user profile of the Clubcard and to realise the differentiation between loyalty in relation to the Clubcard brand. To which of these factors do loyalty schemes generate true loyalty? These factors and the remaining objectives of the dissertation will be answered and achieve through primary research in the next chapter.Chapter Two – Literature Review The completion of the literature review has addressed several objectives.
Chapter Three – Research Methodology Chapter Three Research Methodology .
2 From the literature review. All of which 48 Research Objectives Introduction . either through the theory that customers simply need to be satisfied in order to be loyal or through Duffy’s loyalty calculation hypothesis. 3. Reichheld (1996) injects that “customer satisfaction is the key to securing customer loyalty”. The crucial issue raised in the works of these scholars is that it demonstrates the role of the Tesco Clubcard in building loyalty. primary research is essential. It will impart justification into the chosen method of research and provide assessment to the chosen approach in terms of advantages. despite this positive commendation there appears to be a lack of evidence that it has actually created loyalty.0 CHAPTER THREE – RESEARCH METHODOLOGY 3. Duffy (2001. innovative products and services or the right price. The methodology will illustrate the chosen methods undertaken in order to conduct the primary research. However. disadvantages and limitations. several issues were discovered which required further investigation and research.1 In order to address all the objectives set out in this dissertation. Referring to section 2. However. pg 36) described satisfaction as being a starting point in order to create true loyalty. Humby and Hunt (2004. In conducting the literature review it was noted there was a wealth of acclaim and admiration for the Tesco Clubcard scheme.Chapter Three – Research Methodology 3.7 in the literature review drawing attention to the perception that a satisfied customer was not necessarily loyal. pg 17) argued that it should not be contended that card‐based customer reward programs are credible alternatives to being offered excellent service.
2005.6 illustrated the view that Tesco sustained the Clubcard is a straightforward “thank you” to their customers and it is “designed to give you something back for shopping with Tesco” (www. This would suggest that loyalty card schemes are actually allowing consumers to manipulate suppliers for their own needs. in addition to the Clubcard customer reward program. the Clubcard model is not unique with Seth and Randall (2001. However. “consumers are smarter than marketers perceive. Much of the literature raised the claims that loyalty is generated and influenced by other factors such as price.tesco. coupons. pg 230). as commented by Khan (1998). Therefore primary research is required to be undertaken to determine and establish if the Clubcard has actually created loyalty. pg 39) commenting that Tesco “did not invent the card nor were they a first mover”. Additionally the literature review indicated that consumers have come to expect some form of 49 . If it has. range of products and staff assistance. However. and are actively manipulating suppliers for their own ends”. Egan (2001. Tesco have been vigilant to these factors and the needs of their customers by implementing all of the strategies mentioned. The literature review also exposed that consumers are increasingly becoming more aware. the customer reward program or to the Clubcard brand itself? Section 2. With the quantity and penetration of customer reward programs currently in operation. from this an area of interest is found concerning customers being less attentive to rewards and instead being more interested in gaining appreciation and recognition from Tesco. pg 381) supports this view by concluding that consumers are taking advantage of suppliers and jumping from one to another to get the best deal they can. The issue raised here is with regards to the building of affinity that Tesco has with its customers through the use of specific magazine topics or quarterly mailings. then one must determine what factors the customers are loyal towards.. Tesco. location.com). it is essential to know if the Clubcard scheme “insulate(s) them [consumers] sufficiently from switching” (Miranda et al.Chapter Three – Research Methodology can develop loyalty.
In addition to the issues raised from the literature review. 2) Gauge the effectiveness of how the gathered information from the Tesco Clubcard is utilised. 1991). 1985). analyse and understand their opinions and mind‐set. This research approach is an objective. 3) Recognise and identify the main users of the Tesco Clubcard Scheme. 6) Consider the conjecture that consumers are manipulating suppliers for their own needs by shopping around and participating in other customer reward programs. 1990) and ‘positivism’ (Duffy.Chapter Three – Research Methodology reward as part of their routine shopping experience (Parker and Worthington. 3. it was felt that several other objectives were left unresolved. “quantitative research is described by the terms ‘empiricism’ (Leach. It derives from the scientific method used in the physical sciences (Cormack. From this the research objectives are: 1) Investigate customer opinions and perception on the Tesco Clubcard. As commented by Charoenruk (2007. pg 1‐2). 5) Establish if the Tesco Clubcard is actually needed. formal systematic process using numerical 50 Selection of Research Methods . given the number of loyalty initiatives currently employed by Tesco to facilitate customer satisfaction. pg 491).3 The technique of research methods can be divided into quantitative and qualitative approaches. 2000. 4) Determine if the Tesco Clubcard has actually created loyalty and ascertain what customers are loyal towards.
1990). 1987). Charoenruk (2007. comments that. tests. A qualitative approach is used as a vehicle for studying the empirical world from the perspective of the subject. “There are various vehicles used for collecting quantitative information but the most common are on‐street or telephone interviews” (Market Research World 2006). pg 529).Chapter Three – Research Methodology data findings. In‐depth interviews. which are instead describe in the language employed during the research process (Leach. which attempt to elicit descriptive information about the thoughts and feelings of respondents on a topic of interest to the research”. Routinely the data is collected using a premeditated template of questions in the form of a structured questionnaire survey incorporating primarily closed questions with set responses. not the researcher (Duffy. 1987). focus group discussions and participant observation are common methods used for collecting qualitative information.” It is primarily concerned with the collection of data using numbers and measurements. 51 . quantitative research is “a research methodology that seeks to quantify the data and typically applies some form of statistical analysis”. using a deductive process of knowledge attainment (Duffy. “qualitative research differs from qualitative approaches as it develops theory inductively. Benoliel (1985) expanded on this aspect and described qualitative research as ‘modes of systematic enquiry concerned with understanding human beings and the nature of their transactions with themselves and with their understandings”. qualitative research methods “usually involve small samples. pg 2). It seeks to establish relationships between two or more variables via a process of statistical methods to obtain the connotation of the relationship. it describes. There is no explicit intention to count or quantify the findings. According to Malthotra and Peterson (2006. and examines cause and effect relationships (Burns & Grove. With reference to Proctor (2003. 1985). Qualitative research is chiefly concerned with the collection of in‐depth information via a process of asking questions to understand how people feel and why they feel as they do (Market Research World 2006). pg 150).
able to test hypotheses. Researcher tends to become subjectively immersed in the subject matter. and construct statistical models in an attempt to explain what is observed.Chapter Three – Research Methodology 3. All aspects of the study are carefully designed before data is collected. time consuming. 52 . Recommended during latter phases of research projects.. Quantitative data is more efficient. pictures or objects.. such as questionnaires or equipment to collect numerical data. Data is in the form of numbers and statistics. Researcher knows clearly in advance what he/she is looking for. The design emerges as the study unfolds.e. Subjective ‐ individuals’ interpretation of events is important . uses participant observation. Researcher is the data gathering instrument. Qualitative Quantitative The aim is a complete. Researcher uses tools. questionnaires etc.3. Recommended during earlier phases of research projects. Data is in the form of words. e. but may miss contextual detail. Objective – seeks precise measurement & analysis of target concepts. Researcher tends to remain objectively separated from the subject matter. The aim is to classify features.g. uses surveys. Researcher may only know roughly in advance what he/she is looking for.g.1 Features of Qualitative and Quantitative Research Adapted from Neill (2007) ‐ Qualitative versus quantitative research: key points in a classic debate. in‐depth interviews etc. count them. and less able to be generalized. Qualitative data is more 'rich'. detailed description.
pg 7). McNabb (2004. the selected research method to be used requires the outcome of a combination of statistical analysis in addition to an indication with regards to consumers’ attitudes and perceptions. An additional benefit of using open questions is that it allows for a multitude of replies “where each respondent can give a personal response or opinion in his or her own words” (Collis and Hussey. 2003. 53 . It is often mentioned amongst marketing research literature that qualitative and quantitative approaches are bipolar measurements of data.Chapter Three – Research Methodology In order to achieve the objectives of the methodology. the questionnaire must not only collect the data required. Additionally. pg 179). “questionnaires can be designed to determine what people know. states that “the role of the questionnaire is to elicit the information that is required to enable the researcher to answer the objectives of the survey. This supports the suggesting that qualitative characteristic questions in a survey can be collected by using open ended questions seeking opinions. but collect the data in the most accurate way possible”. From the research methods mentioned above it has been determined that a questionnaire survey will be the most effective and efficient medium in order to achieve the objectives of the dissertation. To do this. pg 34) has observed that “sometimes the information is qualitative in nature but is presented in quantitative form”. Luck and Rubin (1987) defined a questionnaire as a “formalised schedule to obtain and record specific and relevant information with tolerable accuracy and completeness”. The qualitative approach places emphasis on gaining in‐depth answers from a small number of respondents. pg 150) comments that. what they think or how they act or plan to act …. However. Bruce (2004. Veal (1997. whereas in contrast quantitative approaches accentuates gaining statistical information from a large number of respondents. The flexibility of the questionnaire results in very few rules to follow in development of the instrument”.
Qualitative research is principally based on in‐depth interviews and focus groups based on non‐ representative samples. Therefore this method is regarded to be inappropriate to the study. However. One such possible scenario with using a focus group could be that an individual could influence other respondents or control the group to a specific direction. It is. “given the extensive training required to conduct a sophisticated qualitative study” (McDaniel and Gates. 2004. Furthermore.2 Analysis of Data Results and analysis of the data using a computer software package known as SPSS (Statistical Package for the Social Sciences) can be found in appendix C and appendix D respectively. A poorly written questionnaire will not provide the data that are required or. will provide data that are incorrect” (Bruce. It is imperative that there is unbiased study and analysis of data. 3. however. a very vital part of the process. 3. Questionnaire Design . pg 81). by using both qualitative and quantitative techniques in the survey. it is apparent that in order to extract the required information the interviewer required a great skill set. 2006.Chapter Three – Research Methodology The decision to use a quantitative method over a qualitative approach was based on the grounds that a large representative sample is needed. It is acknowledged that focus groups are a useful medium for understanding emotions and attitudes.3. pg 7).4 54 “The questionnaire represents one part of the survey process. it is felt that this understanding can be an achieved to an extent on a larger scale and at considerably less expense. worse.
it is essential that the questions are appropriate to what this study is intending to achieve. Successfully gather information that answers each study question. pg 151) has constructed an Eight‐Step questionnaire construction procedure Malhotra (1999. 2). 3. 3).1 The Eight‐Step Questionnaire Construction Procedure McNabb (2004. cited in McNabb.” 55 .Chapter Three – Research Methodology As the questionnaire is the chief data collection tool. Motivate respondents to answer all questions to the best of their ability. Keep all potential error to a minimum.4. 2004. Emphasis should be on using the correct terminology and it should be appropriate enough to extract the required information from the respondent base. The questionnaire must: 1). pg 151) claims that in the preparation of a questionnaire “the researcher must follow a systematic procedure in order to be sure that it fulfils three broad objectives.
It was devised that the multiple choice closed questions allowed 56 . 3. pg 30). 3.2 Justification of Questions The preliminary intentions for the survey have been recognised from the secondary data. pg 8). “a questionnaire writer who is not familiar with the vocabulary of a market can very quickly come unstuck”. As commented by Bruce (2004. 2004.Chapter Three – Research Methodology With this in mind. pg 151). The validation of the questions used can be found in appendix A.3 Question Types and Wording It is imperative that the questionnaire has been constructed using clear and concise terminology. This has identified the issues and areas to be addressed by providing “a map for the questionnaire” (Punch. pg 272). The questionnaire consists predominantly of both multiple choice and dichotomous closed questions. avoiding double‐barrelled questions and jargon to avoid any unnecessary confusion.4. As age can be a sensitive issue it was decided that the use of pre‐coded groups was the best method. The query of age group and sex of respondents are used to help meet the objective of building a profile of the Tesco Clubcard user. 2006.4. the above questionnaire construction table has been used as a guideline rather than a checklist of steps as “questionnaire construction is as much as art as it is a science” (McNabb. Additionally the consideration for avoiding bias in a question has been noted and the problem if respondent’s inability to evoke has been abridged by keeping the “reference time periods relatively short” (McDaniel and gates. 2003.
Although analysis of this data will not be as straight forward as the closed questions. Furthermore it will enable an opportunity for the interviewer to encourage respondents to develop and expand on their answers and reveal more information. additionally this approach allows for attitudes to be measured and analysed accurately. attractive and interesting rather than complicated. pg 154). In order to gain a better understanding of respondents’ opinions and to allow for a more precise measurement of attitudes. it is 57 . certain questions within the questionnaire will be graded using a Likert scale of one to five where ”respondents are instructed to tick the response options that best reflect their positions on each item” (Foddy.4. The addition of an open question has been incorporated in the questionnaire. it was determined that they could support the data obtained from the previous questions and reveal more information with regards to their motivations and attitudes. it is important. The dichotomous questions were purposely limited to two fixed alternatives as this is easier to manage but it also ensures a rapid answer from respondents. for respondents to be introduced to the purposes of each section of a questionnaire. 1999. unclear. forbidding and boring…. 3. The initiative for this is to allow respondents to use their own words and expressions without restricting choice. The justification adopting a five‐point Likert scale is to ensure that respondents have a sufficient choice of responses which best represents their feeling and it will also increase the response rate and quality of responses.Chapter Three – Research Methodology respondents to indicate their opinions as well as allowing for more than one response to be recorded. It must look easy. so that they can become involved in it and maybe identify with it. perhaps. If space permits. commented that “the appearance of the questionnaire is vitally important.4 Questionnaire Layout Cohen and Manion (1994. pg 258).
easy‐to‐use statistical software tabulate almost all survey results. i. analysed. A positive answer will be followed by a brief description of the respondent and multiple choice questions which can be answered quickly and accurately. usually a number. tabulated. The questionnaire will commence establishing connection through the introductory statement detailing the topic and the motive for carrying it out.Chapter Three – Research Methodology useful to tell the respondent the purposes and foci of the sections/of the questionnaire”.5 Interviewer versus Respondent Completion The chosen method of data collection is that the questionnaires will act as an initial script whereby the interviewer reads out the questions to the respondent and records the answer they give. accurate and facilitates any questions that respondents may field during the survey. most questionnaires are pre‐coded (classification numbers appear beside each question and each possible response). if he/she owns a Tesco Clubcard. pg 407). The validation for this method of data collection is so that the interviewer can ensure that the responses received are complete. the opening question in the questionnaire will determine if the respondent is qualified. 2006. 3. to each possible response to each question” (Malhotra and Peterson. If the answer is negative then the questionnaire will be terminated to avoid wasting time for either party.e.4. 3. For this reason. Once initial contact is made. This refers to “the way the gathered data will be coded. and interpreted… Computers using readily available.6 Coding “Coding means assigning a code. making data entry simple and less 58 . It is vital that care and attention must be taken so that no attempt is made to take lead or influence the respondent into giving answers they normally would not give.4.
Using this process will eliminate any subjectivity and ensure a fair method of acquiring respondents.5 It has been determined that approximately 100 respondents shall be drawn from a population of all visitors to Tesco in Newcastle Upon Tyne. This can be classified as “convenience sampling” in which “the sampling selection process is continued until your required sample size has been reached” (Saunders et al. money and resources. Sample Selection Procedure and Sample Characteristics 59 . 2003. Regardless of the response the process will start over again. pg 9). Furthermore it has been determined that potential respondents will be approached as they enter the supermarket. “every member of the target population has a known nonzero probability of being included in the sample”. whereby every forth person that passes will be asked to participate.Chapter Three – Research Methodology error‐prone… Responses to open‐ended questions are grouped into categories and classes are then translated into numerical form for counting and additional statistical analysis” (McNabb. 2004. pg 177). therefore there is no set criteria for respondents other than that they are Tesco customers. 3. The size of the sample has had to be limited due to available time. The reason for this is because potential contributors are more likely to participate when empty handed and less likely to be in a rush. Potential respondents will be approached as they enter the supermarket and the probability sampling that will be employed will be a rule of four persons. As commented by Fink (1995. pg 153).. It is felt that probability sampling would be the most appropriate method.
30am 17th April 2008 ‐ 9.Chapter Three – Research Methodology The times and dates in which this research was carried out were unfortunately constrained by the periods that Tesco allowed.30am 20th April 2008 ‐ 9.30am ‐ 11. Questionnaires can be custom‐designed to meet the objectives of almost any type of research paper” (McNabb.30am 19th April 2008 ‐ 9. 60 Strengths. 3.30am ‐ 11.30am 18th April 2008 ‐ 9. Limitations and Validity Completed Questionnaires 14 24 19 22 12 9 TOTAL = 100 .30am ‐ 11. resulting in the data being more objective.30am ‐ 11.6. pg 150). 2004.1 Strengths The method of using a questionnaire allows responses to be collected in a standardised way. The questionnaire was carried out on the following dates and times: Date & Time 15th April 2008 ‐ 9. The greatest of these is the considerable flexibility of the questionnaire.30am ‐ 11.30am 3. “Questionnaires have many advantages.6 The proposed method of collecting data through questionnaires is akin to any form of research. it has its merits but additionally it also contains limitations and issues of validity.30am 16th April 2008 ‐ 9. This results in a reduced bias and allows respondents to talk freely.30am ‐ 11.
61 .Chapter Three – Research Methodology Furthermore the information gathered can be presented in numerical and graphical form. if required. The time limits imposed by Tesco for when the questionnaire can be conducted will not be 100% representative of their customer base. however as the questionnaire is designed to be completely relatively quickly hopefully this issue can be avoided. 1999).2 Limitations “Questionnaires. The use of the forth person rule ensures that everyone calling into Tesco on the days and time the questionnaire will take place has an equal probability of being chosen to carry out the questionnaire. As commented by Clarke and Crichter (1985. This is valid in all research models nonetheless this factor must be taken into consideration when carrying out an analysis of the results. 3. Due to the restrictions. data will only be obtained from consumers who happen to visit the store on the specific days the survey is conducted and within the allocated time frame. respondents may answer superficially. like many evaluation methods occur after the event. Additionally. Information can be gathered from a large portion of a group.6. “there is always a gap between what people say and what they actually do”. Using a questionnaire results in a potentially large representative sample. Moreover this would facilitate the platform of a structured logical analysis and. so participants may forget important issues” (Milne. this can be re‐analysed by others. pg 27).
“validity refers to whether the questionnaire or survey measures what it intends to measure”. For example. Using the questionnaire as a research tool and combining quantitative and qualitative research methods will answer the aims of the study. Veal (1987. Additionally. The next chapter presents the research findings and provides analysis of the results. the possibility of respondents giving exaggerated responses or “fail to interpret the questions as intended by its designer” (Belson. validity could be compromised by an assortment of scenarios and circumstances. “Reliability is a characteristic of the instrument itself. validity depends chiefly on reliability. pg 13). if respondents are in a rush to complete the questionnaire this could affect their responses. EWB (2007) back this up by citing. This will further enhance the validity of the questionnaire.7 The method in which the data will be collected has been defined and acknowledged with validation in this chapter of the dissertation. pg 186) commented that validity is “the extent to which (the questionnaires) accurately reflect what they are meant to reflect”. 3. If a questionnaire is shown to be unreliable then there is no discussion of validity.Chapter Three – Research Methodology 3. In an interview situation. but validity comes from the way the instrument is employed” (EWB 2007).3 Validity In the context of questionnaires.6. 1986. 62 Summary . The proposal of approaching respondents and interviewing them before they enter the store is made on the basis that the respondents latest experience with Tesco may cause an irrational change in their opinion and thus resulting in inaccurate data being recorded by the questionnaire.
Chapter Four – Research Findings and Analysis Chapter Four Research Findings and Analysis .
The results from the quantitative research have been correlated and investigated. This segment of the study provides the fundamental information and data required in order to meet the aims of the dissertation.1 The subsequent chapter will present the findings gained from the primary research conducted via the questionnaire (appendix B) and interpret the results.0 4.Chapter Four – Research Findings and Analysis 4. The techniques employed in order to present the findings of the analysis include frequency tables and cross tabulation. This has enabled the analysis to be divided into separate sections in order to achieve each objective.1 User Profile of Tesco Clubcard Respondents The secondary research highlighted a distinct lack of information with regards to the characteristics of the fundamental users of loyalty cards.2 From the research methodology it was determined that there are several areas that need to be established. Individual frequency tables of the results can be found in appendix D 4. It has therefore been determined that an ideal starting point is to identify and establish a user profile of the selected sample. 4.2. Using the rule of every forth person helped ensure that the sampling was random. 64 Analysis Introduction CHAPTER FOUR – RESEARCH FINDINGS AND ANALYSIS .
59 5 10 15 60 + 5 9 14 Total 29 71 100 Figure 4.49 3 9 12 50 .1 shows the results from the questionnaire illustrating that out of the 100 respondents. the fact that 29 males owned a card shows that men are also active consumers and the Tesco Clubcard has effectively obtained the segment.1 Please choose your Gender: Cumulative Frequency Valid Male Female Total 29 71 100 Percent 126.96.36.199.0 Percent 29.2 Please choose your Gender: * Please indicate which age group you fall into: Crosstabulation Count Please indicate which age group you fall into: Under 21 Please choose your Gender: Male Female Total 2 8 10 22 . Although the data obtained was somewhat limited by the sample size and time scale. 29 are males and 71 are female.0 Figure 4.0 71.0 Valid Percent 29.29 9 12 21 30 .1.0 100. The data shows clearly the mass appeal of the Clubcard to be across all age 65 .39 5 23 28 40 .0 71.1.2 shows the age group of respondents compared to their gender.0 100.2. it does exemplify that women are more likely to be cardholders. Figure 4. Interestingly.Chapter Four – Research Findings and Analysis Figure 4.2.0 100.1.
What this shows is that Tesco has been successful in establishing position in the market place. 2007) to attain competitive advantage and thus adding value to the Clubcard scheme.49 50 .3 highlights the age of the respondents compared with their level of trust for Tesco products and the Tesco image.Chapter Four – Research Findings and Analysis demographics and from the data we can establish that the typical male user of Clubcard is aged 22‐29 and for females aged 30‐39.39 40 . Conversely.2.3 Please indicate which age group you fall into: * I trust Tesco products and their image Crosstabulation Count I trust Tesco products and their image Strongly Strongly Agree Please indicate which age group you fall into: Under 21 22 .59 60 + Total 4 3 3 4 5 2 21 Agree 4 8 16 5 5 9 47 No Opinion 1 1 2 1 4 1 10 Disagree 0 7 4 2 1 2 16 Disagree 1 2 3 0 0 0 6 Total 10 21 28 12 15 14 100 Figure 4. The above data indicates that the age groups most likely to be loyal to Tesco’s due to the notion they trust Tesco products and its image are the 30‐39 age groups.1. The results also show that the Tesco Clubcard appeals to every age group and that Tesco is effectively managing its relationship with customers in each of their different “life stage” (Simm. there is no evidence to suggest that the trust exemplified was formed by Clubcard single‐handedly.29 30 . 66 . Figure 4. 22% did not trust Tesco while 68% did trust Tesco (the other 10% neither agreeing nor disagreeing). However. it is also shown in the 22‐29 and 30‐39 age groups higher claims that they do not trust Tesco.1. In total out of the 100 respondents.2.
This high value could be accounted for by suggesting that customers value the Clubcard and have integrated it into their normal shopping behaviour and routine. Figure 4.0 81. furthermore it also illustrates that the Tesco Clubcard scheme is not enough to keep specific customers loyal to Tesco.0 Figure 4.2. creating unambiguous data that are significant to the study.0 1.1 Please indicate how often you use your Clubcard when you purchase goods or services with Tesco Cumulative Frequency Valid Always Frequently Little Never Total 42 39 18 1 100 Percent 42.2. the results from the questionnaire show that this concept is indeed not generic and that some consumers do not view one set 67 .0 100.1 discloses that a total of 81% of the respondents surveyed used their Tesco Clubcard always or frequently when completing a transaction with Tesco.0 39.2 Customer Perceptions on Tesco Clubcard The specific focus of the questionnaire has resulted in limited results of Clubcard users. 1978. pg 19). it is more likely to occur again upon similar occasions” (Skinner.0 100. despite this the results also show that there is a remaining 19% of customers who seldom or never use their Clubcard.0 Valid Percent 42.Chapter Four – Research Findings and Analysis 4.0 39. It is essential that this margin is not overlooked or ignored as this marker represents a large percentage and demonstrates that some consumers do not buy into the scheme and are simply not motivated by the rewards on offer.0 100.2.0 99.0 18.0 18. However.0 1. However.2. With reference to operant conditioning as mentioned in the literature review in section 2.6 and that “if a given bit of behaviour has a consequence of a special sort.0 Percent 42.2.
The results show that a resounding 95% of respondents across all age demographics would still continue to shop there.29 30 .59 60 + Total 21 26 11 14 13 95 0 2 0 0 1 3 0 0 1 1 0 2 21 28 12 15 14 100 10 No 0 Don't Know 0 Total 10 Figure 4. would you still continue to shop there? Crosstabulation Count If Tesco did not have the Clubcard scheme.39 40 . This raises the notion that perhaps customers view the Clubcard as being of little or no significance or application when they do their shopping at Tesco and in actual fact perceive it as an additional bonus. It also raises the notion that loyalty is more behavioural than attitudinal. Figure 188.8.131.52. would you still continue to shop there? Yes Please indicate which age Under 21 group you fall into: 22 .2 shows the age of respondents equated with the notion that if Tesco did not have the Clubcard customer reward program in place.49 50 . 68 .Chapter Four – Research Findings and Analysis of behaviours to lead to positive outcomes. would they still continue to shop there.2 Please indicate which age group you fall into: * If Tesco did not have the Clubcard scheme. adding value to the statement that behaviour is not generic amongst all consumers and that some customers are not affected or influenced by the prospect of rewards. Appreciably what these results show is that Tesco is doing and offering so much more than merely a loyalty card that facilitates repeat purchases to their customers.2.
What is evident from these findings is that despite consumers feeling that more could be done to increase their loyalty they nevertheless view Tesco as being an inventive company and in a positive light.2.3 is that 77% of the respondents surveyed either strongly agree or agree that more could be done by Tesco to increase their loyalty.2.2.Chapter Four – Research Findings and Analysis Figure 4.3 I think Tesco is very innovative * I feel more could be done to increase my loyalty Crosstabulation Count I feel more could be done to increase my loyalty Strongly Strongly Agree I think Tesco is very innovative Strongly Agree Agree No Opinion Disagree Total 1 4 0 0 5 Agree 8 46 16 2 72 No Opinion 2 8 4 0 14 Disagree 0 4 2 1 7 Disagree 1 1 0 0 2 Total 12 63 22 3 100 What we can establish from figure 4. conversely 75% view Tesco as being an innovative company.2.2. Figure 4.2.4 I trust Tesco products and their image * I feel more could be done to increase my loyalty Crosstabulation Count I feel more could be done to increase my loyalty Strongly Strongly Agree I trust Tesco products and Strongly Agree their image Agree No Opinion Disagree Strongly Disagree Total 1 3 1 0 0 5 Agree 16 34 5 13 4 72 No Opinion 2 7 2 2 1 14 Disagree 1 2 2 1 1 7 Disagree 1 1 0 0 0 2 Total 21 47 10 16 6 100 69 .
despite this 95% would continue to shop at Tesco if they did not have the Clubcard scheme.3.2. However.2.Chapter Four – Research Findings and Analysis As stated previously and as shown in figure 4. Figure 4. 70 . would you still continue to shop there? * I expect rewards to be a part of my normal shopping experience Crosstabulation Count I expect rewards to be a part of my normal shopping experience Strongly Agree If Tesco did not have the Clubcard scheme. 77% of respondents felt more could be done to increase their loyalty.2. would you still continue to shop there? Don't Know Total 1 10 1 50 0 30 0 10 2 100 Yes No 8 1 Agree 48 1 No Opinion 29 1 Disagree 10 0 Total 95 3 Figure 4.2.2. despite this.5 shows that 60% of the respondents strongly agree or agree that they expect rewards as part of their normal shopping experience. What can be identified from this is despite customers’ attitudes to more being done to keep them loyal they would still continue to purchase products from services due to their confidence in the products and brand offered by Tesco. 68% strongly agree or agree on trusting Tesco products and their brand image.5 If Tesco did not have the Clubcard scheme.2. This comparison again shows the loyalty that Tesco has generated and that the majority of customers will shop there regardless of a customer reward program. However. However what is unclear are all the separate factors that have contributed to build this loyalty.
When these results are analysed we can see that 60% of respondents do not view loyalty card schemes as being primarily important (ranked 4‐8). What these results reveal is that consumers are attracted to the rewards and seek to realise the experiential and lifestyle themed incentives that Tesco makes available to them. 71 . 8 = not important at all).Very Important 2 3 4 5 6 7 8 . but instead view other factors as being more important to them. This shows that consumers are not principally interested in customer reward programs or the rewards they can attain from despite a relatively high number of respondents’ taking advantage of them.2.2.6 shows that 61% of respondents have redeemed some kind of reward with Tesco in the last 12 months.2.Not Important At All Total 4 7 5 13 12 9 5 6 61 No 5 1 2 3 9 3 11 5 39 Total 9 8 7 16 21 12 16 11 100 Figure 4. Additionally.Chapter Four – Research Findings and Analysis Figure 4.6 Loyalty Card Scheme * Have you redeemed any rewards from the Clubcard scheme within the last 12 months? Crosstabulation Count Have you redeemed any rewards from the Clubcard scheme within the last 12 months? Yes Loyalty Card Scheme 1 . 40% of respondents rank a customer reward programs importance between 1‐4 on a scale of 8 (1 = very important. What this finding illustrates is that shoppers’ attitudes have changed and they view other factors as being more important than earning points on their purchases.2.
3.2.1 also indicated that 19% of the respondents are loyal and satisfied with Tesco.2. exhibiting that they are locked into being loyal.1 Would you describe yourself as being loyal to Tesco? * Would you describe yourself to be a satisfied customer of Tesco? Crosstabulation Count Would you describe yourself to be a satisfied customer of Tesco? Yes Would you describe yourself as being loyal to Tesco? Yes No Don't Know Total 19 31 4 54 No 13 15 1 29 Don't Know 4 12 1 17 Total 36 58 6 100 The results from the table show that overall.3.5. Figure 4. One justification for this could be defined by Barnes (2002) as “functionally loyal” and mentioned in section 2.2.3 Loyalty and Satisfaction The debate in the correlation between loyalty and satisfaction has been highlighted in the literature.Chapter Four – Research Findings and Analysis 4.3. By using a cross tabulation table.2. when the question is cross tabulated we can see that 31% are satisfied but would describe themselves as not being loyal.1). What we can deduce from this is that satisfied customers are not necessarily loyal to a business. Functionally loyal is whereby customers are only loyal because they have an objective reason to be such as convenience. However. figure 4. factors such as opening times and location is central to them. 13% of respondents expressed they were not satisfied Tesco customers but were loyal. Accordingly. 54% of the respondents surveyed described themselves as being satisfied Tesco customers. the individual variables can be analysed (figure 4. It is advocated that this percentage of respondents achieved 72 . Furthermore.
the 12% divergence from the results in figure 4. the results indicate that more additional factors are required in order to “insulate them (customers) from switching” (Miranda et al.1 indicates that most consumers need more than satisfaction to be loyal.7) notion that. “increasing satisfaction does not produce an equal increase in loyalty for all customers”.4 Tesco’s Efficiency and Use of the Information Gained from Clubcard The Clubcard magazine has a run of nearly 9 million copies four times a year (Stone.2. What can be concluded is that the Clubcard scheme does add value and operating in conjunction with other loyalty marketing tools that Tesco utilise. It was shown in the previous section that 61% of respondents surveyed have redeemed some kind of reward from Tesco in the last 12 months.7.2. pg 36). The results show that the association between loyalty and satisfaction is not achievable through a single method alone and in actual fact is dependent on consumers’ own variables. 4. However. The Clubcard scheme can be viewed as a starting point to loyalty as mentioned by Duffy (2001. allows customers to reach a state of loyalty via different routes and methods. Some consumers simply need to be satisfied with a business in order to be loyal.2. However.Chapter Four – Research Findings and Analysis their loyalty condition through the linear progression theory as pointed out in section 2.3. pg 203) and is an integral part of the Clubcard scheme. Thus confirming Söderlund’s (1998 – section 2. Figure 4. such as competitive pricing and customer service. pg 230)..1 below demonstrates the frequency of the respondents who read the clubcard magazine. 73 .4. 2004. 2005.
Figure 4. what can be devised from this is that it does signify that consumers have a lack of interest in this medium.2. unhelpful and of no use 13 7 20 Total 25 26 51 74 .2 Do you read Clubcard magazine * If “yes” or “sometimes please indicate what you think of the magazine.0 26.0 Valid Percent 25.0 184.108.40.206 100.0 100.0 100.1 Do you read Clubcard Magazine Cumulative Frequency Valid Yes No Sometimes Total 25 49 26 100 Percent 25. Crosstabulation Count If “yes” please indicate what you think of the magazine.Chapter Four – Research Findings and Analysis Figure 4.4. These statistics are dependant on how long the respondent has been a Clubcard member. It covers everything you would expect and is of great use Do you read Clubard magazine Yes Sometimes Total 3 5 8 It is a good read with some informative articles and features 9 14 23 It is dull.0 The results show that 49% of respondents claim to not read the Clubcard magazine and that only 51% answered positively to reading it.0 74.0 49.0 Percent 25. However.0 26.
Figure 4.2. 4. a staggering 20 of them found the magazine to be dull.Not 1 .Chapter Four – Research Findings and Analysis Furthermore. the data can be divided into true loyal and functionally loyal.2 shows that out of the 51 respondents surveyed who did read the Clubcard magazine. an incremental shift in buying behaviour”. To highlight a shift in buying behaviour it is practical to recognise and acknowledge if the collection of points results in an increase of the respondents’ expenditure.Very Important Does the collection Yes of points influence you to buy more or to buy specific/alternative promotional products Don't Know Total 21 29 19 13 9 5 3 1 100 2 6 3 1 2 2 2 0 18 No 0 19 2 1 22 3 3 13 4 1 11 5 1 6 6 0 3 7 0 1 Important At All 0 1 Total 6 76 75 . a slight margin of preference. Therefore. pg 9) implied that retail loyalty is “looking to achieve a little extra goodwill.4.2.5 Has the Tesco Clubcard Created Loyalty? Humby and Hunt (2004.1 Does the collection of points influence you to buy more or to buy specific/alternative promotional products * Location Of Store Crosstabulation Count Location Of Store 8 . Consequently. unhelpful and of no use to them. By means of cross tabulating the data with how important respondents rank the location of a store. it could be suggested that the marketing funds could be better utilised elsewhere. this could suggest that Tesco is not suitably employing the data it has gathered from Clubcard to efficiently and effectively communicate with its end customers.5. figure 4.2.
0 100.6 Are Consumers Manipulating Suppliers? Figure 4.1 Apart from Clubcard.0 83.Chapter Four – Research Findings and Analysis Figure 4. do you own and regularly use other store loyalty cards? Please indicate how many: Cumulative Frequency Valid 1 other card 2 other cards 3 or more other cards I only own a Tesco Clubcard Total 28 45 10 17 100 Percent 28.2.0 10.5.0 17.0 Percent 28.2.0 76 . a total of 83% indicated that they own and regularly use up to 3 other store loyalty cards in addition to their Tesco Clubcard. The importance of word of mouth exposure was pointed out in section 2. Figure 4. on closer inspection. though only 6% of the respondents stated that their spending increased in their pursuit of points.0 10. and with reference to preceding literature.1 shows that from the 100 respondents surveyed.6. Remarkably the respondents who are increasing their expenditure because of the Clubcard.1 shows that 76% of the respondents surveyed claimed that the collection of points did not influence them to increase their expenditure or to buy specific alternative/promotional products. none of them ranked the location of a store as being the most important factor to them.7 and thus this number can be seen as favourable in regards to profit margins.0 100.2.6. this is a noteworthy figure in relation to profits. However. while 17% professed they only own a Tesco Clubcard.0 45. At a glance this statistic appears to show that the Tesco Clubcard has failed in its activity to create loyalty and generate an increase in sales.0 Valid Percent 28. This suggests a minor fraction of substantiation against the functionally loyal concept.2.0 73.0 100.0 45.0 17. 4.
as mentioned in section 2. reinforcing Khan’s (1998) notion “that consumers are smarter than marketers generally perceive.0 32.0 8.0 10.2. Figure 4.6. attitudes and perceptions. loyalty is now much harder to achieve.0 Valid Percent 28.0 92.9 and that they are manipulating suppliers for their own gains.0 Percent 28.0 60. and are actively manipulating suppliers for their own ends”. it also points to the belief that the Tesco Clubcard is little more than an expensive sales promotion technique.0 100.0 22.2 below puts this finding into practice as it illustrates that 60% of the respondents surveyed either strongly agree or agree that they actually shop around to get the best deals. However. today amongst the twenty‐first century generation of consumers who have more diverse tastes.0 32.Chapter Four – Research Findings and Analysis These results lead to the principle that competitors are finding it straightforward to replicate and imitate similar offerings.6. and consumers are harvesting the benefits from all these schemes.0 8.0 77 .0 70.0 22.0 10.0 100.0 100.2. What this data confirms is that consumers are savvy. Furthermore these results actually constraint the value of the Tesco Clubcard as a loyalty marketing tool.2 I usually shop around to get the best deals Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Strongly Disagree Total 28 32 10 22 8 100 Percent 28. One can question if loyalty cards have reached saturation point and if the era of the Tesco Clubcard is over? Figure 4. It can be contended that when the Tesco Clubcard was first introduced in 1995 it could have achieved loyalty through its uniqueness and innovation. Additionally.
0 50.3 reveal that 60% of respondents expect some kind of reward as part of their normal everyday shopping experience.0 Valid Percent 10. A total of 52% of respondents correctly indicated that they knew that for every pound they spent at Tesco they would receive one point in the Clubcard scheme.0 30.0 100.4 indicates that consumers are not as ignorant as originally advocated.0 The secondary research remarked that loyalty card schemes rely “on maintaining the ignorance of the very customers that it wants to see exhibiting loyal behaviour” (Parker and Worthington.6.2.0 100.2. as well as pointing out that consumers recognise how much they need to invest in to the scheme in order to receive a laudable prize/reward.6.0 60.0 90. Figure 4.0 Percent 10.Chapter Four – Research Findings and Analysis With the sheer profusion on different but similar customer reward programs being employed by organisations and offered to consumers. the data acquired through the survey and shown in figure 4.0 10.2. the information gathered from the survey opposes this hypothesis. 2000.0 50.3 I expect rewards to be a part of my normal shopping experience Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Total 10 50 30 10 100 Percent 10. However. Figure 4.0 10.6.0 100. Additionally Parker and Worthington (2000. 78 . pg 496). This exemplifies the need for market leading suppliers to invest in loyalty marketing schemes in order to compete for evolved consumers with exceptionally high buyer power.0 30. pg 496) also argued that such schemes were unethical and lead to the materialisation of “points junkies”.
Chapter Four – Research Findings and Analysis Figure 4.29 30 .49 50 .220.127.116.11 60 + Total 5 12 17 8 6 4 52 2 points for every £1 1 1 4 1 1 2 10 5 points for every £1 1 1 0 2 4 1 9 10 points for every £1 3 7 7 1 4 7 29 Total 10 21 28 12 15 14 100 18.104.22.168 below provides this information.7 Does Tesco Really Need the Clubcard The data collected from the survey has provided an important insight into the significance of what factors respondents place upon that influence loyalty.4 Please indicate which age group you fall into: * Do you know how many Clubcard points you gain for every £1 you spend in store? Crosstabulation Count Do you know how many Clubcard points you gain for every £1 you spend in store? 1 point for every £1 Please indicate which age group you fall into: Under 21 22 .39 40 .1 Value for money Location of store Quality of service and staff Loyalty card scheme Product range and presentation Overall store layout and appearance In‐store promotional magazine and flyers Money off coupons/vouchers and special promotions 1 Very important 31% 21% 12% 9% 25% 1% 1% 0% 2 18% 29% 14% 8% 19% 9% 1% 2% 3 20% 19% 24% 7% 12% 12% 2% 4% 4 10% 13% 19% 16% 14% 13% 5% 8% 5 3% 9% 13% 21% 15% 18% 8% 6 6% 5% 8% 12% 4% 27% 14% 7 8 Not very important 8% 4% 3% 1% 6% 4% 16% 11% 9% 2% 11% 9% 18% 51% 18% 14% 25% 29% 79 .2. Figure 4.2. Figure 4.
The responses were grouped as follows: 80 . 7) In‐store promotional magazine and flyers. 6) Overall store layout and appearance. 3) Product range and presentation. Although the results show that money off coupons/vouchers and special promotions as being the least important.Chapter Four – Research Findings and Analysis Taking into account what respondents valued as 1 and 2 (very important/important) and totalling them up revealed the highest ranked order to be: 1) Location of store. The ranking system also shows that loyalty card schemes are in the bottom half of important factors when choosing a primary supermarket. These findings are substantiation that Tesco may be better off investing money into other areas rather than in its Clubcard scheme.7. 2) Value for money. The findings exemplify that location of store and value for money are the most influential determinant factors in achieving loyalty.2 show the results of the open‐ended question in the survey. if we examine the other end of the grading scale we can see that a staggering 51% of the respondents ranked in‐store promotional magazine and flyers as 8 (not very important). 8) Money off coupons/vouchers and special promotions.2. This is an interesting discovery as these are both products of the Tesco Clubcard. 4) Quality of service and staff. The aim of which was to give respondents the opportunity to freely write their own comments and remarks into how Tesco could make them more loyal. Figure 4. 5) Loyalty card scheme.
Additionally.0 12.0 74. discounts from their final shopping bill.0 46.0 1.0 14.0 16.0 12.0 99.0 1.0 58.0 100.0 32.0 3.0 4 12 3 3 3 16 1 100 4. improved provisions for older people.0 22.0 Percent 10.0 100.0 3.0 16.0 3.0 62.Chapter Four – Research Findings and Analysis Figure 4.2.0 The results show that the majority of responses signal towards direct. the findings also show that Tesco should consider investing extra money into providing adequate transport facilities for customers. The feeling is that the Tesco Clubcard should evolve by 81 .7.0 48.0 3.0 100.0 22 14 2 10 22. rather than gaining rewards in the long term.2 What more could Tesco do to make you more loyal? Cumulative Frequency Valid Improve facilities for elderly people Have discounts at the till rather than rewards Help those without transport Improve store layout Faster checkouts/self service checkouts More Clubcard points per pound Increase product range Increase store promotions More store entrances and exits Increase Clubcard rewards Improved on-line shopping Improve Clubcard administration Total 10 Percent 10.0 10.0 14.0 80.0 2.0 83. on the spot.0 77.0 3.0 2.0 Valid Percent 10.0 10.0 4.0 3. This evidence points towards consumers trying to un‐complicate and simplify their everyday lives and that the Clubcard is in theory complicating things for them. increased product selection and improvements to the online shopping service.
Chapter Four – Research Findings and Analysis taking into account direct discounting from the final bill at the point of sale as a result of points collection. The results from the questionnaire show that loyalty does exist amongst Tesco Clubcard holders and Tesco and thus the Tesco Clubcard can be viewed as a valuable asset in terms of a loyalty marketing tool. 4. the results demonstrate that it is not the only aspect that causes consumer loyalty. but it could also help maintain the success of the Tesco Clubcard. location and store facilities. Not only will this assimilate the pricing element of loyalty. The analysis suggests that the Clubcard scheme is a costly sales technique and that perhaps the resources used to finance the scheme might be better apportioned elsewhere to factors which can keep customers loyal and lead to repeat purchases such as lowering prices throughout the entire product range. rather than loyalty card schemes. such as value for money. There has been no indication or evidence to support the theory that the Clubcard alone has created loyalty. Respondents regarded 82 Conclusion . Furthermore the results have shown that other areas need to be considered to prevent consumers from switching to a rival.3 Through the analysis of the primary research. The high usage of the card by respondents indicate that they have accepted the scheme and are willing to incorporate it into their normal shopping experience at Tesco. several key findings have been established and the objectives of the study have been achieved. The results assessed the value of the Tesco Clubcard as a loyalty marketing tool by classifying the findings into several fundamental areas. Despite the accomplishment of the Clubcard. Particular attention should be paid to the details that consumers place importance on. in‐store vouchers and magazines which were all ranked poorly by respondents.
Additionally 60% of respondents also strongly agree/agreed that they usually shop around to get the best deals. 49% of respondents claimed they did not read the magazine and out of the respondents that did admit to reading the magazine nearly half maintained that the magazine was not adequate as it did not appeal to them and they regarded it as dull and unhelpful. With this in mind.Chapter Four – Research Findings and Analysis the product of the Clubcard (vouchers and in‐store magazine) to be at the lower end of the scale in terms of importance when choosing a primary supermarket. A total of 85% of respondents claimed they owned and regularly used at least 1 other store loyalty card in addition to the Tesco Clubcard. it could be contended that the Tesco Clubcard in its current form is a dated remnant of the past and needs to evolve and transform in order to advance its value as a loyalty marketing tool. attitudes and perceptions and the results show that the buying power they possess is higher than ever and as such they are effectively manipulating suppliers to meet their own needs and wants. 83 . Moreover. The results have brought to light the new twenty‐first century generation of consumers who have more diverse tastes.
Chapter Five – Conclusion and Recommendations 84 Chapter Five Conclusion and Recommendations .
Additionally. This wealth of information has enabled Tesco to sustain its position as the market leading UK supermarket retailer. The Clubcard has provided Tesco with an opulent collection of data on individual customer tastes. it can be noted that the significance and value of the Clubcard in achieving customer loyalty appears dissimilar. it also examined the value of the Tesco Clubcard scheme in the context as a loyalty marketing tool. ascertaining the limitations to the study and. by examining the scheme in the context of meeting the objectives of this thesis.2 The literature review has pointed to the notion that loyalty card proposals such as the Tesco Clubcard scheme are an invaluable marketing tool offering a multitude of advantages to both the organisation and the consumers. 85 Conclusion of the study .1 CHAPTER FIVE ‐ CONCLUSION AND RECOMMENDATIONS Introduction The purpose of this study was to discover if Tesco really needs the Clubcard scheme despite all the efforts it employs to keep customers loyal. outlined in chapter one. 5. finally. concentrating upon the objectives before making applicable recommendations. preferences and spending habits. This concluding chapter shall illustrate the main findings of the study collectively. It was discovered that loyalty did exist amongst some card holders. The primary research carried out has produced key results and addressed the objectives of the thesis.Chapter Five – Conclusion and Recommendations 5.0 5. but the study has revealed no evidence to support the notion that the Tesco Clubcard alone has achieved loyalty. However. highlighting areas that need further investigation and directing further research.
Today’s consumer is more interested in finding the best deal they can. claimed that consumers are ignorant. pg 381) remarked on the evolution of twenty‐first century consumers as becoming ‘increasingly promotion‐literate’ and this has reduced the significance of the loyalty card within the supermarket industry. however the results of the primary research reflect that respondents who claimed they were satisfied with Tesco were not necessarily loyal and thus more is required in order to lock them into being truly loyal to Tesco. Therefore it can be argued that the Clubcard scheme can be seen as an expensive encumbrance and is detracting away from the core business of Tesco.Chapter Five – Conclusion and Recommendations The study has identified that a series of modus operandi exists in order to achieve a loyal customer base and that loyalty marketing consists of several factors and not just loyalty cards. What has transpired from the study is the discovery that the Tesco Clubcard was a starting point for loyalty. Additionally. the study has shown that consumers have evolved since the original conception of the Clubcard scheme. Tesco currently utilises a number of techniques to ensure that customers are happy and content. attitudes and buyer power they possess has immensely altered the value of the Clubcard and how they see the Clubcard. The knock on effect would be to allow funds to be better allocated and spent on areas which improve the other techniques currently in place. pg 496). Furthermore the huge number of customer reward programs and similar designs has resulted in consumers no longer being concerned with the loyalty marketing gimmicks and rewards. Harlow (1997 cited in Egan 2001. Parker and Worthington (2000. and the new perceptions. however the results from the primary research dispute and contradict this. The primary research showed that consumers are aware of the value of points and they do own and use 86 . Additionally. the thesis has acknowledged and identified the importance of store location and competitive pricing as being the most effective factors in achieving customer loyalty. At the time of launch the scheme was innovative and appealing to consumers.
Conversely. it can be deduced that today’s consumers are actively and effectively manipulating suppliers to meet their own needs. This is a clear indication that consumers today are more attracted to an instant saving/price reduction rather than the long‐term collection of points in order to attain a similar reduction. as highlighted in section 2. the results also showed some respondents using the card little or never per transaction which points towards the speculation that rewards are simply not enough to keep certain customers loyal to Tesco. From this finding it can be suggested that changing the format of the Clubcard to be more in line with what consumers demand may make it a more viable and valuable loyalty marketing tool. This factor is further reinforced by the discovery that the majority of respondents’ surveyed claimed they would continue to shop at Tesco even without the Clubcard scheme. product range. Furthermore. The general customer perception of the Tesco Clubcard revealed respondents high usage of the card and that they trust the Tesco brand and image in addition to having ardent aspirations to redeem rewards. transport and online shopping all viewed as being important aspects. with factors such as faster checkouts. such as the internet. Ultimately these factors all contribute to a more convenient shopping experience but it has been suggested that the Clubcard only complicates matters. Consumers today are loyal to functional aspects of their shopping experience rather than rewards. the results indicated that many respondents claimed that money off discounts of their final bill at the point of sale rather than future rewards were preferred and would make them more loyal. 87 . As consumers utilise technology around them.6 has been proven to not be generic with some consumers showing positive actions and behaviour without the need for rewards.Chapter Five – Conclusion and Recommendations more than one loyalty card. The findings also showed that respondents perceived the card as an additional bonus to their shopping and the theory of operant conditioning. The knock on effect of the boom of loyalty cards has now led consumers into expecting some kind of reward in their normal shopping experience.
In its current form it is not enough to sustain competitive advantage. Further confirmation of this was established with the greater part of respondents maintaining they would continue to shop at Tesco and trusted the Tesco brand. discovering over half the respondents claiming they were satisfied customers of Tesco. What the findings have shown is that the epoch of the loyalty card is becoming passé. These are: 88 . pg 496) commented that loyalty “cannot be bought” and the findings in the primary research back this theory up. The results showed that Tesco’s communication with its customers via the medium of magazine and vouchers was not effective and not realised to full capacity by recipients.Chapter Five – Conclusion and Recommendations One of the categorical features of employing a customer reward program is to reduce high wastage by specifically targeting consumers with information that will appeal to them. This finding suggests that the Clubcard scheme is directing Tesco to disregard particular sections of the market which offer more interest to consumers such as price reductions or improved facilities. pg 16). The failure to evolve the Clubcard scheme into what today’s consumer demand has brought the Clubcard proposal to a unique crossroad. Parker and Worthington (2000. Readership amongst respondents were moderately low and several respondents did not rate the magazine and/or its content. 1997. This evidence points to the Clubcard scheme becoming a “zero sum game” (Mazur. With outlay into other more effective loyalty marketing mechanisms it can be reasoned that in terms of achieving a loyal customer base they may produce better results. Coupled with consumers that have evolved and are more intelligent has resulted in high buyer power within the supermarket industry. The findings from the primary research have revealed several factors which limit the value of the Tesco Clubcard. The sheer number of similar customer reward programs has reduced the overall value of schemes.
awareness and demands of today’s promotional literate consumer has resulted in savvy shoppers who are hunting around for the best deals and commanding more.Chapter Five – Conclusion and Recommendations • • • Competitors: the quantity of similar schemes has de‐valued customer reward programs. External environment: the evolution of tastes. Additionally. the following recommendations can be suggested: • • 89 Investigate key areas which are of importance to consumers and allocate the funds necessary in order to ensure that these new customer demands are met to help ascertain a loyal customer base.3 Unquestionably the Tesco Clubcard customer reward program has brought success to Tesco. attitudes. 5. Examine and reduce the current amount of money invested into the Clubcard customer reward program as the concept becomes more dated and investing Recommendations . caused confusion and resentment amongst consumers and their simplicity of limitations has brought loyalty card schemes to a crossroad. the research can conclude that the Clubcard in its current format may well have reached its zenith and if it continues to stay dormant then the future value of the scheme is uncertain. yet despite this accomplishment the study has found that it is now in a state of decline. Perception: the study revealed respondents’ perceptions towards the Clubcard and the additional Clubcard products such as in‐store magazine and vouchers was perceived as being weak in terms of productivity and effectiveness. Building upon this conclusion. Its value as a loyalty marketing tool is weakening due to numerous factors. The study has ascertained that the value of the Tesco Clubcard is contentious as it has made loyalty harder to achieve and thus failed to meet the base requirements of the model.
Extra studies could be performed at different Tesco stores to determine if the value and perception of Clubcard is the same or if it differs from region to region. Tesco would only allow questionnaires to be carried out during a small number of mornings and over a few hours. generalisations have regrettably had to be made to the sample group.Chapter Five – Conclusion and Recommendations • 5. Time and money are supplementary factors which have limited the study to a degree. Areas such as lowering prices shall help sustain a competitive advantage within the industry. Further investigation could be carried out to reveal what effects an increased rate of loyalty 90 . Furthermore. attitudes and demands of the new generation of consumers. The current image of the Clubcard feels dated and as such a revision and re‐ launch may give it a much needed boost and help motivate and excite consumers. Evolve and transform the Clubcard model to adapt to the new tastes. The result of this is limited results of consumers who happened to visit the store on the specific times and dates the survey was being carried out.4 money in more significant areas. The main area of concern is the sample size of the questionnaire. Additionally. it is felt that if qualitative interviews were established and carried out the results could help verify and support the findings from the questionnaire. Consideration should be noted to giving customers an instant rebate at the point and time of sale rather than rewarding them through the collection of points. Limitations and Further Research This study is not without limitations. It is felt that it is not a 100% representation of the whole population and the times and dates in which this research was carried out were unfortunately constrained by the periods that Tesco allowed. with reference to the 100 respondents.
91 . Performing such an analysis would illustrate and identify what generates consumer loyalty and thus determine the most valuable loyalty marketing tool within the supermarket industry. The research focused solely on Clubcard holders.Chapter Five – Conclusion and Recommendations points per pound spent would have and if it would make the scheme a more viable and valuable proposition. however it may have been advantageous to extend the investigation to reflect on consumers who do not own a Clubcard yet continue to shop at Tesco despite this.
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APPENDIX A – QUESTIONNAIRE JUSTIFICATION
QUESTION 1a). Do you own a Tesco Clubcard? 1b). If "yes", please indicate how often you use your Clubcard when you purchase goods or services with Tesco. 2). Please choose your Gender 3). Please indicate which age group you fall into. 4). On a scale of 1‐8 (1 = excellent and 8 = poor), how do you rank the importance of each of the following factors when deciding which supermarket you use 5). Apart from Clubcard do you own and regulary use other store loyalty cards? Please indicate how many 6a). Do you read the Clubcard Magazine? 6b). If "yes" or “sometimes” Please indicate what you think of The magazine. 7). Do you know how many Clubcard points you gain for every £1 you spend in store? 8). Does the collection of points influence you to buy more or to buy specific/alternative promotional products which offer bonus points? VALIDATION Initial question, leads directly into the subject and instantly establishes rapport with the respondent. Although customers may own a Clubcard, the inclusion of this question determines how actively they use their card. If a respondent owns a card but never uses it, this will indicate to the author a greater insight with regards to impending questions concerning their attitudes towards the Clubcard scheme. Used to build a user profile of the Clubcard scheme. Helps in building the user profile and responses have been intentionally broadly grouped. It is vital there is no overlap in the age ranges stipulated. The intention of this question is to establish what factors lead customers to repeat purchase and determine the connection between customer and store. This question also highlights the range of loyalty marketing strategies currently used within the retail industry. The use of this question will determine how many respondents own more than one loyalty card and divulge if consumers are “actively manipulating suppliers for their own ends” (Khan 1998). Tesco use the information gathered from Clubcard users to determine the articles it publishes in its Clubcard magazine. This question will establish how effective this practice is and if customers are responding by reading the magazine and indicate how prevalent this modus operandi is. The motive of splitting this question is to void any confusion to respondents and also understanding how they value Tesco’ efforts to communicate with them. The inclusion of this question will discover is consumers are as as ‘ignorant’ as Parker and Worthington (2000) asserted. Parker and Worthington (2000) claimed that consumers are becoming ‘points junkies’ who are desperate to gain and save points. Additionally it will also address if customers aspire to collect and redeem more points and thus increase spending.
What could Tesco do more to make you more loyal? This question is designed to test Capizzi and Ferguson (2005) claim that customers actively seek lifestyle themed rewards. If Tesco did not have the Clubcard scheme. Purposely an open ended question to determine any other feelings that respondents had and to gain a better understanding of them. This will establish directly if the customer feel loyal towards Tesco. would you still continue to shop there? 13). 106 . Have you redeemed any rewards from the Clubcard scheme within the last 12 months? 10).Appendices 9). Used in conjunction with the above question this will address the concerns in the literature review with regards to the relationship between loyalty and satisfaction. This question will establish if consumers are ‘locked in’ to Tesco as the paradigm created by the literature review suggests that it is not just loyalty cards that create loyalty. Would you describe yourself to be a satisfied customer of Tesco? 12). The inclusion of this was to gather and understand customers attitudes and opinions with regards to Tesco and loyalty. Please tick the appropriate box which accurately reflects your level of agreement or disagreement. Would you describe yourself as being loyal to Tesco? 11). Hopefully it will also present new ideas or concepts surrounding customer loyalty. 14).
. . . . . . . . . . . . . 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . It covers everything you would expect and is of great use 1 It is a good read with some informative articles and features 2 It is dull. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ‐ Please turnover questionnaire to continue ‐ 107 . . . . . . . . . Do you read the Clubcard Magazine? If “No” please move onto Question 7. . . . . . On a scale of 1 to 8 (1 = very important and 8 = not important at all) How do you rank the importance of each of the following factors when deciding which supermarket you use: Rank 1 ‐ 8 ‐ Value for money ________ 1 ‐ Location of store ________ 2 ‐ Quality of service and staff helpfulness ________ 3 ‐ Loyalty card schemes ________ 4 ‐ Product range and presentation ________ 5 ________ 6 ‐ Overall store layout and appearance ‐ In‐store promotional magazine and flyers ________ 7 ‐ Money off coupons/vouchers and special promotions ________ 8 . . . . . . . . . . . . . . . . . . . . . . . . . If “yes” or “sometimes” please indicate what you think of the magazine. . . . . . . . . . . . . unhelpful and of no use 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I would appreciate it if you could take a few moments of your time to carry out this survey. . . . . If “yes”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Please indicate which age group you fall into: Under 21 1 40 – 49 4 22 – 29 2 50 – 59 5 30 – 39 3 60 + 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4). . . . . . . . . . . . . . . . . . . Do you own a Tesco Clubcard? Yes 1 No 2 1b). . . . . . . . . . . . . Yes 1 No 2 Sometimes 3 6b). . . . . . . . . . . . . . . . . . . . . . . . . . . All results will be kept confidential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3). . . please indicate how often you use your Clubcard when you purchase goods or service with Tesco: Always 1 Frequently 2 Little 3 Never 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5). . . . . . . . 6a). . . . . . . . . . . . . . . . . . . . . . . . . . Please choose your Gender: Male 1 Female 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Appendices APPENDIX B ‐ QUESTIONNAIRE TESCO CLUBCARD USER SURVEY As part of my MBA thesis I am doing some research on the Tesco Clubcard. . . . . . . . . . . . . . . . . . . . . . do you own and regularly use any other store loyalty cards? Please indicate how many: 3 1 other card 1 3 or more other cards 2 other cards 2 I only own a Tesco Clubcard 4 . . . . . . . . . . . . . . . . Apart from Clubcard. . . . . . . . . . . .
13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If Tesco did not have the Clubcard scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Would you describe yourself to be a satisfied customer of Tesco? Yes 1 No 2 Don’t know 3 . . . . . . . . . . . . . . . . . . . . 8). . . . . . . .Appendices 7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Please tick the appropriate box which accurately reflects your level of agreement or disagreement: Strongly Agree I trust Tesco products and their image Agree No Opinion Disagree Strongly Disagree 1 2 3 4 5 I think Tesco is very innovative I usually shop around to get the best deals I expect rewards to be a part of my normal shopping experience I feel more could be done to increase my loyalty 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10). Does the collection of points influence you to buy more or to buy specific/alternative promotional products which offer bonus points? Yes 1 No 2 Don’t know 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Do you know how many Clubcard points you gain for every £1 you spend in store? 1 point for every £1 1 5 points for every £1 3 2 points for every £1 2 10 points for every £1 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11). . . . . . . . . . . . . . . . . . . . . . would you still continue to shop there? 1 No 2 Don’t know 3 Yes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Have you redeemed any rewards from the Clubcard scheme within the last 12 months? Yes 1 No 2 . . . . . . . . . . . 12). . . . . . . . . . . . . . . . . . Would you describe yourself as being loyal to Tesco? Yes 1 No 2 Don’t know 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9). . .
Appendices 14). What could Tesco do more to make you more loyal? _______________________________________________________________________________________________ _______________________________________________________________________________________________ _______________________________________________________________________________________________ _______________________________________________________________________________________________ ‐ Many thanks for your time and attention ‐ 109 .
Appendices APPENDIX C – SPSS CODED QUESTIONNAIRE RESULTS Q1a Q1b Q2 Q3 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q5 Q6a Q6b Q7 Q8 Q9 Q10 Q11 Q12 1 2 1 2 3 2 8 1 5 4 6 7 1 1 3 4 2 1 1 1 1 1 2 1 4 1 2 3 8 4 5 7 6 1 2 1 3 2 2 3 1 1 2 2 3 2 1 6 7 3 4 8 5 1 2 1 2 2 2 2 1 1 3 2 4 1 4 3 2 5 6 8 7 1 3 3 2 2 1 2 1 1 1 2 2 3 2 3 4 1 5 7 8 6 1 2 4 1 2 1 2 1 1 2 2 3 3 7 2 1 5 8 4 6 1 1 2 1 2 2 2 2 1 1 2 2 4 4 2 1 3 6 7 8 5 4 2 3 2 1 1 1 3 1 3 2 2 6 3 5 1 4 7 8 2 2 2 1 1 1 2 1 1 1 3 2 4 3 1 5 6 4 7 8 2 2 1 1 1 2 1 1 2 1 1 3 1 2 4 3 2 7 1 5 8 6 2 1 3 4 2 1 2 3 1 1 2 2 3 3 2 4 8 1 6 7 5 2 3 3 1 3 2 2 1 1 1 2 2 2 3 2 1 6 7 8 5 4 2 3 2 4 2 1 1 2 1 1 3 2 4 3 2 1 5 7 8 6 4 2 1 3 1 2 2 1 1 1 1 1 2 3 3 2 1 5 8 7 6 4 2 1 3 2 2 2 2 2 1 1 3 2 2 3 2 1 5 7 8 6 4 2 3 2 1 3 2 2 2 1 1 2 1 3 3 1 4 8 2 5 6 7 2 1 3 1 3 1 2 1 1 1 2 2 3 7 1 2 5 3 6 4 8 1 3 3 4 2 1 1 1 1 1 2 2 3 4 5 3 1 2 6 7 8 1 2 1 2 2 2 1 1 1 3 1 5 4 1 3 5 2 6 8 7 3 2 1 2 1 1 1 1 1 2 1 2 3 2 7 4 1 5 6 8 4 2 1 3 1 2 2 1 1 3 2 4 6 3 2 1 4 5 7 8 4 1 2 1 2 2 1 2 1 1 1 1 6 6 5 4 1 2 3 8 7 4 1 2 4 3 1 1 1 1 1 1 2 1 6 2 4 3 1 5 8 7 4 2 1 2 1 2 3 1 1 1 2 6 1 6 4 8 2 3 5 7 4 2 3 2 1 2 1 1 1 3 2 3 1 4 3 7 2 6 5 8 1 2 2 2 2 3 3 1 1 1 2 6 1 3 4 2 5 6 7 8 1 2 2 3 2 2 1 1 1 2 2 1 1 2 5 8 3 7 4 6 1 2 4 2 1 2 3 1 1 1 1 3 1 4 6 5 2 3 8 7 1 2 1 2 2 2 3 1 1 2 1 1 2 6 3 1 4 5 8 7 1 3 2 2 2 2 2 1 1 1 2 2 1 3 2 1 5 4 8 7 6 2 3 3 4 2 1 2 3 1 1 1 2 3 8 3 4 2 1 6 5 7 2 3 1 1 1 1 2 1 1 1 3 2 5 5 4 1 7 3 2 8 6 4 2 3 2 2 1 1 1 1 1 2 3 3 7 2 8 1 6 4 5 4 2 1 3 1 1 2 1 1 1 2 5 2 3 4 7 1 6 8 5 3 1 3 3 2 1 1 1 1 1 2 2 3 1 4 5 8 2 3 6 7 4 3 2 1 3 2 2 2 1 1 4 2 5 5 4 3 2 1 6 8 7 1 3 3 1 2 1 1 3 1 1 2 2 3 2 3 1 8 4 5 7 6 1 2 1 3 2 1 3 1 1 1 2 2 1 2 3 4 5 6 8 7 2 3 2 1 2 1 2 2 1 1 1 2 6 8 1 3 5 7 6 2 4 2 1 3 1 2 2 2 1 1 1 3 2 3 6 2 3 7 1 4 5 8 2 3 2 4 1 2 3 2 1 1 1 2 4 7 5 1 3 4 2 8 6 3 2 1 2 2 2 1 1 1 1 1 6 1 3 2 5 6 8 4 7 3 3 2 4 2 1 3 1 1 1 2 2 3 8 4 3 5 7 2 1 6 3 1 2 2 2 2 1 2 1 1 1 1 2 2 1 4 3 5 8 6 7 4 3 3 1 3 1 2 2 1 1 1 2 2 1 5 3 4 2 6 8 7 4 2 1 2 1 1 2 1 1 1 2 5 2 4 1 7 6 5 3 8 1 3 1 4 1 2 1 1 1 1 2 2 6 1 2 3 4 7 5 8 6 1 2 1 2 1 2 3 1 1 1 2 6 7 1 4 6 3 2 8 5 1 1 2 1 2 2 2 1 1 1 2 1 2 1 2 4 6 3 5 8 7 1 2 4 3 2 2 3 1 110 .
Appendices Q13 Q13 Q13 Q13 Q13 4 2 1 3 2 1 2 1 3 3 2 4 1 3 2 2 2 2 3 2 2 2 2 3 3 4 2 2 3 2 4 2 3 1 2 4 2 2 3 2 4 2 2 2 2 4 2 2 3 2 2 2 4 2 2 4 2 5 2 2 2 1 4 2 1 4 2 4 2 3 4 3 1 1 2 5 3 5 2 3 4 2 4 3 2 2 2 3 1 3 1 3 4 4 2 3 4 1 2 4 1 2 2 4 3 2 3 1 3 3 1 2 2 1 1 1 3 1 2 2 2 1 4 3 2 3 2 2 1 1 1 2 5 3 2 2 1 4 2 2 2 2 4 3 1 1 2 2 2 2 2 2 2 2 3 4 4 4 3 2 4 2 4 2 4 2 3 2 1 3 5 2 1 2 2 1 2 1 2 2 2 2 1 2 2 1 2 1 1 2 2 1 5 2 3 2 2 1 2 2 2 2 2 2 2 1 1 4 2 2 3 2 3 3 2 2 2 3 2 2 2 2 2 2 2 1 2 2 3 4 2 1 2 3 2 2 2 2 2 2 4 2 4 2 2 111 .
Appendices Q1a Q1b Q2 Q3 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q5 Q6a Q6b Q7 Q8 Q9 Q10 Q11 Q12 1 2 2 5 4 5 3 2 6 1 8 7 1 1 2 4 1 1 2 2 3 1 1 1 3 4 3 1 2 5 6 7 8 2 2 1 2 1 2 2 1 1 1 1 6 4 1 3 8 5 2 6 7 2 3 2 4 2 1 2 2 1 1 1 2 2 3 1 4 8 7 2 5 6 2 2 1 2 1 1 1 1 1 2 2 5 8 3 4 2 1 5 7 6 2 1 3 1 2 1 2 3 1 1 2 2 5 2 3 6 5 1 7 8 4 2 3 3 3 2 1 2 1 1 1 1 1 6 3 5 7 6 1 2 8 5 2 1 1 4 2 1 1 1 1 1 2 2 5 2 1 3 7 5 4 8 6 2 2 2 2 1 2 2 1 1 3 2 3 2 8 3 7 1 4 6 5 2 2 1 2 2 1 1 2 1 3 2 4 3 2 5 4 1 7 8 6 2 2 1 2 1 2 1 1 1 3 2 5 1 3 7 6 2 4 8 5 2 3 2 1 2 2 2 1 1 1 1 2 2 2 6 4 5 1 3 7 8 4 3 2 1 3 1 2 1 1 1 1 2 6 2 1 3 5 4 6 8 7 4 1 2 4 2 2 2 1 1 1 1 2 1 1 7 2 6 3 4 8 5 2 2 4 3 1 2 2 1 1 1 2 2 4 2 8 6 1 3 7 6 2 3 1 4 2 1 2 1 1 1 1 2 3 1 5 3 4 2 6 8 7 2 1 3 4 3 1 2 2 1 1 1 1 2 3 1 4 6 2 8 5 7 2 2 1 2 1 2 1 1 1 2 2 3 7 5 3 4 1 2 8 6 2 1 2 1 2 1 3 1 1 1 1 2 4 7 2 4 6 1 3 8 5 2 1 3 4 2 1 1 2 1 1 3 2 1 2 1 6 5 3 4 7 8 2 2 1 2 2 1 1 1 1 1 1 5 6 1 2 3 4 5 7 8 2 1 3 4 2 1 1 1 1 1 2 2 3 1 4 2 5 3 6 8 7 1 2 4 2 1 1 2 1 1 1 2 2 4 2 8 5 1 6 3 7 1 2 1 2 1 2 1 1 1 1 1 6 7 3 4 5 1 2 8 6 1 2 4 2 1 2 1 1 1 1 2 3 1 2 7 5 4 3 8 6 4 3 2 1 2 1 1 1 1 1 1 1 1 2 4 6 5 1 3 7 8 4 2 1 2 2 2 1 1 1 2 1 2 7 1 2 6 3 4 8 5 2 3 1 1 2 1 1 2 1 1 1 2 3 5 6 7 1 2 3 8 4 2 2 1 2 1 2 1 1 1 2 2 2 1 4 2 7 5 3 8 6 2 2 1 2 2 2 1 1 1 2 1 4 2 1 5 7 3 4 8 6 3 2 1 2 2 2 2 1 1 2 2 3 1 4 8 7 2 5 6 3 4 2 4 2 1 2 1 1 1 1 2 1 1 2 5 4 7 8 6 3 4 2 3 2 2 1 3 1 1 2 1 2 4 2 5 3 1 6 8 7 1 2 3 2 2 2 3 1 1 2 2 3 3 2 5 4 1 6 8 7 2 2 2 2 1 1 1 1 1 1 1 2 3 2 6 5 1 4 8 7 1 1 2 4 2 1 2 3 1 1 1 1 4 1 4 3 8 2 7 5 6 2 2 3 2 2 2 1 1 1 1 2 2 1 2 3 4 7 5 8 6 1 2 2 2 1 1 1 1 1 3 1 5 1 5 6 7 2 4 8 3 2 2 4 2 2 2 1 1 1 1 1 5 2 6 5 7 1 5 8 3 2 2 3 3 2 1 2 1 1 2 2 6 3 1 6 7 2 4 8 5 2 1 3 4 2 1 2 3 2 1 3 2 1 2 1 7 6 5 3 8 4 2 3 1 1 2 1 1 3 1 1 2 2 5 2 1 5 3 4 6 8 7 2 2 1 2 1 1 1 1 1 1 1 3 1 3 2 4 8 6 7 5 2 1 3 1 2 2 2 1 2 1 1 1 3 1 2 3 4 5 6 7 8 3 2 4 3 1 1 2 1 1 3 2 4 1 2 4 7 3 5 8 6 3 1 1 1 2 2 1 1 1 1 2 1 5 1 3 5 4 2 7 6 8 3 2 1 2 1 3 1 1 1 2 2 6 7 3 1 4 2 5 8 6 3 3 2 1 2 2 2 1 1 1 1 2 3 1 3 2 5 4 6 7 8 2 3 2 1 3 1 1 2 1 1 2 2 2 3 1 2 4 5 7 6 8 1 2 4 2 1 3 1 1 1 2 2 6 1 3 5 2 4 6 8 7 2 2 2 2 1 2 1 1 1 2 2 1 1 2 3 4 5 6 7 8 1 3 2 1 2 1 2 1 1 112 .
Appendices Q13 Q13 Q13 Q13 Q13 4 2 4 2 2 2 2 1 2 2 2 3 4 4 2 2 2 1 2 4 2 1 4 2 2 1 3 2 4 2 1 2 4 2 5 2 2 5 3 4 3 2 1 2 2 5 3 3 1 4 1 2 4 2 2 2 1 5 2 2 2 1 1 1 5 4 2 4 2 2 5 3 5 4 2 2 3 4 2 2 2 2 2 3 2 2 2 1 4 2 2 3 3 4 2 2 3 4 4 2 1 2 1 2 2 3 2 1 4 2 2 3 4 2 2 1 2 2 2 2 2 2 2 1 2 1 2 4 4 2 3 3 2 2 4 1 2 4 2 2 1 2 1 3 2 5 1 2 2 2 2 3 2 2 2 1 2 1 3 2 2 3 2 2 2 2 2 1 3 2 2 2 1 2 2 5 3 2 2 2 1 2 2 3 2 2 1 2 2 2 3 1 1 3 3 3 2 2 2 2 2 2 2 3 2 2 2 1 3 2 2 2 1 3 3 2 2 2 2 1 3 2 3 2 2 3 3 3 3 3 2 2 1 2 2 4 2 2 3 3 2 3 5 3 2 4 3 3 2 2 2 2 1 2 2 2 3 3 2 2 113 .
0 Valid Percent 29.0 Valid Percent 100.0 81.0 71.0 39.0 18.0 114 .0 Percent 100.0 Gender of respondents surveyed Cumulative Frequency Valid Male Female Total 29 71 100 Percent 29.0 100.0 39.0 Frequency of how often respondents used their Clubcard when purchasing goods or services with Tesco Cumulative Frequency Valid Always Frequently Little Never Total 42 39 18 1 100 Percent 42.0 100.0 1.0 Percent 29.0 100.0 Percent 42.Appendices APPENDIX D – SPSS FREQUENCY TABLES FOR QUESTIONNARE RESULTS Respondents who own a Tesco Clubcard Cumulative Frequency Valid Yes 100 Percent 100.0 100.0 1.0 99.0 100.0 18.0 Valid Percent 42.0 100.0 71.
0 86.0 88.0 6.0 When deciding on which supermarket use.0 28.0 20.0 8.0 4.0 49.0 6.0 100.0 82.0 18.0 15.0 100.0 69.0 28.Very Important 2 3 4 5 6 7 8 .0 15.0 79.0 Percent 31.0 10.0 12.0 Percent 10.0 18.59 60 + Total 10 21 28 12 15 14 100 Percent 10.39 40 .0 71.0 20.Not Important At All Total 31 18 20 10 3 6 8 4 100 Percent 31.0 10.0 3.0 31.0 21.0 8.0 12.0 96. how important is value for money Cumulative Frequency Valid 1 .0 Valid Percent 10.Appendices Age group of respondents surveyed Cumulative Frequency Valid Under 21 22 .0 Valid Percent 31.0 21.0 59.0 100.0 100.0 14.0 14.49 50 .0 115 .29 30 .0 3.0 100.0 4.0 100.
how important is location of store Cumulative Frequency Valid 1 .0 100.0 29.0 100.0 9.0 19.Not Important At All Total 12 14 24 19 13 8 6 4 100 Percent 12.0 96.0 100.Very Important 2 3 4 5 6 7 8 .0 91.0 1. how important is quality of service and staff helpfulness Cumulative Frequency Valid 1 .0 19.0 13.0 13.0 116 .0 90.0 69.0 6.0 19.0 69.0 100.0 24.0 13.0 26.0 Valid Percent 21.0 24.0 8.0 50.0 5.0 Valid Percent 12.Appendices When deciding on which supermarket use.0 9.0 6.Not Important At All Total 21 29 19 13 9 5 3 1 100 Percent 21.0 14.0 100.0 100.0 96.0 4.0 50.0 14.0 1.0 Percent 12.0 3.0 4.0 5.0 When deciding on which supermarket use.0 82.Very Important 2 3 4 5 6 7 8 .0 19.0 13.0 29.0 8.0 82.0 3.0 Percent 21.0 99.
Very Important 2 3 4 5 6 7 8 .0 16.Not Important At All Total 25 19 12 14 15 4 9 2 100 Percent 25.0 Valid Percent 25.0 12.0 100.0 19.0 15.0 70.0 100.0 8.0 21.0 16.0 44.0 100.0 2.0 61.0 9.0 4.0 117 .0 12.Appendices When deciding on which supermarket use.0 When deciding on which supermarket use.0 56.0 7.0 85. how important is product range and presentation Cumulative Frequency Valid 1 .0 12.0 Valid Percent 9.0 14.0 8.0 100.0 89.0 7.0 11.0 Percent 9.0 4.0 100. how important is loyalty card schemes Cumulative Frequency Valid 1 .0 2.Very Important 2 3 4 5 6 7 8 .0 21.0 89.0 11.0 19.0 15.0 14.0 16.0 24.0 12.Not Important At All Total 9 8 7 16 21 12 16 11 100 Percent 9.0 40.0 17.0 Percent 25.0 16.0 73.0 98.0 9.0 100.
0 4.0 Valid Percent 1.0 9.0 8.0 Percent 1.0 18.0 9.0 18.0 100.Not Important At All Total 1 1 2 5 8 14 18 51 100 Percent 1.0 Percent 1.0 9.0 12.0 51.0 2.Appendices When deciding on which supermarket use.0 1. how important is overall store layout and appearance Cumulative Frequency Valid 1 .0 18.0 11.0 53.Not Important At All Total 1 9 12 13 18 27 11 9 100 Percent 1.0 35.0 2.0 17.Very Important 2 3 4 5 6 7 8 .0 2.0 80.0 118 .0 49.0 100.0 100.0 18.0 22.0 8.0 12.0 11.0 31.0 100.0 100.0 Valid Percent 1.0 91.0 10.0 51.0 9.0 1.0 14.0 13.0 14.0 5.Very Important 2 3 4 5 6 7 8 .0 9.0 When deciding on which supermarket use.0 5.0 13.0 27.0 27.0 100. how important is in‐store promotional magazine and flyers Cumulative Frequency Valid 1 .
Appendices When deciding on which supermarket use.0 25.0 Percent 28.0 8.0 14.0 Frequency of respondents who own and use another loyalty card including the Tesco Clubcard Cumulative Frequency Valid 1 other card 2 other cards 3 or more other cards I only own a Tesco Clubcard Total 28 45 10 17 100 Percent 28.0 29.0 100.0 18.0 45.0 Valid Percent 28.0 119 .0 100.0 6.0 10.0 8.0 14.0 73.0 100.0 18.0 100.0 10.0 25.0 Valid Percent 2.0 29.0 14.0 Percent 2.0 28.0 100.0 4. how important is money off coupons/vouchers and special promotions Cumulative Frequency Valid 2 3 4 5 6 7 8 .0 4.0 17.0 82.0 17.0 100.0 53.Not Important At All Total 2 4 8 14 25 29 18 100 Percent 2.0 45.0 83.
0 120 .0 49.0 74.1 39.0 Percent 25. unhelpful and of no use Total Missing Total System 23 20 51 49 100 23.0 100.2 100.0 100.0 Valid Percent 25.0 49.0 45.0 51.0 49.8 100.0 Respondents’ perception on the Clubcard magazine Frequency Valid It covers everything you would expect and is of great use 8 Percent Valid Percent Cumulative Percent 8.0 100.0 60.0 15.0 26.0 26.0 20.7 It is a good read with some informative articles and features It is dull.7 15.Appendices Frequency of respondents who read the Clubcard magazine Cumulative Frequency Valid Yes No Sometimes Total 25 49 26 100 Percent 25.0 100.
0 100.0 100.0 Percent 6.Appendices The amount of points per every £1 spent respondents thought they were receiving Cumulative Frequency Valid 1 point for every £1 2 points for every £1 5 points for every £1 10 points for every £1 Total 52 10 9 29 100 Percent 52.0 18.0 100.0 71.0 100.0 121 .0 Valid Percent 6.0 9.0 Frequency of respondents who increase expenditure or purchased specific/alternative products in the pursuit of collection points Cumulative Frequency Valid Yes No Don't Know Total 6 76 18 100 Percent 6.0 18.0 29.0 100.0 62.0 10.0 39.0 9.0 100.0 39.0 76.0 100.0 Percent 52.0 82.0 76.0 29.0 Valid Percent 61.0 Percent 61.0 10.0 100.0 Frequency of respondents who have redeemed any rewards from the Clubcard scheme within the last 12 months Cumulative Frequency Valid Yes No Total 61 39 100 Percent 61.0 Valid Percent 52.0 100.
0 100.0 17.0 3.0 29.0 100.0 6.0 94.0 100.0 100.0 100.0 Valid Percent 95.0 Valid Percent 36.0 6.Appendices Frequency of respondents who would describe themselves as being loyal Cumulative Frequency Valid Yes No Don't Know Total 36 58 6 100 Percent 36.0 Percent 54.0 100.0 2.0 122 .0 29.0 98.0 17.0 58.0 100.0 Frequency of respondents who would describe themselves as being a satisfied Tesco customer Cumulative Frequency Valid Yes No Don't Know Total 54 29 17 100 Percent 54.0 Frequency of respondents who would continue to shop at Tesco if they did not have the Clubcard scheme in place Cumulative Frequency Valid Yes No Don't Know Total 95 3 2 100 Percent 95.0 3.0 2.0 Percent 95.0 Percent 36.0 58.0 100.0 Valid Percent 54.0 83.0 100.
0 78.0 10.0 10.0 60.0 100.0 97.0 10.0 68.0 63.0 Percent 21.0 100.0 47.0 75.0 100.0 10.0 94.0 100.0 8.0 16.0 22.0 63.0 Percent 28.0 32.0 6.0 Valid Percent 21.0 Valid Percent 28.0 3.0 32.0 100.0 6.0 Percent 12.0 100.0 123 .0 16.0 22.0 Frequency of respondents who think that Tesco is very innovative Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Total 12 63 22 3 100 Percent 12.0 Valid Percent 12.0 8.0 Frequency of respondents who usually shop around to get the best deals Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Strongly Disagree Total 28 32 10 22 8 100 Percent 28.0 22.Appendices Frequency of respondents who trust Tesco products and their image Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Strongly Disagree Total 21 47 10 16 6 100 Percent 21.0 22.0 92.0 100.0 100.0 3.0 47.0 100.0 70.
0 50.0 7.Appendices Frequency of respondents who expect rewards to be a part of their normal shopping experience Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Total 10 50 30 10 100 Percent 10.0 7.0 72.0 100.0 90.0 10.0 14.0 Valid Percent 10.0 2.0 91.0 72.0 100.0 77.0 98.0 Frequency of respondents who feel more could be done to increase their loyalty Cumulative Frequency Valid Strongly Agree Agree No Opinion Disagree Strongly Disagree Total 5 72 14 7 2 100 Percent 5.0 2.0 50.0 100.0 30.0 100.0 124 .0 Valid Percent 5.0 14.0 60.0 10.0 30.0 100.0 Percent 10.0 100.0 Percent 5.
0 83.0 77.0 Valid Percent 10.0 74.0 16.0 80.0 14.0 2.0 1.0 12.0 32.0 46.0 3.0 62.0 2.0 3.0 4 12 3 3 3 16 1 100 4.0 1.0 22.0 16.0 22 14 2 10 22.0 100.0 3.0 58.0 4.Appendices What more could Tesco do to make you more loyal Cumulative Frequency Valid Improve facilities for elderly people Have discounts at the till rather than rewards Help those without transport Improve store layout Faster checkouts/self service checkouts More Clubcard points per pound Increase product range Increase store promotions More store entrances and exits Increase Clubcard rewards Improved on-line shopping Improve Clubcard administration Total 10 Percent 10.0 100.0 100.0 48.0 Percent 10.0 3.0 99.0 125 .0 10.0 12.0 14.0 3.0 3.0 10.
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