Research proposal

Table of Contents
1.0 Introduction..........................................................................................................................................3
1.1 Background of the study / Research Problem..................................................................................3
1.2 Research aim and objectives............................................................................................................4
1.3 Research Question...........................................................................................................................5
1.4 Value of research.............................................................................................................................5
2.0 Review of Literature............................................................................................................................6
3.0 Research methodology.......................................................................................................................11
4.0 Limitations.........................................................................................................................................13
4.0 Action plan.................................................................................................................................14
Schedule/ plan of work........................................................................................................................14
References................................................................................................................................................15
Appendix..................................................................................................................................................17
Topic: Effectiveness of customer loyalty programs on consumer purchase behaviour.

1.0 Introduction

Building relationships with customers have become a prime goal of companies around
the world. Business organizations are no more interested in creating one time sales
rather they are looking for creating a sound and large base of loyal customers. This is
necessary to survive in this highly fierce competitive world. Loyal customers help
businesses in achieving long term success in terms of profitability and stability.
Therefore, companies are required to come up with such tactics and programs which
increase the attachment of customers towards their brand and build a brand loyalty
factor in their customers (.Belwal and Belwal, 2017). Such loyalty programs aims at
increasing the customer loyalty by offering them rewards in lieu of purchasing their
products. These loyalty programs not only result into creating repeated sales for the
business, it also enables companies in obtaining rich data about the consumers and
their buying behaviour. It has been observed from various studies that loyal programs
initiated by the companies have some positive effects on the buying decisions of the
consumers. However, from the companies’ perspective, these programs holds a
strategic importance as development of loyalty programs are considered as costly
affair or investments which requires long term commitment by the organizations.

The present research project is about the effectiveness of loyalty programs on the
buying behavior of consumers in relation to Lulu hypermarket in Oman. The research
conducted the required correspondence to obtain the approval from lulu hypermarket
administration to conduct research in one of the branches or more than one branch in
case that the research needs to go deeper into the study. The researcher get author the
study will concentrate on how well these loyalty programs can induce people to
remain intact to a particular brand for the longest period. There will be a review of
literature that will help the researcher in finding the answers to its research questions.
Further, more there will section which will entail the methodologies that are going to
be used for completing the research project.

1.1 Background of the study / Research Problem

Loyalty programs are the marketing tool which is used by almost all the business
nowadays. Such programs are created by the companies for motivating customers to
repeat their purchases with a specific company/ brand. This is done by offering some
sort of reward system. Discounts, rebates, special offers, freebie, points etc., are some
examples of loyalty programs which are used by the marketers to build a loyal
customer base and generate more revenue & profits.

Hypermarkets are actively using this tactic for grabbing the attention of the
consumers and motivating them to stay connected with them for the longest period.
Hypermarkets are basically a very large retail outlet which offer an extensive variety
of products under one roof to its customers at the discounted rates. It is well proven
theory that for achieving long term success, it is very essential for the firms to hold on
to their customers for the longest period possible. And this is possible only by
offering them some sort of bait in the form of discounts, rebate, special offers which
encourages them to use a particular brand repeatedly.

Research Problem

The problem of this research study is to identify and understand the challenges
which the hypermarkets faces while developing and implementing such loyalty
programs and the ways through which these large retail outlets can win the confidence
and loyalty of their customers in an effective way. Further it is identified that
company most of the customers are switching to other organization due to effective
loyalty program provided to them (Habib, et.al 2015).

1.2 Research aim and objectives

Aim: “ To assess the effectiveness of customer loyalty programs on consumer

purchase behavior. A study focus on hypermarket in Oman  (lulu hypermarket )”.

Objectives:

 To assess the member’s perceived benefits from the loyalty member programs

 To assess the impact of customer loyalty programs on the buying behavior of

consumers.

 To determine the factors this encourages companies in retail sector to develop

such loyalty programs for their customers.
 To ascertain the challenges which the hypermarkets faces while creating such
programs

 To recommend the strategies to the hypermarkets for effectively developing

customer loyalty programs and effectively influences their buying decisions.

 To study the role of employees in creating the behavioral aspect or creating the
loyalty among customers.

1.3 Research Question

1. What are the customer loyalty programs in the context of retail sector-
Hypermarket?

2. What is the impact of customer loyalty programs on the buying behaviour of

consumers?

3. What are the factor that encourages companies in retail sector to develop such
loyalty programs for their customers?

4. What are the different challenges which the hypermarkets faces while creating
such loyalty programs?

1.4 Value of research

This research study is valuable in the sense that it will provide data and primary
information regarding how the customer loyalty programs such as offering discounts,
special offers. Rebates etc., helps the organizations in retailing sectors to develop a
strong and sound base of loyal buyers. It will throw light on the relationship between
loyalty programs and the buying behavior/decisions of the consumers. This specific
topic is undertaken by the researcher because of the importance which the brand
loyalty holds in the long term success of a particular business. No business can
flourish by creating one time sales but have to focus on attracting and holding on to
the customers for the maximum time period possible. For this purpose, businesses
offers some loyalty perks to its customers for inducing them to stay connected with
their brand for long duration. Therefore, this research study is important as it is going
to provide an in-depth understanding about the consumer behaviour and loyalty
factors which will help the researcher in its professional life as well in the future.
Furthermore, the study holds significance for the scholar in relation to its academics.
The performance of the scholar will be evaluated on the basis of this research study.

2.0 Review of Literature

Theme: 1 Customer loyalty programs with respect to hypermarkets

Bowen and Chen McCain, (2015) states in its works that companies have to adopt
some or other tactics or tricks for the purpose of keeping the customers connected
with the brand. In simpler words, the authors mean that customer loyalty programs are
such marketing efforts of business organization that rewards the business with loyal
customers. These programs offer some sort of rewards to the customers for inducing
them to make frequent purchases. As per the discussion of Stathopoulou and
Balabanis, (2016), a customer’s loyalty program can be termed as a marketing tool
which helps in motivating all types of customers repeatedly. Also, this marketing tool
is commonly used by most of the organizations in order to attract the large number of
customers through offering some rewards. However, in compare to all above authors,
Kang, et.al., (2015) states that customer loyalty is a behavioral approach which
connects the customers with the business and allows them to gain various benefits in
buying a product. This way the, author has differentiated its views from the other
authors. However, Brashear-Alejandro, T. and et.al., (2016)’s study suggests that the
combination of the attitude and behavioral brand loyalty of the customer can be
considered as a form of repeat behavior that reflects the conscious decisions in order
to continue buying the same brand. Consequently, it is the combination of attitude and
behavior brand loyalty through the repeated consumption of goods and services which
derives the positive attitude of the products and services of the particular company.

In contrast with the above reviews of the author, McCall and McMahon, (2016)
states that loyalty programs organized within hypermarkets looks like a way for the
customers to save their money. So the supermarket offers the variety of value added
products to the customers in order to satisfy the needs and demands of the customer as
well as providing the never lasting experience to the customers in the form of
discounted coupons and best quality products. As per the views of Magatef and
Tomalieh, (2015) Shopping vouchers and discounted coupons to the customers helps
in maintaining the effective relationship with the customers and thus helps in gaining
the customers loyalty.

Theme:2 The effect of buyer loyalty program on customer purchasing behavior

As per the views of Watson, G.F. and et.al., (2015), the use of the customer loyalty
programs can be considered as a one of the powerful tool which helps in maintaining
the customers relationship. Such customer loyalty programs helps in encouraging the
customer’s loyalty towards the products and services of the company. In compare to
this Ko, Phau and Aiello, (2016) says that customer loyalty is one of the important
issue for the success of the organization and helps in increasing the customer retention
of the firm. Thus implication of the customer loyalty programs on the hypermarkets
not only provides the monetary benefits to the company as well as customer bit also
effects the buying behavior of the customer. As per the discussion of Bowen and
Chen McCain, (2015), drawing new customers within the organization is one of the
expensive as well as a complex procedure. However retention of the existing
employees helps in influencing the positive sides of the organization. It derives the
motivated as well as satisfied behavior of the customer which influences the buying
decision of consumer. Therefore in order to enhance the customer’s engagement,
several different types of loyalty programs are used.

There are various benefits as well as customer loyalty ding the overtime discounts for
the sales of the goods and services. Ma, Li, and Zhang, (2018) has specified
programs. Watson, G.F. and et.al., (2015) explains various different types of loyalty
programs can be achieved by various loyalty programs such as sale of the bundled
goods, ret urn policy of the customers, payback money for the loyal customers. So
such offers and values can be helpful in creating the loyal customers and it influences
buying behavior of consumers which allows them to stick to the specific commodity
or the goods and services. Hence such loyalty program attracts the buyers and thus
influences their decision making to consume a particular commodity towards the
multipurpose decision making. Although, such activities encourages the customers to
repeatedly buy the products thus it helps in improving retention rates by providing the
incentives for the customers in order to purchase more frequently in larger volumes.

Theme:3 Factors that fosters the consumer loyalty programs within the retail
stores
 As per the views of Ma, Li, and Zhang, (2018), There are various different types
of factors which motivates the customer loyalty programs within the supermarkets. In
this context one of the best factors that derive the consumer loyalty programs within
the retail stores is customer service. Therefore, Bowen and Chen McCain, (2015)
states the Customer service as one of the important factor that which engage large
number of customers and also helps in increased retention. Thus, this factor allows the
business to implement the customer loyalty programs at workplace that attracts large
number of customers towards the consumption of the goods and services offered by
the super markets. On the other hand, another important factor will be explained by
Watson, G.F. and et.al., (2015) that is personal relationship with the customers. So in
order to encourage the customer loyalty programs within the business, it is very
important for the company to maintain the effective relationship in order to gain the
loyalty as well as long term retention of the consumers. However, Bowen and Chen
McCain, (2015) provides the argument on such statements that consumer loyalty
program within the retailing business can be enhanced by providing the rewards to the
consumers. So it is the key factor towards the engagement of the customer loyalty
program which helps in maintaining the effective relationship with the company and
thus it will help in attracting more new customers also.

As per the views of Watson, G.F. and et.al., (2015) When a consumer buys a
product from a specific company then it is obvious that satisfaction will derive the
consumer towards the consumption of another product. Thus it creates the loyalty of
the consumer towards the brand or a particular business. Although, Ma, Li, and
Zhang, (2018) says that many loyal customers stray simply on the store where they
are regularly buy the product doesn’t carry it anymore and also the consumer do not
have time to try another product until such goods are satisfying the needs. Hence the
convenience is another factor which helps the retailer business for the customer
loyalty programs. Therefore such different types of factors provided by the research
of the different authors helps in fostering the customer loyalty programs within the
business.

Theme:4 The challenges faced by the Hyper markets during the development of
customers loyalty programs
 As per the study of Watson, G.F. and et.al., (2015), consumer expectations are
contently changing and that can be considered as a great challenge for the
hypermarkets. Providing the customer loyalty programs that helps in maintaining the
effective relationship of the company and also helps in retaining the customers for the
longer time. However, during the development of customer royalty program, the
company has to provide the different discounted vouchers and offers on products in
order to influence the buying decision of the consumer. On the other hand, Watson,
G.F. and et.al., (2015) has stated that applying the consumer loyalty programs such as
coupons and discount vouchers on the specific product also need to proper
observation and calculation. So the company have to perform the critical analyze
about the needs of the people and then providing the rewards on such specific goods
allow hyper market to engage the loyal customers.

Furthermore, as per the study of Bowen and Chen McCain, (2015) during
the rewards system or coupon vouchers, the Hyper market have to bear low profit
margins and low profitability within the organization. Although, customer
engagement is one of the most important tasks and above all retention of the loyal
customers and attracting more new customers is one of the most difficult things.
Watson, G.F. and et.al., (2015) has provided a challenge for the super market that is
technology development. Due to the increased online approach of the people, the
choice of the people is changing rapidly which impacts on the customer loyalty of the
people. So organizations have to face many challenges related to the updated
approach and increased customer loyalty programs in order to hold back the existing
customers from switching to another. Customers are now more conscious and focused
towards the quality as well as quantity of the products and services offered by two
similar companies by using the mobile technology. Therefore Ma, Li, and Zhang,
(2018) says that in order to hold the loyal customers of the company Hypermarket
need to meet the expectations as well as quality of the product. Hence the
organizations have to consequently provide the innovative as well as effective
services and goods to the consumers.

Theme: 5 Strategies that contributes towards the effective development of the

customer’s loyalty programs in Super markets
 Bowen and Chen McCain, (2015) has stated many different types of strategies
towards the increased loyalty programs within Super markets. One among them is
increased online approach of the consumer in order to attract the loyal customers of
the company. However, as per the study of Bowen and Chen McCain, (2015),
customer loyalty programs allows the organization to maintain the strong relationship
within the loyal consumers and thus helps in holding the consumers for the long time.
On the other hand, another effective strategy described by Watson, G.F. and et.al.,
(2015) is the innovation and invention of the new products and services within
organization. It is because; this is very easy to engage the existing customers to use
new products of the organization. However the existing loyal customers can easily
trust the new product of the same company which helps in providing the experience to
the new customers of the organization as well. Although one of the effective strategy
to increase customer loyalty programs within super market is the Solicit feedback of
the customers. As per the views of Ma, Li, and Zhang, (2018), before trying to retain
the loyal customers of the company and increasing new customers, it is very
important to understand the main purpose of using such goods and services. However
understanding their main aims and objectives for using specific product allows the
company to have an idea about the retention and leaving of the customers.

However Ma, Li, and Zhang, (2018) has also provided the one of the most
effective strategy in order to implement the customer loyalty programs within the
organization. This strategy includes periodic discounts and coupons on the attractive
products and services of the super market. Also all such strategies need to be
supported with the social media platforms in order to gain the increased customer
approach. Hence it derives the customer engagement and helps in increasing the
customer loyalty towards the goods and services. Such strategies helps in holding the
existing customers and also engage new customer to approach such products and
services.
3.0 Research methodology

Research methodology consist of different types of methods and techniques

which are used to carry out the research process. (Mathur and et al., 2019). It includes
methods which supports the significance of the data assessment and evaluation
process and guide researcher in the best possible way. Hence, it will lead the
researcher to have higher and effective planning of the research process, which assist
to improve mindset of researcher for research process. The major aim of the research
methodology is that it will guide the data analytics to improve the suitability and
significance measures

3.1 Research design

The research design can be termed as a blueprint of the research methodology. It is

chosen for sake of the research and effective planning purpose. It assists in improving
operational activities related to data assessment process (Andrew, 2019). Two types
of research designs are undertaken and followed by researcher are: exploratory and
descriptive. The exploratory approach will help the researcher to explore or identify
the new or unidentified concepts or ideas which that supports to improve significance
of research.

On other hand, the conclusive approach will help in determining the

conclusion towards a research process which is adopted. For the present research,
researcher will use descriptive research methodology that helps in gaining the best
outcomes from the research process. All these measures will help the researcher in
improving growth measures. Therefore, it will lead to the proper growth in the
effectiveness of the research process. It also helps in enhancing efficiency of the data
assessment activity in the best possible and practical way. The descriptive approach of
research designing is used to carry out the operations which are applied and thus,
supports and will get an effective idea to carry out the casual cause and effect
relationship based data analysis.

3.2 Sampling method and sample size

In order to collect the data researcher required to select sample size from large
number of population. The sampling process leads to determining the extent of the
research process. It will guide the researcher to identify people for the research
process and develop their perception (Lê and et al., 2019). There are two types of
sampling methods: non-probabilistic and probabilistic. In the probabilistic approach,
sample size and the respondent type is determined as per the need and requirement of
the researcher and evaluation process.

On the other hand, the non-probabilistic approach is used when the sample size and
respondent types are fixed. In order to collect data researcher will used random
sampling method. Reason for selecting this method is that it will provide equal
chance to get selected and which reduce chances of bias.

For this purpose, about 10 employees of the Lulu supermarket company and from
them open ended questions will be asked by researcher. Along with this 100 consumer
will also selected and from them close ended questions will be asked by scholar. The
research will depend on open and closed end which will use interview as well as
questionnaires to gathering research information.

3.3 Methods and tools of data collection

Once the research approach is set and implemented by the researcher, the data
collection is followed. The collection of data is a vital process as it helps the
researcher to identify the perception of people towards a research aim or objective.
Other than this, the data collection is also a reflection of concurrent trends prevailing
in the market or society related to the research topic. The two typologies of data
collection measures are: primary and secondary data collection. The primary data
collection will include process of collecting the data using interviews, questionnaires,
surveys and interaction. For the present research report, the researcher chose both,
secondary and primary data collection measure. It will include the use of a close-
ended questionnaire. Therefore the survey will be conducted in which questions will
be asked from employees of Lulu supermarket.

3.4 Approaches to data analysis: Followed by the sampling and effective research
methods which are followed by the researcher.. There are two measures of the data
evaluation processes: qualitative and quantitative. The Qualitative research, which is
followed, helps the researcher to have an in-depth and proper management of the
operations which is followed and thus, it guides the data analyst to improve the proper
execution of the research process in the best possible way. In involves the assessment
of the interview transcripts, images, graphs and other data sources that are accessed
by the researcher (Quinlan and et al., 2019). In contradiction to this, the Quantitative
approach of research process is based on principle of the evaluation of calculations
and numerical data, which is carried out by the researcher. This methods which are
applied to a more suitable increase in the effectiveness of the data evaluation
measures, which are looked after by the researcher. For the present research,
researcher has accepted qualitative data analysis for the evaluation process that assists
in proper planning of research activity.

3.5 Research Ethics

For the effective management and execution of the data assessment activity that
is adopted by the researcher, this can be said that certain ethical operations are applied
and followed by the researcher. Collecting the data in the most effective and positive
way, maintain the effectiveness of operations that are involved will guide the
researcher who will lead to help in carrying out the data assessment using the
effective tools. All these measures guide the researcher to execute the processes and
principles related to research process, which will guide the operations that are applied
in the best way to enhance the quality of research and analysis. Apart from this,
storing the data in the best possible way and handle operations in the significant way
will guide the researcher to lead the researcher to have a higher level of functionality
(Kumar, 2019).

4.0 Limitations

The research has various limitations which the investigators need to understand
carrying out the data assessment effectively. The research limitation consists of
following points such as:

 Aims and objectives of the study need to be framed properly in order to carry
out comprehensive data assessment effectively.
  The methodology part in the data assessment is one of the important aspects
which need proper understanding and observations. So the researcher should
select the methods and approaches effectively which supports the effective
study.
 The limitation includes the proper understanding and different views of author
that provide the contradictory reviews amongst each other.

4.0 Action plan

Schedule/ plan of work

Month Introduction Literature Methodology Data Data Conclusion

Review collection analysis

1st week

2nd week

3rd week

4th week

5th week

6th week

The estimated cost to conduct the research

Amount Description

15 Transportation

14 Stationary and printing

6 Other expenses
References

Books and Journals

Andrew, C.O., 2019. Applied agricultural Research: Foundations and methodology.

Routledge.

Bowen, J.T. and Chen McCain, S.L., 2015. Transitioning loyalty programs: A
commentary on “the relationship between customer loyalty and customer
satisfaction”. International Journal of Contemporary Hospitality
Management, 27(3), pp.415-430.

Bowen, J.T. and Chen McCain, S.L., 2015. Transitioning loyalty programs: A
commentary on “the relationship between customer loyalty and customer
satisfaction”. International Journal of Contemporary Hospitality
Management, 27(3), pp.415-430.

Brashear-Alejandro, T., Kang, J. and Groza, M.D., 2016. Leveraging loyalty

programs to build customer–company identification. Journal of Business
Research, 69(3), pp.1190-1198.

Kang, J., Alejandro, T.B. and Groza, M.D., 2015. Customer–company identification
and the effectiveness of loyalty programs. Journal of Business
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Ko, E., Phau, I. and Aiello, G., 2016. Luxury brand strategies and customer
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Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage

Publications Limited.

Lê, J.K. and et.al., 2019. Why Research Methodology in Strategy and Management
Remains as Important as Ever. In Standing on the Shoulders of Giants:
Traditions and Innovations in Research Methodology (pp. 1-13). Emerald
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double-edged sword?. Journal of Services Marketing, 32(3), pp.300-310.

Magatef, S.G. and Tomalieh, E.F., 2015. The impact of customer loyalty programs on
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Mathur, M. and et.al., 2019. Early Exposure of Undergraduate Students to Research

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McCall, M. and McMahon, D., 2016. Customer loyalty program management: What
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Quinlan, C. and et.al., 2019. Business research methods. South Western Cengage.

Stathopoulou, A. and Balabanis, G., 2016. The effects of loyalty programs on

customer satisfaction, trust, and loyalty toward high-and low-end fashion
retailers. Journal of Business Research, 69(12), pp.5801-5808.

Watson, G.F., Beck, J.T., Henderson, C.M. and Palmatier, R.W., 2015. Building,
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.Belwal, R. and Belwal, S., 2017. Factors affecting store image and the choice of
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Habib, A., Hossain, S. and Oma, T., 2015. Impact of advertisement on consumer
choice: A case of sme and consumers. Singaporean Journal of Business,
Economics and Management Studies, 51(2478), pp.1-15.
Appendix

Dear sir,

I am student in Muscat college doing research about Effectiveness of customer

loyalty programs on consumer purchase behavior as my course required. I
choose your respected company to conduct my research as best place to get
good feedback that will contribute to my research. The information I collect
will be treated confidentially and will only be used for research. I would like
to thank you in advance for the time that you will spend with your employee
to fill out this questionnaire as well as distribute the questionnaire to your
customers and collect it.

Your sincerely,

Medina Diabira

Part (1- Employees Interview Questions )

Part (2- Customers Questionnaires )