The concept of loyalty and identifying the relationship between customer satisfaction and customer loyalty (Tesco)

Type :

Theses

Pages :

75 pages

Format :

.doc

Published date :

04/02/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

Introduction
Overview and background of the study
Aims and objectives of the study
Scope of the study
Rationale of the study
Methodology of the study
Categorization of the customer loyalty concept
A frame on loyalty
1. Critical evaluation
2. The characteristics of limited and open customer-loyalty-programs
Customer Loyalty index sorted by female and male Clubcard members
Clubcard and non-Clubcard members on loyalty parameters
Bibliography
Conclusion

Abstract

Traditionally, marketing has focused on market shares and customer acquisition rather than on retaining existing customers and on building long-lasting relationships with them (Kotler, 2003). More recently, however, market share has been gradually losing its revered status as marketing's holy grail and the wisdom of focusing solely on customer acquisition (hoping that this effort will compensate for high levels of defection) is now being seriously questioned and considered as very high risk since ever more players enter an increasingly crowded marketplace (Baker,2000). In response to these changes there has been a new emphasis on defensive marketing, which focuses on holding on to existing customers and getting more custom from them (higher "share of customer"), in contrast to activities which focus on winning new customers. Calls for a paradigm shift to the pursuit of loyalty as a strategic business goal have become increasingly popular over the recent years. Accordingly, in Feb 1995, tesco changed the way it did business so fundamentally that its effect is still seen in every part of the company. The events changed the way tesco makes decisions, develop products, and manages its stores and, most importantly the way it serves its customers. On that day tesco launched 'Clubcard', its customer loyalty program. As a major food retailer, in a competitive market sector, there is always a need for brand loyalty. customer loyalty schemes were not a new idea when tesco launched it but tesco developed a contemporary version of the original concept which went much further in developing an active relationship with customers. Today, tesco Clubcard has established itself as one of the most successful loyalty schemes over the past nine years, and a key driver of this is the scheme integral to tesco's stated core purpose, 'To create value for customers'.