First of all, I would like to thank my dear creator for blessing me with such knowledge and intelligence. Then I would like to thank my family specially my parents who supported me with their heart and soul and helped me mentally and financially throughout the whole research work. Then I would like to thank my supervisor who taught me how to conduct effective research with his sagacity and understanding. He guided me with his wisdom and improved my work. Last, of all, I really appreciate all my co-workers, participators of the survey and interview for their support and valuable time.
The aim of the research is to critically evaluate the effectiveness of Relationship marketing on customer loyalty level in the UK retail sector. The objectives of the study are 1. To explore the essential features of relationship marketing in the UK retail sector, 2. To analyze the importance of customer loyalty in the context of the UK retail sector, 3. To evaluate the impact of relationship marketing on customer loyalty in the UK retail sector, 4. To analyze the effectiveness of relationship marketing practices used in Tesco in customer view, 5. To Recommend the UK retail industry including Tesco on how it can improve Relationship marketing practices to increase customer loyalty.
To conduct this study researcher used pragmatism and interpretivism philosophy. The researcher used a descriptive research design and deductive study approach in the research. He gathered both qualitative and quantitative data through interviews and a survey. The survey was done on 100 customers of Tesco from a different branch of the UK. They were asked 13 questions where 12 of them were open-ended and one close-ended question. The interview was done on 5 management people and they were asked 10 questions which were semi-structured, unstructured and open-ended.
The primary and secondary data denote that, Tesco’s relationship marketing is effective for their customer. Their main goal, increasing the loyalty of the customers is getting accomplished. The customers who took participated in the survey and the management people who got interviewed stated that Tesco is popular for their products and customer care. However, their relationship marketing campaigns and customer loyalty programs are having a positive impact on customer loyalty and the companies are getting benefit from these campaigns. They also recommended that some improvements can make the relationship marketing better. Though the relationship marketing and loyalty programs are efficient enough for the customers, if they add more innovation and thoughtful programs it will increase their proficiency and effectiveness.
Chapter 1: Introduction
Relationship marketing is very important in the modern world, mainly in the UK. This is because consumers across the world are sophisticated, seek better offers, and have good knowledge. These factors force marketers to shift from push marketing to pull marketing. Thus, retailers are nowadays giving more concentration on relationship marketing. According to Kotler et al. (2015), building relationships with customers is one of the key functions of a business. Hence, marketers are nowadays giving more concentration on building long-term relationships with customers to make loyal to them. However, marketers face challenges to understand customer changing needs and buying behavior. Therefore, marketers need to provide a high concentration on research and development.
1.1 Research Background
Jorgensen (2001) said building customer relationship permanent competitive advantages that drive long-term growth and survival in the competitive marketplaces. Sheth and Parvatiyar (2015) stated that building and maintaining stronger relationships have significant influence and implications on the business strategic marketing plan for a long time basis. Thus, Izquierdo et al. (2005) suggested that the main objective of a business should be building and maintaining long-term relationships with customers. Relationship marketing is becoming a growing concern because of competition and rivalry in the marketplace. Thus, Ndubisi (2004) said organizations are focusing on stronger relationships with their customers through better services and attractive promotions. Businesses focus on building relationships with both existing customers and customers from competitors. Pressey and Methews (2010) stated that a stronger long-term relationship provides rewards and mutual benefits for both business and customers. The main benefits for business are they can gain better idea about customer feedbacks, changing needs and requirements that drive to develop of effective marketing strategies. Therefore, it is now a significant issue for businesses to examine the impact of relationship marketing on customer loyalty. This study focuses on the concept of customer relationships to understand the factors that lead to enhancing customer loyalty. This study underpins relationship marketing from the perspective of customer loyalty at Tesco, UK.
1.2 Problems Statement
Payne (2013) said the gradual and effective relationship with customers drive business to meet their organizational goals and objectives. For maintaining effective relationships with the customer’s businesses are now maintaining interaction with customers and practicing relationship marketing strategies. However, Kotler et al. (2015) revealed that relationship marketing is a key issue in the modern business world, mainly in the UK retail sector, because of competition and rivalry in the marketplaces. Klee and Thurau (2007) stated that satisfying customers have been one of the key fundamental elements and challenges of businesses for decades. Although Tesco, the biggest retailer in the UK, is applying relationship marketing in different ways, it has been under pressure since the global recession 2008/09. Most importantly, the aggressive competitors (including ASDA, Sainsbury’s, and Morrison) are giving hard time for Tesco to gain expected customer loyalty. According to Tesco Annual Report (2015), Tesco sales revenue decreased by 3.8% in 2015 in comparison to the previous year. The key reason behind this failure is Tesco has failed to keep consistency in building, developing, and maintaining effective relationships with its target customers. Hence, a report published by Guardian (2016) disclosed that Tesco lost 1.5% of its market share in 2016. Thus, it has now been a significant issue for Tesco to conduct a study on relationship marketing to increase customer loyalty.
1.3 Research Rationale
Bolton et al. (2012) stated that most of the businesses in the current digital world are moving from transactional to relationship strategies. This is because, as Kotler et al. (2015) notes, long-term customer relationship supports business in increasing customer retention and loyalty. The retailers in the UK are giving more concentration on relationship marketing than ever before to increase their customer loyalty. For instance, Tesco has introduced “Tesco Clubcard” as a relationship marketing technique to build up relationships with customers (Tesco, 2017). However, data published in Tesco Annual Report (2016) shows that Tesco is facing higher customer complaints. Consequently, it has introduced the “Complain Management Desk”. Customers are also raising questions against data privacy in using Tesco Clubcard. In addition, the rapid development of technologies in the retail sector, high competition and rivalry are providing alternative choices to the customers that are significantly affecting market share, customer loyalty, and revenue of Tesco. Therefore, this study explores features of relationship marketing and analyses the impact of relationship marketing on customer loyalty. Then, the study explores solutions to address the research problems and meet the research aims and objectives.
1.4 Research aims and objectives
Building, developing, and maintaining long-term relationships with target and potential customers is a key function of a business, mainly in the UK retail sector to gain higher customer loyalty. In consequence, the key goal of this study is to analyze the impact of relationship marketing on customer loyalty in the UK retail sector and in the perspective of Tesco’s business case. This study analyzes how relationship marketing supports customer loyalty to meet business goals and objectives. Then, based on the finding this study provides recommendations for UK retail sector including Tesco, UK………….