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INFOSYS.110 BUSINESS SYSTEMS:
DELIVERABLE 2: BUSINESS SECTION
2014

Name Nicholas Cornwell
NetID ncor018
Group Number: 272
Website Link: http://infosys1102014s1group272.blogspot.co.nz/
Tutorial Details
Tutor: Day: Time:
Olivia Schultz-Duffy Thursday 9am
Time Spent on
Assignment:
22 hours Word Count: 1601

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ERS: A FLYBUYS FOR THE ENVIRONMENT
INTRODUCTION
Global warming, unabated, promises to produce some of the most serious crises that
humanity will face this century. Businesses cannot afford to remain indifferent towards its
challenges, and must be pro-active in creating solutions to combat it. ERS is a loyalty
program that rewards consumers for buying products that produce low emissions. It will not
only allow businesses to give consumers the opportunity to express their commitment to
the environment while shopping, but also to reward them in the process.
3. BUSINESS SECTION
3.1 Vision
Ensuring a cleaner future for the world by rewarding consumers for upholding a
commitment to the environment.
3.2 Industry Analysis: The loyalty program industry
Industry: The loyalty program industry. Although ERS is concerned with environmental
sustainability, it belongs to the loyalty program industry, rather than the ‘green’ industry,
owing to the nature of its business.
Force: High/Low: Justification:
Buyer power: High When buyers possess a loyalty card, they should
be less likely switch to using others, since more
points accumulate through frequent use.
However, buyers will usually possess multiple
cards. This leads them to shop around for better
deals, which reduces retailers’ influence over
individual buyers. (Meyer-Waarden, 2007)

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Supplier power: High Loyalty program providers must integrate IT
successfully into existing businesses.
Consequently, they are heavily dependent on
external IT consultancy if they cannot provide
their own expertise. (Amato-McCoy, Dec. 2012;
Adams, 2011)
Threat of new entrants: Low Loyalty programs encourage buyers to use them
not only for the rewards they bring, but also
through brand power, the positive feelings
associated with them. It is difficult for new
entrants to dislodge existing providers if the latter
have positioned themselves effectively in
consumers’ minds. (Liu, 2007)
Threat of substitutes: Low There are few other means whereby buyers are
directly, tangibly rewarded upon purchasing
products from a business. The closest is giving
away free products; only of limited appeal to
businesses because of the risk that buyers will not
necessarily purchase further products. (Kim, Lee,
Choi, Wu, Johnson, 2013).
Rivalry among existing
competitors:
High Businesses are now expected to offer loyalty
programs by consumers. They have to compete
against each other by offering greater incentives
versus others in order to remain visible to
consumers. (‘Successful Loyalty Programs’, 2012).

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Overall attractiveness of the industry: The loyalty program industry offers only limited
attractiveness to new entrants. Success in entering the market depends on the ability to
generate interest around the features of the loyalty program.
3.3 Customers and Thei r Needs
A critical success factor (CSF) for ERS is being able to appeal to the entire range of retailers’
customers, in order to encourage as large a reduction of emissions as possible. The needs of
its target customer base are therefore quite diverse, but can be classified into several
categories. Customers use loyalty programs for benefits that are i) hedonic: in order to
obtain personal gratification; ii) utilitarian: to derive financial advantages or savings on
purchases, and iii) symbolic: to express their beliefs and thereby gain self-esteem or social
approval. ERS will have to ensure that each of these needs are met by its offering if it to
achieve its CSF. (Mimouni-Chabanne, Aîda, 2010)
3.4 The Product and Service
The benefits which ERS offers are primarily symbolic: using the loyalty program encourages
consumers to signal that their readiness to help the environment extends to even the
everyday context of going shopping. ERS also offers utilitarian benefits insofar as consumers
will receive discounts they otherwise would not have gained by purchasing low emission
products. Hedonic benefits however are not currently covered by the scheme in its existing
form: one does not usually expect consumers to experience pleasure by helping the
environment or receiving discounts. Altering the scheme to introduce more tangible
rewards should therefore be undertaken to provide hedonic benefits to consumers.
3.5 Suppliers and Partners
Examples of suppliers for ERS are IT consultants such as Equinox and customer service
providers such as call-centres. ERS must work with IT consultants to ensure that the correct
information technology is being provided to its clients and that it can be altered or updated
if necessary. ERS must work with call-centres to ensure that information given to customers
is accurate and that complaints are handled appropriately.

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Examples of partners for ERS include retailers such as New World, and credit-card providers
such as Visa. ERS must work with retailers to ensure that IT components are successfully
incorporated into their business, and that adopting ERS is having a positive impact on their
sales and reputation. ERS must work with credit-card providers to ensure that customer
information is kept confidential and that sales information is sent to ERS’s database.
3.6 Strategy: Cost Leadership
ERS is aiming at appealing to as wide a range of consumers as possible. It will need to
become a common component of the shopping experience, offered by a large number of
retailers and attaining a ubiquity similar to Flybuys.
ERS is also focused on giving small cost savings to consumers in the form of points every
time they make a purchase, which would accumulate into substantial discounts over time. It
will compete with other loyalty programs by offering better discounts for low emissions
products.
The overall strategy is therefore Cost Leadership.
3.7 Value Chain Activity: Selling or Marketing the Product
The most important value chain activity for this business is Selling or Marketing the Product
ERS adds value through being easy for the average customer to use ERS when they purchase
a product: sales events must be unobtrusive so that customers can instead focus on how
reducing emissions should be a common component of the shopping experience. ERS also
adds value by positoning itself to customers as an engaging yet simple way of helping to
reduce emissions. Advertising, promotional stunts, and information provided by ERS all
need to be co-ordinated across a large customer base, and at minimal cost in order to pass
on savings, so that customers know how the program works and that they are benefiting the
environment.
3.8 Business Processes
3.8.1. SALES RECORDING PROCESS –Sales information about the item(s) which the customer
has purchased is processed so that it can be accessed by the database, and assessed so that

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points can be accurately assigned for low emissions products. The information is then stored
so that the customer’s account can be updated, which they can check by using the ERS
website or app, and that ERS personnel can employ it for examining which products are
selling more and what steps need to be undertaken to improve sales.
SALES RECORDING PROCESS MODEL
Start
Customer makes
a purchase
Details of
purchase are
recorded and
converted for
transfer
Information is
sent to the ERS
database
Information is
assessed for
points
The customer’s
account and ERS’s
records are
updated
End
Sales Sales Processing System

3.8.2. CUSTOMER UPDATI NG PROCESS –
Information is first gathered from both what ERS customers provide directly and from their
purchase history. Profiles are then created of customers, which are used to design emails,
texts and advertisements. These are then sent to customers based on their profile, who

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receive messages customised to their individual preferences encouraging them to purchase
more using ERS.
CUSTOMER UPDATING PROCESS
Start
Customer
provides
information
through signing
up and providing
feedback
Further
information is
accessed by ERS
from purchase
history
Collective
information is
compiled to
produce a
customer profile
Potential
customer
interaction is
adjusted to co-
ordinate with the
profile
Messages are
sent (e.g.,
designed emails)
to customers in
line with their
profile
End
Campaign Management System Marketing



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3.9 Functionalities
3.9.1. SALES RECORDING PROCESS
 Converting sales data into information that the database can access.
 Storing information where it is accessible by consumers and ERS personnel.
3.9.2. CUSTOMER UPDATI NG PROCESS
 Integration of information to produce customised messages
 Creation of customer profiles
3.10 Systems

3.10. 1. CAMPAI GN MANAGEMENT SYSTEM – This system uses information that customers
provided both via ERS interfaces and their purchase history to calculate which of ERS’s
current promotions would best interest that customer. It then designs messages
incorporating these details, which is sent to a customer when the system detects that it
would positively influence purchasing decisions. Customers are thereby put in touch with
the products they want which will help the environment.
3.10. 2. SALES PROCESSING SYSTEM – This system transforms data received at points of sale
into information that can be received by the database. It attains data about purchases
directly from customers’ credit-cards rather than from a separate loyalty card. It converts
this into a form that the database is capable of storing. The process of rewarding customers
for their purchasing decisions is thereby made smoother.
3.10. 3. CUSTOMER FEEDBACK CAPTURING SYSTEM - This system allows both the storage of
customer feedback and its incorporation into customer profiles. It logs any feedback that a
customer has given through interacting with ERS for future reference. It evaluates the
feedback’s content to adjust the customer profile so that future interaction with the
customer can be appropriately guided. ERS can consequently respond more effectively to
customers’ views about improving its role in reducing emissions.

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3.11. Summary Table: Value Chain to Systems

Value Chain
Activity
Processes Functionalities Specific Information
System(s)
Broad Information
System(s)

Selling or
marketing
the product
1. Sales
recording
process
1. Converting sales data into information that
the database can access

2. Storing information where it is accesible by
consumers and ERS personnel
Sales processing system


Sales processing system
Transaction processing
system

Transaction procession
system
2. Customer
updating
process
1. Integration of information to produce
customised messages

2. Creation of customer profiles
Campaign management
system

Customer feedback capturing
system
Customer relationship
management system

Customer relationship
management system

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CONCLUSION
ERS strives to be the loyalty program that will help to save humanity and the environment
from the threat of global warming. Generating points for purchasing products creates a link
in consumers’ minds between their activity and belonging to the wider world. ERS’s vision
would not be possible without studying the benefits that information systems and
technology bring. The above discussion has attempted to show how IS and IT could allow
different components of ERS to operate more efficiently and effectively so that its CSFs are
closer to accomplishment.
REFERENCES


1. Adams, John, (Oct 5 2011). As Issuers Stress Loyalty Programs, IT Stresses Out.
American Banker, Vol.176(154), 6. Retrieved from:
http://go.galegroup.com/ps/i.do?id=GALE%7CA268719986&v=2.1&u=learn&it=r&p=
AONE&sw=w&asid=e40c7cbd5f6d6d92fa22ee2bf934f5fc
2. Amato - McCoy, Deena M., (Dec 2012). Building Relationships: Societe de transport
de Montreal's smartphone program blends loyalty and mobility. Chain Store Age,
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AONE&sw=w&asid=55c2e64173a54320f6d2c9fa2471bdca
3. Meyer-Waarden, Lars, (2007). The effects of loyalty programs on customer lifetime
duration and share of wallet. Journal of Retailing, Vol.83(2), 223-236. Retrieved
from: http://dx.doi.org.ezproxy.auckland.ac.nz/10.1016/j.jretai.2007.01.002

4. Mimouni-Chaabane, Aîda, Volle, Pierre, (2010) Perceived benefits of loyalty
programs: Scale development and implications for relational strategies Journal of
Business Research, Vol.63(1), 32-37. Retrieved from:
http://dx.doi.org.ezproxy.auckland.ac.nz/10.1016/j.jbusres.2009.01.008

5. Liu, Yuping, (Oct. 2007). The long-term impact of loyalty programs on consumer
purchase behaviour and loyalty. Journal of Marketing, 71 (4), 19-35. Retrieved from:
http://web.b.ebscohost.com.ezproxy.auckland.ac.nz/ehost/detail?sid=63485966-
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2ZSZzY29wZT1zaXRl#db=bah&AN=26506748

6. Successful Loyalty Programs Influence Spending: Increased Competition Drives
Programs To Offer More than Rewards Points, According To Maritz. (Feb. 2012)
Internet Wire. Retrieved from:

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http://go.galegroup.com/ps/i.do?id=GALE%7CA281365645&v=2.1&u=learn&it=r&p=
ITOF&sw=w&asid=5cbf4635ead5f4301b7495473d392e9c

7. Kim, Hye-young, Li, Ji Young, Choi, Doo Young, Wu, Juanjuan and Johnson, Kim K.P.,
(2013). Perceived benefits of retail loyalty programs: their effects on program loyalty
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