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Essay / Research Paper Abstract
A 12 page paper discussing the loyalty program used at Tesco and Sainsbury, after most UK grocery retailers have abandoned the use of loyalty cards. The paper discusses the effects of the existence of most loyalty programs (i.e., higher prices) and the distinctions between those which offer customers other discounts outside the organization and those already abandoned by other retailers. The paper also discusses Wal-Mart’s use of checkout information in a card-free system. Bibliography lists 15 sources.
Page Count:
12 pages (~225 words per page)
File: CC6_KSmktgLoyCard.rtf
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Unformatted sample text from the term paper:
in place at various retailers such as grocery stores, banks and airlines are designed to entice the customer to make subsequent purchases and ideally to make all his purchases of
a single type with a single retailer. Banks seek to gain all of an individuals banking business, airlines seek to create a desire within the customer to fly only
a single airline. Grocery stores loyalty programs operate on the same basic principle, but with modifications usually not present in other types of loyalty programs.
Grocery store loyalty programs seek to gain greater information about customers than normally would be available to them. The rationale appears to be sound from a
marketing standpoint, in that stores senior management seeks to gain greater knowledge of the individual customer in order to offer more meaningful products and services. Though the organization does
gain greater knowledge about individual customers, it also gains opportunity to vastly inflate its prices. This has been the observed result within the United States, where studies reveal that
stores using loyalty card programs charge much higher prices across the board than do those using no such marketing scheme. Only a few
grocery chains in the US avoid the use of such loyalty programs. In the United Kingdom, most of the leading grocery chains have abandoned the use of loyalty cards
in the past several years. Recently, however, "Sainsbury, in conjunction with a number of other retailers has launched its Nectar Card. Apart from Tesco, the other major grocery chains
have discontinued their loyalty cards in favour of lower prices." The purpose here is to examine whether "this signal[s] a change in the market place or" whether Sainsbury is
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