MR - Loyalty-Cards-Chapter 1-4

1 | M a r k e ti n g R e s e a r c h 2 0 2 0 - 2 0 2 1
“EFFECTIVENESS OF USING LOYALTY CARDS TO ENCOURAGE SALES AND BOOST

CUSTOMER LOYALTY ON A SELECTED RESPONDENT?”
A study presented to the Faculty of BSBA Department

ST. NICOLAS COLLEGE OF BUSINESS AND TECHNOLOGY
CITY OF SAN FERNANDO, PAMPANGA
In Partial Fulfillment of the Requirement for the

Degree of Bachelor of Science in Business Administration
Major in Marketing
By:
Rovelyn De Luna
Renz Ariane C. Sicat
Laarni S. Gotiangco
Jayza Mae C. Deguit
Jazmine Dee N. Abril
Krisel Ibanez
Franchezka Mae S. Manalo
Rocky Miranda
Jomar dela Cruz
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ACKNOWLEDGEMENT
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ABSTRACT OF THE STUDY
Title: “HOW DO LOYALTY CARDS ENCOURAGE SALES AND BOOST

CUSTOMER LOYALTY ON A SELECTED RESPONDENT?”
Researchers: Rovelyn De Luna

Renz Ariane C. Sicat
Laarni S. Gotiangco
Jayza Mae C. Deguit
Jazmine Dee N. Abril
Krisel Ibanez
Franchezka Mae S. Manalo
Rocky Miranda
Jomar dela Cruz
Course: Bachelor of Science in Business Administration

Major in Marketing
Institution: St. Nicolas College of Business and Technology
Adviser: Mr. John Carlo C. Dames
The Problem:
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RESEARCH METHODOLOGY
The study will utilize the descriptive method to assess the effectiveness of loyalty cards
in encouraging sales and boosting customer’s loyalty on selected loyalty card users. This
method aims to accurately describe a phenomenon, situation, and population.
In addition, quantitative methods will also emphasize in the study as the objective
measurements and the statistical, mathematical, or numerical analysis of data collected
through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data
using computational techniques. According to Babbie (2010), Quantitative research
focuses on gathering numerical data and generalizing it across groups of people or to
explain a particular phenomenon. Quantitative methods presume to have an objective
approach to studying research problems, where data is controlled and measured, to
address the accumulation of facts, and to determine the causes of behavior. As a
consequence, the results of quantitative research may be statistically significant but are
often humanly insignificant.
HYPOTHESIS
Ho: There is no significant difference in using loyalty cards to encourage sales and
boost customer’s loyalty on selected loyalty card users.
Ha: There is significant difference in using loyalty cards to encourage sales and boost
customer’s loyalty on selected loyalty card users.
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CONCLUSION
FINDINGS
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Table of Contents
Acknowledgements……………………………………………………………………………………………………….
Abstract of the Study, Research Methodology.........……………………………………….…………….....
Hypothesis, Conclusion, Findings…………………………………………………………………………………….
Table of Contents………………………………………………………………………………………………………….
Chapter 1: The Problem and Its Background…………………………………………………………….
Introduction ………………………………………………………………………………………………………………..
Background of the Study …………………………………………………………………………………………..……
Theoretical Framework ………………………………………………………………………………………………..…
Conceptual Framework …………………………………………………………………………………………………..
Statement of the Problem ………………………………………………………………………………………………
Hypothesis …………………………………………………………………………………………………………………….
Scope and Limitation ………………………………………………………………………………………………………
Significance of the Study………………………………………………………………………………………………..
Definitions of Terms ……………………………………………………………………………………………………….
Chapter 2: Review of Related Literatures and Studies……………………………………………..
Foreign Literature…………………………………………………………………………………………………………..
Local Literature……………………………………………………………………………………………………..……….
Synthesis of Review……………………………………………………………………………………………………….
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Chapter 3: Research Methodology……………………………………………………………………………..
Research Method Used …..……………………………………………………………………………………..…….…
Respondents of the Study…………………………………………………………………………………………..……
Sampling Technique ….…………………………………………………………………………………………..…......
Instrument Used, Validation of Instrument, Data Gathering Procedure...................................
Statistical Treatment of Data………....……………………………………………………………………………….
Research Questions………………………………………………………………………………………..………..…….
Survey Forms………………………………………………………………………………………………………………..
Chapter 4: Presentation, Analysis and Interpretation of Data………………………………..
Tabulation Result……………………………………………………………………………………………………….
Determination of Sample Size…………………………………………………………………………………….
Testing the Hypothesis…………………………………………………………………………………………………….
Frequency Distribution of the Survey………………………………………………………………………………..
Chapter 5: Summary, Conclusion and Recommendations…………………………………………
Summary of Findings………………………………………………………………………………………………………
Conclusion……………………………………………………………………………………………………………………..
Recommendations………………………………………………………………………………………………………
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CHAPTER 1
THE PROBLEM AND ITS BACKGROUND
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INTRODUCTION
Companies worldwide generate a powerful tool in emphasizing, creating and maintaining

customer loyalty. Loyalty is a positive belief in the value that a company provides and the
commitment of customer to a particular brand or company, leading to increased purchases over
time. They use a variety of means to encourage loyalty because retention is more important
and more cost-effective than customer development. Customer loyalty is described as the
strength of the relationship between an individual’s relative attitudes and repeat.
Loyalty programs have become one of the most critical means by which companies
manage their customer relationships. Loyalty could be discovered anyplace both nearby and
worldwide market. Organizations had kept contending while at the same time boosting the bit
of leeway or the quality of their tweaked loyalty card. It additionally implies distinctive
execution measures through utilizing the card. The specialist will likely know how loyalty cards
empower deals and lift client connection on business. Loyalty cards are an incredible method to
create additional business and function admirably as a basic advertising instrument to get the
message out about your organization. The possibility of faithfulness cards is basic. At the point
when a client visits your shop and makes a buy, they increase diverse sort of benefits, similar to
limits, complimentary gifts and focuses that is convertible to money. Numerous organizations
find that devotion card plans increment deals through existing clients and pull in new ones too.
Retail chain, market, hypermarket, comfort store, gas station, retail stand, retail
locations, boutiques, and different occupants inside the shopping centers are contending to one
another by the method of pulling and pushing their procedures. Loyalty Card is a helpful
promoting material utilized by the advertisers. Since loyalty card is noticeable to the wallet and
pack of clients alongside different cards like ATM Card and Credit Card, at that point it is
accepted "a lifestyle" for the two purchasers and buyers. In accordance with, the analysts is
looking for the quantitative and subjective outcome that may shake the shrewdness of
promoting the card. Loyalty programs have been given new acknowledgment lately for a few
reasons. To start with, inlight of the fact that client loyalty card has an assortment of
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advantages for organizations, yet in addition since they have become a normal aspect of the
buyer experience. Be that as it may, in the present market, essentially having a customary
loyalty program isn't enough.
The principle goal of the investigation is to decide how do loyalty card empower deals
and lift client loyalty. This study intends to decide the positive impact of loyalty program
participation status to individual referral, individual data sharing, showcasing research uphold,
receptiveness to store advancement, and increment in buy bringing about store support. In this
study, individuals' conduct mirrors the blend of showcasing assets that add to a more
productive and viable advertising undertaking, including individual referrals, sharing individual
data, advertising research exercises; and being more open to store advancements. Store
promotion emerges simply after a relationship has been solidly settled, and in this way fills in as
an important condition for reliable loyalty program part's conduct.
10 | B S B A M A R K E T I N G
BACKGROUND OF THE STUDY
Each organization has their own advancement that will put that organization beside the
remainder of their rivals. Subsequently, making the organization one of a kind from the manner
in which they grab the eye of their market and offering them items and administrations that will
suit their necessities and needs likewise. For various business sectors require various
advancements that will grab the eye of the purchasers and will make them attempt your item
with respect to how great it was being advanced in various structures.
One of the four P's in Marketing is advancement. There are a wide range of approaches
to advance items and administrations. Advancement incorporate a few interchanges exercises
that endeavour to give added worth or impetuses to purchasers, wholesalers, retailers, or other
hierarchical clients to animate prompt deals. These endeavours can endeavour to invigorate
item intrigue, preliminary, or buy. Instances of gadgets utilized in deals advancement
incorporate coupons, tests, charges, purpose of-procurement (POP) shows, challenges, refunds
and pool promotions. Advancement is expected to draw in new clients, to hold present clients,
to check rivalry, and to make the most of chances that are uncovered by statistical surveying.
It is comprised of exercises, both outside and inside exercises, to improve organization

deals. Outside deals advancement exercises incorporate publicizing, exposure, advertising
exercises, and unique deals occasions. Inside deals advancement exercises incorporates
window presentations, item and special material showcase and limited time projects, for
example, premium honors and challenges item and administration advancement is the most
well-known type of advertising action. It incorporates publicizing through papers, radio, TV,
magazines, outside signage and sites.
According to Clark (2004), each item has distinctive customer purchasing propensity and
it can't be viewed as fruitful item on the off chance that it doesn't have the craving qualities.
Item attribute a significant in expanding the buying propensity for the clients. The clients are
looking from the outset of the brand they needed to purchase before buying an item. The
Republic Act No. 7394 known as the Consumers Act of the Philippines was inacted to shield the
interests of the clients from exchange misbehaviours and from standard risky practices. It
advances additionally the overall government assistance that sets up the guidelines of direct
from business and industry. Article 118, Conduct of Sales Promotion express that a business
advancement which is expected for expansive purchaser interest and uses broad
communications will demonstrate the span, initiation and end and the overseeing rules or
system to be followed in that.
In order to come up with the reliable results, the researchers focused on the use of
loyalty cards. Hence, this research paper aims to determine the effectiveness in using loyalty
cards to encourage sale and boost customer’s loyalty on selected loyalty card users.
THEORETICAL FRAMEWORK
This study is anchored on the equity theory of David M. Messick & Karen S. Cook, 1983.
This theory emphasizes the various parts of society that work together to achieve sustainability,
stability, and functionality. Messick & Cook, 1983 defined that people develop and maintain
relationship in which rewards are distributed in proportion to costs. When share of rewards is
less than what is demanded by equity people are likely to experience dissatisfaction and exit
relationship. These relationship theories indicate the benefits of creating relationships with
customers which leads to building of customer loyalty.
The purpose of building relationships with customers is to retain customers in the

existing company. And by retaining them the loyalty is created and loyalty intern, results in
superior long-term financial performance. Loyalty is the biased behavioral response expressed
over time by customers with respect to one provider out of many providers accompanied by a
favorable attitude. Any insurer should be understandable essence of relationship in order to
build customer loyalty. Relationship will dissolve if mutual benefits can’t secure. Such theories
can be used for better understanding how customers may initiate in the creation of customer
loyalty through relationship.
Despite such a significant effort, the marketing literature has overlooked the role of
equity (Szmigin and Bourne, 1998; Tax, Brown and Chandrashekaran, 1998 cited in Maria et al
2010) in developing customer loyalty. Social exchange theory and social psychology studies
(Homans, 1961; Blau, 1964; Austin, McGinn and Susmilch, 1980 cited in Maria et al 2010) have
shown that equity perception derives from the proportionality between the “outputs
(benefits)/inputs (costs)” ratios experienced by a part (e.g., the customer) and a counterpart
(e.g., the firm). Moreover, according to social identity theory, people tend to classify themselves
into different social categories. That leads to evaluation of objectives and values in various
groups and organizations in comparison with the customer’s own values and objectives. They
prefer partners who share similar objectives and values, (Ashforth et al. 2001).
Sussmann and Vechio (1982) offered Identity-related dispositions as an antecedent of

behavioral intentions which relate in turn to overt behavior. Such dispositions include social
attachment to the organization, such attachment being akin to organizational commitment.
Insurers can draw lessons from social identity theory to inspire customers in the realm of
creating and maintaining relationships, because relationships is seen as mediated by such and
other factors.
CONCEPTUAL FRAMEWORK
The conceptual framework exhibits the various procedures carried out by the researcher
in order to gather the relevant data needed to answer the research questions and to prove the
effectiveness of using loyalty cards to encourage sales and boost customer’s loyalty on selected
loyalty card users.
.
Effectiveness of Programs
Loyalty Cards in being
Encouraging Sales implemented
and Boosting
Demographic Profile Customer’s Loyalty
1.1 Age
Strategic
1.2 Civil Status
2.1LoyaltyofCustomer plan
1.3 Gender
1.4 Income 2.2Increase Sales
2.3Save Money
2.4New Customer Problems
encountered
Paradigm of the Study
The researcher has selected respondents in the study who are using any loyalty cards. It
assessed the demographic profile of the respondents in terms of age, civil status, gender, and
income. Moreover, it also aims to determine the effectiveness of using loyalty cards. Clients
purchase items in type of products or administrations. When they purchase the item, they can
benefit for the loyalty card of an organization. The loyalty card has endless advantages and
preferences that will picked up energy for clients and friends. The loyalty card is important for a
maintenance system Encouragement to differing line of organizations could be conceivable.
Private organizations and government office are subject for the speculation of the card. The
card could make an achievement results for an organization. In an organization, client
relationship the executives – will create client information base, client arrangement information,
client needs/needs and desires. The stock administration will reinforce the historical backdrop of
procurement, measure of procurement, normal buy, grouping of thing development, and
amount requesting. Firm rivalry in the market, with the guide of the loyalty card; showcasing
the executives will strengthen research as essential information, deals the board, limited time
tie up, beneath the line advertising procedure, rehash buy, recurrence of visit, client lifetime
worth, and market infiltration.
Lastly, the researcher also evaluates the programs being implemented and problems
encountered to align and incorporate plans to the strategic plan. Customer satisfaction has
been recognized as the additional element in assessing the effectiveness of using loyalty cards.
STATEMENT OF THE PROBLEM
This study aims to determine the effectiveness of using loyalty cards to encourage sales
and boost customer’s loyalty on selected loyalty card users.
Specifically, this study sought to answer the following questions:
1. What is the profile of the respondents in terms of the following:
1.1. Age
1.2. Civil Status
1.3. Gender
1.4. Income
2. What is the level of effectiveness of using loyalty cards in encouraging sales and boosting
customer’s loyalty on selected respondents?
2.1 Loyalty of Customer
2.2 Increase Sales
2.3 Save Money
2.4 New Customer
3. Is there a significant difference in the assessment of the effectiveness of using loyalty

cards in encouraging sales and boosting customer’s loyalty on selected respondents when
profile is considered?
4. What are the problems encountered by the respondents using loyalty cards?
5. What are the problems encountered by the companies using loyalty cards to encourage
sales and boost customer’s loyalty.
6. What are the programs being implemented by the companies to encourage sales and boost
customer’s loyalty using loyalty cards?
OBJECTIVES:
1. To study the use of loyalty card to encourage sales and boost customer’s loyalty.
2. To study the effectiveness of use of loyalty card on selected loyalty card users.
HYPOTHESIS
Ho: There is no significant difference in using loyalty cards to encourage sales and
boost customer’s loyalty on selected loyalty card users.
Ha: There is a significant difference in using loyalty cards to encourage sales and boost
customer’s loyalty on selected loyalty card users.
SCOPE AND LIMITATION
The study will be focusing on the effectiveness of using loyalty cards to encourage sales
and boost customer’s on selected loyalty card users. It will be conducted during the year 2020-
2021.
The variables involved are the profile of the respondents in terms of age, civil status,
gender, and income. Moreover, it was also included the level of effectiveness in using loyalty
cards, problems encountered by the company and students in using loyalty cards and programs
being implemented by the company.
SIGNIFICANCE OF THE STUDY
The study aims to assess the effectiveness of using loyalty cards to encourage sales and
boost customer’s loyalty on selected respondents.
To the Loyalty Card Users, this study will provide them a concrete avenue which will inform
them about the effectiveness of using loyalty cards where they can identify preferred company
and can save money.
To the Company, this will serve as a reference on aligning programs regarding customer’s
satisfaction.
To the Researcher, the results of the study will help the researcher in assessing the
effectiveness of loyalty cards to encourage sales and boost customer’s loyalty, where it can
serve as a basis in the workplace of the researcher.
To the Future Researcher, this will serve as a reference on determining the effectiveness of
using loyalty cards to encourage sales and boost customer’s loyalty. Moreover, this may serve
as a basis for further study regarding this topic.
DEFINITION OF TERMS
The following are the terms that will be used conceptually and operationally from the study.
These terms will be the guide to better understand and ease of reference for the undertaking.
1. Customer - a person or organization that buys goods or services from a store or business.
2. Loyalty card – a plastic or paper card given to a client by a store or organization, used to record
data about what the client purchases and to remunerate them for purchasing merchandise or
administrations from the store or organization
3. Respondent - a person who replies to something, especially one supplying information for a
survey or questionnaire or responding to an advertisement.
4. Sales – the exchange of a commodity for money; the action of selling something.
5. Customer Loyalty - is a proportion of a client's likeliness to do rehash business with an organization
or brand.
6. Boost - help or empower
7. Encourage - give support, confidence, or hope
8. Membership-the reality of being an individual from a gathering
9. Significance - the nature of being deserving of consideration; significance
10. Privileges - an exceptional right, preferred position, or resistance allowed or accessible just to a
specific individual or gathering
11. Effectiveness - the degree to which something is successful in producing a desired result;
success
12. Advancement - the process of promoting a cause or plan.
CHAPTER II
Review of Related Literature and Studies
Foreign Literature and Studies
Kooser, A. C. (2020). About the Ethical & Practical Aspects of Using Customer
Loyalty Cards. U.S.: Hearts Newspapers, LLC. Retrieved October 2020, from
https://smallbusiness.chron.com/ethical-practical-aspects-using-customer-loyalty-cards-
3287.html
Loyalty cards are one tool in the small business marketing arsenal. These cards are
designed to encourage repeat business by offering rewards for customers who return again and
again. Loyalty cards are also used by some businesses to track customer purchases to better
understand buying patterns and target marketing. Loyalty cards can work for many different
types of businesses, but they make sense especially for restaurants and retail stores.
Types of Cards
Loyalty cards can come in many different flavors. A simple example is a paper card at a
coffee shop that is punched with each drink purchased. When you get to 10, you get a free
drink. Newer versions of the loyalty card can look a lot like a credit or debit card. The card is
scanned, and information about the purchase is captured into a database that tracks
information on what has been bought and what rewards are available to the customer. With so
many businesses offering loyalty cards, it can be easy for cards to get lost in the shuffle.
Customers can connect their card to their email or phone number and then give that
information to identify themselves at the register. This can be one advantage of going with a
more advanced database system compared to a paper punch card.
Types of Rewards
Rewards can be as simple as a free side at a restaurant, a meal upgrade or a percent

discount on the next purchase. Choosing the types of rewards to offer will depend on your
business and what motivates your customers. Experiment with different kinds of rewards and
check in with customers about what they think of your loyalty card program. At the same time,
avoid getting too complex with the rewards. Keep the offers straightforward so customers know
exactly what they have to do to reach the next reward.
Customer Loyalty
The ultimate purpose of loyalty cards is to get customers to spend more money.
Businesses can achieve this by encouraging repeat business, offering incentives for larger
purchases and reserving special offers just for loyalty program members. Remember you are
likely in competition with other businesses that also offer loyalty programs. Check in periodically
to see what the competition is doing. Loyalty cards are an ongoing process. Analyze any data
you collect and adjust the rewards to generate greater customer loyalty over time.
Customer Information
When it comes to the ethical aspects of loyalty cards, the collection of customer
information is a hot topic. Many loyalty card programs require a customer to sign up by
providing personal information such as name, address, birth date, phone number and email.
Surveys asking about age, income, preferences and shopping habits may also accompany the
loyalty card sign-up process. It is a business's responsibility to safeguard this personal
information. Implement a privacy policy and take steps to secure your customer data. Don't sell
or share your customers' information without their express permission.
Tracking
Loyalty cards can be used for tracking purchases on a customer-by-customer basis. This
can lead to a greater understanding of shopping habits and enable businesses to track the
success of marketing initiatives. As with personal information, it is important for businesses to
keep tracking data secure. Many consumers are willing to give up a certain amount of privacy in
exchange for loyalty program deals and rewards. Use the data to make adjustments in the way
you stock your store and to help with the design of future promotions.
Magatef, S. G., & Tomalieh, E. F. (2015, August). The Impact of Customer Loyalty
Programs on Customer Retention. International Journal of Business and Social Sciences, 68 (1).
Singh & Khan (2012) highlighted how short-term actions with few modifications with the
profit will turn into long term customer loyalty and hence long-term benefit. The authors were
focusing on understanding the customer retention and customer loyalty and their importance to
the business. The authors also understand the approach of how to increase customer retention
and customer loyalty towards the business. With the understanding of the behavior of the
customers and satisfying them provides the benefit to the business in the long term.
Establishing good relationship with the customers by providing better services will create
customer loyalty and more visits over time. This will bring more profit to the business in long-
term and will reduce the competition. The study also identified the strategies which attract the
customers to the retailer and also understood the considerations to be done while implementing
them. With this, it will help the business to gain customer retention and loyalty towards their
business if they implement them diligently. (Singh & Khan 2012)
Agchi & Xingbo (2011) identified a moderator, step-size ambiguity, and address that
when ambiguity is high, only reward distance affects loyalty programs. When ambiguity is
lower, consumers integrate step size with reward distance. The physical and psychological
distance estimation contexts (e.g., weight loss, savings) where distances and step sizes can
vary (e.g., as a function of units: kilograms vs. pounds), but especially in loyalty rewards
contexts. (Bagchi & Xingbo 2013) ISSN 2219-1933
Omar et al. (2009), pointed out that the introduction of customer relationship marketing
instruments by retailers has been strongly increased in recent years both in theory and practice.
Loyalty programs have become a popular choice of marketing strategy by retailers who believe
that loyalty programs are an important strategy and mechanism for retailers to build store
traffic, increase basket size and increase frequency by creating deeper relationship with their
customer. However, some members in the marketing industry have begun to question the
effectiveness of loyalty programs in obtaining customers’ support and loyalty. The authors
reported on the results of a preliminary study of the literature which has been conducted in an
attempt to understand the issue and role of service quality in retail loyalty programs as well as
factors that are important in loyalty program service quality.
East et al. (2005), defined Consumer loyalty as a singular concept, usually as an attitude
toward the loyalty object or as repeat patronage behavior. The definition may combine attitude
and behavior in either an additive or an interactive expression. The authors argue that
definitions of loyalty are useful if they predict phenomena such as recommendation, search and
retention (loyalty outcomes). The findings of the study addressed that in three consumer fields,
the combination measures of customer loyalty often perform poorly as predictors of loyalty
outcomes compared with singular measures since recommendation is predicted by attitude but
not by repeat patronage. Retention and search behavior are predicted better by repeat
patronage than by attitude. The prediction of loyalty outcomes is not improved by the inclusion
of an interaction term in the model. The combination concepts of loyalty are of limited value.
And there is no form of loyalty that consistently predicts all the different loyalty outcomes and,
so they abandon the idea of a general concept of loyalty.
Lewis (2004) developed a model for customers’ response to a loyalty program under the
assumption that purchases represent the choices of customers who are solving a dynamic
optimization problem. This theoretical model is using a discrete-choice dynamic programming
formulation. The author relies on specific loyalty program with data from an online merchant
that specializes in grocery and drugstore items. The results suggest that the loyalty program
under study is successful in increasing annual purchasing for a substantial proportion of
customers. Loyalty programs have an important effect on customer relationship management
for firms in travel related industries such as airlines, hotels, and rental cars. (Lewis, 2004)
Kopalle and Neslin (2003) have proposed analytical models to study the impact of
loyalty programs in categories with different structures.
Deighton (2000) addressed that information technology enables firms to practice

individual-level marketing which help the wide spread of loyalty programs into several industries
such as: gaming, financial services, and retailing.
In order to investigate the conditions under which a loyalty rewards program will have a
positive effect on customer evaluations, behavior, and repeat purchase intentions, Kannan &
Bramlett (2000) used cross-sectional, time-series data from a worldwide financial services
company that offers a loyalty rewards program. The results show that members in the loyalty
rewards program discount negative evaluations of the company in comparison with the
competitors. One possible reason could be that members of the loyalty rewards program admit
that they are getting better quality and service for their price or, in other words, “good value.”
The authors also estimated a model of the influence of a loyalty rewards program on
customers’ decisions to repurchase a service and their decisions about how much to use the
service. The model focused on the multiple direct and indirect effects of loyalty programs on
these two dependent variables. Using the model will help in estimating the effectiveness of a
loyalty program in customer retention. (Kannan & Bramlett, 2000)
Henning & Klee, (1997), focused at the customer satisfaction with a company’s product
or services as it is the key to company’s success and long-term competitiveness. The author
considered customer satisfaction a central determinant of customer retention. The overall
purpose of this study is to develop a conceptual foundation for investigating the customer
retention process, with the use of the concepts of customer satisfaction and relationship quality.
The study has a critical examination of the satisfaction-retention relationship, and the
development of a comprehensive view of the customer’s quality perception.
Dowling and Uncles (1997), explained that there are three primary lessons from the
research they did. First, a major reason for launching of many customer loyalty programs is
competition. Second, if a loyalty program does not support the product or service value
proposition, it might be justified in attracting more distributors to deal with the product. Third,
brand loyalty is more likely to come from the market. International Journal of Business and
Social Science Vol. 6, No. 8(1); August 2015 84
O’Brien and Jones (1995) suggest that the major factors that customers consider when
assessing programs are the relative value of awards and the probability of achieving a reward.
The probability of achieving a reward is a function of cumulative buying thresholds and time
constraints.
Loyalty programs have a long-run positive effect on customer evaluations and behavior.
If loyalty rewards programs increase relationship durations and usage levels, then customers
will be increasingly exposed to the complete spectrum of service experiences. (Keaveney 1995)
Increased customer satisfaction and loyalty have a positive influence on long-term

financial performance. The positive financial outcomes of the rewards program exceed the
investments made in the program. (Anderson, et al. 1994)
Khadka, K., & Maharjan, S. (2017, November). Customer Satisfaction and Customer
Loyalty. Finland.
Oliver (1999,33) defines loyalty as "a deeply held commitment to rebuild and re-
patronize a preferred product or service in the future despite situational influences and
marketing efforts having the potential to cause switching behaviors. “Customer loyalty is viewed
as the strength of the relationship between an individual’s relative attitude and re-patronage.
Although customer satisfaction is a crucial part of a business, satisfaction alone cannot take a
business to a top level. Customer satisfaction produces a positive financial result, especially in
regular purchases. Today’s unforgiving market where creating and maintaining customer loyalty
is more complex than it used to be in the past years. This is because of technological
breakthrough and widespread of the internet uses. Loyalty building requires the company to
focus the value of its product and services and to show that it is interested to fulfill the desire or
build the relationship with customers (Griffin 2002.)
Thomas and Tobe (2013) emphasize that “loyalty is more profitable.” The expenses to
gain a new customer is much more than retaining existing one. Loyal customers will encourage
others to buy from you and think more than twice before changing their mind to buy other
services. Customer loyalty is not gained by an accident, they are constructed through the
sourcing and design decisions. Designing for customer loyalty requires customer-centered
approaches that recognize the want and interest of service receiver. Customer loyalty is built
over time across multiple transactions.
A relationship with a customer is equally important in customer loyalty and this requires
that company work in a broader context that extends beyond itself, as no company can be
world class at everything (McDonlad & Keen 2000). Gremler and Brown (1999) divided
customer loyalty into three different categories that include behavior loyalty, intentional loyalty,
and emotional loyalty. Behavior loyalty is repeating purchasing behavior while intentional loyalty
is the possible buying intention. Emotional loyalty, however, is achieved when a customer feels
that a brand corresponds with their value, ideas, and passion.
Kohlmeyer, M. H. (2016, September). Customer Loyalty Program as a Tool of Customer

Retention: Literature Review. CBU International Conference on Innovations in Science and
Education, 4.
According to Tabaku and Zerellari (2015), there are two approaches on customer
loyalty: behavioral and attitudinal. The behavioral approach on customer loyalty refers to the
customer consistently and continuously buying from the same provider. Whereas, attitudinal
loyalty is a result of a psychological connection with the product or service, involving a
preference and components like a positive attitude and commitment.
Ludin & Cheng (2014) describe customer loyalty as a continuous relationship between
the customer and the brand. It can be seen as resistance to switch brands inspite of any
situation or problem encountered during the business process. Additionally, they describe
customer loyalty as repeated purchases of a product from the same brand.
Loyalty behaviors show an increase in number of purchases, an increase in number of

customers and lower price sensitivity (Varela-Neira, Vazquez-Casielles & Iglesias, 2010). Loyal
customers guarantee a reduction in marketing costs for long periods of time. (Mascarenhas,
Kesavan & Bernacchi, 2006).
Loyalty programs have existed for 30 years. American Airlines was the first to launch a
loyalty program and called it “Frequent Flyer Program”. This program was based on the
fundamental statement that all customers are not created equal. Thereafter, loyalty programs
have disseminated into hotels, rental car, financial services and restaurants. Over the years,
loyalty program have become prevalent (Vinod, 2011). Loyalty programs are a marketing
strategy focused on offering benefits to achieve loyal customer retention. These programs are
also called frequent purchase programs or reward programs because benefits depend on
purchasing frequency (Gómez, Arranz, Cillán & 2006).
Meyer-Waarden (2008) states previously used definition of loyalty programs as an

integrated system of marketing actions that aims at making customers more loyal by developing
a personalized relationship with them. Developing approach treats customer loyalty program as
a tool for relationship management. This tool gives an opportunity to create personalized
communication. Companies record information by loyalty cards and possess instruments of
dissemination and individualization of marketing mix (Meyer-Waarden, 2008). It enables
managers to hold customers data and create customer databases. Collected data may be
exploited for many reasons, like price discrimination, direct marketing, customer profiling and to
promote products. However, it must be kept in mind that customers are afraid of losing their
personal data and expect appropriate privacy protection therefore, customer loyalty is reliant on
the customer’s trust in the company. Creation of safe customer profiles can address this issue
and will help attract privacy sensitive customers (Enzmann & Schneider, 2005).
Gómez, Arranz & Cillán (2006) emphasize that customer loyalty program have to build
behavioral and affective loyalty. According to behavioral approach, loyalty program play an
important role in the purchase frequency. Participants in this program make a higher number of
visits to the retailer than non-participants.
Local Literature and Studies
Palma, N. M., & Dimaculangan, E. D. (2017, August). Impact of Loyalty Card on

Philippine Retail Industry. 3. Philippines.
The Philippine Retail Industry is a diversified conglomerate of different product lines of

businesses. It said to be notable or remarkable in terms of business formations, enterprising
skills, innovation and creative thinking, and continuing development. Nowadays, several retail
businesses have captured the percentage of contributing to the growth of the economy and
industry share of business.
One of the trends in the Philippine Market is the fusion of Loyalty Card in the retail
word. Loyalty could be found anywhere both local and global market. Big companies in the
Philippines had continued competing while maximizing the advantage or the strength of their
customized loyalty card. It also signifies different performance measures through using the
card.
The researcher’s intention is to know and expose the benefits and impacts of the loyalty
card in the Philippines. The deliverables of the probable results of the research will might affect
the decisions of the business sectors regardless of any business size (small, medium, and large)
enterprise. However, the researchers wanted to find the deep understanding of using the card
to the following retail companies like SM, Petron, National Book Store, Mercury Drug Store, and
Philippine Airlines. The investigator would also like to expand its horizon by also tapping other
retail companies both local and global.
It’s been famous to the Philippine consumer that the well-known retailers have been
consistently pushing to avail the loyalty card and enjoy the perks of having it. SM Retail
company had coined there card as SM Advantage Card (SMAC). Petron is well known for Petron
Value Card. National Book Store is legendary for maximizing the Laking National while Mercury
Drugstore is for Suki Card. On the other hand, Philippine Airlines had been took advantage the
Mabuhay Miles for their clients.
Retail formats like department store, supermarket, hypermarket, convenience store,

gasoline station, retail kiosk, retail stores, boutiques, and other tenants within the mall are
competing to each other by the way of pulling and pushing their strategies. Loyalty Card is a
handy marketing material used by the marketers. Since loyalty card is visible to the wallet and
bag of customers along with other cards like ATM Card and Credit Card, then it is believed “a
way of life” for both buyers and consumers. In line with, the researchers is seeking for the
quantitative and qualitative result that might shake the wisdom of capitalizing the card.
Customer preferences regarding compelling offer is a probable issues to be examined

either it is contributory or not. Membership activation rate is another issues that was tackled.
How does the different company entice and excite their loyal customers in order to patronize
the usage of the card is a mere fact to be looked by the researcher.
The research has provided different inputs about the rationale in purchasing a product,
availing loyalty card, and impact to the company. The research also studied about the
implications of the card to the customers. Such as goals like, defining the factors and impact of
the retail loyalty card. Quantifying the possible results, and locating the domino-effect of the
card to the entire organization and external stakeholders. Moreover, the study also emphasize
on how to create loyal customers.
The significant of this study has been taken the consideration of finding the intrinsic and
extrinsic reward of having the card as a marketing tool. Does the tool is effective in utilizing the
resource of the company to attain the departmental objectives? Does it contribute to the
company’s vision and mission? This is a prevailing study towards confirming the monetary and
non-monetary benefits. The researchers also find out reasons about the discontinuity of the
usage of the card and its cardholder behaviour.
Moreover, this study will surely give empirical and analytical results. This will focus on
the consumer behaviour, business metrics, marketing and sales metrics, economy, and other
contributory factors both internal and external environment. Research respondents are also
qualified and bonafide user of the loyalty card. Some of them are collectors of the mentioned
card.
Lastly, the researcher would like to emphasize skepticism is nothing without finding first
the reality of the great tool in marketing world which is the Loyalty Card. Impact is a broad
terminology for looking the horizon of research, therefore, an enjoyment of knowing the
authenticity will make the research process enjoyable and challenging.
Retail Companies
In this study, some facts on different companies have been researched. In the
Philippines, here are the following active institutions that promote the usage of the loyalty card:
Club Balai Isabel is located near the shores of the world-famous Taal Lake and across from its
volcano is a place where you can relax, connect and be with nature. Club Balai Isabel offers an
option for an active lifestyle with all the comforts of city living. Fully booked is a retail company,
selling books. In allied health industry, Healthway Medical is the trusted and most preferred
network of mallbased clinic in the Philippines, offers a unique one-stop-shop setting where
minor surgical operations, special medical examinations and preventive healthcare and
specialized medical consultations are performed under the administration of reputable and
experienced doctors in the country.
Jollibee Food Corporation abbreviated as JFC and popularly known as Jollibee (PSE: JFC)
is a Philippine multinational chain of fast food restaurants headquartered in Pasig City,
Philippines. Mercury Drug is a blister pack sold by the piece (tingí-tingì). The company began in
March 1, 1945 with a single drugstore owned by Mariano Que. He named it after Mercury, the
messenger of the gods in Roman mythology, whose caduceus is sometimes used as a symbol of
medicine. Suki Card is a loyalty card produced and marketed by Mercury Drug.
National Book Store (abbreviated as NBS) is the largest bookstore and offices supply
store chain based in the Philippines. Their loyalty card produced and marketed is Laking
National card.
While in airline industry, Philippine Airlines or known as PAL is a trade name of PAL
Holdings, Inc. (PSE: PAL), also known historically (until 1970) as Philippine Air Lines, is the flag
carrier of the Philippines. While in Petron is the largest oil refining and marketing company in
the Philippines, supplying more than a third of the country’s oil requirements. Shell is another
leading company which the United States-based subsidiary of Royal Dutch Shell, a multinational
oil company ("oil major") of Anglo–Dutch origins, which is amongst the largest oil companies in
the world.
SM is giant retail company in the Philippines. Under the SM group companies are SM
Department Store, SM Supermarket, SM Hypermarket, Savemore, SM Prime Holdings Inc,
Banco De Oro, Chinabank, SM Development Corporation, Highlands Prime Inc, Taal Vista Hotel,
SM Bay City, Hamilo Coast, SM Foundation Inc. Other affiliates are Storyland, SM Shoemart, SM
Appliance Center, SM Advantage, SM Cinema, Megatrade hall, Toy Kingdom, Toy World,
Watsons, and SM Investments Corporation. SM Supermalls is owned by SM Prime Holdings,
Inc., is a chain of shopping malls in the Philippines, with 48 malls across the Philippines as well
as branches in China. The primary task of Marketing Convergence, Inc. is to operate and
manage the program for SM Advantage loyalty.
Espiritu-deMesa, F. (2013). A Cut From Above: The Impact of Loyalty Program Status
on Member's Behavior. DLSU Business & Economics Review, 23(1), 1-9.
In response to the current era of intense competition and demanding customers, a new
generation of customer relationship management (CRM) tactics has been developed, which is
the loyalty program (Bhattacharya, 1998). Several scholars (Kivetz & Simonson, 2003; Mauri,
2003) asserted that loyalty programs have become an important strategy and mechanism for
retailers to increase revenue growth rate and have become a key component of CRM, serving a
critical role in developing relationships, stimulating product and service usage, and retaining
customers.
Lieberman (1999) observed that loyalty card programs are proven to be an effective tool
within the relationship marketing framework. Loyalty program is defined as the business
process of identifying, maintaining, and increasing the yield from best customers through
interactive, valueadded relationships (Capizzi &Ferguson , 2005). Loyalty programs are
structured marketing efforts that reward and encourage loyal behavior of their members (Sharp
& Sharp, 1997).
According to Allaway, Berkowitz, and D-Souza (2003), retail scene loyalty programs
involve a concentrated effort to build store traffic, increase basket size, and increase frequency,
which create all of deeper relationship ties with its customer base. Today, the use of loyalty
programs as a technique for firms to enhance customer loyalty is extremely popular as it is
believed that both consumer and store can reap benefits from it (Luxton, 1998).
Loyalty program works to build and preserve stronger customer relationships with the
sponsoring store that would result without these programs (Lacey, 2009). In the context of this
study, store advocacy reflects an enduring attitude toward or desire for a particular store or
brand. Store advocates are motivated to maintain their relationship because of attachment
feelings and sincerity in their personal attitudes. Advocacy arises only after the relationship has
been firmly established, and thus serves as a necessary condition for consistent member’s
behavior.
Advocates are those customers who recommend their retailers to others, buy more from
that retailer when they have choices, and stay with that retailer when new competition
becomes available.
According to Day (2002) and Katz and Lazarsfeld (1955), the ultimate test of a
customer’s relationship with a brand or firm is his willingness to recommend it to others.
Furthermore, Gronroos (2004) stated that committed customers promote the stores through
personal referrals. Research generally supports the claim that personal referrals are more
influential than other marketer-controlled sources. Sheth (1971) concluded that personal
referral is more important than advertising in raising awareness of an innovation and in
securing the decision to try the product. Day (2002) inferred that this is due to source reliability
and the flexibility of interpersonal communication. He computed that personal referrals are nine
times as effective as advertising at converting unfavorable or neutral predispositions into
positive attitudes. Mangold’s (1987) review of the impact of personal referrals in the
professional services context concludes that personal referrals have more emphatic influence on
the purchasing decision than other sources of influence. This is perhaps because personal
sources are viewed as more trustworthy (Murray, 1991).
Delivering quality customer service has emerged as a strategic imperative for retaining
profitable corporate customers. Sharing valuable information is one service that could be
effective to enabling seller buyer relationship formation, maintenance and long-term
continuation. Ho and Tai’s (2010) study suggested that although information-sharing services is
an important means for enhancing customer loyalty, not all types of customers should be
treated in the same way. The customer group characterized by low trading frequency and low
trading value may not perceive value from the information service provided by the seller. The
seller may not need to invest information technology resources for providing information-
sharing services to such customer group.
Based on the notion of reciprocity, perceived relationship investment implies that when
organizations invest certain resources in their customers, the customers tend to feel the need to
contribute equitably in return in some form (Smith & Barclay, 1997). Morais, Dorsch, and
Backman (2004) found that customer’s perceptions of investments made by the provider result
in equitable investment made by the customer, and that those customer investments in the
provider lead to increased loyalty (Lacey, 2009). Customers can avoid a store’s marketing
message when they exercise greater control over the flow of marketing messages in their lives
(Urban, 2005).
According to Lacey (2009), marketing research support is a collective term to describe

customer’s willingness to provide input for improving marketing performance, such as
participating in new product development testing, reacting to proposed advertising campaigns,
giving opinions on service quality, and sharing insight about unfulfilled customer needs. As
relationship commitment builds, customers become more willing to participate in store-
sponsored marketing research activities (Bendapudi & Berry, 1997; Bettencourt, 1997).
According to Lacey (2009), committed customers are not just expected to maintain
current purchasing activities, but to increase both the level and proportion of their purchasing
activities over time. Customers who remain with the firm are more likely to increase business
volume in the future (Mattila, 2001). Compared to other promotional tactics, loyalty programs
are distinguished by their emphasis on lifting average purchase frequency by offering
incrementally higher incentives to customers on the basis of frequency and dollar value
purchases over a specified time period (Dowling & Uncles, 1997). Loyalty programs have been
shown to have positive impact not only on retaining current customers, but also on encouraging
customers to make a higher share of their product category purchases from the sponsoring firm
(Lewis, 2004).
SYNTHESIS of Review
The implementation of using the loyalty cards creates meaningful impact to customers
and companies. Both foreign and local companies magnifies or their customers through the
benefits of using the loyalty cards. The cards is associated and collaborated for the
development customer relationship management, inventory management, marketing

management, sales, accounting and customer life time value to the company.
In developing the customer relationship management (CRM), the monitoring and

analyzing of customer frequency rate and amount of transaction / purchase will be studied.
Knowing the behaviour of customers with the help of profiling it might help the company to
create right and timing strategy.
Summary or detailed history of items / products movement is quantified in the card. A

purchaser might use the data gathered from the card and will serve as a good facts for
ordering. Classification of customers buying movement could be also examined.
In marketing arena, the tool of using the patronage card a depth evaluation of
customer’s behaviour and attitude will be formulated. This creates a significant fact for market
research. Formulation of strategies and tactics could stratify with the support of the card. It
simply says that the loyalty card gives right approach to the intended customers of a company.
In sales management, specifically increasing sales and addressing sales gap will further
subsidize the company because of the influence of the card. Repetition of purchase either
increasing the frequency and amount of transaction will be generated. It is also work together
with promotional gimmicks of a company. In a card, an earning points activity could motivate a
customer. Then later, the customer might use the points and redeem for a prize. The prizes are
part of the benefits of the loyalty programs.
Some companies use the card as mode of payment for the customers. They tied up with
credit card companies and banks. Good to know, that the card could is multi-beneficial to the
stakeholders. The accumulated point could be used for payment of product. The card also use
for debit and credit transaction.
The frequent use of the patronage card produces a customer life time value for the
company. Customers are attracted to the perks like periodical promotional, earning money
value, awareness, customer touch point, and serving them as a special one for the company.
The card serves as identification, in order to fasten the transaction. There are many
special privileges for the cardholder / member that they could enjoy compared to non-users.
The attraction of freebies, discounts, savings, and invitation for events makes their customers
loyal to them.
Moreover, a loyalty reward system works best with retail businesses and loyalty cards
may encourage sales and boost customer loyalty.
CHAPTER III
RESEARCH METHODOLOGY
This chapter discusses the design and procedures undertaken during the conduct of the
study. It presents the research methods used, respondents of the study, instruments used,
validation of instruments, data gathering procedures and statistical treatment data.
RESEARCH METHOD USED
The study will utilize the descriptive method to assess if how loyalty cards encourage
sales and boost customer loyalty among the selected respondents. This method aims to
accurately describe a phenomenon, situation, and population.
In addition, quantitative methods will also emphasize in the study as the objective
measurements and the statistical, mathematical, or numerical analysis of data collected through
polls, questionnaires, and surveys, or by manipulating pre-existing statistical57 data
using computational techniques.
According to Babbie (2010), Quantitative research focuses on gathering numerical data

and generalizing it across groups of people or to explain a particular phenomenon. Quantitative
methods presume to have an objective approach to studying research problems, where data is
controlled and measured, to address the accumulation of facts, and to determine the causes of
behavior. As a consequence, the results of quantitative research may be statistically significant
but are often humanly insignificant.
RESPONDENTS OF THE STUDY
The researchers will be gathering data among the selected respondents who are
currently residing in the Province of Pampanga. Once the total population is identified, the
sample size will be computed using Raosoft.com, an online, free, sample size calculator
with 95% confidence level and 5% margin of error.
SAMPLING TECHNIQUE
The data gathered from the respondents have been tabulated and interpreted. We used
the marginal error of 5% as the basis and used Rao Soft Equation.
N=
Where; N = is the total number of population/number of respondents
P = what is the response distribution 50% = .05
E = margin of error
Z = confidence level do you need, 95% = 1.960
We applied the Rao Soft Equation that gives data in finding the sample with 5% margin
of error.
INSTRUMENT USED
A researcher-made survey questionnaire will be used to gather the data needed in this
study. The questionnaire is divided into three parts. The first part was designed to determine
the profile of the respondents in terms of age, civil status, gender, and income. The second part
was used to know the level of effectiveness of using loyalty cards in encouraging sales and
boosting customer’s loyalty. Meanwhile, the last part is about the assessment of problems
encountered by the selected respondents and companies using loyalty cards.
VALIDATION OF THE INSTRUMENT
The research instrument will be presented first to the research adviser. Adjustments on
the content of the questionnaires will be made based on the recommendation of the research
adviser and/or research expert. To test the internal consistency of the items used in the
instrument (reliability), a sample of 30 respondents will be part of the pilot test. Cronbach’s
alpha will be used to test the reliability of the instrument. Cronbach’s alpha is a coefficient of
reliability (consistency) of the items of a questionnaire. In assessing the Cronbach’s Alpha, the
value must be equal to or higher than 0.7 to magnify good reliability (Bonett & Wright, 2015).
Once the instrument obtained good reliability, that would be the time that the questionnaires
will be floated to research participants.
DATA GATHERING PROCEDURE
Once the items in the research instrument are approved by the research adviser or
research expert, a pilot test will be executed. The purpose of pilot testing is to test the reliability
of the items in the instrument. Once the Cronbach alpha is equal to or higher than .7, that
would be the time that the questionnaires will be floated to research computed sample size
(participants). All answered questionnaires will be collected, assessed, and analyzed by the
researcher. The results of the study will be presented in the succeeding chapter including
relevant and pertinent discussions to show the relevant findings and results of the study.
STATISTICAL TREATMENT OF DATA
The data collected in this study were organized and classified base on the research
design and the problems formulated. The data were encoded, tallied and tabulated to facilitate
the presentation and interpretation of results using the following.
1. Frequency and Percentage
The percentage and frequency distribution were used to classify the respondent’s
personal background variables such as age, gender, academic status and estimated family
income. Descriptive statistics like frequency was used to determine the number of respondents
who belong in each category of the profile variables; also this was used in knowing the common
range of their daily allowance and what percentage is spent for food, transportation, academic
purposes and personal needs.
On the other hand, the percentage of that item is computed by dividing it with the
sample total number of respondents who participated in the survey. The formula used in the
application of this technique is.
% = (f/n) x 100
Where % = percentage
f = frequency
n = number of cases or total sample
2. Ranking
This is a descriptive measure to describe numerical data in addition to percentage.

Ranking was used in the study for comparative purpose and for sharing the importance of items
and analyzed.
3. Chi – square
It was used to determine the significant differences between the perceptions of the
respondents. The values of chi-square for a given distributions is computed by:
a. Finding the difference in between each observed value and the corresponding
expected value;
b. Expressing the square of the differences as a fraction of the expected value; and
c. Summing
Thus, the formula used for computing the chi-square values is presents below;
=∑
Where ; chi – square value
fo = observed frequency
fe= expected frequency
Computation from degree of freedom is necessary in order to obtain the critical

value (P), the formula is;
df = (r-1) (k-1)
Where; r = number of rows
k = number of columns
df = degree of freedom
RESEARCH QUESTIONS
Generally, this study aims to determine if how loyalty cards encourage sales and boost
customer loyalty.
Specifically, this opted to answer the following question.
Dear Respondent,
We are currently conducting a research study entitled “How Do Loyalty Cards Encourage
Sales and Boost Customer Loyalty Among Selected Respondents?”. We are asking for your
permission to answer this questionnaire. Rest assured that all information that you will provide
herein will be treated with utmost confidentiality and for academic purposes only.
Hoping for your favorable response. Thank you.
Sincerely yours,
Researchers
Survey Questionnaires
Survey Question
1. What is your age when you first owned a Loyalty Card?

A. 18-25 years old
B. 26-35 years old
C. 36-45 years old
D. 46-60 years old
E. 61-80 years old
2. Which of the following is similar to your reason in availing Loyalty Card?

A. To officially become a Loyal Customer and access loyal customers benefits.
B. To help the company increase sale.
C. To save money every time you purchase.
D. To express your satisfaction as a new customer.
3. As a holder does it boost your confidence in having loyalty card in a specific establishment?
A. Yes
B. No
4. As a customer is it beneficial to have a loyalty card?

A. Yes
B. No
5. What do you think the disadvantage of a loyalty card?

A. another thing to carry
B. additional expenses
C. not useable every time
D. it’s expensive to earn rewards
6. What is your preferred method to receive communications from your reward program?
A. Email
B. Mobile App
C. Text Message
D. Facebook messenger
7. Would you be more likely to participate in a loyalty program if you could access the program
easily from your smartphone?
A. Ye
B. No
8. How often do you use your loyalty card?

A. Once a week
B. Two or Three times a month
C. Less than once a month
D. I never use them
9. Would you recommend using loyalty cards?

A. Yes
B. No
10. Is there a point in rewarding things other than purchases?

A. Yes
B. No
C. Maybe
D. Not at all
CHAPTER IV
PRESENTATION, ANALYSIS AND

INTERPRETATION OF DATA

TABULATION RESULT
Choices
a. 18-25 years old 29
b. 26-35 years 15
old
c. 36-45 years old 6
d. 46-60 years 0
old
e. 61-80 years old 0
Total 50
Percentage
18-25y/o = 29 ÷50 = 0.58 x 100 = 58%

26-35y/o = 15÷50 = 0.3 x 100 = 30%
26-45y/o = 6 ÷50 = 0.12 x 100 = 12%
100%
Choices
a. To save money every time you purchase 28
b. To officially become a Loyal Customer & access Loyal Customers 22

Benefits
c. To help the Company increase sales 0
d. To express your satisfaction as a new customer 0
Total 50
Percentage
A =28÷50 = 0.056 x 100 = 56%

B =22÷50 = 0.44 x 100 = 44%
C =0÷50 = 0. x 100 = 0%
D =0÷50 = 0. x 100 = 0%
100%
3. As a holder does it boost your confidence in having Loyalty Card in a specific

establishment?
Choices
a. Yes 49
b. No 1
Total 50
Percentage
A =49 ÷50 = 0.98 x 100 = 98%

B = 1÷50 = 0.02 x 100 = 2%
Choices
a. Yes 49 100%
b. No 1

4. As a customer is it Total 50 beneficial to have a
Loyalty Card?
Percentage
A = 49 ÷50 = 0.98 x 100 = 98%

B = 1÷50 = 0.02 x 100 = 2%
100%
5. What do you think is the disadvantage of Loyalty Card?
Choices
a. It’s expensive to earn 25

rewards
b. Not useable every time 13
c. Another thing to carry 6
d. Additional expenses 6
Total 50
Percentage
A =25÷50 = 0.5 x 100 = 50%

B =13÷50 = 0.26 x 100 = 26%
C =6÷50 = 0.12 x 100 = 12%
D =6÷50 = 0.12 x 100 = 12%
100%
6. What is your preferred method to receive communications from your reward programs?
Choices
a. Text Message 24
b. E-mail 11
c. Mobile App 11
d. Facebook Messenger 4
Total 50
Percentage
A =24÷50 = 0.48 x 100 = 48%

B =11÷50 = 0.22 x 100 = 22%
C =11÷50 = 0.22 x 100 = 22%
D = 4÷50 = 0.08 x 100 = 8%
100%
Choices

a. Yes 48
b. No 2

7. Would you be more Total 50 likely participate in a
Loyalty Program if you could access the program
easily from your Smartphone?
Percentage
A =48÷50 = 0.96 x 100 = 96%

B = 2÷50 = 0.04x 100 = 4%
100%
8. How often do you use your Loyalty card?
Choices
a. Less than once a month 27
b. Two or Three times a week 13
c. Once a week 8
d. I never use them 2
institution
Total 50
Percentage
A =27÷50 = 0.54 x Choices 100 =

54%
B =13÷50 = 0.26 x a. Yes 48 100 =
26%
C = 8÷50 = 0.16 x b. No 2 100 =
16%
Total 50
D = 2÷50 = 0.04 x 100 =
4%
100%
9. Would you recommend using Loyalty Card?
Percentage
A =48÷50 = 0.96 x 100 = 96%

B = 2÷50 = 0.04x 100 = 4%
100%

Choices
a. Yes 27
b. Maybe 17
c. Not at all 6
d. No 0
Total 50
Percentage
A =27÷50 = 0.54 x 100 = 54%

B =17÷50 = 0.34 x 100 = 34%
C = 6÷50 = 0.12 x 100 = 12%
D = 0÷50 = 0. x 100 = 0%
100%

Determination of Sample Size
There is a lot in determining the sample size. The researchers used the Roasoft formula
in determining the sample size. The said computation is as follows:
n = Z2P(1-P)nZ2P1-P+ n (e)2
n = 1.9602-5(1-.5)3011.9602-51-.5+301(.05)
= 3.8416 (.05) (.05) 301

________________________________
3.8416 (.05) (.05) + 301 (.0025)

= (1.9208) (150.5)
________________________________
(0.9604 + 0.7525)

= 289.0804
________________________________
1.7129

N = 168.77 or 169 sample size


12%
18-25 years old

26-35 years old
36-45 years old
30%
46-60 years old
58%
61-80 years old
Based on the interpretation of the pie chart, the highest percentage shows that aged 18-25yrs.
old is their age who first owned a loyalty card, while 30% belongs to those ages 26-35 yrs old,
aged 36-45 got the lowest percentage of 12%.
0% 0%
To save money every time you

purchase
To offi cially a Loyal Customer &
44%
Access Loyal Customers Benefits
To help the Company increase
56% sales.
To express your satisfaction as a
new customer

Based on the survey on which of the following is similar to your reason in availing
Loyalty Card? 56% answered that they save money every time they purchase, while 44% range
of those who are officially a loyal customer and access loyal customer benefits.
3. As a holder does it boost your confidence in having Loyalty Card in a specific

establishment?
2%
Yes
No
98%
In this pie chart it shows that most users of Loyalty Card are boosting
their confidence, 2% says no.
4. As a customer is it beneficial to have a Loyalty Card?
2%
Yes
No
98%
Most of the respondents in this survey answered yes, that having loyalty card is
beneficial to them, the remaining 2% say no.

5. What do you think is the Disadvantage of a Loyalty Card?
On this question, 50% of the total respondent say that it’s expensive to earn rewards,
26% say that it is not usable, some 12% answered that it is another thing to carry and the
12% say that they prefer to give or donate it.

6. What is your preferred method to receive communications from your reward

program?
In this pie chart it shows that 48% among the respondent answered that they
are comfortable receiving communication from their reward program thru receiving text
messages. 44% of them prefer to receive notification thru email & Mobile App, and 8%
say that they want it thru Facebook Messenger.
7. Would you be more likely to participate in a Loyalty Program if you could

access the program easily from your Smartphone?
As you can see in this survey, it shows that 96% was likely to participate in a Loyalty
Program if could access the program through Smartphones, and only 4% of the overall
respondents wouldn’t agree on this matter.


8. How often do you use your Loyalty Card?

According to this Survey, most of the respondents which are 54% often use their loyalty
card Less than once a month, while 26 % of the respondent say that they only use it twice or
three times a week, 16% of the respondent were using their Loyalty card once a week,and 4%
of the Loyalty card owner in this survey say that they never use their card.

9. Would you recommend using Loyalty Card?

4%
Yes
No
96%
To the question if they recommend using a Loyalty Card? This survey shows that 96%
of the total respondents say YES and 4% say NO.


0%
12%
Yes
Maybe
Not at all
34% 54%
No

The last question on our questionnaire asked if there a point in rewarding things other than
purchase? 54% would agree, 34% says its maybe, and 12% says not at all, no one answers
NO.
Testing the Hypothesis

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1 | M a r k e ti n g R e s e a r c h 2 0 2 0 - 2 0 2 1

“EFFECTIVENESS OF USING LOYALTY CARDS TO ENCOURAGE SALES AND BOOST

A study presented to the Faculty of BSBA Department

In Partial Fulfillment of the Requirement for the

ABSTRACT OF THE STUDY

Title: “HOW DO LOYALTY CARDS ENCOURAGE SALES AND BOOST

Researchers: Rovelyn De Luna

Course: Bachelor of Science in Business Administration

Institution: St. Nicolas College of Business and Technology

Adviser: Mr. John Carlo C. Dames

Abstract of the Study, Research Methodology.........……………………………………….…………….....

Hypothesis, Conclusion, Findings…………………………………………………………………………………….

Chapter 1: The Problem and Its Background…………………………………………………………….

Background of the Study …………………………………………………………………………………………..……

Theoretical Framework ………………………………………………………………………………………………..…

Conceptual Framework …………………………………………………………………………………………………..

Statement of the Problem ………………………………………………………………………………………………

Scope and Limitation ………………………………………………………………………………………………………

Significance of the Study………………………………………………………………………………………………..

Definitions of Terms ……………………………………………………………………………………………………….

Chapter 2: Review of Related Literatures and Studies……………………………………………..

Chapter 3: Research Methodology……………………………………………………………………………..

Research Method Used …..……………………………………………………………………………………..…….…

Respondents of the Study…………………………………………………………………………………………..……

Sampling Technique ….…………………………………………………………………………………………..…......

Instrument Used, Validation of Instrument, Data Gathering Procedure...................................

Statistical Treatment of Data………....……………………………………………………………………………….

Chapter 4: Presentation, Analysis and Interpretation of Data………………………………..

Determination of Sample Size…………………………………………………………………………………….

Testing the Hypothesis…………………………………………………………………………………………………….

Frequency Distribution of the Survey………………………………………………………………………………..

Chapter 5: Summary, Conclusion and Recommendations…………………………………………

THE PROBLEM AND ITS BACKGROUND

Companies worldwide generate a powerful tool in emphasizing, creating and maintaining

BACKGROUND OF THE STUDY

It is comprised of exercises, both outside and inside exercises, to improve organization

The purpose of building relationships with customers is to retain customers in the

Sussmann and Vechio (1982) offered Identity-related dispositions as an antecedent of

Paradigm of the Study

STATEMENT OF THE PROBLEM

Specifically, this study sought to answer the following questions:

1. What is the profile of the respondents in terms of the following:

1.2. Civil Status

2.1 Loyalty of Customer

2.2 Increase Sales

2.3 Save Money

2.4 New Customer

3. Is there a significant difference in the assessment of the effectiveness of using loyalty

SCOPE AND LIMITATION

SIGNIFICANCE OF THE STUDY

Review of Related Literature and Studies

Foreign Literature and Studies

Rewards can be as simple as a free side at a restaurant, a meal upgrade or a percent

Deighton (2000) addressed that information technology enables firms to practice

Increased customer satisfaction and loyalty have a positive influence on long-term

Kohlmeyer, M. H. (2016, September). Customer Loyalty Program as a Tool of Customer

Loyalty behaviors show an increase in number of purchases, an increase in number of

Meyer-Waarden (2008) states previously used definition of loyalty programs as an

Local Literature and Studies

Palma, N. M., & Dimaculangan, E. D. (2017, August). Impact of Loyalty Card on

The Philippine Retail Industry is a diversified conglomerate of different product lines of

Retail formats like department store, supermarket, hypermarket, convenience store,

Customer preferences regarding compelling offer is a probable issues to be examined

According to Lacey (2009), marketing research support is a collective term to describe