Investigating The Mechanism And Impact Of Nectar Card Marketing Essay

Investigating The Mechanism And Impact Of Nectar Card Marketing Essay To explore the effectiveness of customer centric theory by the implementation of loyalty cards in retail business. To make a critical review about the operation and success of Nectar card Sainsbury in maintaining the customer relationship in current business environment. To investigate more about some practical theories used by Sainsbury for the implementation of Nectar cards in their business. To evaluate the impact of Nectar card among Sainsbury customers to point out some valuable suggestions thereby to improve the effectiveness of nectar card in business of Sainsbury. Research background In this competitive market the main factor affecting the business is the effective strategic management in the business. Information technology is the most effective factor now days. Therefore all the business organizations are to be careful in maintaining effective IT related strategies for the effective business. Sainsbury is a well established supermarket network in London. They have made a strategic approach by using the IT sector as by using the nectar card as an service to the customer where as using it as the information collector for the effective business. They mainly focus to meet customer requirements. In this proposed research I am planning to do a research on the nectar card used by the Sainsbury at Holborn, London. By using this effective strategy of management Sainsbury have achieved a wide range of customers at Holborn. As they use this card to keep an updated record of data of their customers and to keep a track of their regular customers. By this research I am focusing on the main sections on the strategic application of the information technology of the Nectar card in the business management of the Sainsbury. ORGANIZATION BACKGROUND: Sainsbury, An organization with more than 140 years old opened its first showroom in the year 1869 by Mr. John James and Mary Ann Sainsbury from the time of its establishment towards Sainsbury has very well strategic planning for the instant we can very well see that Sainsbury opened its first showroom in Drury lane, it was the one of the poorest area in the in the country England and they started to sell the high quality products at the lower rate which attracted people all over the place and from the time being the rate of success of strategic decision were very high which lead to the growth of the Sainsbury from 1 store to the 800 stores by the year 2010. The other main strategy adopted by the Sainsbury was they aim to sell to product under their own brand name and first among them was the smoked bacon. The bacon was smoked in their in store under the smoking oven. Sainsbury had a very large shortage of the workers during the First World War and they started to recruit women to wo rk in their in store and many other store roles were assigned to the women. (j-sainsbury,2009) In 1950s Sainsbury our self service stores are started in the UK much before many competitors have implemented and this had made Sainsbury a different store from others continuously the strategies adopted by the company goes at higher success rate one of the result among them was the in the year 1969 their own brand products accounted for the 50% of their turn over.(j-sainsbury,2009) GOAL OF SAINSBURY: The major o goal of the Sainsbury is by providing good quality shopping experience at the convenient price with the highest quality available in the market. Sainsbury aims at the higher customer expectations for the daily lives which makes the life of the customer easier.(j-sainsbury,2009) VALUES OF SAINSBURY: Sainsbury value for the passion for the healthy, safe, fresh and tasty foods, our focuses towards delivering great products at fair prices, a history of innovation and leadership and a strong regard for the social, ethical and environmental effects of our operation have continued to stand the test of time. (j-sainsbury,2009) Five major principles followed by the Sainsbury are: Bringing the best for the food and health. Integrity in sourcing Environment respect. Marking positive effects in the community. Making working environment a better place to work. (j-sainsbury,2009) LITERATURE REVIEW: LOYALTY CARD: Loyalty card is an another marketing strategy adopted by many business organization and loyalty card is provided by different organization and marketed by different organization in different name and some among them is the Nectar card, Club card, Reward card etc. Usually loyalty card is a plastic or paper card usually looks like credit or debit card in which the name of the card holder will be imprinted in the face of the card. Loyalty card is the usual name famous in the UK region and its name varies in different region in the world. The other side of the card typically will have a magnetic strip or a barcode so that they can be easily scanned to the system when purchasing the products. (loyalty,2008). A retail firm in the in the retail industry may issue this loyalty card towards the customers or consumers which can be then used as an identification procedure in order to find the particular customer. The loyalty gives the data of the consumer regarding demography as well as the other relevant data. It gives data such as the address as well as the number of families in the home. Each and every loyalty card issued by the retail merchandise will have customer privacy statement as well as the non- disclosure data about the customers and these data will not be disclosed between the others users of the same retailing sector. These data provided by the loyalty card can be used for the both externally as well as internally. These data can be used to analyze the data such which will be better and favorite brand for the particular customer or whether the consumer is vegetarian or not.( loyalty,2008) EPOS: Electronic point of sales: EPOS data are usually used by the retailing groups like supermarkets, hypermarkets, pharmacies, chemists, convenience stores, small independent stores, petrol bunks, cash and carry, off license as well as in pubs and restaurants. Electronic point of sales data are the much useful data to the retailer like the one which when the customer swipe the card at the till of the shop all the details like what all are the things purchased by the consumer will goes towards the marketing wing and as per the data available the marketing wing can able to analyze the customer and they can provide provides rewards and loyalty program according to the taste and nature of the consumers or customers.( loyalty,2009) NECTAR CARD: Nectar card is a loyalty card as well as a loyalty reward program mainly based in the UK region supplied with the partnership of the business giants like Sainsbury, American express and BP. The nectar card was introduced into UK in later of 2002. (nectar,2009) Nectar is maintained by the private organization named Loyalty Management Group UK and now it became the part of Group aero plan. The helpline is mainly based on the Tyne and in Mumbai. Nectar card has maintained a 5 year plan from the year 2002 and thus helped to overtake the club card issued by the Tesco and by the year 2010 Nectar card has became popular 2in the UK. (nectar,2002) Sainsbury uses the data from the nectar card by the process of EPOS. Sainsbury valuate each and every customer by the process of EPOS services provided by the nectar card. At the time of billing process Sainsbury stores each data in the database through this process they can be able to analyze what all are the products which are mostly sold in the particular day and they can analyze the trends in shopping of the consumers as well as the customers. By looking over the database of each customer they can be able to analyze the taste of the consumers like whether he or she is vegetarian or non vegetarian through this analyze they can be able to provide particular offer toward for the particular products for the customers and at the same time they can be able to provide offers for the products which are not usually used by the consumer. During each seasons for example during the month of Christmas if consumer or customer consumes wines they can be able to provide seasonal offers for the p articular products at particular time. (j-sainsbury,2003). Rationale I had been employed by the firm and have found that with the advent of loyalty cards the company is capable of promoting its sales very easily. The loyalty cards have made market analysis and exploitation of customer behavior carry with nominal expenditure very effectively than any other method. Hence being from an IT background and as learning Business Management, I thought to keep me ahead in this era of technology based business. This research will horn me with more knowledge. Hypothesis Loyalty cards are the simplest ways to analysis and understand periodical customer behavior and to promote business regionally. Methodology Don Erwin says The main reason for studying research methodology is that it provides a time-tested, proven means of providing new, reliable knowledge that accumulate the growing body of knowledge.(Ethridge,2004,p.10) The methodology of research can be explained as the systematic method to solve the research problem or the scientific method of doing the research and meeting the objectives of the research. Research methods and methodology closely related parts of the research, in which the methodology has many dimensions and method can be viewed as the part of this .This makes the methodology of a research always wider than the research method. Thus in this context researcher should well aware about the research methods as well as methodology before doing a research. (Kumar, 2008, p.5) The research can be classified on the basis of a number of factors like objectives, data used, data collection methods, the use of the research, approach of the researcher etc. most of the time a research may be the combination of more than one type. So following are the classification of some major type of research in which my research is more related to. Descriptive Vs analytical research The descriptive research mainly concentrates on the descriptive approach of stating the affairs and research problems. This make use of the main research methods like survey method, observation   and other primary data collection method in spite of the secondary data which is already available. An important characteristic of this research is that it can only describe what is happened or happening and no control over the variables of the research topic. But in the case of analytical research the researcher make use of the various information and facts which is already available for the evaluation of the research topic, so that no need to collect fresh or primary data.(Kumar, 2008, p.8) My research is planned to make use of both primary and secondary types of data so my research is more related to descriptive type research than analytical type. Theoretical Vs Empirical Research In the theoretical way of doing a research the researcher primarily selects some of the theoretical facts and information from the sources like articles, journals, books etc then the researcher further analysis the research questions on the basis of this data which is mainly the secondary data. But in the case of the empirical data the research begins with the help of secondary data but latter the researcher also make use of some of the primary data for the further analysis of evaluating the hypothesis and finding the answer to the research questions. . (Schwab,2004,p.15) In the empirical research secondary data helps to make a detailed analysis of the research topic were the primary data helps to find out key ideas and values of the topic, altogether makes the research more reliable and meaning full. Because of this strong advantage I am making use of Empirical research method in my research. Explanatory Vs predictive Research Explanatory research mainly carried out in the situation in which the researcher should find out the reason behind a particular phenomenon which is already happened and is related to the research topic. In this type of approach the researcher identifies different factors or variables and analysis this variables with the help of predicted hypothesis and objectives. In this type of research the researcher can make strong interpretations on the basis of the collected data, but in the case of predictive research the researcher is making predictions regarding the various factors with the help of the collected data. (Gratton, 2004,p.9) Since in my research there is no scope for prediction of phenomenon and also requires the interpretations of collected data my research is more explanatory. Qualitative and Quantitative Research Qualitative and Quantitative is the most important classification on the basis of the date used to carry out the research. The data is mainly classified into two, one which contains narrative explanations and interpretations called qualitative data but the other contains numerical data and its analysis called the quantitative data. The researches which uses qualitative data for proceeding the research is called qualitative research, similarly research which uses quantitative data is called quantitative research. Most of the research is the combination of the quantitative and qualitative approach called the mixed approach. In my research also in making use of both type of research so its a mixed research approach. Quantitative Research This approach concentrates more on measurement and evaluates of the quality or amount, on the factors which can be expected in terms of the quality. This is more related to the quantitative phenomenon and quantifiable data. By implementing this research type the researcher can be able to analyses the topic very precisely with the help of set of procedures and rules so that the reader can get a clear picture of the issues under consideration. (Kumar, 2008,p.10) The scope and limitations of the quantitative approaches are follows. Scope of quantitative research The quantitative research is helpful to the stake holders to evaluate the performance of the company very clearly and easily. Since the analysis is strictly based on the objectives and main points the comparisons can be easily done. Quantitative approach is easily replicate and highly reliable. The authenticity of data used in this type of research can be verified easily The authenticity of quantitative data which is used in the quantitative research analysis can be easily verified. Limitations The main limitation of Qualitative type of research is that it can be effective only with the help of quantitative research. The approach holds minimum flexibility. Highly depends on the authenticity of the numerical data used in the analysis. If the data is not reliable the whole research becomes meaningless and insignificant. Highly time consuming and expensive to perform. This type of research should be planned carefully to ensure the correct destination. Qualitative research Through this type of approach the researcher can easily evaluate and illustrate human behavior and related issues.   Qualitative research is a very important in business researches because it is vey useful in the product design and sales. Through this the user can easily evaluate the preference and habits of the people and can predict the future of the product whether it is viable or not commercially. Qualitative research mainly supported by a realistic and provable hypothesis which can be analyzed to reach the research result.(experiment-resourses,n.d.) Scope of qualitative research Qualitative research is very useful if the research topic is complex with the help of hypothesis and clear objectives. Approach helps the researcher to explore and interpret the real world experiences which is impossible in the case of quantitative analysis. Depth evaluation of the topic is possible in a detailed manner so that the research will be more useful for the readers. Procedures are flexible so that new levels of research can be established very easily. Can make maximum use of the previous researches and also can point out the ignored factors in the previous researches. Limitations Highly influenced by the personal skill of the researcher so that the quality of the research cannot be ensured with the quality data and data collection methods. Systematic comparison is difficult because of the aggregative approach of the research. Low reliability and less precise when compared to the quantitative research. Since the research is more concentrated on the personal experience , general trends opinions ,judgment etc ,this can only be effective in the qualitative method of analysis. Mathematical analysis is impossible. Data collection Methods The most important step in a research is its data collection. By which the data for the research is collected. This step is much important in a research, as proper care is to be taken for the reliability of the data collecting and towards the relevance of those data. For these collecting of data there are few methods which can be classified as primary and secondary data. The main collection methods used are secondary method which includes methods like collecting data from internet, books journals etc. but in the few cases the collection of primary data may face difficulties as it is fresh and new data collected. Primary data collection methods This method is used to collect data from the area of research directly by using various primary data collecting methods. The researcher uses various methods like questionnaires, interviews, surveys etcà ¢Ã¢â€š ¬Ã‚ ¦ the primary data is fully depended on the subjects and hence there is a chance of bias if the subjects are not trust worthy. In this research I am planning to do: Observation method: This is the method of data collecting by the process of observing the working environment at the area of research, in this research it is the working environment off the Sainsbury super market at Holborn, London. This collection method is done by the direct participation of the researcher. Advantages: In this method of data collection the data collected may be more reliable as the researcher has a direct personal experience in the area of research. Observation method is an effective where as an simple method by which the researcher can get a direct contact with the working environment of the area of research and can collect data effectively and easily Direct contact with the employees can be helpful for the success of the research. As they may be able to provide data much easier. Disadvantages: In few situations the information collected by the direct contact may be incomplete and may require further effort on it. The validity and reliability of the data collected by the observation method may not be confirmed. As only a proper skilled researcher can analyze the working environment of an activity effectively. As the part of collecting data in this research, I am using the observation method as I had an experience of six months in this super market and this method is mostly reliable one. Questionnaire method In this method of data collection, I am intending to prepare a collection of questions related to the research topic to find out relevant data for the research. Advantages: Questionnaire method helps to provide data according to the relevance of the research. As all the questions in the questionnaire are directly linked to the research objectives. Collection of data can be done much effectively and easily than conducting an interview. In this method of data collection it is easy to get data from a very large number of persons as the questionnaire can be supplied to them in a short period of time. Disadvantages: In this method of data collection in few situations the participants may not be ready to provide accurate data. All the questions in the questionnaire are to be answered effectively by the participant incase to do easy analysis. As there is possibility of anonymous questionnaires the participants may have a negative feel towards the questionnaire. (Cresewell,2002,p.25).   Interviewing method: This is the method by which I have to formulate a structured frame of the questions which lead me to collect the data which supports my research.   The responses towards my questions by the participants make my research much effective one. Advantages: This is a method by which the data is collected by the researcher by direct contact with the person related to the research area therefore this is much effective to collect relevant data for the research This method of data collection is an flexible one as the questions may vary according to the person. This method helps to get the primary data more easily and reliably as the interview is done with the person who can provide effective data and it is conducted by the researcher itself. Disadvantages: There may be limitations for the researcher to publish data provided by the interviewee in the interview in some situation. As the data may be much confidential related to them. This is a process which takes much time in analyzing and sorting of the data also to lead the data to the finds of the research questions I am planning to conduct a direct interview with the manager of the Sainsbury Supermarket at Holborn, London.  Ã‚   Secondary data collection methods   Secondary data collection means those data which have already be collected and published. Also can be accessible from various sources like journals, articles, books, internet etc. these data collected will   be much reliable if we take proper care in the selection of the sources we use. In this research I am intending to use various above mentioned sources which are reliable.   Advantages: The data can be easily and effectively collected in this method as the required sources are easily   accessible by the researcher through various libraries, internet etc The books which are much reliable as published and written by qualified persons makes those data more reliable and relevant. As the data collected will be already arranged or sorted by the pre-publisher the sorting of data will be easier. Disadvantages: As there are various unreliable sources it is difficult to identify the reliable one and the unreliable one. The improper updating of various websites in the internet may affect the reliability and relevance of the data. As all the data are published before there may be a tendency to copy the work done by any other person which means practicing plagiarism. Ethics in research Ethics in the research is one of the most important factors the researcher should take care of because this can create trust of the reader on the research. The ethical principles can be applied to all levels of the research like planning, evaluating, data collection conducting etc. Integrity, honesty and confidentiality are the main factors which can contribute a lot to the ethical behavior of the research. Some of the ethical standard a research should maintain is follows, Avoid the use of information which can harm environment, individual and property unnecessarily. Reliability of the information and individuals in the research should be ensured. The confidentially and privacy of the data should be preserved whenever necessary. Suitable precautions should be taken when dealing with the individuals in the research to maintain the reliability of the research. Try to avoid big economic expenses, big reward and contract for the study to avoid the falsification of information.