Loyalty Card Scheme Coursework Example | Topics and Well Written Essays - 6000 words

Loyalty Card Scheme - Coursework Example When the buyer joins the loyalty scheme they may be asked to complete a form which asks for details such as their name and address; these are subsequently entered into a database. Once a buyer has an entry in the database, further records of buyer buys can be added, so that eventually it is possible to build a profile of person buyer purchasing behaviour. This record of buyer purchase report can then be used to segment the retailer's buyer base, for reason of direct advertising and tailoring other marketing interactions and special offers to buyer desires. In exchange for registration, the buyer receives points that can be used in full or part payment for products or services. There has been considerable debate about the value of loyalty cards for both the consumer and the scheme's sponsor. Criticism can be grouped into those that cast doubt on whether what might merely be viewed as a modest discount arrangement, akin to electronic green shield stamps can generate buyer loyalty, and those who comment on the difficulties associated with the analysis of the buyer purchase data that retailers can collect through loyalty schemes. This article undertakes a case study based analysis of the Tesco Clubcard loyalty scheme. This loyalty scheme extends beyond the traditional model of a loyalty scheme in which buyers exchange modest rewards for buyer data and information, to the creation of a affiliation or brand web. Buyers are invited to engage with this web at a number of different levels. After a review of some of the earlier work on loyalty schemes, this article first describes elements of the Tesco Clubcard loyalty scheme, in terms of rewards, deals, and integrating channels. Finally, the article poses a number of research questions that extend beyond the more parochial assessments of the impact on loyalty scheme membership loyal behaviours, buyer value, and business performance, to the potential of loyalty schemes in building brand perceptions and experience. LITERATURE REVIEW Affiliation marketing shifts the focus of the marketing exchange from transactions to affiliations (Foss and Stone, 2001; Peck et al., 1999; Christopher et al., 1991; Buttle, 1996). Affiliation marketing recognizes that a stable buyer base is a core business asset. The essence and nature of affiliations and their business vale is summarizing in the concept of buyer loyalty, and its associated literature. The benefits of buyer loyalty to a provider of either services or products include: - lower buyer price sensitivity; - reduced expenditure on attracting new buyers; and - improved organisational profitability. Buyers may demonstrate their loyalty in any one of a number of ways; they may choose to stay with a provider, whether this continuance is defined as a affiliation or not, or they may increase the number of purchases or the frequency of their purchases or even both. They may also become advocates of the organisation concerned by playing a powerful role in the decision-making of others (Hallowell, 1996; Birgelen et al., 1997; Reichheld et al., 2000; Bolton et al., 2000). Loyalty schemes have become widespread in recent years. Byrom et al. (2001) recommend that there is over 150 such idea in the UK, resulting in the