Business Excellence, Vol. 9 No. 1, 2015.
Original scientific paper
LOYALTY PROGRAMS IN GROCERY RETAILING:DO CUSTOMERS PROVOKE A TIERED REWARDING SYSTEM?
Dunković Dario
orcid.org/0000-0002-2030-2212
; Faculty of Economics and Business, University of Zagreb
Petković Goran
orcid.org/0000-0001-7304-9751
; Faculty of Economics, University of Belgrade
Abstract
The concept of customer loyalty is inherently attractive to retail business. Stores are implementing and adopting loyalty programs to gain interest of the customers in maintaining relationship with the store. However, differentiation among programs of different retailers is poor. For this reason, an adequate conceptual model supporting different advantages in relation to established schemes, particularly in terms of profi tability, is formed and tested. The aim of the paper is to determine the participation of “two-tiered rewards” in customer
relationship management, where customers who buy less and buy cheaper are discriminated against in relation to others. Programs should play the key role in creating a unique store image. However, to what extent can introduction of diff erent schemes and technologies into the program create positive eff ects on the image? This is a sensitive issue for retail management as aspiration to increase profitability at the same time creates different perceptions among
customers. To explore the conceptual model, a survey was carried out in six retail chains. There were 286 cardholders who participated in the survey whose perceptions and attitudes were ranked and they were divided into three age groups. The results show a propensity of
customers toward a two-tiered reward scheme. However, other relevant contradictory tendencies were present. The managerial implication of the paper is to improve the understanding of the effects of multi-tiered rewards, thus helping the retailers who operatively use the programs to make a decision about how to best allocate marketing resources.
Keywords
customer loyalty program; retailing; store image; propensity; twotiered rewards
Hrčak ID:
139865
URI
Publication date:
15.6.2015.
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