Weighing 30% of the total mark for this unit. The answers to the questions posed not be less than 2000 words, no more than 2,500 words in length. Use the case study and other credible references to answer the following questions. There are 4 questions regarding the article” Customer Loyalty Schemes in the Retail Sector”-you must answer all questions and all questions are equally weighed-that is they all carry the same available marks. 1. Critically evaluate, from a Relationship Marketing perspective whether as stated in the first sentence of the case study, “Customer loyalty schemes (or programs) are explicit efforts by retailers to gain long-term patronage from customers”. 2. Using your knowledge of Relationship Marketing, critically evaluate the comment on page 3, that “the success of a loyalty scheme depends on the use of customer data to personalise the relationship between retailers and customers and move beyond a mere transaction” 3. According to the case study on page 5, customer loyalty schemes have three levels of engagement with the customer. Using your knowledge of Relationship Marketing, critically evaluate this assertion and discuss what engagement level, you as a customer would be comfortable with and why that is so.? 4. In the summary, the reasons for customer dissatisfaction with loyalty schemes are given. With this in mind, critically evaluate the role that loyalty schemes can play in establishing, maintaining and developing relationships with customers Document Preview:

9-511- -077MARCH 7 7, 2011 JOSÉ B. ALVAREZ ALDO SESIA Cu ustomer r Loyalty t Sche emes in n the Re etail Se ector Wh hat creates loy yalty is how much we unders stand your life e and what we do about it th hat helps your life. If you w wanted to, you could just use data to make c customers do w what you want t them to do. . . . We never w wanted to do t that . . . if you don’t have the vision as a ret tailer that you are doing this to understand d the customer better, and de eepen that relat tionship, you’r re always going g to wonder wh hy you’re maki ing the effort. 1— Terry L Leahy, CEO o of Tesco, on th he Tesco Club bcard Cu ustomer loya alty schemes (or program ms) are expl licit efforts by b retailers t to gain long g-term patron nage from cu ustomers. Loy o alty scheme es are develo oped for a v variety of rea asons includi ing to rewar rd loyal custo omers, to gen nerate more ro obust inform mation about c customer beh havior, to influ uence 2consu umer behavior, and as a de efensive meas sure to comba at a competing n scheme. T The purpose o of this note i is to describe the objectives of these sch hemes, their o origin and evo olution, to hig ghlight key as spects of the eir implement tation, and to suggest appr roaches to ma aximize their impact. Whil le this note fo ocuses on the e U.S. and U.K K. retail secto ors, most of its s content is ap pplicable to o other economi ies. Purp pose Th he basic idea of a loyalty scheme is to o reward cust tomers’ repea at purchases and to encourage loyalty t by providing targets at which variou us benefits an nd rewards a accrue to the customer. Lo oyalty schem mes attempt to o win a slight tly larger share of the cust tomer’s spend d (wallet) than n would othe erwise be the e case if the additional va alue of the sc cheme were n not offered. T They create s stickiness wit th the custom mer as there is an implic cit cost to the e customer fo or not patron nizing the re…


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