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Customer Loyalty in the UK. What Causes Consumers to Be Disloyal to Big Supermarket Brands?

Seminar Paper 2016 9 Pages

Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media

Excerpt

CONTENT

INTRODUCTION

CUSTOMER LOYALTY

ARE UK CONSUMERS BECOMING DISLOYAL TO THESE BIG SUPERMARKET BRANDS?

WHAT IS IT THAT CAUSES CONSUMERS TO SWITCH THEIR LOYALTY TO BRANDS?
Supermarkets are unable to meet their customer demand
Loyalty programs are missing their mark
No unique relevance to consumers

WHAT COULD SUPERMARKETS DO TO RETAIN THEIR CUSTOMERS?
CUSTOMER FEEDBACK
Customer Satisfaction Index
Feedback
Market Research
Market Segmentation or Strategic Activities
INTRODUCING CUSTOMER LOYALTY PROGRAMME
PROVIDING GOOD QUALITY PRODUCT WITH LOW PRICE

CONCLUSION AND RECOMMENDATION

REFERENCES

BIBLIOGRAPHY

INTRODUCTION

This seminar paper will explore about the consumer behaviour and their loyalty to the big supermarket in the United Kingdom. This paper will also critically examine whether the consumers are switching their loyalty or not and what might be the key issue of doing so. In addition, the paper will recommend to the supermarket regarding the way of consumer’s loyalty retention as well.

Customers are the most important part to the various renowned supermarket companies rather than their own competitors in business in United Kingdom. Consumer behaviour is the key point to choose the market products in the supermarket. There are normally three stages of consumer behaviour for instances pre-consumption, consumption and post-consumption (Solomon, Russell-Bennett and Previte, 2012). Consequently, it is highly significant to focus continuously on customer behaviours in their each stage. However, consumer behaviour is radically changeable at least three times a year seeking best service from the retailer market. Consumer reliability is the crucial point for retailers making profit and expansion of their business.

At present, all large supermarket companies in United Kingdom are showing priorities to build strong relationship with their consumers and it is known as consumer loyalty. Therefore, business competition is growing remarkably within the supermarket like Sainsbury, Tesco, Morrison, Asda in the United Kingdom. Similarly, consumers are easily able to move their loyalty from one super market to another. Belleghem (2013) reported Morrison announced pre-tax loss about £176 million from the market, while discount shop like pound land achieved huge profit in the last couple of consecutive years.

CUSTOMER LOYALTY

Customer loyalty is considered as the active relationship between an individual’s relative attitude and continuous support. Actually, the relationship is measured as facilitated by social norms and surrounding aspects (Dick and Basu, 1994). In addition, making strong relationship with customers is the prerequisite of the business success in United Kingdom and ultimately supermarket could make more profit. According to researchers, customer and retailer relationship makes company financially and socially strong in the society.

In addition, there are some programmes for instances frequently programmes (FPs) help particularly to develop customer loyalty. In addition, Kotler and keller (2012) reported that many companies can use FPs to hold their customer loyalty. Moreover, Knox and Denison (2000) revealed that the typology of loyalty measurement (Shown in figure 1). They segmented consumer loyalty into budget measures, switching measures, and patronage measures depending on the consumer loyalty.

Figure 1: Typology of loyalty measures (Knox and Denison, 2000)

Abbildung in dieser Leseprobe nicht enthalten

To retain consumer loyalty, many supermarket companies are launching currently several programmes for examples free brochure or gift pack or price discount policy during the specific period of times for instance Black Friday, X-Mass Day and Bank Holiday. Therefore, retaining customer loyalty is significant to achieve competitive advantages of the supermarket companies.

ARE UK CONSUMERS BECOMING DISLOYAL TO THESE BIG SUPERMARKET BRANDS?

According to Loyalty survey 2012 in United Kingdom (Shown in figure 2), consumer loyalty was absolutely variable in not only big supermarket but also various brand products as well. It was noted that only 28 percent of the supermarket companies achieved good as well as excellent loyalty rate, while rest 39 percent had very poor loyalty rate (Temkin Group, 2012).

Figure 2: Distribution of Scores based on Loyalty Ratings (Temkin Group, 2012).

Abbildung in dieser Leseprobe nicht enthalten

However, huge consumers are feeling currently themselves as disloyal to the supermarket in United Kingdom. Namruti (2012) reported that about 8.75m supermarket consumers in England and Wales non-existence loyalty towards any of the following large six supermarket companies. In addition, about 20% out of 45m consumers are professionally disloyal and they have no loyalty to Sainsbury’s, Co-operative groups, Waitrose, Asda, Morrisons, or Tesco (shown in figure 3).

Figure 3: Proportion of the Swapper Consumers (Namruti, 2012).

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Moreover, report revealed that about 21.1 million regular consumers in England and Wales are disloyal due to their local variations. According to figure 3, consumer loyalty rate was very low in Waitrose and it was about 22.6% out of 2.03m of their regular customers (Namruti, 2012). In addition, Tesco is also concerned about their highest amount of share because of their customer’s movement to another brand. Overall, consumer is becoming disloyal to big supermarket in United Kingdom.

WHAT IS IT THAT CAUSES CONSUMERS TO SWITCH THEIR LOYALTY TO BRANDS?

Consumer loyalty is variable based on consumer behaviour and geographical location of their lifestyles as well. The following points are responsible to switch their loyalty to another brand:

Supermarkets are unable to meet their customer demand: currently, declining consumer loyalty is the key issue for all big supermarkets in United Kingdom. Consumers are so conscious regarding present product quality and customer service rather than their past history. For example, if consumer are served late that might be the causes of switching their brand only due to bad customer service (Belleghem, 2013).

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Details

Pages
9
Year
2016
ISBN (eBook)
9783668130227
ISBN (Book)
9783668130234
File size
798 KB
Language
English
Catalog Number
v313913
Institution / College
University of Bedfordshire
Grade
B
Tags
customer loyalty what causes consumers disloyal supermarket brands

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Title: Customer Loyalty in the UK. What Causes Consumers to Be Disloyal to Big Supermarket Brands?