Impact of Pricing Strategy on the Customer Loyalty in the Retail Industry: a Case Study of Tesco

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Table of Contents

1- Introduction1
1.1 Topic1
1.2 Background and Context of Study1
1.3 Rationale of Study2
1.4 Research Question2
1.5 Research Objectives2
1.6 Hypothesis3

2 - Literature Review3
2.1 Retail Industry (Retailing)3
2.2 Definition of Strategy4
2.3 Pricing Strategy5
2.4 Types of Pricing Strategies5
2.4.1 Penetration pricing5
2.4.2 Skimming pricing6
2.4.3 Competition pricing6
2.4.4 Product Line Pricing6
2.4.5 Bundle Pricing6
2.4.6 Psychological pricing6
2.5 Customer behaviour6
2.6 Customer Loyalty7
2.7 Pricing strategy and customer loyalty8

3 - Research Design and Methodology8
3.1 Research Strategy8
3.2 Research Methods9
3.2.1 Qualitative Method9
3.2.2 Quantitative Methods10
3.3 Type of Data11
3.3.1 Primary Data11 Questionnaire11
* Telephonic Interviews11
3.3.2 Secondary Data 12
3.4 Sampling12
3.4.1 Quantitative Sampling12
3.4.2 Qualitative Sampling12
3.5 Data Validity12
3.6 Data Reliability13
3.7 Ethics 13
* Gant Chart14

1- Introduction

1.1 Topic
Impact of pricing strategy on the customer loyalty in the retail industry: A case study of Tesco

1.2 Background and Context of Study
Tesco is retail market leader in United Kingdom. The core business of organization is selling grocery but it also sells electronic products, clothes, jewellery and many other products (Pet Insurance, Car 1.4 Research Question

“What is the impact of pricing strategy on customer loyalty in Tesco, Croydon?”

1.5 Research Objectives
* To examine impact of customer buying behaviour on pricing strategy * To determine the importance of customer loyalty on growth of Tesco, Croydon * Find out the suitability of existing pricing strategy of Tesco, Croydon and suggest new pricing strategy if existing pricing strategy is not generating optimal revenue

1.6 Hypothesis
Null Hypothesis (H0): Tesco strategy to make customer loyal is working well Alternative Hypothesis (H1): Tesco strategy to make customer loyal is not working well.

2 - Literature Review

2.1 Retail Industry (Retailing)
According to Jones, et al, (2005) Retailers come on the end of supply chain who directly sells their goods and services to the end users. They buy the goods or services in the bulk and sell these goods and services to end users in lower quantity. The goods or services flow to the retailers through the intermediate party or directly through the suppliers. However, industrial users also can buy the goods from the retailers like uniforms for the schools and stationary for the offices, etc. The places where retailing activities carried on are called the shops or stores.

The retailers play very important role in providing the information about the customers. They directly interact with the customers and gather information through the interaction with the customers. The customer services, customer care and customer relation are different ways which extract and generate information. This information flows back from the retailer to other part of supply chain. On the back end, different parts of supply chain get their required information and design their manufacturing strategy. The goods also include utilities like electricity and gas. These utilities also flow through the chain of organization and they deal with their customers just like the retailers of physical goods (Davidson and Simonetto, 2005).

The shops can be in the streets, in the busy shopping malls, or these can be corner shops. These are types of physical shops. Like all other organizations, the main purpose of each retail store is to earn profit for their owner or shareholders. In the...
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