MINOR PROJECT

ƒ What are loyalty programs? ƒ Why are they relevant? ƒ Comparative study of various

retailer. ƒ How to design loyalty programs?

and increase the amount of purchases Emphasis is on developing long-term bonds with customer. and so as to minimise loss. Set of actions devised so as to stimulate and keep up with some customers. namely the rate of lost customers. lasting relationships with a core group of customers. . Aim is to create strong.ƒ ƒ ƒ ƒ Relationship marketing programs to foster usage loyalty and a commitment to their company s products and services.

 Managing customer churn. .  Creating and delivering unique.ƒ A marketing initiative for :  Developing long lasting relationships with most valuable customers. consistent and memorable engagements.  Developing better business understanding for driving footfalls and increasing ROI.

ƒ Their se is i es rea am  retailers. .  airli es.  car rental com anies.  film developers :- ƒ That is to say in all the sectors that deliver a good or a service in reg lar se and of a relatively high nit value.

most companies have developed loyalty programs build around the concept of loyalty cards.ƒ ƒ ƒ Fostering ongoing communication ith customers Furnishing loyalty y uilding extras like upgrades and other peaks timulating a sense of elonging y providing a club membership format. Within the field of retailing. .

ƒ It is easier and less expensive to make an additional sale to an existing customer than to make a new sale to a new customer The Firm provides ‡Products/services ‡Individualized attention ‡Continuous information ‡Price offers ‡Customer services ‡Extras and peaks The Customer provides ‡Repeat purchase ‡ Extra loyalty ‡Good ill ‡Positive ord-of-mouth ‡Lo er cost for the firm Trust And Promises .

dvocate s function Environment: .Information density Psychosocial states: .Importance of granted advantages .Contact frequency .Trust .Risk reduction Internal behaviours .Buying frequency .Commitment .Food rate .Information research .ttachment .Purchase diversity -Customer Retention C A External behaviours .Positive ord of mouth .Buying regularity .Nature of the re ards .Marketing pressure .B Caracteristics of loyalty programs: .Competitive environment .Consumer s experience .ttitude .

Writing off the cost of investing in the customer s acquisition. Provide the firm ith a stable turnover basis. notably through additional sales or crossselling. calculations of lifetime-values. ƒ ƒ ƒ ƒ ƒ . keeping up the purchase.ƒ Keeping one s customers and therefore preserving one s market shares. Developing and recruiting customers at a lo er cost. Cutting operational costs of subsequent transactional flo s. Increasing the customer s loyalty and value. Guarantee of future profit. margin and profit levels.

 consumers ith initial lo patronage levels gradually purchased more became more loyal to the firm. . (2007). Conclusion:Thus there is a need to consider patronage to decide re ards for loyalty programmes. Yuping.ƒ Liu.  Consumers ith lo or moderate patronage level gradually purchased more became more loyal to the firm.Long-Term Impact of Loyalty Programs  Heavy buyers at the beginning of a loyalty program claim their qualified re ards but the program did not prompt them to change their purchase behavior.

ars. Benavent. the market was characterized by an absence of change of the competitive situation. ( 6) Impact of oyalty rogrammes on Repeat urchase Behaviour  The double jeopardy phenomenon was present and loyalty programmes did not substantially change market structures. .  When all companies had loyalty programs.ƒ Meyer. hristophe.aarden.

ƒ They are intrinsic to most marketing strategies. however?  Proliferation of programs questions their differentiating capability  Value addition to customers is debatable? ƒ Is it the kind of product new marketers should consider? .

ƒ India is a nascent market for loyalty programs. Consumer choices are being shaped through unparalleled access to information ƒ . holds tremendous potential.

ƒ ƒ ƒ ƒ ƒ ƒ ƒ Becoming increasing sophisticated Exposure to modern retail formats Increasing awareness of fashion and brands Time of higher value than money Becoming more experiential Plethora of choices Want to be served when they want and where they want .

ƒ ƒ ƒ ƒ 76% of US retailers and 75% of US shoppers are engaged in loyalty programs Shopper s Stop claims more than 60% of sales from loyalty members. Subhiksha claims 80% of sales comes from loyalty members. Also a credit card research has shown that 75% of college going student keep their first card for 15yrs and 60% keep that card for life. .

earn up to 5 Re ard Points at Shoppers Stop and 1 Re ard Point anywhere else.com b) Exclusive benefits & privileges c) Exclusive offers ever so often d) Updates on what you can look forward to shop for at Shoppers Stop e) Exclusive cash counters at Shoppers Stop so you can spend more time shopping than waiting in a line . 100 purchase.First Citizen Card ƒ Program type:  Earn up to 3.For every Rs. ƒ Benefits: a)Reward Points for every time you shop at Shoppers Stop stores or shoppersstop.5% every time you shop ith your First Citizen Citibank Credit Card .

ƒ ƒ Green Cards Program type: Membership & 12 month Purchase-based Upgrading System  Three Star Card . 20000/immediately preceding 12 months of current shopping date.Upgrade to a 7 star status by shopping for Rs.Upgrade to a 5 star status by shopping for Rs.  Seven Star . 8000/immediately preceding 12 months of current shopping date.  Exclusive shopping days to get hold of latest merchandise  Regular updates on collections and promos via catalogues. sms and email  Special invites to the most happening events  Extended exchange periods and complimentary drops for alterations  Exclusive billing counters and much more . 40000/immediately preceding 12 months of current shopping date.Upgrade to a 3 star status by shopping for Rs.  Five Star card . ƒ Benefits:  Instant discounts for every time you shop at pantaloons.

each with it own benefits. Some of the pleasant surprises included special screening of the movies Kyun Ho Gaya Na and Spiderman. in addition to a host of other privileges such as exclusive tie ups. Water Kingdom. and more. promotions and special shopping hours. exclusive movie screenings. special invites. Member ship criteria: Benefits: Privilege points accumulated on the membership card translates into gift vouchers for a host of items as also value adds like special offers. based on the concept of instant gratification has ensured 100% card to benefit ratio. Tie-ups with Pizza Hut. bring in their own set of benefits. Members are immediately rewarded for purchases at any of the Globus stores. discounts. Globus offers two different card categories. ƒ ƒ ƒ .ƒ ƒ ƒ Privilege club Program type: The Globus Privilege Club card. etc. get together events. Sometimes just stepping into a Lifestyle store can fetch one a free cup of cappuchino coffee at Qwiky's who have a presence within the store.

you can enroll by paying a nominal one-time fee of Rs 150. Member ship criteria: Benefits: . classic A purchase of Rs 2000 on the same day entitles you to a complimentary membership into Clubwest Classic. Gold A purchase of Rs 5000 on the same day entitles you to a complimentary membership into Clubwest Gold.ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ Club west Program type: CLUBWEST is a two-tier program. Alternately. which comprises Clubwest Classic and Clubwest Gold.

POP Price off. home furnishing Categories Apparel &accessories for men. Email). coupons Sales. Quarterly profit Sales   1000on weekday & 1500 to 2000 on weekends. combo. women & children Rs.1800 Apparel & accessories for men. electronic (SMS. women Rs 800 Stylized clothes. contest . exchange offer Yes Hoardings. print . In store Yes In store Cause related. hoardings.Store Name Format Type Positioning Pantaloons Multi brand Family store Lifestyle Multi brand Westside Trent group Style & affordability Max Multi brand Landmark group Family shopping destination & value pricing store Foot wear. average bill size. free gifts. footwear & accessories Average billing per customer Average footfalls Rs199-1999 Rs750 to 1450 Loyalty card Programme Media used Yes Hoardings. free gifts Evaluation of promotion Sales. accessories. discounts Sales. Quarterly profit Lucky draw. holidays 1200 in week days & 000 during week end 25-45 per hour 450 per day & Weekend 1200 Yes Print. conversion (footfall) . discount. gift vouchers. free coupons. contests. discounts. electronic. In store Promotion type Lucky draw.

.ƒ ƒ Usage of sales promotion activities has direct impact on behavior.  reinforce or reward loyalty etc. Broadly. objectives set for these activities are  i)to generate store traffic  ii)to enhance store image and  iii)to create a price image( high or low). It motivates a consumer to:  buy now rather than in future.

Lifecycle Customer Experience Segmentation .

ƒ How to gather data. run campaigns and monitor ROI? ƒ .Setting the expectations from the program. analyze. ƒ Determining what customer information and buying behavior data to gather.

ƒ ƒ ƒ Identifying your loyal customer and their buying behavior. Using customer data for new product campaign and new outlet identification. . Improving margins and revenue through direct marketing campaigns.

ƒ ƒ ƒ Why do customers buy this brand? Why are customers dissatisfied? What is the current buying behavior?  By time.  Brand or price conscious. season etc. . day.  Existing customer segment.  Product and/or service.

ƒ Designing a comprehensive loyalty management tool which provides:  Data gathering  Data analysis  Direct marketing campaigns  Information access for customer and brand  Monitoring ROI from campaigns .

Outlets Customers Customer Purchase Gather Customer Purchase Data Data Base Analyze Data Direct Marketing Programs Direct Marketing Customer Campaign Profile Consumers .

redemption. query. recent visits. Data Gathering: Online (over GPRS) rewards. frequency.ƒ Enrollment: Design custom forms and enroll on live database. manage member grades. customer personal data correlation. Analysis: Value. issue cards. ƒ ƒ .

Support: Customer and outlet support for program management. Events to customers selected from analysis. Mailers. ƒ ƒ . SMS.ƒ Marketing Campaigns: Email. Monitoring ROI: Correlating campaign to customer repeat buying.

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