Discontinue the Clubcard?
Methodology and Methods
Inductive vs. Deductive
Survey with Customers: Survey Monkey
Ethical and Access Issues
Tesco was established in 1919 when a young man named Jack Cohen left the Royal Flying Corps and utilized his severance pay to set up a small grocery stall on the east end (Funding Universe, 2011). He developed the concept of “pile it high, sell it cheap” which he subsequently utilised as a slogan. In 1924 Cohen merged with another company, TE Stockwell. By combining the names of the primaries, he developed the name Tesco. Tesco expanded from the single stall in the East End into High Street. Cohen visited the United States to learn grocery marketing principles and after the Second World War he began developing the company in earnest (Funding Universe, 2011).
Tesco has remained the market leader in the United Kingdom throughout the years, despite having higher prices than many of its competitors (Pioch, Gerhard, Fernie, & Arnold, 2009 218). The one category in which Tesco continually beat out the competition was in the area of wide selection of products and stock (Pioch et al. 2009 215). Ozeren, Korkmaz, and Yucealp (2009 175) have suggested that by concentrating on economy of scope rather than on economy of scale, today’s super markets may be better able to maintain that competitive stance. Ozeren et al. (2009) hypothesize that the current consumer is beginning a transformation from passive customer, to business collaborator in value chain.
Tesco brings to the market and retailing field a strong background of innovation. It was one of the first innovators who brought out the idea of the loyalty card, perhaps an offshoot of the marketing tool of S&H Green Stamps, which had been developed in 1896 (Lach, 2000). The Tesco Clubcard was introduced in 1995 in order to improve customer value and develop customer relationships. Other companies filed suit and today it is unusual indeed to discover a major retailer that does not participate in some type of club card or loyalty marketing program. Waitrose is one of the few exceptions; they do not use loyalty cards at the present time.
Lach (2000) states that companies today provide $4 billion a year in premiums in order to attempt to convert consumers to the company’s brand. This is undoubtedly an evolution of the Green Stamp program, which allowed consumers to receive stamps for every qualified purchase. The stamps were placed in a book and the books were turned in for merchandise. Today, however, it may be time to develop other incentives than token green stamps, keychains, a birthday cookie club, or a free CD in order to get customers to purchase from the company and return on a regular basis. If As Siebers, Aickelin, and Celia (2010) pointed out:
At any given point in time a customer’s behaviour, as the product of an individual’s cognitions, emotions, and attitudes, may be attributable to an external social cue such as a friend’s recommendation or in-store stimuli, or an internal cue such as memory of one’s own previous shopping experiences. Changing customer requirements may in turn alter what makes a successful management practice (because these are context specific, and customers are a key component of any retail context).
Costabile (2000) supports the statements of Siebers et al. (2010) as he states that today’s markets are forced to be hypercompetitive. With markets being worldwide, rather than local, there are many more facets to deal with than when Mom and Pop had a corner grocery and could buy grocery and retail supplies for a relatively homogenous population. Instead, there are now thousands of brands in a typical retail store, and “brand switching is now a click away” (Costabile 2000, p. 1).
A 2004 study by Mintel suggested that it is ‘normal’ for families and households today to have more than one loyalty card. Although companies developed the use of the card in an effort to gain competitive advantage in a hypercompetitive market, this concept will not work if the every company has a card. It stands to reason that once every company or nearly every company has a card, the only value becomes the ease in tracking the customer’s preferences. If all companies offer loyalty cards, it seems likely that the card loses the perceived value to the customer and it becomes just another fob on the keychain.
Loyalty is defined as “the reflection of a customer’s subconscious emotional and psychological need to find a constant source of value, satisfaction and identity” (Jenkinsen 1995 116). This suggests that loyalty is a deep emotion, one which fulfils psychological needs of the customer. The customer is searching for an identity, for a level of importance to the company from which he or she purchases not only luxury goods but necessities. The current research suggests that when customers use a brand more and are satisfied with it, they come to trust it, (Delgado-Ballester & Mumuera-Aleman 2005) implying that customer satisfaction is part of that deep emotional need. If this is the case then we need to ask if perhaps the time of the loyalty card has passed, and the time of the customer as collaborator has arrived (Ozeren et al. 2009)
Chapter 2 — Aims and Objectives
This chapter presents the aims and objectives of the proposed study.
The first aim of the research will be to conduct a through literature review. While Chapter One of this proposal has provided the skeleton of the literature review that will be conducted, a complete literature review will establish the current state of knowledge (North Carolina State University, 2006) involving loyalty programs, retail marketing, and the reasons behind customer purchases. This information will be invaluable in answering the research question, which is “Is it time for Tesco to discontinue use of the Clubcard?”
This aim is supplemented by three primary objectives as follows:
This proposed study will be guided by three primary objectives:
1. To provide a current overview of Tesco and how its Clubcard affects customer loyalty at present.
2. To administer and analyze a custom survey of consumers concerning their views about clubcards in general and the Tesco Clubcard in particular.
3. To deliver a synthesis of the secondary and primary research to answer the study’s guiding research question.
Chapter 3 — Methodology and Methods
This chapter presents an overview of available research methods, the research philosophy to be applied in the proposed study, as well as a description of inductive vs. deductive research. A description of the proposed study’s research strategy is followed by an outline of the research process that will be followed. Finally, a description of the proposed study’s data collection methods, secondary research, original research and the posting of the custom survey on an online survey service is followed by a discussion concerning the limitations of the study proposed herein.
Overview of Research Methods
There are several social research methods available to the qualitative researcher, including historical methodology, hermeneutics, ethnography, phenomenology, field-based case study, grounded theory and action research (Burton & Steane 2004). Likewise, quantitative researchers can draw on a wide range of research methods, including descriptive, correlational, cause-comparative and experimental (Jensen 2002). The common theme that characterizes quantitative research is the use of numbers rather than textual, graphic or other documentary resources (Neuman 2003). For instance, according to Jensen, “Quantitative research methodologies generate numerical data. Surveys (whether of audiences or content) and experiments are the basic ‘methods’ of the data collection” (2002, 230). Likewise, Neuman reports that quantitative research is “information in the form of numbers” (2003, 542).
The aim of quantitative data collection and analysis, then, is to produce findings which lead to the acceptance or rejection of a specified hypothesis. Numerical data analysis through statistical procedures represents a systematic and objective way of determining whether significant patterns of relationships exist among those phenomena that have been measured in data collection
Among the main research philosophies are the (a) the positivist/empiricist orientation (which supports the use of quantitative methods), (b) the constructivist/naturalist worldview (which supports the use of qualitative methods), and (c) the pragmatic model (which supports the use of quantitative, qualitative, or a combination or mix of both methods as dictated by the research questions) (Tashakkori & Teddlie 1998, 3). The research philosophy to be employed in the proposed study will be the pragmatic model using a mixed methodology consisting of both qualitative and quantitative methodologies.
Inductive vs. Deductive
Inductive and deductive research approaches take diametrically opposite views preparatory to undertaking a study as defined further below.
Inductive Research. Inductive research is “an approach to inquiry or social theory in which one begins with concrete empirical details then works towards abstract ideas or general principles” (2003, 537).
Deductive Research. According to Neuman, deductive research is “an approach to inquiry or social theory in which one begins with abstract ideas and principles then works towards concrete empirical details to test the ideas” (2003, 533).
Based on the guiding research question, a deductive approach was deemed best suited for the purposes of the study proposed herein.
The selection of an appropriate research strategy is important to the successful outcome of a study (Maxwell 1996). Based on a review of the available research strategies, the research strategy to be used in the proposed study will be to use a qualitative analysis of the secondary literature to develop a custom survey to collect relevant quantitative primary data. This research strategy is highly congruent with the guidance provided by Poggenpaul, Myburgh and Van Der Linde who report, “There is a strong argument for qualitative research strategies as a prerequisite for quantitative strategies” (2001, 408). The use of both qualitative and quantitative data is also congruent with Neuman’s observation that, “Both qualitative and quantitative research use several specific research techniques (e.g., survey, interview, and historical analysis), yet there is much overlap between the type of data and the style of research. Most qualitative-style researchers examine qualitative data and vice versa” (2003, 16). Likewise, DeMarrais and Lapan suggest that the debate over quantitative vs. qualitative research methods has been resolved, with “both camps recognizing the value of multiple views and approaches to research practice” (2004, 3). This research strategy will follow the research process which is described below.
The research process to be employed in the proposed study is the inverted pyramid approach in which the researcher investigates the general issues under consideration from a broad perspective and increasingly fine-tunes the research process to target those specific issues of interest (Neuman 2003).
The data collection process will begin with the secondary research using a critical review of the relevant secondary literature. According to Fraenkel and Wallen, “Researchers usually dig into the literature to find out what has already been written about the topic they are interested in investigating. Both the opinions of experts in the field and other research studies are of interest. Such reading is referred to as a review of the literature” (2001, 48). The next step in the data collection process will be the administration of a custom online survey to collect primary data from Tesco customers as described further in the section, “Survey with Customers: Survey Monkey” further below.
According to Dennis and Harris, “Secondary data are information that has been collected earlier for a different purpose, but which may still be useful to the research project under consideration” (2002, 39). Because resources are by definition scarce, taking advantage of secondary data whenever possible can contribute a great deal to the findings of a research project (Dennis & Harris 2002). There are some constraints involved in strictly relying on secondary resources only, though. For example, Dennis and Harris caution that, “Finding the information needed to answer a particular research question from secondary data avoids the need to spend time and money on primary research, but the likelihood of an ideal match is remote” (2002, 39).
In contrast to secondary research, original research involves the collection of primary data, or data that has been collected for the first time (Dennis & Harris 2002). In this regard, the use of both secondary and primary data is consistent with the guidance provided by Dennis and Harris: “Primary data are information that is being collected for the first time in order to address a specific research problem. This means that it is likely to be directly relevant to the research, unlike secondary data, which may be out of date or collected for a totally different purpose. Ideally, an effective research project should incorporate both primary and secondary data” (2002, 39).
Survey with Customers: Survey Monkey
Surveys are a highly efficient and cost effective approach to collecting primary data (Benz & Newman 1998). According to Leedy and Ormrod’s definition, “Survey research involves acquiring information about one or more groups of people ? perhaps about their characteristics, opinions, attitudes, or previous experiences ? By asking them questions and tabulating their answers. The ultimate goal is to learn about a large population by surveying a sample of that population (2005, 183). Since the custom survey will contain more than 10 questions, a premium account (approximately $10/month) will be created to accommodate the online survey. To help ensure the validity of the custom survey instrument, the steps recommended by Proctor and Vu for online surveys will be followed as set forth in Table 1 below.
Recommendations for Web Survey Ordering, Organization, and Implementation
1. Limit the number of open-ended questions;
2. Design the survey so that it answers only the questions of interest (as briefly as possible).
1. Ask demographic questions first.
2. Make the first question interesting to the participant.
3. Do not require contact information such as telephone number early in the survey.
4. Do not place open-ended questions at the beginning of the survey.
1. Use simple designs;
2. Include a prompt if the respondent has not answered the relevant research questions;
3. Provide clear instructions where needed;
4. Keep question implementation similar to allow the respondent to focus on the content of the question;
5. Identify each drop-down menu box in use with a “click here” instruction;
6. Allow the respondent to scroll to each question unless ordering of the items is fundamental to the research;
7. When skip directions depend on the answer of a question, give respondents the control of going to the next question;
8. Do not design the survey so that it requires specific software or hardware for the user to respond;
9. Double space responses if they do not fit onto one screen of the expected minimum resolution of the target sample;
10. For long surveys, consider providing a progress indicator
Source: Proctor & Vu 2005, 311
Finally, fundamental limitations to the online survey approach to be used in the proposed study will be the inability of the researcher to verify the identities of the survey respondents and the potentially limited number of Tesco customers who agree to participate in the research. As Darlington and Scott point out, “Experienced researchers will know, however, that potential research participants are not always easy to find. Researchers often have to take as many participants as they can get, within the constraints of time and other resources” (2002, 53).
Chapter 4 — Ethical and Access Issues
This chapter describes the population of interest for the purposes of the proposed study and what steps will be taken to ensure data privacy.
The population of interest for the purposes of the proposed study will be Tesco customers who possess Clubcards as well as those who do not. Potential respondents for the online survey will be recruited by placing requests for participation in online forums directed at Tesco and other warehouse superstores such as Ware Online (http://www.wareonline.co.uk/haveyoursay / topic.asp?TOPIC_ID=4789) and Wales Online (http://forums.walesonline.co.uk/viewtopic.php? t=19540). The recruitment advertisements will include a description of the research project as well as a hyperlink directing interested customers to the online survey that is posted on SurveyMonkey.
Although all respondents of the custom survey instrument will be assured of their anonymity, all responses to the online survey will remain confidential and will be secured under password in the researcher’s personal computer.
Chapter 5 — Preliminary Bibliography
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Burton, S., & Steane, P. (2004). Surviving your thesis. New York: Routledge.
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Delgado-Ballester, E. & Mumuera-Aleman, J. (2005) Does brand trust matter to brand equity? Journal of Product & Brand Management 14(3) 187-196.
DeMarrais, K. & Lapan, S.D. (2004). Foundations for Research: Methods of Inquiry in Education and the Social Sciences. Mahwah, NJ: Lawrence Erlbaum Associates.
Dennis, C., & Harris, L. (2002). Marketing the e-Business. London: Routledge.
De Vaus, D. (1996). Surveys in Social Research. London: UCL Press.
Ehrenberg, A. (1988) Repeat-buying: Facts, theory and applications London: Charles Griffin and Co.
Funding Universe (2011) Tesco. Retrieved online at http://www.fundinguniverse.com/company-histories/Tesco-plc-Company-History.html
Heskett, J. (2002). Beyond customer loyalty. Managing Service Quality, 12 (6), pp. 355-357
Jenkenson, A. (1995) Retailing and shopping on the internet. International Journal of Retail & Distribution Management, 24 (3), pp. 26-37
Jensen, K.B. (2002). A Handbook of Media and Communication Research: Qualitative and Quantitative Methodologies. London: Routledge.
Lach, J. (2000) Redeeming qualities. Advertising Age. Retrieved online at http://adage.com/article/american-demographics/redeeming-qualities/42382/
Leedy, P.D., & Ormrod, J.E. (2005). Practical research: Planning and design (8th ed.). Upper Saddle River, New Jersey: Pearson Merrill Prentice Hall.
Maxwell, J.A. (1996). Qualitative research design: An iterative approach. Thousand Oaks, CA: Sage Publications.
Meer, D. (1995), System beaters, brand loyals, and deal shoppers: New insights into the role of brand and price, Journal of Advertising Research, 35, 2-12
Mintel (2004). Customer loyalty and discounting in retailing [online]. Available from: http://reports.mintel.com/sinatra/reports/search_results/show&type=RCItem&page=0&noaccess_page=0/display/id=4346/display/id=142006§ion/display/id=4346
Neuman, W.L. (2003). Social research methods: Qualitative and quantitative approaches, 5th ed. New York: Allyn & Bacon.
North Carolina State University (2006) Writing a literature review and using a synthesis matrix. Writing and Speaking Tutorial Service. Retrieved online at www.ncsu.edu/tutorial_center/writespeak/download/Synthesis.pdf
Ozeren, E., Korkmaz, A., & Yucealp, E (2009) Satisfying the expectation of customer throughout the value chain: Value chain implications on supermarkets vs. groceries. Scientific Papers Management, Economic Engineering in Agriculture and Rural Development 9(1) Presented to International Conference on Value Chain Sustainability November 12-14, 2008 Izmir, Turkey.
Pioch, E., Gerhard, U., Fernie, J., & Arnold, S. (2009) Consumer acceptance and market success: Wal-Mart in the UK and Germany. International Journal of Retail and Districution Management 37(3) 205-255
Poggenpoel, M., Myburgh, C.P. & Van Der Linde, C. (2001) Qualitative Research Strategies as Prerequisite for Quantitative Strategies. Education, 122(2), 408-410.
Proctor, R.W. & Vu, K.P. (2005). Handbook of human factors in Web design. Mahwah, NJ: Lawrence Erlbaum Associates
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Siebers, P., Aickelin, U., Celia, H., & Clegg, C. (2010) Simulating customer experience and word-of-mouth in retail – A case study. Transactions of the Society for Modeling and Simulation International; Simulation: 86 (1), 5-30
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Tashakkori, A., & Teddlie, C. (1998). Mixed methodology: Combining qualitative and quantitative approaches. Thousand Oak, CA: Sage Publications.
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