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The Influencing Factors Of Retail Loyalty Programs Commerce Essay

The rapid explosion of the information technology and the internet usage draws attention of the many business researchers in the area of customer satisfaction and customer loyalty in online environment. In the recent times importance on the customer loyalty has become important because of the competitive nature of the online market and by the number of online consumers. The decreased search cost and the increased competition makes it more important for the marketers to build and maintain consumer loyalty (Rodgers et al 2005).

Customer loyalty is pertaining to customer’s willingness to continue in a relationship with a retailer. Also there is a strong relationship between customer switching behaviors and loyalty. In the success of the company there is always a vital role to play for the customers. The companies can’t survive without having a good customer base. So it is important for the companies to learn how to retain the customers within the process of buying and selling. Nowadays the customers have a wide range of choices in the market and they are cognizant of the options available for them over the internet.

Background of the problem:-

The number of online purchase in Ireland is rapidly increasing according to the recent statistics. The online purchase in the Ireland is 16% more than European average. So this indicates that the online market space has high importance as the physical stores. Due to the cheap cost and high reach online presence is highly important in making the high profit and gaining the penetration in the market segments. The thesis is based on identifying the factors causing the online loyalty in the Irish context. In Ireland major online retailers are Tesco and Superquinn. When comparing the market penetration of these two giants it is obvious to assume the importance of their online presence. Both companies use their online loyalty program to retain their customers in the long run.

As a communication medium the internet has lot to offer to both the customers and the sellers, it creates an equal opportunity market for the customers and retailers in every sense. Normally retailers compete in the web with reducing the price as the customers are able to compare the prices with a single click, thus the electronic market will create immense price competition among the retailers thus resulting a lower profit margin (Peterson 1997). Also Srinivasan (et al 2000) states that retailers need to develop and maintain customer loyalty as the price sensitivity of the customer is very high in the transaction market.

Research importance:-

From the retailers perspective the online loyalty is an important means of gaining profit in the long run. The high cost of customer acquisition leaves much customer relationships unprofitable during early transaction. Also selling in the cyberspace is different from the conventional way of selling in the physical stores. It requires a deep understanding of the customer behavior and different technology challenges to the conventional theories and knowledge (Butler and Peppard 1989). A significant understanding of this behavior in the online as in the physical world cannot be gained without a good appreciation of the factors affecting the purchase decision. If the companies know what are the factors affecting the online purchase decision they can alter the marketing mix for these factors as a means to retain their potential customers. Also in the service design stage, the web designers can also implement the most appropriate design to gain more traffic and sales from such an understanding of the online consumer behavior.

The importance of gaining new customers in online means it is almost similar to the gaining the customers on the physical stores which is the vital necessity for any business. So the loyalty tends to cause fall in the customer acquisition costs in online. Also it is found that average customer acquisition cost is higher than the average life time value of the customer (Hoffman and Novak, 2000.p.179).also to acquire the lost customers it is required to spend a lot in different varieties such as marketing cost, brand awareness and value equity (Griffin and Lowenstin 2001). And if the customer acquisition cost to the company is greater than the average revenue to the company the company would be in the financial risk (Balabanis et al 2002).

The scope of the study

Here the researcher goes through the secondary data’s which are done by others to know more about the topic. It is done through the literature review where all the parts of the topic are discussed in detail by many authors and experts. For completing the thesis the primary research is necessary, to compare the results to its objectives and to find a solution, the literature review will help the researcher to make the plans and primary tools which are necessary for collecting data for completing the study. The research methodology will discuss how the primary research is carried out. On the basis of the gathered data it is analyzed to obtain the result according to the objective. After this researcher conclude the research following with some recommendations. Here the researcher gets in to the detail view of online customers attitude towards online shopping and different constraints of the online purchase decision, to know whether it is helping to increase customer loyalty. For that the study is conducted in two online stores Tesco Ireland and Superquinn.

The purpose:-

The main aim of this research is to know what are the constraints of the online loyalty in Irish retail sector with special emphasis on Tesco and Superquinn online customers and how they are influenced by these factors. Here the researcher crosschecks different online loyalty factors within the Irish context.

Research objectives:-

The research objective is to identify what are the factors affecting the online loyalty in the irish online retail sector. The thesis also accounts how the Irish customers are behaving towards the online loyalty program.

Another objective of the research is how to obtain loyal customers from the retailer’s perspective.

Research interest:-

The researcher has studied bachelors in engineering in India and the researcher as been working as customer care agent for a year in Ireland. As the researcher is cognizant about the retail sector and the online purchases the researcher is more interested in doing this thesis. The researcher believes that the volume of online sales will rapidly increase in the coming future and there is a huge Job potential for those who have the market knowledge and customer behavior in the online context. As the researcher was an employee of the Tesco Ireland and the information accessibility for conducting the research is comparatively easy than other research topics the researcher choose to conduct thesis on this topic. Moreover the topic is viable in terms of the current technological exposure. So the researchers experience and the research importance are the main motives for choosing this topic as a research subject.

Limitations: - the research has some limitations as the researcher is able to sample only 160 people for the purpose of qualitative analysis which is only very small population to reproduce the research for a bigger and sizable population of the online retail shoppers in Ireland. The researcher had to structure the questionnaire to get the most out of the qualitative data in order to limit the errors in the response from the customers. As this is pure academic research the researcher has experienced many difficulties of a fresher due to the lack of experiences and in the most cases it has overcome by the supervision of the research faculties, So all these factors may affect the quality of the work. There are constraints on time, finance etc., moreover the data analysis is carried out in SPSS software which is completely new for the researcher to analysis the data.

Organization of research

This research is divided to eight major sections, and the contents in each part are briefly discussed below. a brief description of contents in each section is given below.

Title and table of contents. The title page is set as per the requirements of the university requirements. It contains all the relevant information on the ordering of the chapters. The next page is the table of contents in which all the chapters headings are listed with the relevant page numbers. The list of tables and figures are followed with corresponding page number.

Acknowledgement and abstract: An acknowledgement is written on account of the people which involved in the research. The acknowledgement is followed by the abstract to give a brief idea of the thesis developmental stages.


This part of the dissertation try to discuss about the primary aim and main objectives of this research, it also discusses the background of the research topic and about the organization Tesco and Superquinn. Here the researcher tries to give an introduction to online loyalty and online buying behavior in the common context and its importance using some theoretical aspects which is going to be discussed in detail in the literature review part.

Review of Literature

The second chapter literature review describes the theoretical aspects of the topic. This section Includes discussing on the theory on customer loyalty and online buying behavior also which includes customer retention, customer loyalty schemes and about the loyalty cards offered to customers.

Research Methodology

Here the researcher discuss about the methods used to complete the study. It includes the research philosophy, research approach, primary tool used to collect data, population, sample etc., in detail. The researcher also justifies his method with relevant literature.

Data analysis and findings:

This section deals with the different data collection methods such as quantitative and qualitative methods are discussed. All major findings related to the online loyalty is discussed also all the analytical and rational explanations are discussed in this section. The quantitative data is analyzed using the SPSS software and the qualitative data is also interpreted in this section.

Conclusion and Recommendations

In this section the researcher discuss about the objectives based on the findings of the study. Here the researcher also make some recommendations for the Tesco and Superquinn, that can be introduced to develop customer satisfaction and hence the customer loyalty.

Self Reflection on Own Learning and Performance: This section explains how the entire dissertation work influenced the researcher’s learning style and the learning style adopted by the researcher while doing the research. It will also explain the key skills developed by the researcher during the course of dissertation and MBA International


In this section the researcher gives all the reference of the Books, Journals, and Internet sources

Which were used for completing the dissertation.

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