An Effective And Profitable Customer Loyalty Programme Marketing Essay


A study by Allegra Strategies shows that the UK Coffee house market has performed above outlooks, and surely better than the UK retail sector as a whole, during the recent economic downswing. Coffee house gross revenues in 2009 grew by 6.2 % compared to 2008 to make an estimated & A ; lb ; 1.63 billion ( Coffee Explorer, 2010 ) .

Academic surveies, research and instance histories have all systematically recognised that it can be up to five times more to get a new client than to retain an bing one ( Pfeifer, P. E. , 2005 ) . Besides, depending on the nature of the market in which a concern is runing, it is possible to increase net incomes by up to 60 % following a decrease of merely 5 % in client desertion ( Reichheld, F. F. , 1993 ) .

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An effectual trueness programme can ensue in decreased client monetary value sensitiveness, a lower rate of client desertion, increased referrals and more repetition purchases, thereby cut downing concern costs and increasing gross and net incomes ( Page, M. et Al, 1996 ) .

There is no universally accepted definition of what constitutes client trueness. However, the construct propounded by Dick and Bassu ( 1994 ) is widely cited in academic surveies. It places accent on the function of consumer attitude and behavior suggesting that client trueness should be seen in footings of how strong the relationship is between a consumer ‘s attitude and behavior towards a merchandise or trade name and their incidence of repetition purchase.

Table of Contentss



Page Number

Title page




Table of contents



Introduction and Market Background



Research Aims and Aims



Reappraisal of Literature in Relation to Research Aims and Aims






Scope and Restrictions






Agenda of Actions


Proposed Structure for the Dissertation


Reference List


Chapter 1 – Introduction and Market Background

This thesis proposal suggests how the critical scrutiny and analysis should be carried out in relation to the hypothesis propounded on the rubric page.

Published information shows that 76 % of java house clients tend to be loyal to their favorite java store ( Allegra Strategies, 2008 ) . However, despite the fact that the large java house ironss have adopted client trueness programmes, there is no grounds that these programmes have generated incremental profitable gross revenues. Harmonizing to Allegra Strategies, the usage of trueness programmes by the large participants is merely a reaction to the lag of a maturating market ( Thomas, J. , 2010 ) .

In position of this lag any possible new entrant is likely to fight to derive market portion from the established participants and it will be progressively necessary for new entrants to use sophisticated relationship selling techniques. Relationship selling can be defined as ‘to expeditiously and efficaciously increase the acquisition and keeping of profitable clients by selectively originating, edifice and keeping appropriate relationships with them. ( Payne, A. et Al, 2006, page 136 ) .

Relationship selling encompasses a big figure of diverse but interconnected selling subjects. In position of this complexness, the proposal is to concentrate on one important component of any relationship selling scheme, viz. client trueness, with peculiar mention to the java house market.

Chapter 2 – Research Aims and Aims

The primary purpose of the research undertaking is to analyze the behavior of consumers in relation to their choice and backing of any peculiar java house mercantile establishment. This analysis will be supported by, and corroborated with, client trueness informations analysis in both the concern environment by and large and the retail trade sector in peculiar.

However, the issue of client trueness programmes can non be examined in isolation and it will foremost be necessary to derive an apprehension of the assorted factors that contribute towards trueness and how they impact on the relationship between an administration and its clients. This apprehension will be acquired through the replies to critical inquiries which will concentrate on the undermentioned contributory factors to client trueness:

Consumer attitudes and behavior.

Customer satisfaction in footings of service bringing and merchandise offering.

Outlet convenience.

Recommendation and referrals by bing clients.

Chapter 3 – Reappraisal of Literature in Relation to Research Aims.

Consumer behavior theoreticians by and large believe that the natural inclination of consumers is to hold ‘split ‘ truenesss towards trade names ( Bass, F. M. , et Al, 1984 ) . Professor Andrew Ehrenberg of London South Bank University supports this position proposing that the changing behavior of consumers means that trueness strategies may non work every bit intended ( Scriven, J. , 2006 ) . However, conversely, he besides states that loyal behavior does be since there is clear grounds that people do purchase the same trade names repeatedly.

Most theoreticians in the country of consumer behavior besides believe that consumers make buying determinations based, to a big portion, on their behavior and attitudes ( Petty, R. E. , Unnava, R. H. , Strathman, A. J. , 1992 ) . However, there is an inexplicit failing in analyzing conceptual theoretical accounts of trueness that are merely behavioral and attitudinally focussed. Recommendation, client satisfaction, and mercantile establishment convenience besides have of import functions to play ( Garland, R. et Al, 2004 ) .

Several research surveies have concluded that there is a direct connexion between client satisfaction and client trueness ( Heskett et al. , 1993 ) . However, research has besides shown that between 60 % and 80 % of clients who defect to a rival were really satisfied with the service they were having before they defected ( Reichheld, F.F. et Al, . 2000 ) . Consequently, whilst client satisfaction is evidently an of import trueness factor, it may non be every bit important as behavior and attitude.

Besides, trueness may merely ensue from the location convenience of a peculiar mercantile establishment. In this case attitude and behavior may be of fringy or no significance. However, convenience is seen by Bloemer and his research co-workers ( 1999 ) as a ‘functional ‘ ( as opposed to ’emotional ‘ ) feature of trueness and may non be digesting due to competitory activity i.e. a new mercantile establishment gap.

Last, the influence of recommendation and referral should non be underestimated. The ‘Relationship Marketing Ladder of Customer Loyalty ‘ ( Christopher et al, 1991 ) suggests that clients who have been acquired may so come on, capable to satisfaction, from being merely a client to an ‘advocate ‘ or even a ‘partner ‘ . Furthermore, ‘Loyal clients repeatedly purchase merchandises or services. They recommend a company to others. And they stick with a concern over clip ‘ ( Prus et al, 1995, p.100 )

Chapter 4 – Methodology

Primary research into the country of client trueness in the java house market is necessary to confirm, and expand on, the limited secondary informations available about the nature and function of java house client trueness. It will take the undermentioned signifier:

Face-to-face interviews with java house consumers. These will be performed with clients go outing java houses – both ironss and mugwumps.

Interviews with directors of independent java houses.

Following a critical scrutiny of the primary and secondary research findings, the thesis will supply decisions and recommendations that will help an emerging java house in doing concern critical determinations about the viability, nature, function and likely success of client trueness strategies.

Chapter 5 – Scope and Restrictions

The secondary research will cover the country of client trueness by and large. However, the primary research will be limited to the java house market merely in order to to the full fulfill the demands of the hypothesis.

Besides, whilst the enlisting of directors in the independent sector is expected to be accomplishable, it is anticipated that organizing interviews with directors of the large ironss may turn out to be debatable.

Chapter 6 – Resources

In footings of secondary beginnings, there is a wealth of informations available on consumer behavior, client satisfaction and client trueness in the signifier of academic research diaries and documents and instance surveies. A figure of the conceptual theories and academic surveies have been referred to in the literature reappraisal in this proposal. In add-on there are other thesiss available on the topic of client trueness in general but non specifically on client trueness in the java house market.

The nature of the java house market itself is the topic of extended research and the premier advocate in this country of survey is Allegra Strategies. Whilst its studies are available for purchase, they are besides often cited in diary articles available online. Besides, there are market specific websites that cover the java industry such as Coffee Explorer ( ) .

Chapter 7 – Agenda of Actions

Phase 1

Design questionnaire for client and director interviews.

Research sample of java house directors and contact by telephone with written follow up corroborating assignment.

Carry out secondary research.

Phase 2

Carry out client and director interviews.

Phase 3

Analyse research findings and correlative with hypothesis

Phase 4

Draft thesis utilizing construction as below.

Phase 5

Proofreading of thesis by writer and another person unconnected with the undertaking.

Phase 6

Concluding amendments to thesis.

Proposed Structure for the Dissertation

Title Page.


Table of Contentss.

Introduction – the chief aims of the research undertaking and general background informations on the retail market and java house market.

Background – sum-up of the construct of client trueness within relationship selling and an designation of the cardinal component parts of trueness.

Research Methodology – the nature of the grounds and informations collected and how it has been collected.

Literature Review – a reappraisal of academic theory, facts and relevant grounds in relation to the construct of client trueness and its component parts that supports the research premiss.

Facts, Data and Evidence – a sum-up of what has been discovered from both primary and secondary research beginnings and what decisions can be drawn from it in footings of the hypothesis presented in the rubric.

Decision and Recommendations – a general decision drawn from the assembled grounds and what class of action should be pursued and by whom.

Reference List

Appendixs – Figures, Graphs, Diagrams

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