Analysing the loyalty card as promotion tool; can it improve satisfaction and loyalty between the supermarkets and customers such as Tesco plc case study. Name
* Dissertation main aim
Analysing the loyalty card as promotion tool; can it improve satisfaction and loyalty between the supermarkets and customers such as Tesco plc case study. Chapter 2 Literature Review
* Customer Loyalty
It is more than 20 years since questions revolving the definition of loyalty have been addressed (Grisaffe 2001). Despite this, further readings have shown that a lot more is still attached to the idea and as a result considered to be a complicated phenomenon (Parker and Worthington 2000). One of the outstanding insights into loyalty is said to be the link between behaviour and attitude. Crucial to shading more light towards getting a clear understanding to this is the relationship between behaviour and attitude. It is however worth noting that this is not significantly enough since the perception provides room for behaviour and attitude change in future. Humby and Hunt (2004) are of the opinion that loyalty is more of an emotional concept thus resisting the definition in terms of behaviour. This therefore champions that loyalty is an emotional concept resulting from trust. Others also define loyalty as emotional concept built on empathy (East 1997). Building on the idea and recognition that opinions and feelings are active, variables that include but not restricted to social, physical environments as well as individual abilities have been known to pre-empt action. On the contrary this view can be seen as being loyal functionally in that customer tends to be loyal to a company only because of convenience (Barnes 2002). According to (Grisaffe 2001), loyalty does not rotate around behaviour, for instance, other are buyer whom have developed cognitive rule in that they only buy low priced products, because of this such customers will look loyal to that brand over a period of time. This will only be interrupted by the entrance of another brand which is priced lower than the previous. The customer will again change to become loyal to the new product in the market. From this, it is evident that customers are more loyal to their decision rules as opposed to the brands and thereby a proof that loyalty is more than behaviour.
Of several definitions, the characterisation seemed most suitable when discussing the Tesco Clubcard. Suggestions that daily life of loyalty entails “emotional commitment” and “monogamy” where one choice overrides the rest has been brought forward (Humby and Hunt 2004, pg 9). To bring out comparison, retail loyalty concentrates on achieving a bit of goodwill, a slight margin of liking, a rise in the shift in terms of buying tendency.
Customer satisfaction can be described in simple terms as the measure of a customer’s expectation being met in totality or not. It forms to a greater extent the most important element when it comes to retaining, making customers remain loyal and make purchases. For this reason it lies squarely on the fact that for customers to feel satisfied, business owners focus turn to creating and reinforcing pleasant experiences. This goes a long way in retaining existing customers and adding new ones altogether. In order to achieve all these, the steps employed towards attaining customer satisfaction remains a top priority.
Lots of research has been undertaken in relation to the importance of customer satisfaction. Satisfaction can be defined as one feel of pleasure or disappointment which come as a result of comparing the apparent performance in relation to one’s expectations (Reichheld 1996). According to Newell (2000, pg 30), customer satisfaction is of great importance when it comes to securing customer loyalty. It should be keenly noted that customers today demand more than just satisfaction in order...