LOYALTY MARKETING IN INDIAN FOOD GROCERY RETAIL

Abstract

The objective of this dissertation is to study loyalty marketing in Indian food and grocery retail. The report begins with an introduction to loyalty marketing by defining the concept. Then, there is an account of the origin of loyalty program which was started with S&H Green Stamps. This is followed by a mention of the “AAdvantage”, the frequent flyer loyalty program of American Airlines. A brief overview of the food and grocery retail in India is also provided.

In the literature review, a study of various research papers was undertaken on the topic of loyalty marketing. The discussion starts with a theoretical framework of loyalty marketing followed by some theory on the primary need of loyalty marketing. The discussion then moves on to the need of loyalty marketing in retail Industry where stress is given on engaging the customer and technology as the primary driver for loyalty marketing. After this theory, there is an analysis of a research paper on how the use of “Combined Currency” affects the usage behaviour of consumers who use flights as a medium of transport. This is followed by a discussion on the concept of “Artificial Advancement and the effect of Endowed progress” on the customers. A theoretical mention is also given on the concept of Loyalty cards and the advantages of using loyalty cards. This is followed by a discussion on how loyalty programs are being evaluated. The literature review ends with a mention of how loyalty programs are gaining precedence in today’s competitive scenario and a brief case on Big Bazaar and some of its initial customer loyalty programs. The research methodology comprises of a clear mention of the research problem at hand and a structured research design to solve the same. The research design consists of three phase’s viz. the exploratory phase which is the initial secondary research on the topic, the data collection phase which is done via primary research and the data analysis phase. The data analysis deals with qualitative as well as quantitative analysis of data. The responses received from the in-depth interviews were analysed using qualitative analysis while the responses from the survey were treated with quantitative analysis. Qualitative analysis of the responses was done by dividing the responses into relevant sections like planning of program, measuring ROI, etc. As far as the quantitative analysis is concerned, the responses were collated and were reported as percentage of total responses. Some questions which involved likert scale were treated with factor analysis. The result was divided into parts viz. based on in-depth interviews of the store level managers and other based on surveys of the shoppers. This was followed by limitations of the dissertation and what could have been done to get an even better solution to the research problem. The future scope gave an account on how this research can be taken forward both by the researchers as well as retailers to get a better understanding of the current state of customer loyalty programs. A final conclusion was made that the customer loyalty programs needs to improve to serve the customers in a better way.