Impact Of Loyalty Programs On Consumer Behavior In English Supermarket Industry, Essay.

You are required to compile a research proposal that will allow you to demonstrate the application of your selected methodological approach to a well structured, coherent, realistic, achievable and well-argued proposal for a programme of professional research and development.

The research proposal should be written in the form of a report and should cover specific areas (see below) that will have been covered during the delivery of the module.  The report should be structured along the following lines that could also be used as the basis for sub-headings:

• Executive summary
• Table of contents
• Title, introduction and rationale for the proposed research
• Research questions/aim/objectives and conceptual framework
• Literature review
• Research approach, design and methodology
• Access issues and ethical considerations
• Timeline/milestones
• Conclusion
• References

Specific submission requirements

• Maximum word count is 5000 words (+/- 10%). Marks maybe deducted for submissions that are excessively long or short. Please indicate the word count on your report.
• Your report should be typed in word format and submitted via turnitinon or before the due date.
• Please use a minimum font size of 12 and line spacing of either 1.5 or 2. Don’t forget to insert page numbers into your document.
• Your report should be submitted no later than the date and time specified, unless an extension has been obtained from the module coordinator in advance of the submission date.Extensions will only be given for reason of illness. In all cases a medical certificate/letter signed by a doctor must be submitted. Marks will be deducted for late submission of work without permission, according to the University regulations.

Supermarket industry has evolved significantly over the past few years in English market. Several retailers have employed some form of frequent reward program in order to retain and attract their customers. General assumption is that rewarded customers will repeat their purchases (Wang et al. 2016). For that reason, many retailers have introduced several new loyalty policies or schemes for providing additional benefits to the regular customers. Although, there is no sufficient information about the ways these different types of rewarding system will influence the behavioural pattern of the customers.

Customers who have received a gift or a discount because of their regular purchase are likely to remain happy and satisfied with the provided service quality. However, different rewarding scheme will have different impact on the psychological pattern of the customers. Studies have highlighted that all individuals like to be valued by the others. It allows them to maintain positive frame of mind towards other individuals or group or an organization. Loyalty programs are directly linked with the psychological perspective of the customers, as it play significant role in determining the overall satisfaction level.

For that reason, management of all the supermarkets will have to be extremely careful at the time of initiating loyalty programs for maximizing the profit level in the market (Tanford 2013). Over the past few decades, liberalization has allowed all the major global companies to expand their reach in different areas of the global market. As a result, customers interact with multiple products or services in almost every day.

Availability of different alternative options can also affect the taste and preference level of the customers. Therefore, the study would focus on assessing the exact impact of loyalty program on consumer behaviour. In this study, detailed research will be conducted on the initiation of different loyalty schemes. It will develop proper conceptual framework with the development of clear aim and objectives. The study will also focus on selecting best possible research methodology for capturing relevant detailed information about the research topic.      

Rationale for the proposed research: 

With time, terms like customer relationship management (CRM), loyalty and customer satisfaction have gained significance importance in the corporate structure. Modern day organizations look to implement different strategies and procedures for keeping customers associated with the organizations for longer timeframe. Presently, English supermarket organizations are facing massive competition among each other. Expansion of top players and introduction of new small size organization have created entire process extremely complex. In addition, English supermarkets are also facing massive challenges with the increasing popularity of the e-commerce platforms (García-Gómez, Gutiérrez-Arranz and Gutiérrez-Cillán 2012). It has provided customers more alternative options at their convenient places, which easily drawn many people to purchase products from e-commerce platforms.

The increasing popularity of e-commerce has reduced the sales volume of the traditional supermarkets by 13% in past few years (Brashear-Alejandro, Kang and Groza 2016). For that reason, significance of loyalty programs has increased in a major way. Initiation of loyalty programs has allowed regular customers to access value added services. It has allowed organizations to keep all the customers happy and satisfied with provided quality of services. However, studies have highlighted the fact that initiation of different loyalty programs has created different impact on the behavioural pattern of the customers under different circumstances. For that reason, the study will look to evaluate all possible areas associated with the loyalty programs to identify the exact amount of impact it can have on the behavioural pattern of the customers.      

Research aim

Research aim: 

The study aims to investigate the exact amount of impact loyalty programs can have on the behavioural pattern of the customers within English supermarket industry.

Research objectives: 

For assessing the significance of loyalty programs on consumer behaviour, the study will focus on following objectives:

• To identify different types of loyalty programs initiated within the English supermarket industry
• To investigate the exact impact each initiated loyalty strategies have created on the overall behavioural pattern of the customers
• To highlight the significance of initiating loyalty programs for keeping overall customer behaviour favourable to the business
• To recommend best possible way to utilize loyalty programs within English supermarket industry

In order to evaluate the correlation between loyalty program and customer behaviour, the study will focus on following research questions:

• What are the types of loyalty programs initiated within the English supermarket industry?
• How much impact can each initiated loyalty strategies create on the overall behavioural pattern of the customers?
• What is the significance of initiating loyalty programs for keeping overall customer behaviour favourable to the business?

Significance of customer loyalty program:

As per the article by Kopalle et al. (2012) loyalty programs referred to different reward programs offered by organizations to its consumers who purchase products or service in regular basis. Appropriate initiation of the loyalty program can provide customers advance access to new products, free merchandises and special sales coupons. In the present competitive business environment, keeping all organizations loyal to the organizations is up most important for achieving long-term success in the market. Different organizations have focused on utilizing different strategies to keep the faith and trust level of the consumers. Kang, Alejandro and Groza (2015).

have highlighted the fact that English supermarket have increased significantly over the past few years. It has provided organizations no other options than to look for different effective strategies or procedures in order to keep satisfaction level of the consumers at the desired order. The prime objective of loyalty program is to create long-term profitability so that the business can remain in the market for sustainable timeframe. As highlighted by Melnyk and van Osselaer (2012) loyalty programs are the combination of two key programs including it provides rewards for the loyal customers and it provides detailed information about the consumers to the issuing company.

The effectiveness of the loyalty programs depends on the proper evaluation of the anonymous purchases by the consumers. It allows organizations to identify all the regular customers who avails products or services on regular basis. Proper evaluation of the consumers buying behaviour would also help the organizations to identify the type of products purchased by the group of people (Xie and Chen 2014). Proper identification of the regular customers for the initiation of the loyalty programs will induce them to perceive that they are valuable asset of the company. Thus, it would help to boost their self-esteem in a major way.

There is no specific pattern for the initiation of the loyalty programs. Therefore, different organizations utilize different strategies for keeping their customers happy and satisfied. Now, the most common way to utilize loyalty program is to use simple point system (Kumar and Reinartz 2012). In this system, frequent customers earn points with the purchase of different products that eventually turn into some sort of reward or gift.

This is an extremely clear process where consumers can understand the exact amount of points they will earn after purchase of different products. Tier system is another popular method for the utilization of loyalty programs (Breugelmans et al. 2015). It primarily encourages customers to visit shop on regular basis. There are many other loyalty programs such as VIP benefits of Amazon prime initiated by different companies. However, the prime challenge for majority of the companies is to balance between desirable and attainable rewards for making the eventual outcome of the loyalty programs profitable.     

Research objectives

Importance of implementing customer loyalty program:

As illustrated by Kim et al. (2013) organizations need to understand the significance of utilizing customer loyalty programs for achieving sustainable growth in the market. Proper understanding of the significance will induce businesses to invest more or to take more risks for gaining competitive advantage in the market. Recent survey has highlighted the fact that an increase of 5% in the overall loyalty level of the consumers can actually enhance the sales volume by up to 30% (Wu and Wang 2012). In addition, it also enhances the profit per customer in a significant manner. In addition, organizations will have to understand the fact that loyal customers are much more valuable than first time customers are. For that reason, organizations have to provide more facilities or benefits to the loyal customers in order to overcome the hurdles or benefits.

Customer loyalty programs can actually enhance the overall satisfaction level of the consumers that creates positive impact on loyalty. Recent survey has highlighted the fact that around 69% of the total consumers have expressed that loyalty programs has influenced their choice of retailers in a major way (Bowen and Chen McCain 2015). They have mentioned that proper initiation of the loyalty program has helped them to save money, which definitely influenced them to visit same retail outlets many times. Moreover, they have also mentioned that initiation of the loyalty programs has actually helped them to develop strong relationship with the retail outlets, which will definitely create major impact on the development of positive behavioural pattern.  

However, Gómez, Arranz and Cillán (2012) have mentioned that efficiency of the loyalty programs heavily depends on the relationship of the customers with the brands. For that reason, if retailers can provide added benefits to the customers at the time of purchasing their preferred brands, it will enhance the overall effectiveness of the loyalty program in a major way.  As described by Keropyan and Gil-Lafuente (2012) loyalty programs are not short-term customer retention strategy. In fact, organizations have to spend years to create desired impact on the market. Sustained loyalty programs can actually help businesses to enhance the overall image in the market. Globalization has allowed businesses from all across the globe to enter into the English market.

As a result, businesses are facing massive challenges in order to maintain their goodwill and reputation. Hence, it enhances the significance of loyalty programs even higher, as it will allow organizations to overcome all the hurdles and challenges associated with the market related pressure (Lee et al. 2014). Development of goodwill in the market will eliminate majority of the threats associated with the entry of new business entities. Therefore, it will encourage organizations to take more risks for providing maximum quality o services in order to achieve sustainable growth in the market.

Factors that affects in maintaining consumer loyalty:

As described by the Schumann, Wünderlich and Evanschitzky (2014) it is essential for the businesses to identify all the prime factors that induces to implement different loyalty programs. Now, supermarket industry in English market has growth significantly over the past few years. Development of new small organizations along with expansion of the top players has created extreme level of completion within the market. For that reason, it has provided customers many options at the time of selecting any particular brand or products.

Significance of customer loyalty program

Hence, organizations have no other options than to look for different alternative options for covering all the areas associated with the market challenges (Singh and Khan 2012). Recent market survey has highlighted the fact that different supermarkets have developed and offered different schemes or offers for retaining consumers for longer timeframe. Now, it will increase the pressure among the other businesses to provide some value added services for achieving growth in the market. As per the article Suh and Yi (2012), maintaining strong relationship with the customers is very much essential to deal with different level of challenges in the market. Now, implementation of loyalty programs allows businesses to create strong positive goodwill among the customers. Therefore, it will eventually increase the trust level among the customers in a major way, which is necessary for achieving long-term growth in the market.

Economy is one of the most significant factors due to which the business experts belonging to the English supermarket fails maintain customer loyalty. As stated by Evanschitzky et al. (2012), a business organization of supermarket industry tends to implement customer loyalty programs for enhancing the number of target group. Special monitory benefits for the premium customers, implementation of point system, implementing CSR activities are the most effective ways for drawing the attention of customers.

It is also undeniable that in last five years supermarket industry is facing innumerable challenges in maintaining organizational image and reputation due to the extreme level of threats from the competitors. As a result, the revenue growth of the organization is getting hampered day by day (Steinhoff and Palmatier 2013). In order to implement special monitory benefit program the business experts have to invest large amount of money for the purpose of customer loyalty program.

Therefore, as per the current scenario of supermarket it has been observed that organizations are facing difficulties in maintaining their image and reputation due to the lack of work force strength, managerial skill and competitors’ market threat (Dorotic, Bijmolt and Verhoef 2012). As a result, customers are showing their reluctance in purchasing the products and services from those organizations. Automatically, the entire revenue process is getting hampered day by day. Business experts have to face innumerable difficulties in implementing customer loyalty program due to the lack of economic strength.

Tanford and Baloglu (2013) have highlighted the threat associated with the increasing popularity of the e-commerce businesses across the globe. Organizations like Amazon have achieved immense success over the past few years compared to any supermarket across the globe. The availability of different options along with cheap price has allowed e-commerce sites to emerge as the first options for the customers. It has enhanced the convenience level of the customers in a major way, which directly affected the overall sales volume (Thompson and Chmura 2015).

Many studies have emphasized e-commerce as the future mode of buying for the customers. It indicates that English supermarkets will face more challenges in near future in order to keep the sales volume at the desired level (Gandomi and Zolfaghari 2013). As a result, traditional supermarkets will have to think out of the box for keeping all the customers associated with the organizations for longer period of time. Moreover, management of the supermarkets will have to take additional responsibilities in ensuring all the customers receive quality services at each time.    

Impact of loyalty program on consumer behaviour:

As illustrated by Stourm, Bradlow and Fader (2015) customer loyalty programs can actually create major impact on the long-term business level of the organization. The initiation of appropriate loyalty programs can improve and increase the reputation of the organizations in a major way. In the present time, customers have the power to go online and submit review about the quality or poor experience at the time of purchasing any products from a particular organization. This review will be visible for other potential customers who are looking for available information about the organizations.

Thus, a single negative review can create doubt among many potential customers regarding the quality of services (Ha and Stoel 2014). For that reason, organizations will have to be very careful at the time of treating any customers within the outlet. On the other hand, loyalty programs also help businesses to keep all the potential customers for long period. Now, appropriate retention of the customers increases the sales the volume of the organizations in a major way (Lee et al. 2014). Therefore, it will definitely create positive impact on the overall profit level of the organizations.

Arbore and Estes (2013) mentioned the fact that appropriate utilization of loyalty programs enhances the brand loyalty in a major way. Providing additional benefits or rewards at the time of developing any particular product can actually induce customers to enhance the profit level in a major way. For instance, reward card systems initiated by different supermarkets in English countries have enhanced the overall sales volume in a major way. In fact, recent survey has highlighted that the more rewards provided by the organizations, more people are looking to return to purchase products or services.

It allows developing strong bonding among the people, which eventually help to deal with other prime players available in the market (Shi, Prentice and He 2014). It is expected that the larger retail chains will have more human resource and capital advantage compared to small size organizations. Therefore, it will induce all the small size organizations to take more risks in order to overcome the challenges related with the completion in the market.    

Literature gap:

The above illustration has highlighted the fact that loyalty programs can allow businesses to encourage people to visit stores on regular basis. Moreover, increasing competition in the English market has provided no other options for the businesses than to look for different unique strategies and procedures for retaining all the customers for long period of time. Utilization of different loyalty programs has allowed organizations to retain majority of the customers for longer timeframe.

Still, many areas associated with the loyalty programs are yet to be evaluated in an in-depth manner. Moreover, organizations are looking to initiate different new strategies and procedures for gaining the trust of the customers. For that reason, continues evaluation of the loyalty programs are required for covering all areas associated with the research topic. For that reason, the study will try to include all the initiated loyalty strategies by the English supermarkets for assessing the exact amount of impact it will have on the overall behavioural pattern of the customers.  Research methodology: 

Research methodology illustrates the way research studies focuses on gathering all relevant data about the research topic. Appropriate selection of research methodology is up most important for addressing all critical areas associated with the research topic. For that reason, the study has concentrated on different aspects of the research methodology such as research philosophy, research approach and research design, which are discussed as follows:

Research philosophy:

Research philosophy focuses on covering all areas of the research topic for successful evaluation of all factors. Selection of research philosophy heavily depends on the nature of the research topic. Positivism, interpretivism and realism are the available types of research philosophy that studies use for accomplishing all objectives in an appropriate manner (Saunders, Lewis and Thornhill, 2012). In order to assess the relationship between loyalty programs and consumer behaviour, the study will focus on utilizing positivism research philosophy. The selection of positivism philosophy heavily depends on the different factors.

For instance, it will help the study to remain unbiased at the time of evaluating the relationship between loyalty programs and consumer behaviour. Therefore, positivism philosophy helps to reduce the error percentage associated with the research topic in a major way. Moreover, selection of positivism philosophy will help to assess the way loyalty programs and procedures have changed over the certain period of time (Flick 2015). It will allow the study to evaluate the impact of different loyalty programs on consumer behaviour. On the other hand, the study will not focus on using other research philosophies, as it will increase the overall time required for the completion of the research project successfully.

Research approach:

Research approach reflects the way study looking to implement selected research methodology for the fulfilment of all the aims and objectives. Inductive and deductive are the two available types of research methodology that studies use regularly (Bryman 2012). Here, the study will select deductive research approach for identifying the significance of implementing loyalty programs. The selection of deductive approach will also help to evaluate the developed research questions and hypothesis in an appropriate manner. It also help to identify and include all the necessary elements associated with the research topic. The selection of deductive approach will help to evaluate different previous literatures or explanations appropriately, which will increase the overall quality of the research topic. On the other hand, the study will not inductive approach, as it does not require inclusion of any new concepts or ideas.  

Research design:

As stated by Cassell and Symon (2012) research design illustrates the way all the activities associated with research topic are conducted. Appropriate selection of research design ensures the study can cover all the areas associated with the research topic. Exploratory, explanatory and descriptive are the available types of research design that studies use for accomplishing all the goals and objectives. For assessing the significance of loyalty programs on consumer behaviour, the study will use descriptive research design. The selection of descriptive research design would help to enhance the quality of the collected data. The utilization of descriptive research design will help the study to avoid any reliability or authenticity issues associated with the collected data. As a result, it will help the study to evaluate the entire developed hypothesis in an appropriate way. Therefore, it will help to assess the kind of impact each implemented loyalty program can have on the behavioural level of the consumer.   

Data collection:

Data collection is arguably the most important area of the research topic that studies need to utilize for capturing relevant information about the research topic (Taylor, Bogdan and DeVault 2015). In order to identify the relationship between loyalty program and consumer behaviour, the study will concentrate on primary data collection technique. The selection of primary data collection approach will help the study to identify all the current strategies initiated by the supermarkets in England. Thus, it would help to highlight the present situation in a comprehensive manner. The study will select both quantitative and qualitative data collection technique for covering all areas associated with the research topic.

Selection of quantitative data collection technique will help to identify the trend or pattern related with the research topic (De Vaus 2013). It will also help to evaluate the outcome based on numeric terms. On the other hand, qualitative data collection will help the study to capture detailed data about the way different supermarkets in England have initiated different loyalty programs. It will also help to include different viewpoints or thoughts initiated by the respondents, which is likely to enhance the overall quality of the research topic. Thus, utilization of mixed methods will eventually help the study to cover all aspect of the research topic.

The study will use survey procedure for capturing quantitative data about the research topic. On the other hand, face-to-face interview will be used for gathering qualitative data about the way loyalty programs affect the behavioural pattern of the consumers. The study will consider development of two separate set of questionnaires for successful completion of the data collection procedure. Only open-end questions will be included in the qualitative questionnaire while quantitative questionnaire will be developed using only closed end questions. The study will take 20 minutes time from each manager for covering all areas of the research topic.    

Population and Sampling:

Population reflects all individuals, groups, or institutes related with the research topic. Thus, population include all those individuals who can be affected on the eventual outcome of the result (Denzin and Lincoln 2013). Here, the study is focusing on evaluating entire English super market industry along with the behavioural pattern of the customers. Thus, it reflects a huge population size that cannot be covered within the given timeframe. Hence, the study has no other option that to look for effective sampling strategies at the time of selecting respondents. Probability and non-probability are the two prime types of sampling technique that studies can choose to utilize for fulfilling all the aims and objectives in an effective way (Silverman 2016).

Here, the study will select probability sampling strategy at the time of selecting respondents for quantitative data collection procedure. The study will use stratified random sampling technique, which will allow choosing respondents from different groups or subgroups. Here, the study will select 75 respondents who are regular customers of different English supermarkets for assessing the trend associated with the research topic. On the other hand, the study will select non-probability sampling strategy for selecting respondents for qualitative study. The study will select 10 managers of different English supermarket for gathering all the information associated with the research topic.  

Data analysis method:

After the completion of data collection procedure, the study will concentrate on identifying best analysis method in order to conclude. In order to analyze all the captured quantitative data, the study will focus on utilizing different statistical methods like mean, median and mode for assessing the impact of loyalty programs on behavioural pattern of the consumers. The study will also use advance statistical tools like regression and ANOVA for addressing the relationship between independent factor loyalty programs with dependent factor consumer behaviour. Inclusion of advance statistical tools and techniques will help the study to enhance the overall quality of the research topic (Bryman and Bell 2011). On the other hand, the study will choose conversation analysis for evaluating each word spoken by the respondents. It will allow the study to cover all the areas associated with the developed goals and objectives.     

Access issues: 

Accessing all the relevant information about the research topic is important for analyzing all the research aim and objectives in an in-depth manner. Here, the study will require both primary and secondary data for assessing the exact amount of impact loyalty programs can have on the behavioural pattern of the consumers (Mackey and Gass 2015). As a result, the study will have to access different paid secondary databases for acquiring relevant information about the research topic. It will increase the overall budget of the research study significantly. On the other hand, researcher is also likely to face challenges at the time of quantitative and qualitative primary data.

In case of quantitative data collection, the study mighty face challenges related with the refusal of the respondents in providing any data about the research topic. On the other hand, qualitative data will have to be collected from managers of the supermarkets who are extremely busy in their professional life. As a result, researcher will have to identify time as per the convenience of the managers for gathering optimum level of qualitative data about the loyalty programs in supermarket.  

Ethical considerations:

As stated by Taylor, Bogdan and DeVault (2015) maintenance of ethics is up most important for any research study to highlight all the prime areas of the research topic appropriately. For assessing the impact of loyalty programs on customer behaviour, the study will also maintain different ethical guidelines. Firstly, the study will concentrate on maintaining the guidelines provided by the data protection act. Here, the study will consciously not disclose any research related information to the outside environment. Secondly, the interviewer will remain unbiased at the time of collecting primary data about the research topic, as it can have impact on the overall outcome.

Thirdly, the interviewer will force any respondents to provide data about the research topic. In fact, maintaining the dignity of the respondents will be considered as the upmost important element of the research topic. Fourthly, the study will only concentrate on the authentic secondary data sources at the time of developing literature review section. It will definitely help to enhance the overall quality of the research study in a significant way.    

Timeline/milestones:

Activities	Start date	End date	Duration
Selection of the research topic	01/07/2017	04/07/2017	5
Development of research aim and objectives	05/07/2017	08/07/2017	4
Construction of the literature review	09/07/2017	18/07/2017	10
Appropriate research methodology selection	19/07/2017	22/07/2017	4
Implementation of data collection process	23/07/2017	31/07/2017	9
Selection of data analysis	01/08/2017	06/08/2017	7
Conclusion	07/08/2017	10/08/2017	4
Submission of final solution	11/08/2017	13/08/2017	3

Conclusion:

The above illustration has highlighted the fact that proper utilization of loyalty programs is critical for keeping the behavioural pattern of the consumers favourable. As people are having more options due to increasing competition in the supermarket sector, they are bound to switch preferences. Therefore, all the supermarket organizations will have to focus on analyzing the best possible way to utilize loyalty programs for enhancing the customer loyalty.

Now, the selected research method and data collection strategy is likely to cover all the areas associated with the research topic. It is also likely to identify different loyalty strategies initiated within the English supermarket industry. As a result, it can be expected that the outcome of the study will able to assess the loyalty strategy that has created maximum impact in developing favourable customer behaviour. As a result, it would help to provide appropriate recommendations regarding the way English supermarkets can initiate loyalty strategies.

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