ABSTRACT Normally, the marketing people give attention only to the new customers and not to the regular

customers. Nowadays, however, in markets the shares are slowly losing its status in the market field. This is now being seen as a serious issue and it is taken as a high risk factor, since, more people are interested in this field, which gives good profit to them (Hansemark and Albinsson, 2004). Due to these changes in this field, new ideas has came now in marketing, which deals with the regular customers. They give importance to regular customers to make tie with them long-lasting. From them they get new customers too. To increase new customers is their main goal, for that they introduced new strategies in business to increase their turnover (Lacey and Sneath, 2006). Due to this, by the year of 1995, the company changed the vision towards business, in all parts of concern. The innovation had been made by the company in making decisions, in developing the quality of products, and is balanced well. The very noticeably, thing they made is, approaching its customers, from that day the company started clubcard and it is a customers wellbeing program (Kelly, 2002). The food products retail industry is a competitive one. Always the buyers expect good and worthy items from the retailers. It was quite old during the introduction of the company and what made it work for them was the good customer service that was offered. They give best service to the customers that are their success. This paper investigates the concepts of loyalty and customer satisfaction in Tesco. This paper also presents the investigation on the conditions of customer loyalty with improves the profit and promoting loyalty for consumer relations. Some of the key factors for the success of Tesco are clearly presented and evaluated in the research. Qualitative research method is used for collecting the secondary data from the resources like journals, articles and the websites. The loyalty of the customer has been indentified in the Tesco and their effects will remain as a major key factor for the success of the sector.

CHAPTER 1 1. INTRODUCTION This section will include the brief introduction of the Tesco and its clubcard. The major concept of the research work is to analyze the customer loyalty of the Tesco and its strategies. The aim and objectives of the research work will be illustrated briefly and the rationale of the research work will also included in this section that it shows the importance to carry the research work. The scope of the research will describe the purpose and also use of the research work. The strength and limitation of the research work will also be included in this section and it shows the in-depth concept and the issues faced by the researcher while carrying the research work. 1.1 TESCO AND ITS CLUBCARD The Tesco Clubcard proved itself as a serving concern. The companys key of success to attain this height is to create value for successes. They do the right things, in the right time to their customers that what they need and also understand the customers well. The company won by earning the new customers and maintaining its old and existing customers with the stable service for a long time. It works with its distributors and the important thing is its allowance by making the clients or giving them a chance to get a view of the needs of the end user. The company succeeded only because of their new innovative ideas (Alexander, 2002). The company is the second leading market before the clubcard. It is a globally successful means of shopping through the internet and has developed economically which has serviced the industries and also debatably been the most prospering examples of customer relationship management (Bowen and

Chen, 2001). The companys clubcard is large that means the maximum prospering CLP function is applied to the public of the country among the huge variety of reward schemes and 40% of the total percentage is dynamic in some weeks and about 83% of the company's profit is moving via the clubcard (OMalley and Tynan, 2000). Not many could then question or raise their suspicions about the card which stands as the proof of the companys innovativeness. This quite clearly gives us an indication regarding the cards advantages and presents the composition through the company clientele such as inscription and so forth. The company might not have acquired this position not for the clubcard and it is not finished as rapidly or inexpensively unless the loyalty scheme has a view of the work done. When all the clientele speaks to the consumer and himself being in the spotlight, the company has made the consignment concrete (Lacey and Sneath, 2006). The card includes the features about the clientele offered and to whom it is done etc. It serves like the consignment for helping clients, and almost, peakto-minimum retailers pragmatism. The company caused the consumer loyalty trading function , while a different British supermarket loyalty code by the year of 1990s neglected, hesitated or chanceless acquired by them(Reichheld et al, 2000). In the year of 1995, headlines has announced the fatality of loyalty strategy, commonly backed by different retailers whose loyalty plans are remote storages. Still clubcard is queried as a calculated precedence by the administration. Instead of that, the company answered the critics in style by replying the critics in the form of the valuable design of the card and the company has not discovered that their loyalty code is quite expensive. The company caused clubcard function that it could determine out the clients requirements and also produce the sufficient sales by fulfilling these by covering the price that the customers need (Thiele and Bennet, 2001). 1.2 AIMS AND OBJECTIVES 1.2.1 AIM

The aim of this dissertation is to evaluate the customer loyalty in TESCO and its customer loyalty program. The research majorly concentrates on the key factors of the Tesco along with its business strategies. 1.2.2 OBJECTIVES To study the customer loyalty and customer satisfaction To analyze the customer loyalty and customer satisfaction of Tesco To analyze the view of customer regarding the Club card scheme of Tesco 1.3 SCOPE As the review analyzes the companys clubcard completely, the favorable outcomes are not achieved in easy manner for all the adopted strategies of customer loyalty. The upcoming investigation will review the other traders in sequence that is capable to acquire the actual concept consumer-loyalty in Tesco. Also, the following review analyzes the loyalty consequences of the clubcard by which it has a greater market influence. 1.4 RATIONALE The major importance of this search will help the sector to identify the loyalty of the customers because for a successful organization, loyalty of the customer plays a major role. Tesco gives importance to the customers loyalty and by identifying the loyalty of the specific organization will assist the other organizations to preserve the loyalty of the customers. Also, by this the customers satisfaction will be attained. 1.5 METHODOLOGY Consequently to promote the previous objectives, this review brought into the report of the pair of qualitative and quantitative investigation plans that is frequently essential for 'triangulation' that stands for 'being restricted in addition to a couple of places (Green et al, 2002). Deductive, due to the

subsisting procedure that is used for trustworthiness and faithfulness along with the influence done for clientele determinations and approach tested by the information and inductive, due to the facts that accumulated and then examined by affording the recent attributes to the trustworthiness procedure for the process that are available in clientele determinations. A practical knowledge about the company will be obtained since the engagement of the experimental interrogation about the trustworthiness factor which is present in the specific trade company. Both the quantitative and qualitative research is used in this research work. Qualitative alternative details from a category of resources is assembled such as the company case analyzes, the company booklets, the company websites, online articles, newspaper and also journals, recorded interviews, clientele news medium ideas, investigation authority (e.g. mintel) data sets. The data acquired by quantitative research method from the company industry and also various superstores is accumulated and then examined by comparing the loyalties impact. The major data is accumulated by stopping the public in the shopping stores and getting their opinion (zikmund, 2000). In the view of attaining the data for the specific purpose of the study is the secondary data which are collected from the books, articles, journals and trusted internet resources like e-books and other materials. 1.6 CONCLUSIONS AND RECOMMENDATIONS The company's dependability has turned out to be a support for the clientele strategy if it has got an assistance with the company in their development other than being an excellent food seller, in continually exploring the behavior as the rate-summing up the representative for its clients, the companys consumer detail properties are the practices that will permit to acquire the consumers priority by the administration (Odin et al, 2001). The company's loyalty strategy recommends that a strategy of the loyalty could have a sustained influence on the minimum channel while, by its origination, it alters the dynamic culture of the management. While the panel distinguishes by

which the loyalty strategy information is the clientele fundamentals, then the measurable economical status in method, work force and also the sources that actually begins to provide the allowances. 1.7 LIMITATIONS OF THE RESEARCH The research work carries the secondary data for analyzing the concepts of customer loyalty in Tesco. The data are collected from the secondary resources like journals, articles and websites. The collected information regarding the concept will not provide the actual data to carry the research. The information may vary from source to source and this may affect the result of the research. 1.8 STRENGTH OF THE RESEARCH The research work carried out in the Tesco regarding their loyalty of the customers. This research shows that the Tesco shows more concentration of the loyalty of their customers. The data obtained for this research work is by using the secondary collection method. Since it provides the information for the research work will be very accurate and efficient. 1.9 DISSERTATION OUTLINE Section 1 includes the introduction of description of the customer loyalty of the Tesco and its strategies. This chapter also gives a brief illustration about the aim and objectives of this dissertation. Section 2 gives the previous literatures about the general concepts of loyalty among the customers and its classifications. Section 3 shows the methodologies that are applied in this research work. It renders a brief illustration regarding the data collection method. Section 4 is the data analysis chapter. In this section, the data collected are well analyzed by in-depth manner and it shows the effects and efficiency of the customer loyalty on the Tesco. Section 5 is the conclusion chapter that concludes by suggesting recommendations for the enhancement of the customer loyalty in Tesco.

1.10 SUMMARY This section includes the brief introduction of the loyalty of the Tesco. The aim and objectives of the research work has been clearly illustrated in this section. This section shows that the loyalty of the customer is very essential for a companys growth and development. Likewise, Tesco is a sector majorly concentrates on the loyalty of the customer. It gives an overview about strength and limitation of the research work and also it illustrates the methodologies that are implemented in this research.

CHAPTER II 2. LITERATURE REVIEW 2.1 INTRODUCTION Clearing the commotion in regards to the loyalty concept is the intention of the literature review chapter. Bringing out the actual meaning of the loyalty

concept on clearing the commotion in regards to the loyalty concept by considering it as a behavioral and an attitudinal attribute in Tesco is the main intention of the literature review chapter in this research process. An elaborate account of the related models and the frameworks that have been put forth by the purists are also made in this chapter as well. The causes for the popularity and the unexpected rise in the Tesco loyalty schemes are also analyzed in the literature review chapter of this research. The stand alone entity or a portion of the complete strategy which assists in strategic decision making and its formation in Tesco is the assessment that is made in regards to the successful loyalty programs that are conducted. Stressing the hype and hoopla that is possessed by the loyalty schemes and the myths that are related to the hype and the hoopla of the loyalty schemes in Tesco are analyzed in the conclusive stages of this research. 2.2 LOYALTY THE EXLUSIVE PHENOMENON Ang and Buttle (2006) states, one among the most repetitively discussed and much misconstrued concepts in modern times has been the loyalty concept. Few authors utilize consumer loyalty in an interchangeable manner with supplementary constructs which comprise the consumer retention process and the repeated purchasing behavior of the consumers in Tesco. This utilization made by some authors is an evidence of the consumer loyalty being regularly discussed and most misconstrued concepts in modern times. The construction of consumer loyalty is not similar to the construction of the repeat purchasing behavior of the consumers as purchasing on a repetitive basis is an intentional function of the buyer which is also recommended by some authors as well (Brown and Stanley, 2000). The repeated purchasing behavior of the consumers does not happen without any reason and there is always a reason for the performance of such an activity by the consumers. The consumer retention in Tesco does not result in constructing loyalty among the Tesco consumers. According to Butscher (2001), A purely behavioral character is

only observed in the consumer retention process in recent times. The behavioral and the attitudinal dimensions of loyalty construct are observed in the concepts of constructing the loyalty among the consumers in modern days. The focus of loyalty is felt on the intrapersonal aspects of the consumers behavior in contrast to Tesco being an active party in constructing retention among the consumers in modern days. As per the review of Cater and Cater (2009), the attitude to the brands, services, salespersons, products and the stores by the customers and the consumers is termed as Loyalty. A prerequisite to the loyalty factor is the level of attachment felt by a consumer towards a service or a product. The repeated patronage of the consumer towards the product or the service is the second factor that marks the consumers loyalty (Coyles and Gokey, 2005). The degree of preference and the degree of perceived product differentiation are the two dimensions which shape the attachment of a consumer towards a product or service in Tesco. The extent of consumers conviction in regards to the product or the service is stated as the degree of preference held by a consumer. Davis (2005) said that The differences made by the customer in regards to the product or the service used by him in contrast to the products that are looked upon as alternatives are observed in the degree of perceived product differentiation which is the second dimension in shaping the attachment of a consumer towards a product or service in Tesco. Jones and Taylor (2007) mentioned that when the purchaser feels a strong purchasing preference along with a high level of perceived product differentiation, the occurrence of a maximum amount of attachment of a consumer towards a product or a service usually happens to the consumer in Tesco superstores. 2.2.1 CONCEPTS OF LOYALTY CLASSIFICATION (FROM TescoS AND OTHER RETAILERS PERSPECTIVE) Transactional loyalty, the buying behavior of the consumers could witness an alteration or could already be altered and the causes which

stimulate such alteration among the consumers could not be clear in a transactional loyalty (Keiningham et al, 2007). Due to the close associations to the commercial results being possessed by the transactional loyalty in Tesco, the widely and popularly chosen choices are the transactional loyalty in Tesco (Tesco, 2005). The vital goal of a superstore happens to be the achievement of transactional loyalty by it. The concentrations of Tesco on more emotional features are the means by which the transactional loyalty is supported by Tesco. Tescos form of loyalty which is less transactional and more emotional are dealt in an additional manner in this research due to Tesco encouraging transactional loyalty by making its concentrations on the emotional aspect of the consumers and their behavior (Tesco, 2005). Perceptual loyalty, the opinions and attitudes of consumer which are significant but do not hold any necessary impacts on the purchasing behavior of the consumers are analyzed in the perceptual loyalty concept of the consumers (Lovaglio, 2004). Due to the perceptual loyalty concept reflecting possible behavior patterns that can be formed in the future and not reflecting past behavior patterns, the perceptual loyalty concept is on occasions considered to be more important among the consumers from the view of Tesco. The softer side of Tesco which is the attitudes and opinions of the consumers are the major concentrations of Tesco in this research and due to this reason; the perceptual loyalty concept will be dealt in an elaborate manner in this research. According to Moraga et al (2008), Complex loyalty, the combination of the transactional and perceptual loyalty is observed in the complex loyalty.

TRANSACTIONAL LOYALTY CROSS-SELLING Instead of choosing an alternative, when the consumer purchases a new or a different product or service from the similar supplier is called as cross selling loyalty (Uncles et al, 2003). UP-SELLING according to Humby et al (2007), Purchases that are made from a similar supplier of the same product or the service in a usual manner by the consumer is called as up selling loyalty by the retailers. REPEATS PURCHASE When the similar requirement arises and when the similar products are bought by the consumers, it is termed as the repeat purchase behavior of the buyer. PERSISTENCY Instead of concluding a relationship among the retailer and the consumer, maintaining that relationship among them is termed as persistency loyalty by the retailers (Ang and Buttle, 2006). The Tesco employees provide details in regards to the new products to the consumers for the sake of selling them to the Tesco consumers. Products which are of a branded and high quality nature are supplied to the Tesco consumers to make them buy Tesco products on a continuous basis (Tesco, 2010).

PERCEPTUAL LOYALTY SATISFACTION The context of the satisfaction levels felt by the consumers of a product or a service is the simple and the apparent means by which the loyalty of the consumers can be calculated by the retailers. Due to the presence of several illustrations of the consumers changing the suppliers in spite of achieving high levels of satisfaction

from them, the satisfaction of the consumers must alone not be accounted for calculating the loyalty of the consumers to the retailer (Brown and Stanley, 2000). Greater insights in the satisfaction levels and the means by which these satisfaction levels associate to the loyalty of the consumer that will bring the researcher nearer to the research objectives is also offered in this research. Achieving the satisfaction of the consumers providing them high quality and branded products and retaining them is attempted by Tesco with its consumers. Customer satisfaction in Tesco is one of the reasons for the success of Tesco and its loyalty program (Tesco, 2005). AWARENESS The degree to which the business is familiar within the target market of the business that is attained by the Word-of-Mouth recommendations or by the extent of the knowledge of the supplier is identified as the loyalty function by the awareness concept of the retailer and the consumer. The availability of the new products and creating awareness about their presence in Tesco to its consumers must be made by Tesco (Tesco, 2005). COMPLEX LOYALTY LIFETIME VALUE The lifetime value in Tesco is generated by calculating the commercial benefit of the relationship with a consumer over a period of time by Tesco retailers. BRAND VALUE The strength of the communication and the wide consumer awareness are the factors which are relied by the strongly branded businesses that offer the consumers a thought to deal with the right companies which might otherwise not be considered by the common man on his own. Tesco is one of the leading retailers and it proves the high brand value of Tesco (Tesco, 2005).

Guaranteeing the return of the consumer to a provided supplier on a regular basis is the main intention of branding and this is also the relative benefit that could be attained by the competitor if the branding process is not performed by the retailer. The key objectives of the Tescos clubcard are to increase the value of the brand and to avoid the consumers from becoming fatigued to a brand alone (Turner and Wilson, 2006). In the course of the research, the details regarding the enhancement of the brand value and the measures to avoid brand fatigue which are the key objectives of the Tescos clubcard are analyzed in an elaborate manner.

A slight additional goodwill, a little preference margin and an incremental shift in the buying behavior of the consumer is attained when the retailers aim at winning and maintaining the loyalty of the consumer with the retailers. The brand name, high customer satisfaction and the loyalty schemes of Tesco improves the customer loyalty and customer retention in Tesco (Tesco, 2010).

2.1.2 LOYALTY CONCEPTUALIZATIONS

Three well known factual of loyalty proofs are suggested: Loyalty is the primary thing that creates the relationship with the brand. Loyalty can be exposed in terms of the repeated purchase of the customers and also purchasing controlled by the single characteristics, situations, and the buying scenario (Rowley, 2005). As per Rowley (2007), Loyalty has been mostly specified and determined with behavioral conditions (stochastic method), or attitudinal conditions (deterministic method) and even though it has been recommended by which procedure must be realized in both the conditions, there is yet few contract while it approaches to evaluating it . This argument was started before 30 yrs and still it continues. The supporter of stochastic method argues that the customer who buys the same brand or product consistently is considered as the loyal customers. The behavior of the customer is measured by how they loyal to the brand or product and the nearest factor to determine the behavior of the customers (Waarden, 2008). The customers loyalty behaviour of Tesco can be identified by the customer retention in Tesco (Tesco, 2010). Loyalty

can be defined and observed as the behavior of repeated purchase of the customer. Definition for consumer purchasing is given by stochastic pattern. The weak commitment is created by the repeated purchase of the brand. But the customers of the Tesco purchases the same brand consistently because they do not want to waste the time by searching for other product. The true fact is that this method is slightly difficult for Tesco as it assumes loyalty behavior to be complicated and the realization has not happened as a result of increased amount of descriptive inconsistency. Furthermore, they have been recommended that some customers were 100% loyal about the brand; however, they are expected to have a collection of more than two products inside the merchandise sort from that they usually purchase. The limitation of this approach is it does not state that the frequent purchase has been made due to the situation, habit or it may be for some other reasons (Capizzi and Ferguson, 2005). Many researchers stated that the true loyalty can be achieved by the strong attitudinal behavior of the consumers of Tesco. Loyalty can be defined as the commitment to continuously buy the preferred product at every time which causes the repetitive purchase of the same brand. The loyalty can be isolated and controlled by certain factors that include customer satisfaction and commitment and trust. For Tesco, the customers loyalty is also considered as the repeated purchase of the same brand (Tesco, 2005). CONSUMER SATISFACTION: According to Brink et al (2006), it is difficult to compare satisfaction and loyalty and the relation between them is not similar. However there is belief that the customers who are loyal to the brand are always satisfied customers and the satisfaction is a changeable factor and it cannot be predicted by the repeated purchase of the customer. In Tesco, the satisfied customers are not determined by their repeated purchase and this may result to find the loyal customers. COMMITMENT AND TRUST:

Trust and commitment are the two factors important for the success of the relationship marketing. Trust reflects the confidence of the customer towards the brand. The psychological attachment to the brand and the wish to maintain the relationship with the customers reflects the commitment. While considering the trust of the Tescos customers, their reflection towards the brand is made by the customers confidence (Tesco, 2010). The intensity of loyalty is measured by the deterministic approach and it is not based on the disagreement of the loyalty and disloyalty. However the deterministic approach in Tesco disagrees believing the declarations of the customers without analyzing the behavior of the customers. The relationship and behavior of the customer explains the loyalty of the customers despite the sociological and psychological attitude of the customers. Likewise, the purchasing behavior of the Tescos customers cannot be determined by the frequent buying of the same product (Smith et al, 2004). The combination of satisfaction and the exposed behavior of the customers are not enough to predict the loyalty. The positive attitude of the Tescos customers formed by the favorable interactions of the customer behaviours is known as Loyalty. From this loyalty, Tesco can be constructed through the attitude and behavior of the customers. The problems can be reduced by developing the hybrid framework that combines both the dimensions of loyalty. 2.1.3 LOYALTY FRAMEWORKS The requirement of loyalty is felt by most companies that are presently successful in their business. Any organization requires loyalty from its consumers. As mentioned by Ang and Buttle (2006), the equity and value of the brand are directly influenced by the loyalty of the consumers to it which is the cause of the loyalty being required by the companies. The attainment of more number of consumers could be made by the loyalty frameworks which is the reason behind Tesco concentrating on loyalty frameworks as well. Maintaining regular consumers and obtaining new consumers are facilitated by loyalty and this is the assistance of the loyalty feature to Tesco. More

expectations and their fulfillment by the company will be possessed by the loyal consumers. The company may be forced to satisfy the inflated needs of the consumers due to the additional amount of anticipations that are possessed by the loyal consumers (Berman and Evans, 2001). The financial performance of Tesco witnessed improvements in 2010 when contrasted to the previous years financial performance due to the cause that loyalty assists in enhancing brand equity and brand value of Tescos products. Tescos gross profit in 2009 was more than 4,185 million and in 2010 it is more than 4,607 million (Tesco, 2009). 2.1.4 REASONS FOR LOYALTY POPULARITYS RAPID INCREASE Consumer loyalty is a calculated method for developing investors rate through the growth of suitable relations with key clients and consumer sectors. As per Bowen and Chen (2001), however the concentration is on separate clients, loyalty program could be considered as equipment to improve brand loyalty, reduction expense, cause larger customer ,reduces the need to choose another brand ,helps as well as approves, draw attention to a greater pool of customers, and also improves the purchase quantity of product. The two objectives of customer loyalty programs are there. They help in improving the sales gain in escalating the supply percentage along with the increase of quality which is grown for the commodity bought by the provider (Brown and Stanley, 2000). The next goal is more protective, by building the close connectivity among the brand and present customer it is desired to retain the present consumer unit. Likewise, both the loyalty programs are used by Tesco and thus the quality and the profits are improved. The fame of those programs depends on the controversy by which earnings could be enhanced importantly by accomplishing either of those two goals. Nowadays cost-effective loyalty program could support parties (Butscher, 2001). Loyalty program could extend the purchase of the Tescos customer more frequently, contribute the capability to bulk customize trading interaction, reduce refuse and also assist

boost assurance. Thus, the Tescos Loyalty program tries to recognize the needs of the customer by communicating with them. Identifying the customers is the reason for the popularity of Tesco. Losing a customer is like losing the support of the customer for the whole time. The increase in the popularity of the customer loyalty is due to the remarkable profits of the company. For example the associates of Bain Company achieved 6% increase in the net profit by retaining the customers through the loyalty program and most of companies gat profited through this. According to Cater and Cater (2009), loyal customers of the Tesco bring more customers by word of mouth and they purchase more as well as pay high prices for the product. Managing the loyal customers is easy because they are well known about the procedures for ordering and delivering the product. This adds another profit for the retailers who have the loyal customers. The short term customers generate more profit to the company where as the loyal customers are marginally benefited. In the beginning the loyal customers produces more profit to the company but if they once stopped purchasing the product it will create loss to the company. This is also very suitable to the Tesco (Tesco, 2009). Many of them argued that the loyal customers are the source for the profit of the company. But the profit may relate to the service, process or product of the company. By understanding the needs and the economy of the customers the marketing strategy of the company is planned and through this success can be achieved. The loyal customers of the Tesco may bring assurance to the business by the enhanced customer exception, feedback, tolerating the mistakes made by the customers. And also the Tescos loyal customer encourages the supplier by satisfying them and this leads to the carelessness and inactivity on believing the loyal customers. As a result of this the Tesco fails to make changes when the market structure changes. Even though the many of the researchers recommended that the loyalty of the customers is valuable to the shareholder of the company and the

organizations are examining the position and option of to achieve the objective (Byrom, 2001).

2.2 APPROACHES FOR CUSTOMER-LOYALTY The idea of consumer-loyalty program is not actually a new thought in addition with its credible reasoning to state which the cooperatives' initiated the latest program in the middle of 1800s. But, the principle is yet the equivalent, to construct the persistent relations with clients, and also to perform thus by reinforcing loyal and heavy or regular purchasers, in the desire of accomplishing the advantages of loyal clients (Endacott, 2004). The final objective of all CLP is to improve common functional productivity by consumer preservation. But Ang and Buttle (2006) debates that the productivity of Tesco must be conceived as an average objective that could be accomplished if another objectives are attained as designing a company consumer record. Latest CLPs are by certain build of partnership card that is familiar in the last moment during retail in sequence to recognize the consumer and also to register the buy particulars (for instance. Time of buy, rate and kinds of cards published by and on sake of traders, comprising: PAYMENT CARDS: This known as store cards and it offers the mechanism to the consumers to pay the retailers. REWARD CARDS: It is otherwise known as the club cards or bonus cards. The customers are rewarded through this card for the consistent purchasing (Nicholls, 2002). COMBINED CARDS: It is like a reward or payment card and it has four CLP- card strategies. kind of products and so forth) and also the rate of the prizes gained. There are several

Source: (TESCO, 2010) As per Ang and Buttle (2006), traders bears four various CLP-card plans

PURE STRATEGY: In this the card will be issued by the retailer and the profit and loss is based on the retailer. To understand the need of the customers Tesco uses this pure strategy. This implies that the strong link is made among the customer and Tesco (Tesco, 2009). The desires and needs of the customer are identified and it has to be fulfilled. The objective of this scheme is to understands the customer well and serve the customer.

PUSH STRATEGY: The issuing the card to the Tescos customers will increase the benefit for the retailers. This scheme motivates the customer to do shopping in a special way. This forces the customers of Tesco to make a new type of attitude towards shopping. The retailers use this strategy to expand the business by attracting more consumers (Lambert, 2009). The new customers are getting attracted towards the Tesco through the push loyal strategy if this scheme gets success.

PULL STRATEGY: This card is issued to the retailer and this can increases the profit of the retailer day by day. The customers are attracted by introducing the new offers like buy one get one free or buy one get two free. This stimulates the Tescos customer to purchase more products and it is an effective scheme too (Tesco, 2005). But to attract the new customers it is not that much sufficient offer provided by the retailer.

PURCHASE

STRATEGY:

Paying

the

expenses

and

also

falling

remunerations throughout numerous retailers. The objective of this strategy is to increase the purchase of the customers. It is suitable for the transaction processing and financial services (Lovaglio, 2004). This is also useful for the retailers who wish to develop the transaction or financial services. The usage of the customer is encouraged by the Tesco for reducing the processing cost, product and by creating brand

awareness of the product. It is like a payment card but actually it is a reward card. PURGE STRATEGY: The retailer introduces other schemes except the loyalty card program and offers benefits to the customers and there by increasing the profit. The retailer aim is to increase the competitiveness of the company in the market instead of providing any loyalty schemes (Moraga et al, 2008). The retailers acquires the information from the members of the CLP as the members recognized themselves by signing the program and the members pay the fee based on the program type. The members are asked to pay the membership fee or joining fee to sort the members to restrict the unwanted person and it is a big advantage to them. Opt-it CLP Open CLP Costs are covered by membership Various users are reached fee Channel membership helps the Completed database by Competitors customers and

target groups Membership got

valuable

limited access potential customers are reached Effective communication is made Future analysis, segmentation and by well structured membership The cost and the number segment specific segmentation is made after completing database. of Loyalty program got cost effective

members are maintained by the membership Source: (Butscher, 2001) The Tesco club card comes down as a form of open- CLPs, because everyone residing in the country UK if they are 18 yrs or more can register their names

through the filled application forms that offer the information regarding the promotion. Loyalty card is a replacement for the loyalty drivers. 2.2.1 BUILDING A CLP Cautious designing is required for framing a consumer loyalty program in a company. Elaborated techniques and schemes for recognizing the consumers and registering them, segmenting and rewarding them with prize plans will assist in preserving the program and the consumers with the company for which the cautious design in framing a consumer loyalty program is intended in a company (Uncles et al, 2003). The rise in company commodity prices and constant arrival of consumers and business growth achieved by it in case of price rise made by the Tesco in its products is a clear indication of larger loyalty achieved by Tesco with its consumers. The consumer loyalty programs offer inimitable gifts or prizes to the consumers which is a reward for the loyalty maintained by the consumers towards the Tesco (Tesco, 2009). The deficiencies in differentiating the loyal consumers and their loyalty levels could be identified by conducting consumer loyalty programs by the Tesco. These deficiencies could also result due to the observable dissimilarities while making observations on the loyalty factor of the consumers as well. Therefore the construction and maintenance of loyalty programs have to be made in a proper manner in Tesco which perform such a task and reward the consumers on the basis of the loyalty programs held by them to their consumers. The consumers attempt to maintain their loyalty behavior with Tesco due to the fine recognition achieved by the consumers by their maintenance of loyalty with Tesco. Gentle advantages are of primary importance to the consumers who take part in the loyalty programs in a company (Tesco, 2010). The competitors prevailing in the market attempt to copy the CLP programs of other companies to obtain the benefits attained by the Tesco which has implemented certain loyalty procedures in their own company as well.

(a) Price of the products (2) the option of repurchase alternatives provided by the company 3) the prize set by the company and affordable nature of those prizes (4) obvious chances for achieving the prizes and (5) the comfortableness in using loyalty program by the consumers are five factors which assist in determining the loyalty program value of Tesco (Humby et al, 2007). Behavior samples, samples on the basis of approach, combination samples and association termed samples are the CLP formats and a suitable CLP format has to be selected by the CLP manager for performing an assessment of the consumers loyalty in Tesco. The behaviour of the consumers is the concept on which much of the CLP are conducted by the companies. Iterated patronage which means repeated purchasing behaviour of the consumers is the fact which is concentrated on the behavioral aspects of the Tescos consumers and this feature is concentrated by most of the CLP that are held by the companies. This fact and its measurement are generally cost effective and also state the reason for the repetitive purchase behaviour of the consumer. It also instantly offers noticeable facts in an effortless manner in regards to the achievement of instant advantages by the management. This is the cause of employing the CLP in Tesco. As per the Berman and Evans (2001), the emission of higher profit margin in the form of higher sales due to the requirement of need of higher promotion for the brand could be observed due to the performance of behavioural termed samples in a consumer loyalty program. The behavioral after effects could however be felt if the behavioural termed CLP samples are not performed in a company". The behavior based CLP presented in the figure 3 (See appendix). The relationship based model is another strategy which is adapted by the Tesco (Tesco, 2005). ECONOMIC CONTENT: The economic advantages recommends the

eagerness of the consumer in taking part in a CLP efficiently and if the separate price advantage computation guides the consumer to an outcome which is optimistic the consumer is certain to take part in a consumer loyalty program (Turner and Wilson, 2006). Loyalty promotion, fundamentally, means

economic differentiation of the consumers made by a Tesco from the consumers who come and shop in an irregular manner. Realizing the Tescos customers' behaviors as well as economics (calculated from loyalty code) permits to perform. RESOURCE CONTENT: Securing valuable resources which cannot be obtained from any other sources in an efficient manner is the cause of establishing relationships among a retailer and a consumer in the Tesco. Acquisition of the purchasing power and effort of the consumer by the retailer and acquisition of dependability, status, safety and supplementary features of reputation and tangible value in the products and services purchased by the consumer is the exchange made among the retailers and consumers in resource content in a retail business (Rowley, 2007). Commitment could be the contribution made among the exchange partners by the dependence, strategic interest, reciprocity and equity by following resource content in a consumer and retailer relationship.

SOCIAL CONTENT: A flourishing relation is shown by the models which are based on the association and the existence of it among the consumers and the Tesco. Interaction, sincerity in serving the consumers, acting in a reasonable manner and knowing the common concerns and maintaining them is the means of creating associations by the retailers with the consumers (Waarden, 2008). Friendship among the retailer and the consumer could be grown by developing the CLP program in such a way by Tesco. Consumer assurance and loyalty are two among the important inconsistent factors which could be witnessed in the consumer loyalty relationship between Tesco and its consumers. Vital nature of this relationship is the design in which the consumer loyalty programs are framed and interference of the competitors was the paradigm on which the successful construction of a consumer loyalty program depends on Tesco. appendices (figure 4). The relationship based CLP is presented in the

2.2.2 CUSTOMER LOYALTY PROGRAM IN TESCO According to Berman and Evans (2001), Integrative instruments is the so called category in which the consumer loyalty program of Tesco can be classified. Several elements from existing tools which are dependent on a distinguished set of product, price, communication and distribution issues for the cause of organizing consumer benefits are combined due to the ability possessed by the integrative instrument category. This is the cause of classifying Tescos consumer loyalty program in the so called integrative instruments category. Goods and services of particular CLP operating company which is Tesco or its partners are comprised in the product mix classification (Tesco, 2009). Member discounts, favourable conditions for payment and monetary benefits which are received by bonus program are comprised in the price mix classification. Great importance for interaction with CLP members and with Tesco is observed in the communication issue. The performance of Tescos activities which are done by it and which are not done by it sends a message which can strengthen or weaken the consumer and retailer relations in Tesco. Informing these activities to the Tesco consumers is vital as this would be the means of it to inform its activities to its consumers. The exclusive CLP magazines which is the Club card magazine, regular newsletters or mailings and the CLP meetings and events held buy t for its members are the means by which it informs the activities does by it and announces them to consumers. 2.3 AN APPROACH OF LOYALTIES According to Capizzi and Ferguson (2005), Understanding the significant intentions of evaluating the loyalty plans and the strategies which make Tesco in performing in an outstanding manner is the intention of performing this study. The analysis of the overall strategy and abilities of the Tesco to make the consumers purchase with it in a repeated manner which is the utility of consumer loyalty programs, Due to Tesco following the consumer loyalty

programs as a core consumer plan to attract more customers and to retain older consumers with it, essential advantages and significance is offered by it to its consumer loyalty programs. Tescos loyalty plan assists it in knowing about the character of the consumers and causes for their repetitive purchases made with Tesco (Tesco, 2009). The current performance of the relationship of Tesco with its consumers and the strategic direction of Tesco towards the consumer loyalty concept are also driven which is evaluated by the long term CRM strategy which is followed in Tesco. Close alignments of a company with consumers and bringing this vision to reality which is difficult in nature is the intention of applying this success strategy in Tesco. 2.4 RELATION MANAGEMENT BETWEEN THE TESCOs CONCEPT AND THE CUSTOMER A framework for understanding and meeting the requirements of the consumers are put forth by the strategists. According to Bowen and Chen (2001), The Ideal Customer Experience is the term which is stated for understanding and meeting the needs of the consumer that have been put forth by the strategists for this framework. Delivering a consumer experience which fulfills the requirements of the individual consumer can be made by Ideal Customer Experience framework designed by him. A consumer whose requirements are understood and fulfilled will persist in buying from Tesco on a constant basis and value on the retailer as well is the strategy behind Tescos strategy in regards to the relationship management concept resulting in an Ideal Customer Experience in Tesco (2009). 2.4.1 CUSTOMER LOYALTY MEASURES Consumer loyalty criteria are planned for persons inside an industry who impose the strategic direction of the industry. Those criteria assess the activity of Tescos present customer unit and also obtains forthcoming route followed by them in their customer strategy feature (Tesco, 2010). The Tescos loyalty criteria consist of the following features in it:

 Lifespan rate of consumer unit by tenure Dimension of consumer unit by tenure essential rate of consumer unit by tenure Medium benefit per customer by tenure

2.4.2 CUSTOMER STRATEGIES The Tesco establishes consumer plans to preserve loyal consumers, develop loyal consumers, obtain more consumers or develop loyal consumers and find if pessimistic consumers can be turned into surplus consumers for the Tesco (Tesco, 2010). Generally, the consumer skills determine the implementation of those plans by the companies to the consumers in the market. Obtaining the details of the consumer and their requirements is the main intention of formulating such a plan by the Tesco. In case, consumers have faced issues in regards to obtaining details about the consumer needs, the performance of such an achievement will be useless by the Tesco as well. 2.4.3 MEASURES OF CUSTOMER STRATEGY Breaking down measures on the basis of each and every consumer segment which breaks it down on the basis of value and characteristics and preferences of every consumer is the manner in which the consumer strategy is measured on a deeper manner in Tescos consumer strategy (Tesco, 2009). Tailored consumer strategy criteria like the wallet share for development plans and retention value for retention plans are held to the consumers by the companies in recent times. The outcomes of those criteria facilitate the company to allot particular sources in targeting specific customers by it. 2.4.4 POPULATING THE CUSTOMER PROFILE Tesco populates consumer tariff with related and necessary details in correctly realizing and gathering consumer requirements to build perfect

consumer understanding with its consumers (Smith et al, 2004). The summary of requirements and grievances which are provided by the consumer assists in fulfilling them and solving the issues of the consumers in the industry develops closeness in the consumer and retailer relationship. 2.4.5 CUSTOMIZING THE CUSTOMER EXPERIENCE The perfect consumer understanding could be provided once the requirements of the consumers are understood by Tesco. The way in which the service is offered or the procedures which assist in collecting the requirements of the separate consumer and fulfilling them is the means by which the consumers and the demonstrations of understanding the consumers in a perfect manner by Tesco can be proved to the consumers (Smith et al, 2004). The Tesco can surpass its competitors by knowing the requirements of the consumer and serving them accordingly. 2.4.6 TACTICAL MEASURES The end user and his feeling of ownership and technical performance are measured among the various measurements that are made in regards to the loyalty of the consumers to a particular company (Byrom, 2001). The experience of the end user is a tactical experience which is measured among the various measurements of measuring consumer loyalty in Tesco. Observing the achievement or failure of a few elements inside the experience of the end user can be performed by this criterion. Reckoning on the samples (exposed in the above diagram) the approach developed may be disproportionate. Enhancing sales by improving belief in regards to the Tesco brand and strengthening the emotional commitment of consumers to it is the objective of the advocates of attitude approach who are referred in the first model which has been adopted by Tesco to its consumers (Endacott, 2004). Movement of consumers in a upward direction by Tesco on the basis of an image based or persuasive advertising and personal service

programs are made by it on a frequent level and these are the frequent tactics used by it with its consumers. Maintaining their portion of the category sales matching the initiatives which are followed by the competitor and averting shortages in the supply and attaining development by enhanced market penetration is attempted by managers adopting the model. The launch of a loyalty program mainly for defensive purposes for matching the competitors without anticipating dramatic changes in the attitudes and behavior of the consumer could be made in such a scenario (Nicholls, 2002). Averting stock outs, extending opening hours, providing suitable assortment mix are some of the prosaic factors. As per the review of Lambert (2009), emphasizing these prosaic factors is made by the advocates of the contingency approach in a company. Price promotions and deals and special offers for attracting competitor brand consumers are also frequently announced by people who employ contingency approach in their companies. The possibility of loyalty programs and their impacts on the demand factor is not much and is generally very limited which is the scenario witnessed in the case of contingency approach followed in a company. 2.5 RHETORIC VS. REALITY The concept of trading consumer relationships and the aim, responsibility and impacts in doing it possess uncertainties in it. A number of mechanistic or strategic steps like loyalty cards or points plans are provided to the consumers which could be the means of achieving consumer loyalty from the consumers by a company. Tesco also attempts to trade the consumer relations and attempts to increase the profit attained by it on a regular basis (Tesco, 2009). The arrival of many consumers would also assist it in possessing an enhanced amount of reputation which would add to the reputation which is already possessed by it. Tesco also attempts to perform the trade of consumer relationship for the prolonged success of it by offering the Clubcard scheme to its loyal consumers. Offering bonuses and prizes are a

sufficient means of constructing loyalty, producing information and modifying the behaviour of the consumers in a desirable manner of the consumers by the companies (Bowen and Chen, 2001). The clubcard scheme of Tesco assists it in determining its loyal consumers and also assists it in making them feel more valuable by offering bonuses and prizes for its loyal consumers. Relationship marketing is the means by which the total company and its customer servicing activities are directed which attempts to incorporate and adjust many resources, procedures and offers senior customer value to them which is an institutional perspective of performing relationship marketing in a company. An amazingly inefficient availability in conducting CLP programs is witnessed and the recommendations state fifty percent of the people in overlooking the clientele goals in a complete manner if not in a partial manner in spite of promotional writing suggesting the need of a lot of CLPs in the industry. One fact which is the truth is the presence of numerous CLPs in recent times. The creation of numerous CLP programs are witnessed and when the spirited people battle an opposing program, it usually results in sacrificing excellence or the quality in the program for the cause of achieving faster results in the program (Butscher, 2001). Tesco also conducts a loyalty program assists them by determining their loyal consumer which enables it to take effective steps in making its services more effective that would be desired by the other consumers and make them loyal to it (Tesco, 2010). The smaller groups are finding it difficult to compete in an effective manner due to the maturity in the markets resulting in the increase in saturation and the cannibalization of the loyalty effects by the retailers. Underestimation of setting up and maintaining CLPs which increase sales also possess the possibility of resulting in draining the money of the retailers which could be due to various reasons. Underestimating the CLP set up and its maintenance costs could be few reasons which could have led to the downfall or the reduction in setting up CLP programs by the companies. Due to the heavy financial incentives which have

to be offered to the consumers, price wars with the competitive retailers will have to be faced on occasions as well (Cater and Cater, 2009). Making investments on wrong consumers mean that the demand of few consumers is really small that the expenses and effort made to change them as loyal consumers does not match the revenue provided by these consumers to the retailers. Collecting details are suggested on a major scale in too many loyalty

programs which do not concentrate much on designing the relationship between the retailer and the consumer. This has resulted in neglecting the need of deliberate involvement of the consumers in the Tescos consumer loyalty programs which is stated as an incorrect approach by several promoters of consumer loyalty programs who feel that it is not the right way of conducting consumer programs by the Tesco (Tesco, 2010). Tesco and its promoters make attempts to build relationships with the consumers on a frequent basis and damage to these associations among the consumers and retailers is caused since the retailers view these associations as a means to develop closeness with the consumers and the consumers view these associations as interference made by the retailers with them (Davis, 2005). The consumers could face problems in connecting with retailers which are a possibility if they do not consider the relationship formation of the retailers and avoid it which would be affecting the consumers as well. 2.6 SUMMARY This chapter discusses about the related loyalty frameworks and techniques and their relation to the loyalty procedures that are followed in Tesco. Displaying the outlook of constructing a loyalty programme and arranging Tescos club card program as a loyalty programme of it in Tesco is made in this chapter. The review presently goes into a suitable method for identifying the loyalty method which is adopted in the company and the means of

aligning the strategy with the dependability standards and total clientele objectives of the Tesco consumers is presented in this research section. The next chapter is the research methodology chapter and this chapter discusses the data collection methods which were useful in collecting the data for this research work. The convincing nature and the consistency of the data which is obtained in this research are analyzed in this research chapter as well. The Satmetrix loyalty index is employed as the tool in calculating the loyalty index of end users in Tesco which would identify the effects of Tesco reward scheme on the Tesco consumers.

CHAPTER 3
3. RESEARCH METHODOLOGY 3.1 INTRODUCTION A process followed by an individual for responding the queries of himself or some other individuals queries in regards to a certain object, individual or a

subject is termed as a research. The research methodology chapter deals with the research philosophies and their causes for its utilization in the research. The research methods and the research approaches that have been used in the research methodology and the causes for using them in the research are also discussed in this chapter of the research. The methods of data collection and the sampling techniques that will be useful in performing the research and in collecting the information from the respondents are also analyzed in this section of the research. The reliability and the validity measures that have been involved in the research are discussed in this chapter. 3.2 RESEARCH PHILOSOPHY The research philosophy section of the research methodology chapter deals with the particular research views of several authors that are made in a research. The two classifications of research philosophy which are usually employed in a research are the positivist and the interpretivist research philosophy (Ketchen and Bergh, 2007). 3.2.1 RESEARCH PHILOSOPHY USED Examining the presence of the loyalty factor with the Tesco consumers who come to shop in Tesco has to be made to know the overall loyalty of Tesco consumers and the causes for their possession of loyalty towards it. This can be made by analyzing the loyalty factor of the Tesco consumers. The thoughts of each and every individual consumer of Tesco have to be made for this analysis. The positivist approach is suitable for this research. The positivist approach observes various thoughts on the research and provides the conclusion based on the analysis. Thoughts of each and every individual are not similar on most circumstances in regards to the loyalty and the causes for their possession of their loyalty to Tesco could vary. The analysis of these thoughts can be made by the positivist philosophy. The information on Tescos customer loyalty can be identified from

various resources. Based on analysis the conclusion on customer loyalty on Tesco can be identified. Since all these features and their presence could be tested by using a positivist research philosophy, the positivist research philosophy is being employed in this research. 3.3 RESEARCH METHODS Collecting the data in regards to the subject of research is a primary requirement in performing a research. The process of gathering the information can be done by the quantitative or the qualitative methods in a research (Gunter et al, 2002). 3.3.1 RESEARCH METHOD USED Examining about the loyalty concept and the consumer satisfaction which would enhance the profit of the company can be learnt only by knowing what the causes could be in making the consumers to be loyal to Tesco. The satisfied consumers are the consumers who remain loyal to any company and this would apply to Tesco also. Thus the profit of the company could be enhanced if it possesses loyal consumers to it which could be attained only by satisfying the consumer. The qualitative research method is used for the deep understanding of the human behaviour and the causes. Customer loyalty on Tesco can be identified based on the clear understanding of the customers thoughts. For the above reason qualitative approach is used in this research. The profits of the company due to the satisfaction and the loyalty of the consumers are to be analyzed in the research with a view to determine effective business strategies that have been dealt by Tesco. The customer loyalty of Tesco is identified by the qualitative approach. In this research the quantitative method is used to present the result in the graphical format using charts. According to Hanson and Barbara, (2008), the quantitative research method deals with the statistics, data, the numerical

factors and any measurable data in a research. The numerical data like responders percentage and percentage of customers using Tescos Clubcard are presented using charts. For these reasons the quantitative approach is used in this research. 3.4 RESEARCH APPROACH The research approach determines the methodology or the approach which enables the researcher in performing a research. The two research approaches are the inductive and the deductive research approaches which can be generally utilized in a research (Keuzenkamp, 2000). 3.4.1 RESEARCH APPROACH USED Deductive approach is used in this research work to analyze the Tescos customer loyalty. According to Cohen et al (2007), the deductive research approach is commenced by a common idea in a research. The deductive approach provides the specific conclusion or specific result to the research which is beginning from the general theory with the observations made in the research. The aim of this research is to identify the customer loyalty on Tesco and this approach is starts from the general theory on customer loyalty. Based on the observations collected from the customers of Tesco using survey method, the research gives Tescos customer loyalty as a specific result. Since the deductive approach is stars from broad theory and ends with the specific conclusion, this deductive approach is perfectly matched with the research work. The concepts in regards to the reasons which satisfy the Tesco consumers and make them loyal to it and assist it in achieving higher profits are identified using this research. 3.5 DATA COLLECTION METHODS The most crucial activity that is performed in a research is the process of colleting the data for the research. The primary and the secondary data

collection methods are the two measures by which the data could be collected for performing a research (Noor, 2008). 3.5.1 DATA COLLECTION METHOD USED The information in regards to the satisfaction and the loyalty of the consumers which have been instrumental in Tescos success and the obtained information that will enable Tesco to plan the business strategies on a long term basis to continue its success assume significant importance in this research. This information could be obtained by meeting the consumers and getting their thoughts about Tesco and its service. This can be made by meeting the Tesco consumers in the Tesco superstore who come there to make their purchases. Thus the primary method of data collection which involves the researcher to perform the research in a direct manner or perform the research in a field work format is employed in this research for collecting the data in regards to the satisfaction and the loyalty of the Tesco consumers. The secondary method of data collection is also used in the research when the analysis of the Tesco literature review is made in this research. The information on overview of Tesco and customer loyalty of Tesco are discussed and analyzed in the literature review. This information is collected as a secondary data from various internet resources and books. 3.6 DATA COLLECTION INSTRUMENTS Survey and questionnaire are the data collection instruments which is used for collecting the data in this research. The Tesco consumers who were making their purchases in the Tesco superstores were surveyed for collecting the data in regards to the research. A set of pre defined questionnaires in regards to the satisfaction and the loyalty of the Tesco consumers and the reasons are prepared and are provided to the Tesco consumers. The information regarding Tescos customer loyalty, Customer retention and their reasons are clearly identified by this primary data collection method with the help of this questionnaire.

3.7 SAMPLING TECHNIQUES The process of choosing the participants of the research from among a group of population is termed as the sampling process in a research. The suitable sampling technique and the sample size utilized for the research is chosen by the researcher in this research. Analyzing the satisfaction of the consumers and the loyalty of them to Tesco could be made is the principal objective of this research. The sample which is utilized in this research is the Tesco consumers itself. Sample size of 100 customers is selected for this research. 3.7.1 SAMPLING TECHNIQUE USED One among the classifications of the probability sampling techniques which is utilized in obtaining the required information in regards to the research is the random sampling method. This is used in getting the data for this research from the customers of Tesco. The satisfaction of the consumers and the loyalty of them and the impacts of the same on the profits of Tesco and the business strategies that could be formed by Tesco to overcome them are the main intention of performing this research. To perform such a research, the views of the consumers in regards to the satisfaction and the loyalty of the Tesco consumers have to be analyzed and the analysis about them are made by surveying the Tesco consumers in the malls and this is the purpose of the research. Finding the Clubcard members of Tesco is very difficult and it will take more time to identify. Because of this reason random sampling technique is used in this research. The samples are selected randomly in Tesco based on the convenience. 3.8 RELIABILITY AND VALIDITY According to Healy and Perry (2000), Reliability is termed as the consistency of a measure in a research. The possession of reliability in a research could be said when the researcher obtains the same results on a frequent level in it. Analyzing the different descriptions that are provided by various authors in a

research is the means by which the conclusion in regards to the reliability of a measure is made in the research. Collecting the data is made by the use of the qualitative research method in this research. Proper analysis of the questionnaires that are utilized in this research to collect the data from the consumers is made to achieve the reliability in this research. Examining numerous descriptions is the means by which the validity is offered to the conclusion and this is termed as the validity in a research (Healy and Perry, 2000). The primary data collection and qualitative approaches are enhances the validity of a research. Analyzing the questionnaires which are provided in the pilot study to the consumers enables the researcher to identify the thoughts of the researcher in regards to the satisfaction and the loyalty of the Tesco consumers towards it. The diverse opinions and the diverse views of the people in regards to the research could be identified by these questionnaires and the outcome of it in Tesco by the researcher. As this information is collected from the Tesco consumers itself, the data that is obtained is therefore identified as valid by the researcher. 3.9 PILOT STUDY The verification of the proposed methods and the procedures and their working in a proper manner in regards to their applications in a big and expensive investigation is the main intention of performing the pilot study in a research. Prior to the making of the investments and the heavy expenses which are usually observed in a massive research, adjustments and the revisions could be performed if a pilot study is utilized by the researcher in a research. Numerous pilot studies have been made in this research. The interviewing of the Tesco consumers was made by preparing a sample questionnaire in regards to the same by the researcher. 3.10 GENERALIZABILITY

Anticipating the continuation of a frequent occurrence in the future in case an occurrence happens repetitively is made by the researcher in a research. The quality of the research is associated by the generalizability of the research. Increasing the sample size is the means by which the generalizability is enhanced in this research. The actual result for customer loyalty on Tesco can be identified using the large sample size. The sample size of 100 customers is this research. This improves the generalizability of the research work. 3.11 ETHICAL ISSUES Certain ethical principles and standards are followed in this research. Any research conflicts in regards to the performed research are not possessed in this research paper. The research is not copied from any previous researches which have already been made in regards to the subject of the research. Any individual or the entity who is involved in this research is not impacted by this research as it is made only for serving the education purposes. Any political issues will not be posed by this research. The results of the research will be maintained in a confidential manner and all the ethical issues will be strictly followed in this research by the researcher. 3.12 STRENGTHS OF THE RESEARCH Analysis of different thoughts of different people has to be made which is made by the positivist research philosophy in this research. The behaviour of the humans in regards to the satisfaction and the loyalty of the consumers and the reasons which administer such human behaviour among them which enhance the profit of a company could be made by utilizing the qualitative research method. The past, current and the future growth of the company could be analyzed by the quantitative research method. This method assists the researcher in analyzing and presenting the customer loyalty in a graphical manner. The current state of Tesco on the basis of the satisfaction and the loyalty possessed by the Tesco consumers is analyzed by the deductive approach in this research. The primary data collection method is made by

interviewing the consumers in the malls which enhances the validity of this research. The questionnaires are offered to the Tesco consumers by which the data is obtained from the consumers and this enables the achievement of the reliability in the research. The ethical issues are strictly followed in this research and the pilot studies are also performed in this research as well. 3.13 LIMITATIONS OF THE RESEARCH The sample size in which 100 consumers are surveyed to find out the loyalty concept and the relation of it on the satisfaction of the consumer and their loyalty is the only limitation which is observed in this research. A few more people or a larger sample size could be utilized in getting the details about the research or in attaining additional knowledge about the research. Each and every customer is having their own thoughts on Tescos loyalty scheme. Some of the selected sample may not use the Tescos Clubcard. 3.14 SUMMARY This chapter has made discussions on the research philosophy and which research philosophy has been used in this research. The research method and the research approach that have been utilized and the reasons to use them in this research are also analyzed in this chapter. Discussions are also made on the methods in collecting the data and the data collection instruments that are utilized in collecting the data for this research as well. The sampling techniques and the reliability and the validity of the research and how they are applied in this research have been examined in the research methodology chapter. The generalizability, the ethical issues that have been followed in this research, the use of the pilot studies have been discussed in this portion of the research. The following chapter which is the fourth chapter of the research is the data analysis chapter and it makes a detailed analysis about the satisfaction and the loyalty concept of the Tesco consumers. CHAPTER 4

DATA ANALYSIS INTRODUCTION The research methodology chapter discussed about the research techniques, data collection methods and research approach used for the research. The gathered data regarding the customer satisfaction and customer loyalty are discussed in this chapter. This research mainly concentrates on analyzing the customer satisfaction and customer loyalty in Tesco. A sample size of 100 is taken to collect the primary data. The primary data is collected by using the set of pre defined questionnaires. 1. CLUB CARD HOLDERS Clubcard provides many advantages to the customers and it is an interesting scheme. In the year 1993 Tesco introduced clubcard scheme to the customers. A query regarding the usage of clubcard has been asked to the customer of the Tesco. One of the customers answered as follows, I have been purchasing in Tesco for several years. While purchasing in Tesco I am using this clubcard because it offers more benefits tome . For this question about 80% of the customers said that they are having the club card and the remaining 20% of the customers said they are not having the club card. This analysis implies that most of the customers are having club card.

CLUBCARD HOLDERS
80%

20%

Ye s No

2. SHOPPING USING CLUB CARD A question has been asked to the customer to know whether they are using the clubcard while shopping at Tesco. For this query one of the respondent replied as follows, I do shop frequently in Tesco. I use club card while purchasing. It offers the benefits like discounts, gift vouchers. According to Bowen and Chen (2001), the company can obtain the loyal customers by providing more offers to them. The purchasing attitude and behavior of the customers should be noted by the company. This will help them to retain more customers. While asking this question to the customers of Tesco, about 55% of the customers said they are always using the clubcard while purchasing and 25% of the customers said they are using the club card sometimes. The remaining 20% of the customers said they do not use the club card while purchasing in Tesco.

SHOPPING US ING CLUBCARD

55 25 20 Alw ys a Som time e No, I w on't

3. TESCO CLUBCARD BENEFITS Tesco offers more benefits to the customers through the loyalty program. The customers of Tesco were asked a question regarding the benefits of Tesco clubcard. The respondent replied as follows, Yes, last month I received 10 gift vouchers for my shopping. Tesco provides a gift voucher worth 20 for every month to the customers who made purchase using the club card scheme. As per the statement of Capizzi and Ferguson (2005), the customers can continuously buy the same product if they satisfied by that product or they receive any benefit from the shop. Certain customers shop regularly for the benefits offered by the store. While asking this question to the customers 50% of them said the club card scheme is benefit to them. They are receiving gifts and discounts for the purchase they made and 20% of them said club card scheme of Tesco is not benefit to them. The customers of about 30% said that they are receiving benefits but if it is enhanced it will more benefit to them. The analysis shows that most of the customers are benefitted by the Tesco club card system.

TESCO CLUBCARD BENEFITS

20% 30% 50% Yes No Should im prove m ore

4. TESCO CUSTOMER SERVICE The companies are maintaining the relationship between the customers by providing service to them. The customers of Tesco were asked a question regarding the customer service at Tesco. A customer replied as follows, Yes, Tesco provides good service to the customers. They are responding very quickly when ordering some products to deliver at home. OMalley and Tynan (2000) mentioned that, it is necessary for the company to identify the needs of the customers. Serving the customer is important for any company and this helps the company to maintain the relationship between the customers and management. The company has to solve the problems faced by the customers. When asking this query to the customers, they said the customer service at Tesco is good. They are responding in a very quick manner to our queries.

5. CUSTOMERS SHOPPING EXPERIENCE IN TESCO The customers of Tesco were asked a question regarding their shopping experience in Tesco. One among the respondent replied as follows,

According to me the condition and design of the Tesco is convenient to shop. The branded products are available here. We do not want to search the products and it saves our time too. As per the statement of Reichheld et al (2000), the management should make the shopping experience of the customer positive one. The company must understand the needs of the customers to make the shopping more convenient to them. For this question, about 65% of the customers said that they are comfortable and happy while shopping in Tesco. The customers of about 35% feels that it would be better for them if some changes made in the shopping environment.

S HOPPING EXPERIENCE WITH TESCO

35% ha ppy 65% re quires e modifica om tion

6. TESCO CLUBCARD SATISFACTION When the customers of Tesco are asked a question regarding the satisfaction of Tesco club card benefits one of the customers replied as follows, I have been using this club card for the past three years. Many schemes are offered by Tesco for the club card members. Tesco offers discounts for the products in the beginning of every month.

Turner and Wilson (2006) mentioned that, Club card is one of the loyalty programs and it offers many complementary services to the customers. The company uses this program to satisfy and retain the customers. If the customer gets satisfied by the service or product provided by the company they will purchase repeatedly in that shop or company. As per this question the customers of about 60% said they are benefitted by the club card system of Tesco and about 25% of the customers said they are not benefitted by the club card system. The remaining 15% of the customers said they are benefitted by the club card system but the customer need that benefits more often.

S ATIS FACTION OF CLUB CARD BENEFITS

60

25 15

ye s ofte n no

7. CHOICE OF SHOPPING IN TESCO Tesco offers several membership program and schemes to retain and satisfy the customers. A question has been asked to the customers to know why they are shopping in Tesco. Among the 100 customers, one of the customers said as follows

The club card system of Tesco really helpful for me. The discounts and offers provided by Tesco makes me to shop at Tesco and I am very much impressed to shop at Tesco because of availability of products. According to Lacey and Sneath (2006), the companies are providing offers and loyalty schemes to retain and satisfy the customers. They are attracting the customers by providing discounts and more offers in order to sustain in the competitive market environment. When asking this question to the customers, about 45% of them said they are shopping in Tesco for the club card scheme and 20% of the customers said they are shopping there for service. 15 % of the customers shop at Tesco for products and the remaining 20% of the customers shop at Tesco for discounts. This analysis shows that most of the customers are shop at Tesco for the club card scheme.

CHOICE OF S HOPPING AT TESCO

45

20

15 20

clubca rd

se rvice

products

discounts

8. USAGE OF TESCO CLUBCARD

A query was asked regarding the usage of Tesco club card to the customers and one of the customers replied as follows, I am using Tesco club card alone to purchase. This is enough for me to purchase the products. Moreover Tesco club card offers discounts to the products and I am satisfied with the Tesco Club card. Rowley (2005) stated that, the companies are introducing this loyalty program to retain the customers. The loyalty program makes the customers to shop regularly. This loyalty scheme changed the attitudes and behaviours of the customer towards purchasing. For this question the customers of about 60% said that they are using the club card alone to purchase and remaining 40% of the customers said they are using other store club card to purchase. This analysis shows that most of the customers are using Tesco club card to purchase.

US AGE OF CLUB CARD

60 40

us only Te co's club ca e s rd

us othe s rma ts offe a o e r upe rke rs ls

9. SATISFACTION OF LOYALTY SCHEME

Loyalty programs are very common among the retail shops. A question was inquired to the customers of Tesco about the satisfaction of loyalty scheme. While this question one of the respondents replied that, I am happy with the loyalty program offered by Tesco. It is benefit to me and it offers discounts, gift vouchers. Last month I got a gift voucher and I am very happy about that. Byrom (2001) mentioned that, loyalty program like club card is very helpful to begin the deep relationship between the customers and management. The company can understand the needs and desires of the customers through this. While asking this question to the customers, about 65% of them said they are happy with the loyalty program of the Tesco and remaining 45% customer said they need some modification in the current loyalty program of Tesco.

S ATIS FACTION OF LOYALTY SCHEME

35 65

ha ppy ne d s e ome m odifica tions

10.

SUGGESTION OF TESCO CLUB CARD TO OTHER CUSTOMERS

The Tesco customers are inquired regarding whether they are suggested Tesco club card to any other relatives, friends. For this query the customer replied as follows, I suggested Tesco club card to my friends and relatives. I got gift vouchers many times through the Tesco clubcard scheme and it offers benefits to me. Therefore I suggested the clubcard scheme to my friends and relatives. When asking this question, about 70% of them said yes and they are suggested Tesco club card to their friends and relatives and 30% of people said they have not suggested this club card system to any one. 4.2 FINDINGS The customer loyalty and customer satisfaction of Tesco was analyzed by using the primary data which is collected from the customer of Tesco. The analysis implies that about 80% of the customers are club card holders. According to Bowen and Chen (2001), the company should note the purchasing attitude and behavior of the customers and this will helps the company to identify the changing needs of the company. From the analysis it is identified that over 65% of the customers are using the clubcard while purchasing in Tesco. Capizzi and Ferguson (2005) mentioned that, some of the customers shop regular to the particular store for the benefits offered by them only. The analysis implies that most of the customers are benefitted through the club card system which is offered by Tesco. As per the statement of Turner and Wilson (2006), the company uses the loyalty program to retain and satisfy the customers. Clubcard offers many complementary services to the customers. It has been determined from the analysis that most of the customers are satisfied by the Tesco club card benefits. Reichheld et al (2000) stated that, the needs and desires of the customers should be identified by the company to make the shopping of the customers more convenient. The

operating process, design and condition should be comfortable for the customers. From the analysis it has been determined that the customer feels the shopping environment of Tesco is convenient to them. They are happy to shop at Tesco because of its branded and availability of products. According to Lacey and Sneath (2006), the companies are attracting the customers by providing offers, services and loyalty programs. By introducing new offers the company can retain the existing and attract the new customers. This analysis shows that most of the customers are shop at Tesco for its club card and some of the customers are shop in Tesco for the service and products. OMalley and Tynan (2000) mentioned that, customer service is necessary for any company to maintain and retain the customers. It helps to identify the needs of the customers. The analysis shows that most of the customers are satisfied with the service provided by Tesco help desk officers. Byrom (2001) mentioned that loyalty program is helpful to begin the deep relationship between the customers and management. When the customers are asked regarding the satisfaction of loyalty scheme, moat of the customers said that they are satisfied with the loyalty scheme of Tesco. Rowley (2005) stated that loyalty program makes the customer to shop regularly. From this analysis it has been identified that about 60% of the customers are using the Tesco club card alone to purchase. About 70% of the customers are suggested this Tesco club card to relatives and friends. 4.3 SUMMARY The data analysis chapter discussed the customer satisfaction and customer loyalty of Tesco on the basis of collected data. The customers views regarding the clubcard, loyalty program and offers provided by Tesco were well analyzed and findings were produced. From the analysis it is identified that most of the customers are satisfied with the clubcard and offers provided by Tesco. The following chapter is conclusion. Based on this analysis conclusion and recommendations are presented for this research topic.

CHAPTER 5 5.1 CONCLUSION Data collected in regards to the satisfaction of the customers and customer loyalty and the analysis and findings for the same were presented in the previous chapter of this research. The conclusion for the research is provided on the basis of the analysis and the findings that were presented in the earlier chapter of this research. In 1993, Tesco had launched its loyalty card - the Club card to its customers. Tesco customers making their purchases in Tesco could utilize this card since this card fulfills such a purpose in Tesco. Getting new customers, satisfying them and retaining them are the causes of launching the Club card by Tesco (Tesco, 2005). Encouraging repeated purchases and acquiring more customers and retaining them and maintaining their loyalty with Tesco can be made by it by providing special offers by Tesco to its customers. Performing purchasing activity in Tesco is the main utility of the Club card by customers possessing such a card with them. The Club card offers benefits to most of the customers possessing and using them in Tesco. Discounts for the products purchased by the customers and rewards and gift vouchers for the products purchased by them will be provided by Tesco for such purchases made by its customers. The provision of numerous benefits and satisfying them by such provisions is the main intention of Tesco. Since satisfaction of the customers to acquire new customers and maintain them and retaining its older customers are intended by it numerous complimentary services are offered by Tesco to the Tesco Club card holders. Following this practice in Tesco has enabled in making repeated purchases by its customers in Tesco. Customers have to obtain a positive shopping experience when purchases are made by customers in the shopping stores. Identifying the customers and their requirements for making their shopping environment more comfortable and enjoyable have to be made by the shopping stores (Chakraborty et al, 2007). This will assist in providing a positive shopping experience to the shoppers

which is very much essential for the growth of the company and similar experience is sought by the customers as well. Tesco by its loyalty cards and by its benefits and reward schemes to the purchases made by the customers in Tesco offers such an experience to its customers. Purchasing products in Tesco is a comfortable task due to the design and the good purchasing atmosphere created by it to its customers. The availability of the products and services offered by Tesco are the other causes which have been significant in making repeated purchases by its customers in Tesco. A deeper relationship could be framed by Tesco with its customers since loyalty programs the Club cards are offered by it to its customers. Identifying the essential requirements of the customer is the assistance achieved on performing such a measure by Tesco. These conclusions make it clear that Tesco offers a lot of value to its customers as well. Customers have also stated that supervisors and front desk officers of Tesco are kind and offer quick assistance in solving issues in Tesco proving the provision of value to the customers in Tesco. The provision of numerous advantageous offers like gift vouchers, good shopping environment and discounts are given to satisfy its customers. This is the conclusion attained by this research. Repeated purchases by the customers are witnessed in Tesco due to a lot of benefits offered by it to its customers which is clearly indicated by this research. Although most customers are satisfied with the benefits provided by Tesco to its customers, few customers also possess the requirement of certain changes in the Club card which would prove beneficial to them as well. 5.2 RECOMMENDATIONS 5.2.1 CUSTOMER SATISFACTION Satisfying the customers is the means of obtaining loyal customers by any company. This principle applies to Tesco as well. Conducting a survey and offering a consideration to the feedback attained from the survey could assist in identifying the need of the customer. Maintaining close relationship with the customers by each and every company would assist them in identifying the

needs and the wants of the customers. Proper observation of the purchasing attitude and behavior of Tescos customers should be made by it. Improving the customer service offered by it to its customers could be made by this observation in Tesco. An enhanced amount of customers will join the Club card system if the essential modifications are made by Tesco. 5.2.2 CUSTOMER RETENTION The business are started to attain high profitability by the company. Retaining the customer is a significant means of attaining high profitability in a retail business. Maximum priority to the needs and wishes of the customers should be provided by Tesco. Making the shopping environment more comfortable is required by Tesco. Offering free home delivery service for retaining loyal customers could also be made by it as well. 5.3 FUTURE RESEARCH In spite of the best efforts taken to perform this research, few issues have been identified in performing this research. Collection of data by the primary method is utilized in obtaining the data for this research. Tesco customers were surveyed to obtain the data for this research. Hundred customers were used as the sample size for this research. A large sample size could have been surveyed which could have enhanced the accuracy of this research and this was not possible due to a smaller time frame involved in performing the research.

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APPENDIX QUESTIONNAIRE DISCLAIMER Dear sir/madam I am a student doing post graduation in the above mentioned department and University. I am carrying a research on the topic of Customer loyalty and customer satisfaction A case study of Tesco for completing the Master of Business Administration course. I need information to perform this research work and I am privileged to receive the actual responses from the customers who participate in the research. The data collected will be maintained confidential. Thank you.

QUESTIONNAIRES 1. Do you possess Clubcard? A) Yes B) No 2. Do you use club card while regularly shop in Tesco?
A) all the time when am going to the store

B) occasionally C) No I dont need it 3. Are you receive any benefits from club cards like bonus points free gift vouchers? A) Yes B) No C) need to be enhanced

4. Are you satisfied from club card benefits? A) Yes B) Should be more often C) No 5. How do you feel when shopping in Tesco? Yes, Im happy b) No, some modification should be done 6. Why you are shopping at Tesco? A) Club card B) service C) products D) discounts

7. Do you think that the help desk and customer supervisors in Tesco are solving your problem properly? 8. What do you feel about the loyalty scheme of Tesco or do you think it requires any modifications? a) Yes, Im happy b) No, some modification should be done

9. Are you using Tesco club card alone for purchasing or you are using any other club card for purchasing? a) I am using Tesco clubcard alone to make purchase b) I am using other supermarket loyalty cards to make purchase

10. Do you suggest Tesco club card to any of your relatives, colleagues and friends? a) Yes b) No