A Study of Customer Loyalty Program First Choice At Shoppers Stop

Submitted by SUBHRODIP GHOSH

Under the Guidance of Prof. Geeta Sheety A Project Submitted in Part Completion of PGDM to the

Chetanas Institute of Management and Research Bandra (East), Mumbai-400 051

2011-13

Declaration

I, the undersigned, hereby declare that the project report entitled A Study of Customer loyalty Programme First Choice ,Shoppers Stop written and submitted by me to Chetanas Institute of Management and Research in part completion of P.G.D.M under the guidance of Prof.Geeta Sheety , is my original work and the conclusions drawn therein are based on the material collected by myself. I further declare that the information presented in this project is true and original to the best of my knowledge.

. SUBHRODIP GHOSH C.I.M.R P.G.D.M-Marketing ROLL NO: M-60 (2011-2013)

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Certificate

I, Prof. Geeta Sheety, hereby certify that Subhrodip Ghosh, student of Chetanas Institute of Management & Research specialization in marketing has completed the project report on A Study of Customer loyalty Program First Choice, Shoppers Stop, Andheri , under my guidance in the academic year 2011-2013.

Prof.Geeta Sheety (Professor Marketing)

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Acknowledgement
Exchange of ideas generates a new object to work in a better way. Whenever a person is helped and co-operated by other, his heart is bound to pay gratitude and obligation to them. I am honored to be attached with prestigious organization. I extend my sincere gratitude to the management of CHETANAS INSTITUTE OF MANAGEMENT AND RESEARCH for availing me and giving me an opportunity to work with them and assisting me in my project whenever required. I thank PROF. Geeta Sheety, who spared her valuable time and gave me opportunity to work and undertake this project and guided me throughout this project. I would like to express my sincere gratitude for providing me the opportunity to work and learn with her and with indispensable help and guidance throughout this project and for inspiring me to strive to achieve the best in difficult situations.

SUBHRODIP GHOSH C.I.M.R P.G.D.M-Marketing ROLL NO: M-60 (2011-2013)

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Table Of Contents

Topics Executive Summary About Shoppers Stop Objectives And Hypothesis Secondary Data And Literature Review Research Methodology Primary Data Analysis Hypothesis Testing Findings Recommendations Limitations Bibliography Appendix

Page No. 6 7-15 16-17 18-28 29-30 31-41 42 43 44 45 46 47-48

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Executive Summary

The main objective of the project was to understand, First Choice the customer loyalty program of Shoppers Stop is effective in retaining its customer or not with respect to Schemes and Offers,Pricing,Merchendaising and Ambience, as well as whether the customers are satisfied or not . Analysis of these factors was necessary so that exact effectiveness of First Choice can be determined. To investigate this in detail a survey was undertaken to understand various aspects of customers. The report encloses in depth description about the topic A Study of Customer Loyalty Program First Choice At Shoppers Stop.

In this project my focus is on tracking down the customer retention of Shoppers Stop due to the loyalty program provided by them along with their changing requirement, preferences and their changing perspective on different schemes offered

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About Shoppers Stop Shoppers Stop is an Indian department store chain promoted by the K Raheja Corp Group (Chandru L Raheja Group), started in the year 1991 with its first store in Andheri, Mumbai Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging Market Retailer of the Year Award", by World Retail Congress at Barcelona, on April 10, 2008.Shoppers Stop is listed on theBSE. In 2011, Shoppers Stop has 53 stores in India. It is one of the leading retail stores in India. Shoppers Stop began by operating a chain of department stores under the name Shoppers Stop in India. Shoppers Stop has 56 stores across the country (with the latest one being the outlet at Kumar Pacific Mall, Pune) including three airport stores. Shoppers Stop retails a range of branded apparel and private label under the following categories of apparel, footwear, fashion jewellery, leather products, accessories and home products. These are complemented by cafe, food, entertainment, personal care and various beauty related services. Shoppers Stop launched its e-store with delivery across major cities in India in 2008. The website retails all the products available at Shoppers Stop stores, including apparel, cosmetics and accessories. Shoppers Stop opened stores in Amritsar, Bhopal and Aurangabad. Shoppers Stop retails products of domestic and international brands such as Louis Philippe, Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie , Nike, Reebok, LEGO, and Mattel. Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish, LIFE and Vettorio Fratini, Elliza Donatein, Acropolis etc. The company also licensees for Austin Reed (London), an international brand, whos men's and women's outerwear are retailed in India exclusively through the chain. In October 2009, Shoppers Stop has bought the license for merchandising Zoozoo the brand mascot for Vodafone India.

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Vision
To be a global retailer in India and maintain its No.1 position in the Indian market in the Department Store category.

Values that help us in achieving our mission and vision: We will not take what is not ours The obligation to dissent (against a viewpoint that is not acceptable). We will have an environment conducive to openness. We will believe in innovation. We will have an environment conducive to development. We will have the willingness to apologise and forgive. We will respect our customers' rights. We will create an environment of trust. We shall be fair. We will be socially responsible.

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Brands of Shoppers Stop Shoppers Stop

n unparalleled assortm ment of the e leading in nternationa al and nati ional brand ds in With an clothing g for men, women, w and d kids; acce essories, fr agrances, c cosmetics, footwear; h home furnishi ing and decor d prod ducts, our r stores a aim to pr rovide sho oppers a truly internat tional shopping s ation. destina nced, prof fessional managemen m nt; suppor rted by w world-class systems and Experien practices; and a ta alented poo ol of assoc ciates with a shared passion for every r making e shopper r visit a me emorable on ne, has hel lped Shopp pers Stop to o grow from m a single s store in 199 91 to th he largest t chain of Depar rtment St tores in India to oday. ending purs suit to benc chmark ou urselves wit th the best in the worl ld is testifie ed by Our une the fact that Shopp pers Stop is i the only Indian me ember of th he "Intercon ntinental G Group of Depar rtmental Stores", whi ich has the e likes of Se elfridges (U United King gdom), Kars stadt (German ny), Marks & Spencer (UK), Mata ahari (Indon nesia), Mye ers Grace B Bros. (Austr ralia) and n's (Philippine es) among its memb bers. Rustan ppers Stop p we belie eve in a world of limitless p possibilities. We alw ways At Shop set benc chmarks, cross c limit ts, achieve the impos ssible and celebrate our succes sses. Innovati ion being our key driver, we have ado opted a n new philoso ophy of "S Start Somethi ing New" to o give retail a new dim mension. W We endeavo or to Start S Something New in performance. St tart Someth hing New in i products s. Start Som mething Ne ew in custo omer ething New w in Life. service. Start Some

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Homest top

S is a complete home solution cha ain offering design, style, qua ality, Home Stop convenie ence and value v to th he consume er. Home S Stop provid des high qu uality prod ducts required d for homes s with a de eeper produ uct assortm ment. Home e Stop, the first of its kind of prem mium home e concept store from m Shopper rs Stop Lt td is the destination to transfor rm your dr ream hous se into a reality. Pr resently in n Ahmedab bad, Banga alore, Coimbat tore, Cybe erabad, Del lhi, Mumb bai, Navi Mumbai, Pune, Vi ijayawada and Lucknow w. Home St top offers a choicest range r of ho me produc cts to give y your house that unique look l and fe eel you alwa ays wanted d. From th he kitchen to the dini ing room, the t bathroo om to the drawing ro oom, Home eStop has ever rything tha at will add a special touch t and exclusivity y to your space. It is onestop-sho op for all your y home needs rang ging from h home decor r to furnitu ure & reclin ners, bath ac ccessories to bedroom m furnishi ings, mattr ress to dr raperies, ca arpets, kitchen gadgets accessorie es and app pliances to modular k nd anything else one e can kitchen an think of f. Home Stop houses s some of th he most rep puted natio onal and in nternationa al brands u under nd crockery y from Corelle, prem mium steel utensils f from Magppie , one roof. High en allerini and d Oxo from m USA, excl lusive down n feather p pillows and d fine Cookware from Ba g, bed linen n and furn nishing fro om Stop, Iv vy, Sonnet t, Esprit M Maisha ,Por rtico, bedding Bombay y Dyeing an nd home appliances a from f Phillip ps and Mo orphy Richa ards, bathr room linen fro om Welspun n, Portico.

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Crosswo ord

Crosswo ord aims to o be a poin nt of cultu ural and so ocial intera action wher re authors and poets ho old court, where w child dren are reg galed, wher re people gr ravitate to be informe ed, to be enter rtained, ev ven enlighte ened. The name emb bodies the vision of C Crossword as a place an nd space fo or people who w seek in nformation n, knowledg ge or just the pleasu ure of reading. . Crosswor rd stocks the wides st range o of Books Movies- Music- T ToysStatione ery- Magazi ines and CD D ROMs. With its large child drens sectio on and its focus on m making the store a frie endly, safe, funfilled place, Crossword attra acts many families w who normal lly dont th hink of vis siting ies like the Crossword d Gift Vouc chers, the fr friendly Ret turn, Exch hange bookstores. Faciliti nds policy, the Cafes within w the stores and the unique e store exp perience ma ake it & Refun easy an nd enjoyab ble for cu ustomers to shop a at Crossw word. Over 3 lacs l loyal customers are rew warded thro ough the Cr rossword B Book Rewa ards Progra am with po oints, discounts, exclusiv ve discount ts & offers and more . EWORDS S, a month hly e-newsl letter with rev views of new w books, ne ews about in store eve ents and bestseller lis sts, is curre ently mailed to t these Me embers. Since its s inception n in 15th October 1992, Crosswo ord has rec ceived wide e recognition for its achie evements; articles on n retailing in India in nvariably f feature Cro ossword. It t has been fe eatured in Advertisin ng Age International l, USA, as s one of the Marke eting Superstars for 199 94. The Boo okseller, UK K, has also described it as being g on the cu utting r in n India. edge of retailing

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Motherc care

Motherc care PLC is s the larges st specialist t retailer fo or infant an nd toddler care. Shop ppers Stop ha as an exclu usive franc chise agreem ment in In ndia with M Mothercare e , for sho op in shops in n departme ent store fo ormat.. Under this tie e up Shopp pers Stop h has , in a s short span of f time, opened 40 Mother M care e stores a across 17 cities in In ndia, inclu uding Ahmeda abad, Aura angabad, Amritsar, A Jaipur, J Ind dore, Luck know, Noid da, Mumbai i (7), Pune (4) ), Hyderaba ad (4), Ban ngalore (7), Coimbator re (1), Mys sore (1), Ch hennai (2),D Delhi & NCR (5), Kolkata(1) ) and Vijayaw wada. care stocks s a variety of product ts for moth hers and their babies s, toddlers and Motherc children n till eight t years of age the focus bein ng on styl le, function and saf fety. Renown ned for its uniformly high stan ndards of q quality wo orldwide, M Mothercare also offers a wide rang ge of the safest and d the most t comfortab ble, yet tre endy maternity products. Its prod ducts for would-be w moms m inclu ude matern nity nightw wear, pregn nancy labour essent tials, literature and even swimw wear. and w mothers, the produc cts have be een divided into four c categories newborns s 0-3 For new months, , infants 3-18 months, toddlers s 18-36 mo onths and kids 3-8 ye ears. There e are pushcha airs, car seats and tra avel equipm ment, nurse ery furnitur re, cots & c cribs, you n name it. Here, on ne can also o find bedd ding, mattre esses, high hchairs, clo othing & sh hoes, bathin ng & changin ng products s, child saf fety produc cts and no ot to menti ion, books & toys too. In fact, one e can safely y assume that there is s no baby c care and m maternity pr roduct that t you will not find in here.

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Este Lauder

When Este E Laude er establish hed her bea auty busin ness in 194 46, she had d four prod ducts and a mission m to show s as many m wome en as I can n reach not t only how to be beau utiful but stay y beautiful. Over 60 years y later, , Este Lau uder, the fla agship bran nd of The E Estee Lauder Companies s Inc., has fulfilled countless womens dreams to look and d feel ul. The bra and is a gl lobal leade er in skinc care, make eup and fra agrance an nd is beautifu renowne ed for hig gh-quality, innovativ ve and te echnologica ally advanced produ ucts. auder curre ently has th hree freesta anding stor res in India a located in Mumbai in n the Este La Palladiu um at Lower Parel, New N Delhi at Select City Walk k, Saket an nd UB Cit ty in Bangalo ore. In Add dition we have h Este Lauder cou unters in Shoppers S Stop New D Delhi at Amb bience Mall l, Vasant Kunj and Inorbit Ma all, Malad. All locatio ons feature e the brands best selling products around th he globe as well as pro oducts cho osen specifi ically for India an consum mers. Key global g prod ducts inclu de Este L Lauders Re e-Nutriv lu uxury skin car re line, Tim me Zone an nd Perfectionist CP+. Iconic pro oducts suc ch as Adva anced Night Re epair Synch hronized Recovery R Co omplex, Dou uble Wear Stay-In-Pla ace Founda ation and frag grances inc cluding Est te Lauder s classic ra ange of Pri ivate Collec ction perfu umes, Pleasure es and Pure White Linen L ar re all available in In ndia. MAC (Make-up Art Cosme etics), a le eading bra and of pro ofessional c cosmetics, was created in Toronto o, Canada in 1984 to support t the spec cial needs of professi ional makeup p artists a collection n of colors, products and tools that meet the deman nding lighting and studio o condition ns under which w the p ros work. T The compa anys popul larity has grow wn through h a traditio on of word d-of-mouth endorsem ment from m makeup art tists, models, photograp phers and journalists s around the world. . MAC o opened its first location in India in i 2005 an nd is now available a in n twenty si ix stores na ation-wide. The MAC attitude is s best expr ressed by our artists s, seen an nd felt in o our stores and accessed d through our o website e

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Clinique e

GREAT SKIN CAN N BE CREAT TED In 1967, Carol Phi illips had been b an editor at Vogu ue magazin ne for more than 25 ye ears. Always looking l to provide p ext tra service to t her read ders. Carol had met w with Dr. Nor rman Orentrei ich for an n article en ntitled Can Great S Skin Be Cr reated? At t the time e the predomi inant attit tude towar rd skincar re was to cover r rather than care. This groundb breaking ar rticle actua ally helped transform m the beaut ty industry y; telling pe eople that great skin actu ually could d be created d with the p proper prod ducts and c care. Soon after cle was pub blished she e and Dr. Orentreich O were chall lenged by L Leonard La auder the artic to creat te a Allergy y Tested, 100% Frag grance Fre ee line of s skin care customized d for peoples specific needs. Th he result was Clini ique which h was ba ased upon the breaking 3-Step Skin Care C System m. groundb e operates Thirteen T st tores in Ind dia today; W We have tw wo freestan nding store es in: Clinique Delhi, select s city walk Saket and Mu umbai Pall ladium Ma all. In Add dition we have Clinique e counters in Shoppe ers stop Ino orbit Mall M Malad, And dheri, Juhu u, Park Pla aza Pune, Garuda G Mall l Bangalore e, 1 MG Ro oad Mall Ba angalore, C Chennai, Va asant Kunj New Delhi, Rajouri R Delh hi, GVK Hy yderabad, Elgin E Road Kolkata. Ev very Cliniq que counter r and store of ffers Free skincare and make e up cons sultations as well a as a rang ge of Dermato ologist deve eloped, allergy tested, 100% frag grance free products custom fit to o the Indian skin s needs for both Ma ale and Fem male.

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Associate Companies
Nuance Group Nuance Group with Shoppers Stop makes an entry into airport retailing. The alliance is marked with a joint venture with The Nuance Group AG of Switzerland, the worlds leading airport retailer. Shopper's Stop Ltd. is handling the retail operations at the duty free zones in international terminals. The joint venture company, called Nuance Group (India) Private Limited. is operating outlets at the International airports at Bengaluru and Hyderabad.

Hyper City-Argos Hyper City-Argos and Shoppers Stop, the two retail ventures of K Raheja group had signed a memorandum of understanding with UKs leading retail chain Home Retail group to develop the Argos (retailer) retail format stores in India. Two years later, Shoppers Stop Ltd has informed Bombay Stock Exchange shall wind down and discontinue its catalogue retail operations under the Hypercity-Argos brand. The product range varies from Foods, Homeware, Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Clothing. The first Hypercity store opened in Mumbai in May, 2006, spread over 120,000 sq.ft. of retail space. Besides introducing several firsts to Indian retailing, Hypercity has an exclusive supply agreement with Waitrose, a top supermarket super market chain in U.K. and an exclusive arrangement with Raleigh Cycles for India.

Timezone Shoppers Stop forayed into the Entertainment sector by acquiring 45% stake in Time zone Entertainment Private Limited which is in the business of setting up and operating Family Entertainment Centres (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi Mumbai and Mumbai. Shoppers Stop Ltd. and LAI of Australia are the Joint venture partners of Timezone Entertainment Pvt Ltd in India. Currently, Timezone operates 17 FECs with a retail space of 117,608 sq. ft. in India.

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OBJECTIVES AND HYPOTHESIS OF THE PROJECT

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Objectives of the Study:

Is First Choice the customer loyalty program is effective in retaining its customer.

To understand if customer are satisfied with First Choice the loyalty program of Shoppers Stop.

To study the customer perception of schemes and offers of Shoppers Stop.

To study the customer satisfaction level with regards to pricing.

Hypothesis
Hypothesis is the guess researcher makes which either solve the problem or guide him in further investigation. If the hypothesis is proved the solution can be found. If not proved, alternative hypothesis need to be formulated and tested. Hypothesis arises from intuition. Initially Considering the objective the hypotheses are: Ho(Null Hypothesis):-First Choice the Customer loyalty program is effective in retaining its customer. H1(Alternate Hypothesis):-First Choice the Customer loyalty program is not effective in retaining its customer.

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SECONDARY DATA AND LITERATURE REVIEW

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Second dary Data a and Literature Re eview

Before getting int to primary y research, , it is very ry importan nt to catc ch hold of f the informat tion alread dy available e. In this section s I ha ave incorpo orated all t the informa ation that cou uld be obt tained from m secondar ry sources s like maga azines,new wspaper,iner rtnet etc.Below are the two t articles s mentione ed,which sa ates the var rious aspec cts of custo omer p loyalty programs. ARTICL LE-1 By Fred Van Benne ekoms 5th July, ,2008 Custom mer loyalty y, not cust tomer sat tisfaction, is key to the s success of f an organization, and d customer loyalty is fostered f wh hen an orga anization excels along g two dimensions: Desi ign of its Products P - including its Service e Products s Oper rational Execution Ex - or Confor rmance - to o the Desig gn Many co ompanies fo ocus on rew warding cus stomers wh ho have rep peat purchas ses. Such reward r prog grams have e their plac ce in assuri ing custom mer loyalty. However, if i the produ uct or servi ice doesn't meet custo omer needs s, no reward d program m will keep them retur rning. For success s in the long ru un, an orga anization m must: Continu uously imp prove Quickly y identify and a resolve e problems s to the cu ustomer's s satisfaction -- or more Learning g is the roo ot of continuously imp proving des sign and ex xecution, an nd the life b blood of learn ning is fee edback. Strong, S effe ective cus tomer feed dback loop ps do not t just happen. Structure ed, compre ehensive research pro ograms are necessary y to provide e the data upo on which to o develop projects p and d initiatives s to improv ve customer r loyalty. The fir rst step in custom mer loyalt ty researc ch program ms is fo ormulating the objective es. Next, the current state of cu ustomer loy yalty needs s to be docu umented. That is, what t is the sati isfaction lev vel and the e defection rate? Depending on the state o of the company's data ba ases, the lat tter figure may m be diff ficult to asc certain. Then, da ata collectio on projects s, such as survey s ques stionnaires s and other r research t tools, must be e developed d. The goal l in these tools t is to f find out cu ustomers' sa atisfaction level and how w many cu ustomers are a defectin ng. Follow w-on detail led researc ch should help determin ne why cus stomers are e defecting. . Once the e feedback is captured d and analy yzed, the find dings mus st be comm municated to the ro oot source e where im mprovemen nt is needed. The result: better products and a proce sses that foster cus stomer loy yalty and long run prof fitability. Many co ompanies conduct a cu ustomer sa atisfaction s survey, pla ace a check mark on th heir "to do" list, and go on about normal n bus siness. Wh hileperiodic c in-depth r research he elps to identi ify needed changes c in service pro oduct desig gn, continu uous listen ning to custome ers' percept tions about t completed d service tra ansactions allows a se ervice organiza ation to kee ep a vigilan nt eye on service qualit ty. By app plying Statis stical Proce ess Control techniques s to transac ction-based survey d data, root cause analy ysis can ide entify

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areas ne eeding impr rovement or o successfu ul aspects o of the servi ice operatio on to strength hen. This sur rvey researc ch is the he eart of a cu ustomer loy yalty progra am, comple emented by y occasional focu used inter rviews to unearth u th he context tual data about pro ocess shortcomings, comp plaint solici itation and d a rob bust service e recovery program. p With thi is base, the en a reward ds program can be des signed that t targets cu ustomers.

LE-2 ARTICL

The Ke ey to Cust tomer Loy yalty: The e Total Sh hopping Ex xperience By Susa an M. McP Partlin, U.S S. retail and consume er leader a at Pricewa aterhouseC Coopers, and a Paul M. M DAlessa andro, prin ncipal at Pw wC,6th May,20 012
These days d consu umers are e watching g their pen nnies and consideri ing purcha asing decision ns more ca arefully th han ever, and that makes it increasing gly difficult t for businesses to driv ve growth, earn profit ts, and sec cure their customers loyaltyn never mind maintaining m g a price premium p over o rivals as value shopping becomes m more prevalen nt. Deliverin ng a distinc ctive, brand d-defining customer c e experience is a powerf ful solution n. We believe you can win w your customers c long-term m devotion by creatin ng unique and memora able buying g experienc ces for the em rather than relyi ing on pri ice as a p prime motivato or. A recen nt study by y PwCthe first in a s series explo oring custo omer experi ience in a ran nge of indus striesexam mined this strategy in n the retaili ing industr ry. The find dings suggest important lessons for businesses across i industries. The study y was base ed on our Exp perience Radar meth hodology, which w help s business ses identify fy often hid dden sources of value th hat lead to exceptional e l, differenti iating custo omer experiences.

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Measuring the experiences of about 6,000 U.S. consumers across 11 industries, the study found that retail consumers loyalty is strengthened by shopping experiences that forge powerful psychological connections, and not by points or rewards programs alone. To create such experiences, you first need to understand the experience attributes your customers value most. These may include ease of accessing and using an offering, ease of obtaining service support before and after a purchase, a products quality or aesthetics, and a sense that an offering enhances a customers personal brand or connection with others. Once youve segmented customers according to their most valued experience attributes, you must develop and deploy an action plan to deliver a matchless customer experience. Get it right, and you attract profitable new customers, keep your best customers, boost your profit margins, and command a price premium over competitors. Get it wrong, and your savvier rivals will swiftly pull ahead of you. The most potent way to create an unforgettable customer experience is by investing in knowledgeable staff and making the most of front-line employees. In fact, PwC found that staff members product knowledge and recommendations accounted for almost one third of all good experiences related to service support. Contrastingly, only 1% of the shoppers surveyed ranked rewards programs alone as the top influencer of purchase. Of course, rewards programs are importantbut the real power comes from augmenting such programs with differentiated experiences. We recommend developing an experience action plan thats built on the customer knowledge youve already extracted from your loyalty programand that activates the following five experience enhancers:

Focus first and foremost on the shopper experience: Use front-line staff to craft experiences that create psychological connections with consumerssuch as affirming customers purchase decisions, providing friendly assistance, and preventing buyers remorse. Make satisfied customers your brand ambassadors: Consumers who experience a positive shopping experience can become your best marketers. Encourage your brand ambassadors to generate buzz through social media-based viral campaigns, or help them host community-based events with their personal networks. Help consumers avoid risk: Attract new customers by helping them overcome psychological hurdles to making a purchase, such as concerns about shipping costs or

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rigid return policies. The study revealed that retailers could improve margins by 812% by offering free shippingyet as many as 59% of retailers charge for shipping. Embrace the anytime, anywhere economy: With consumers researching products and shopping both online and offline, understand their preferences before your competitors do. Develop a multi-channel strategy that enables customers to easily research offerings and to shop where they wantwhether its online, offline, at home, or in stores. When something bad happens, fix it: Our study found that 72% of consumers are unwilling to repurchase from retailers who fail to resolve their issues. And a whopping 49% of customers dont tell a retailer about their bad experiences. So you often may have no idea that customers are unhappy until they leave. To address bad experiences promptly, provide customers with feedback channels. And make sure theyre happy with your responses to their feedback. A simple apology may be all you need to transform an irate customer into a passionate evangelist for your company. Even as the recession loosens its grip on the economy, consumers wont likely relax their hold on their wallets anytime soon. Therefore the ability to create memorable experiences for them will remain a critical capability. Businesses that understand what their customers value most in the purchasing experience, and that build strong psychological bonds with them, will pull ahead of their rivals and strengthen their customer loyalty.

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What is s Loyalty? ?
Loyalty, , in day-to-day life, implies i an unselfish belief in in nstitutions or unswer rving fidelity in marriag ge, or em motional commitment to friends. Loyalty also sugg gests hoice above all others. monogamy: one ch r definition is: A deep ply held co ommitment t to rebuy o or repatron nize a prefe erred Another product/service consistently c y in the future, th hereby cau using repe etitive beha avior ng purchase e of the br rand despit te situation nal influenc ces and marketing ef fforts reflectin having the t potentia al to cause a switchin ng behavior. . o a partic cular brand d or compan ny even tho ough Loyalty is, in simpler terms, a reliance on us satisfac ctory altern natives ma ay exist. L Loyalty help ps build relationship ps. It numerou requires s that comp panies view w customers s as people e first and c consumers s second. T Trust, commitm ment, ethic cal practice es, fulfillment of prom mises, mu utual excha ange, emoti ional bonding g, personali ization and d customer r orientatio n have bee en reported d to be the e key elements in the relationsh hip buildin ng process s (Levitt,19 986; Green nrooms, 1 1994; Morgan, ,1994; Gum mmesson,1994; Bejou u et al,1998 8 ). There are a three basic b appr roaches th hat have e evolved to conceptua alize loyalt ty: a behavior ral (purcha ase) appro oach, an attitudinal a (feelings) approach, and a hy ybrid approac ch incorpor rating cons sumer char racteristics s and purc chase situa ation which h are depicted d below:

The Be ehavioral Model of Loyalty

Behavioral model ls are pu urely hist torical an nd determ ministic. T They shed no understanding on n the reas sons for th he observe ed behavio or; they s simply produce lities for future purchases based d on what h has been re ecorded in t the past. probabil

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The Att titudinal Model of Loyalty

Attitude es towards the t brand and a compa any image a lso affect the custome er mind to build rel lationships s with the company. c

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The Sit tuational Model of Loyalty

onsumer preferences p are not we ell defined, , they may be constru ucted base ed on When co the influ uence of so ome contin ngency fact tors. Three e types of c contingenc cy variables s are specified d: consum mer circum mstances (b budget, tim me constr raints, nee ed for nov velty, toleranc ce for risk, need for r social ap pproval,etc. .);consumer r characte eristics(such h as habit, desire for va ariety, toler rance of risk k and need d to conform m);and pur rchase situa ation including product p ava ailability, pr romotions/ /deals, the use occasio ons). effects (i These models m help p determine e extent of loyalty of a particula ar consume er by obser rving historica al behavior r, studying his attitude es and by a analyzing c contingency y factors.

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Evolution of Loyalty :
Traditional views The concept of loyalty first appeared in the 1940s. In its earliest days loyalty was proposed as a uni-dimensional construct, which was related to the measurement perspective taken by the researcher. Two separate loyalty concepts evolved. namely, brand preference (Guest, 1944, 1955) and share of market (Cunningham, 1956), which was later referred to as attitudinal loyalty and behavioral loyalty respectively. Nearly 30 years after loyalty first appeared in the academic literature, researchers (e.g. Day, 1969) proposed that loyalty may be more complex and that it may comprise both attitudinal and behavioral aspects. This two-dimensional concept has since been combined and referred to as composite loyalty (e.g. Jacoby, 1971). The composite definition of loyalty has become the basis for loyalty research that has since been undertaken (for examples see Jacoby and Kyner, 1973; Bloemer and Kasper, 1995; Bennett, 2001). The composite definition of loyalty considers that loyalty should always comprise favorable attitudes; intentions and repeat-purchase (see Jacoby and Chestnut, 1978). Some researchers (see Oliver, 1999) suggest that Loyalty evolves and that there are stages of loyalty. In a personal sense loyalty is a feeling or an attitude of devoted attachment and affection. This feeling of loyalty tends to imply that a person feels an obligation to stay with a brand in good and bad times. Loyalty is the key to the longevity of any brand and one type of loyalty, namely word of mouth has recently been correlated with company growth (Reichheld, 2003). It is possible that each and every customer has loyalty qualities or states in varying degrees, and that customers have a different mix of loyalty qualities or states. Marketers can activate different loyal states or qualities in different ways. For example, word of mouth behaviors may be encouraged through reward programs while attitudinal loyalty may be encouraged through emotive advertising. As the concept of loyalty is dynamic, managers need to study how these intentions evolve through different phases of a brand life cycle. Loyalty intentions are a function of perceived value early in the life cycle. Over time, more affective attitudes toward the brand and the relationship with the company come to mediate the effects of value on intentions. From the introduction to the growth stage of a life cycle, managers must adapt from improving value per se to measuring and managing relationships and brands directly. Providing customers with perceived value or satisfaction is widely recognized as a means of improving loyalty intentions (Fornell et al. 1996; Zeithaml, Berry, and Parasuraman 1996) and actual retention (Bolton 1998; Bolton and Lemon 1999; Mittal and Kamakura 2001). However, research demonstrates that these relationships are potentially complex and dynamic and that the drivers of intentions change and evolve over time (Mittal, Kumar, and Tsiros 1999; Slotegraaf and Inman 2004). Recent research has suggested that intention drivers vary considerably over time. Mittal, Kumar, and Tsiros (1999) compare the drivers of perceived performance and subsequent loyalty intentions for new vehicle owners 3 to 4 months after purchase
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and again 21 months later. They find that service satisfaction has a greater impact on intentions early in the relationship, whereas product satisfaction has a greater impact later in the relationship. In a subsequent study, Mittal, Katrichis, and Kumar (2001) examine the drivers of customer satisfaction for people who owned a credit card for less than a year versus more than a year. They find that the weight customers place on different performance attributes shifts on the basis of their tenure with a firm. Again, in an automotive context, Slotegraaf and Inman (2004) study changes in the effects of resolvable attributes (attributes that can be fixed or repaired under warranty, such as a faulty part) versus irresolvable attributes (attributes that cannot be fixed or changed regardless of the warranty, such as size or gas mileage). They find that resolvable attributes have greater influence on satisfaction over time, whereas irresolvable attributes have less influence. So from the above literature we conclude that these studies reinforce the need for a dynamic perspective. As the customers experience with a particular offering grows over time, attitudes toward brands and relationships become stronger, more top of mind or accessible, persistent, resistant to change, and likely to guide intentions and subsequent behavior. (Fazio, Powell, and Williams 1989; Priester et al. 2004).They suggest two important attitude-type constructs. The first is affective commitment (Morgan and Hunt 1994; Verhoef 2003), or the factors that create stickiness in a relationship. This commitment is affected directly by the degree of personal interaction between a customer and a company and how the company manages the customers account over time (Bendapudi and Leone 2002). The second is brand equity, which is influenced by factors such as repeated performance and satisfaction (Keller 1993; Selnes 1993), word of mouth or the buzz about the brand (Rosen 2000), the degree of identification with the brand, and its relevance to a customers situation (Aaker 2004; Keller 2003). As the market grows and customer experience accumulates, more affective attitudes toward the relationship and brand come to drive intentions. With respect to relationship commitment, the implication is that the personal relationship between a customer and a company should be measured, nurtured, and managed effectively (Bendapudi and Leone 2002) through a companys customer relationship management system. For brand equity, the implication is that the degree to which customers identify with a particular brand and find it relevant to their situation should also be measured and managed effectively.

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Loyalty in Retail Industry, INDIA

The Raheja chain that started the retail revolution in India in 1991 and now organized retail is booming in India with national and international players. According to Kishore Biyani, the big brain behind Big Bazar, price, quality or service is the only way to retain customers in retail. The repeat customers spend more than the average customers and need to be encouraged to come back. That's why the stores have started offering special discounts to customers who join their loyalty card program. Lifestyle, for instance, has a loyalty program called `The Inner Circle', while Pantaloons offers a `Green Card'. Rewards programs, Westside has `Club West' and `First Citizen' from Shopper's Stop to woo the customer. The competition being intense, more retailers - Reliance Fresh and Subhiksha for instance - have introduced membership programs. Trumart from pyramid group plans to introduce a credit card for its shoppers to give the benefit of buying goods on credit. The purpose is to emulate the services provided by the local kirana store, which also sells on credit. Getting one of these cards is easy. On a bill of Rs 2500 or above, stores such as Lifestyle, Westside, or Pantaloons or even at a Titan showroom or a Landmark bookstore issue a membership card. First Citizen Citibank Card and ICICI Bank's tie-up with Big Bazaar. Reliance entered into retail in December 2006, was distributing free 1/2 kilo sugar & ice-cream for every purchase of Rs 100 for the first few days. They have also introduced a reliance card which is free. Cardholder gets 1 point for every 100Rs of purchase after 25 points they give a cash-voucher which can be used again. They also have a feed back form to get valuable inputs from regular buyers. According to an FMI study, many US food retailers are attributing 10 to 20 per cent increases in sales to their loyalty programs. The UKs largest supermarket chain, Tesco, attributed one-third of its 6 per cent volume increase in sales over six months to its recently launched Club card. The profit increase comes from several directions: the acquisition of new customers, increased customer retention, increased basket size, a shift towards owns (private) label and other high profit lines and the ability to recover defectors. Other reasons are more value from marketing spend (above the line marketing costs can be reduced by targeting offers more specifically) and the sale of data to other manufacturers.

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RESEARCH METHODOLOGY

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Research Design
The research is based on DESCRIPTIVE STUDY and I have used CONVINENCE SAMPLING TECHNIQUE to serve the purpose..

Sampling Unit: - College students, Working Professional, House wifes. Survey: The survey was carried out in Vile Parle(E), Mumbai.
Sample Size: A sample of 100 was taken which included youth and adult.

Data Collection Sources

a. Primary Data Primary data was collected by the survey method. The respondents were personally interviewed with the help of a structured questionnaire. b. Secondary Data - Secondary Data was collected from Magazines, Journals, Newspapers, and Internet etc.

Research Approach: Survey

A survey is a research technique used to gather information from a sample of respondents by employing a questionnaire. Normally surveys are carried out to obtain primary data.

Data Collection Instrument

Structured Questionnaire (Non-Disguised Questions) A questionnaire is a set of structures questions to be asked from respondents in a particular order with appropriate instructions. A questionnaire serves four functions enables data collection from respondents, lends a structure to interviews, provides standard means for writing down answers and help in processing the data collected. Tools Used for Research Tools used for this research are Questionnaire, Short Interviews, and Google Documents. A brief questionnaire focused to collect the relevant information was prepared. Respondents were asked to fill the questionnaire.

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PRIMARY DATA ANALYSIS

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Q1.How often do you visit shopping malls? a) Once a month. b) Once in two months. c) Once in three months. d) Very rarely.

Answer Once a Month Once in two months Once in three months Very rarely

No .of Respondents(100) 40 30 20 10

Percentage (%) 40 30 20 10

How often do you visit shopping malls

10%

20%

40%

Once a Month Once in Two Months Once in Three Months Very Rarely

30%

Interpretation: It is observed from the above data that 40% of people visit shopping malls once in a month, Followed by 30% who visits once in two months. There are only 20 % people who visit only once in three months and 9% people visit rarely.

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Q2.Which is the stores you frequently visit? a) Shoppers Stop. b) Lifestyle. c) Pantaloons. d) West Side. No. of respondents(100) 55 25 10 10 Percentage (%) 55 25 10 10

Stores you frequently visit

10% 10% Shoppers Stop Life Style 55% 25% Pantaloons West Side

Interpretation: Maximum number of people visit Shoppers Stop which is 55%.LifeStyle is the second store with 25% of visit followed by Pantaloons and West Side with 10% both respectively.

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Q3.How often do you purchase at these stores? a) Once a month. b) Once in two month. c) Once in three month. d) Very rarely. Answer Once a month Once in two month Once in 3 month Very rarely No. of Respondents(100) 55 25 15 5 Percentage (%) 55 25 15 5

How often do you purchase at these stores

5%

15%

Once a Month Once in two Month

25%

55%

Once in three Month Very Rarely

Interpretation: Maximum number of people purchases once a month that is 55%, followed by 25% of people who purchases once in two months 15% of people buy once in three month, only 5% of people purchases rarely.

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Q4.)How often do you visit Shoppers Stop? a) Once a month. b) Once in two month. c) Once in three month. d) Very rarely. Answer Once a month Once in two month Once in three month Very rarely No. of Respondents(100) 60 20 15 5 Percentage (%) 60 20 15 5

How often do you visit Shoppers Stop

5% 15%

Once a month Once in two month Once in three month

20% 60%

Very rarely

Interpretation: Out of 100 respondents 60% of respondents visits Shoppers Stop once in a month, while 20% visits once in two months,15% visits once in three months and 5% visits rarely.

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Q5.Are you aware of First Choice Shoppers Stop loyalty program? a) Yes b) No Answer Yes No No. of Respondents(100) 78 22 Percentage (%) 78 22

Aware of First Choice Shoppers Stop loyalty program

22%

Yes

No

78%

Interpretation: Maximum number of people i.e. 78% of people is aware of the program which means that the store is very successful in reaching out to the customers and making them aware of the existence of the loyalty program.

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Q6.Are you a member of Shoppers Stop First Choice loyalty program? a) Yes b) No Answer Yes No No. of Respondents(100) 66 34 Percentage (%) 66 34

Member of Shoppers Stop First Choice loyalty program

34% Yes No

66%

Interpretation: A whopping 66% of people are member of the loyalty program because it is observed from the earlier question that more than 75% of the people are aware of the existence of the loyalty program itself. This implies that the store has reached out successfully to the people.

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Q7.It is easy to avail the benefits of First Choice loyalty program? a) Yes b) No Answer Yes No No. of Respondents(100) 58 42 Percentage (%) 58 42

Easy to avail the benefits of "First Choice" loyalty program

42% 58%

Yes No

Interpretation: Maximum number i.e.58% of the respondents feel that it is easy to avail the benefits of the program because they are very clear about the whole process of redeeming it. The store should take some action so that the 42% of the respondents who says its not easy to avail benefits of the loyalty program so that they can get the benefits easily.

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Q8.The store keep me informed of all the upcoming offers and events at which I can avail some benefits? a) Yes b) No Answer Yes No No. of Respondents(100) 61 39 Percentage (%) 61 39

Store keep me informed of all the upcoming offers and events

39% Yes 61% No

Interpretation:Maximum number of respondents i.e.61%feel that they are aware of any upcoming events related to the store but as observed in the earlier question that still 42% respondents are unable to avail the benefits because the process is complicated.

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Q9.At times due to First Choice offers I have ended up over spending in a) Apparels b) Accessories c) Others. Answer Apparels Accessories Others No. of Respondents(100) 57 30 13 Percentage(%) 57 30 13

Due to First Choice offers I have ended up over spending in

13% Apparels Accessories 30% 57% Others

Interpretation: Due to the loyalty program 57% of the respondents ended up with overspending in apparels followed by 30 % in accessories and 13% in other, which indicates that that the loyalty program First Choice have an effect on the mind of the respondents.

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Q10.) Are you satisfied by the services that have been offered to you being a member of the loyalty program First Choice? a) Yes b) No Answer Yes No No. of Respondents(100) 68 32 Percentage (%) 68 32

Satisfied by the services that has been offered to you being a member of the loyalty program "First Choice"

32% Yes No

68%

Interpretation: Majority of the respondents voted that they are satisfied with overall services of the loyalty program First Choice i.e. 68%.The major reason for satisfaction that are found in the survey are: The redemption process is clear to maximum no of respondents. The reward to billing amount ratio is clear to the respondents. The communication in terms of making customers aware about the program is very effective and hence the program is very successful and they are loyal to Shoppers Stop.

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Hypothesis Testing
A majority of the respondents i.e. 78% say that are aware of the loyalty program First Choice of Shoppers Stop and 66% are member of the loyalty program. This implies that because the process of redemption of points and also the reward points to billing amount ratio is clear, the respondents feel that they are benefitted after becoming the member of the loyalty program. A lot of customer also seemed to be happy about the fact that Shoppers Stop has an exclusive shopping days for its First Citizen members. This means that the store is able to retain its customer with them. Also majority of the respondents i.e. 68% were satisfied by the services offered by the Shoppers Stop. Therefore We select the Null Hypothesis and reject the Alternate Hypothesis because First Choice the customer loyalty program for Shoppers Stop is effective in retaining its customers.

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Findings:
Majority of people are aware of the Shoppers Stop loyalty program. Out of the respondents who are members, maximum of them knows how to redeem the loyalty points. Customers are satisfied with the communication strategy of the loyalty program by Shoppers Stop. Customers feel it is easy to avail the benefits of the loyalty program First Choice. There are various interesting schemes, offers or other facilities like free parking which excites the customer. Promotional activities (gifts, discounts, coupons)should be enhanced more.

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Recommendations
The overall image of the customer loyalty program First Program was found to be good and there are not much loop holes related to redemption of points. The company should be more prompt in handling the queries and problem of the customer, which is very essential to retain the customer with the customer in future. Press release of any new products or ventures should be entertained. The entire process to redeem the reward points should be made much simpler and clear to the customer. Event promotion: taking advantage of upcoming festivals, concerts so that more people come to know about the Shoppers Stop Loyalty program. The company should increase their sales period as customers are somewhat dissatisfied with time duration of it.

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Limitations

Although I have tried my level best to prepare this report an error free report every effort has been made to offer the most authenticate position with accuracy. But there may be a possibility of some error in my report also.

As whole of my project and my findings are based on the information collected through survey fact sheet, hence there might be a possibility that respondent may have given wrong or partially correct information.

The research was conducted in a limited area.

The time period allotted for the study was less, which may provide a deceptive picture in comparison to the study based on long run.

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Bibliography:www.forbesindia.com www.shoppersstop.com www.retailindia.com www.economictimes.com Loyalty program applications in Indian service industry IIM-Ahmedabad ,India

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Appendix
Personal Details Name: Gender: Male ( ) Female ( )

Please tick on the appropriate option for the following questions Q1.How often do you visit shopping malls? a) Once a month. b) Once in two months. c) Once in three months. d) Very rarely. ( ( ( ( ) ) ) )

Q2.Which is the stores you frequently visit? a) Shoppers Stop. ( b) Lifestyle. ( c) Pantaloons. ( d) West Side. ( ) ) ) )

Q3.How often do you purchase at these stores? a) Once a month. b) Once in two month. c) Once in three month. d) Very rarely. ( ( ( ( ) ) ) )

Q4.)How often do you visit Shoppers Stop? a) Once a month. ( ) b) Once in two month. ( ) c) Once in three month. ( ) d) Very rarely. ( ) Q5.)Are you aware of First Choice Shoppers Stop loyalty program? a) Yes. ( ) b) No. ( ) Q6.)Are you a member of Shoppers Stop First Choice loyalty program? a) Yes. ( ) b) No. ( )

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Q7.)It is easy to avail the benefits of First Choice loyalty program? a) Yes. b) No. ( ) ( )

Q8.)The store keeps me informed of all the upcoming offers and events at which I can avail some benefits? a) Yes. ( ) b) No. ( ) Q9.)At times due to First Choice offers I have ended up over spending in a) Apparels. ( ) b) Accessories. ( ) c) Others. ( ) Q10.) Are you satisfied by the services that has been offered to you being a member of the loyalty program First Choice? a) Yes. ( ) b) No. ( )

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