There have been many new generations of loyalty programmes that have gained a widespread appeal during the first airline industry when America introduced its first flyer programme. Loyalty Programmes can be traced back to 1896 through the introduction of S&H Green Stamps which was recorded as the largest consumer’s goods in the world. Technological development generated a large increase in loyalty programmes which helped to develop the world economically. “2000 Jupiter Research study, 75% of US consumers participated in at least one loyalty programme.” Lacey, R, 2006. Customer Loyalty Programme. Customer Loyalty Programme: are they fair to consumers?, 23, 458-464.
Organizations that exploit personal information captured by consumers and firms and discriminate value proposition segmentation is the vital reason that cause unfair Loyalty Programmes as there is an absence of incorporating equity and exchange theories in South Africa.
Loyalty programmes are synchronized, membership based, marketing activities that use targeted communications and customize the delivery of branded goods and services and build a powerful bond with the sponsoring firms. These factors are used as marketing tools by organizations to maintain their Customer Relationship Management strategies by making use of loyalty cards, club cards and advantage cards.
Organisations that make use of the equity and exchange theory create an environment that can successfully evaluate the fairness throughout the Loyalty Programmes.
Organizations using an equity theory allow firms to help distinguish and reward more valuable customers without excluding less valuable customers. If this may occur it generates variables that can negatively affect the organizations reputation and ...
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... products, sale coupons and free merchandise throughout the different levels of segmentations. This enhances customer service and created a larger benefit to firms financially in long run.
By collecting the mass data and analysing it through cross-tabulation and looking at problems of one question in relation to the response of another question, it creates a link between factors that correspond to each other. Effective and orderly research helps a firm to act timely and accurate when addressing problems to customers and ultimately enhances the efficiency of the entire firm.
Through this marketing research proposal it has shown that by combing equity and exchange theory it enhances the ability for organisations to solve many problems that are brought into place on different levels to ensure that there is fair treatment to all customers concerning Loyalty Programmes.
Market research provides information to help unravel marketing obstacles that businesses face in today’s business climate, an essential part of the business planning process. As shown in the example certain strategies such as segmentation or differentiation are almost unattainable without relevant market research.
Marketing research has become a very important part of small businesses and large corporations gaining information about their customers and how they feel about their products and services. According to Philip Kotler, "Marketing research is systematic problem analysis, model building and fact-finding for the purpose of improved decision-king and control in the marketing of goods and services (Kotler & Keller, 2012)”. The initial step in the marketing process is to identify the problem the company is having and then decide the way the marketing team would like to conduct the research. The marketing team will devise a plan on how to gather the information and set a budget for the research project. In the planning of how they will conduct the
A loyalty program is best seen by the consumer when benefits are clear, bringing more value than the costs of participation. A membership card could be a relationshi...
Facilitating customer participation in Qantas loyalty program and that of partners by coming up with new products, services, forming new partnerships and offering additional exciting benefits that which will attract the targeted market segments and even new customers. Qantas Loyalty program participation can be enhanced by awarding Qantas Frequent Flyer points for purchases made online and offering membership levels or entitlements that will offer distinct and enhanced personalised benefits as well as privileges to
Maintain reputation for fairness and integrity by treating every customer as we would want to be treated
In 2011, Air Canada was Canada’s largest airline and the 15th largest commercial airline in the world, serving over 32 million customers annually with more than 170 destinations. Their mission was “connecting Canada and the world.” According to Air Canada’s Senior Vice-President of E-Commerce and Chief Information Officer, “We are in the customer service industry. In this line of business, the differentiators are service level, identification and innovation, but innovation is the key” (Karimi-Alaghehband and Rivard, 2014, p. 1). Air Canada was pursuing the dual strategic objectives of operational excellence and building customer loyalty through innovation.
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
While current loyalty data solutions are typically tied to individual companies, often through private label credit cards or firm-specific loyalty cards. Loyyal vision is to provide businesses the opportunity to offer multi-branded rewards by creating the “Internet of Loyalty.” The company is also contrarian in that it is built to allow a wide range of institutions to take advantage of loyalty, including government. In fact, the
Ninety percent of Canadians are enrolled in at least one loyalty program. Market research has shown that loyalty programs are growing to be very popular in today’s market. A loyalty program is a program offered by a company to customers, who make frequent purchases. Loyalty programs are of benefit to both the consumers and the business. The consumers benefit by receiving coupons, special access to sales and new products whereas the company benefits by gaining an abundance of knowledge about the consumers, through their purchasing habits. Loyalty programs have proven to be very successful for several companies such as Target, Starbucks, and Shoppers Drug Mart. The senior management in sales and marketing believe that initiating a loyalty program
” Chartered Institute of Marketing defines it as the management process responsible for identifying, anticipating and satisfying customer’s requirements profitably. However, there exist numerous definitions of marketing, it is always about “meeting existing needs and anticipating future needs” (Bagozzi, 1975). The marketing concept is a kind of recipe how a company can achieve its goals by understanding the exchange partners and associated costs, being a response to external opportunities and threats and to internal strengths and weaknesses as a means of competitive advantage (Houston, 1986). Bagozzi (1975) underpins this viewpoint, arguing that marketing is much about the exchange paradigm which focuses on the question why parties take part in exchanges and how these work.
Three views of theoretical foundations are widely considered in business to business marketing: social exchange theory, social penetration theory and interaction theory. The social exchange theory as pointed out by Blau (1964, cited in Hsin Hsin et al. 2015:867) is described as social interactions involving two or more parties in order to achieve a mutually benefiting goal. What this means is that, in the marketing sphere, organization are expected to seek ways of the norm of buying and selling but develop relationships which could lead to customer retention, thereby recognising interdependence in sustaining the social exchange relationship. The social exchange theory deals with the issues of rewards and trust among the trading partners which derived from a continuous exchange of financial outcomes over a period of time (Fill and Fill 2005:149). Autry and Golicic (2010) advocates that the strength of any relationship is dependent on trust and commitment and successful fulfilment of objective. Cropanzano (2005) argues that relationship between two parties can best be sustained in the long run if certain rules of exchange are adhered to. These rules provide guidelines in which both parties are expected to comply during their exchanges
Value is an integral part of marketing (Newman, 2015). If consumers are provided with goods and ideas of greater value by a business compared to its competitors, that have shown the businesses in depth market research taken in order to fulfill its consumer’s particular needs then it can create longer affiliations with the consumers due to the level of satisfaction and quality provided. Based on the concept of “Demand Chain Management” (Madhani, 2015).
The purpose of this section of this report is to define the marketing concept; to explain what it means to be a market-orientated organisation; and to show that Tesco’s appear to be a successful, market-orientated company. Furthermore, that Tesco’s employ strategic relationship marketing to offer value to customers’; and achieve higher revenues and brand loyalty in return. Finally, to explain that being market oriented may also have some disadvantages if not carried out effectively.
This paper will outline the importance of marketing research and apply that importance to a communication to the management team at Johnson & Johnson’s Consumer Products group. The discussion with management will include the use of current marketing research tools by the company today and the application of each.
Task 1: Critically evaluate the key concepts/theories on the topic of the effectiveness of loyalty programmes on customer loyalty