Organizational Culture Of The Chrysler Group - 1283 Words

There are several layers of organizational culture. Three of which consist of observable artifacts, espoused values and basic assumptions. The Chrysler Group has a certain culture that has existed for decades. Due to the fact that they had to file bankruptcy, this culture needed to be changed. The observable artifacts in the Chrysler Group were the fact that they were known to have drastic price cuts when they found out that sales had decreased (Kreitner, Kinicki, 2013). The Chrysler Group had the idea that offering huge discounts would increase their sales and make them a greater profit. This idea was their espoused value but was not found to be true. It was only an aspiration. Chrysler had a norm for offering large rebates as well as other things to entice customers to buy their automobiles. The chief operating officer assumed that because another company was offering high rebates that this is what Chrysler Group should do as well. The goal of Chief Executive Sergio Marchionne was to make Chrysler a profitable organization again. For this to be done a plan had to be set in order. The competing values framework is an excellent tool used to analyze and change a company’s organizational culture (Kreitner, Kinicki, 2013). Marchionne’s plan for Chrysler incorporates the entire competing values framework; clan, adhocracy, market and hierarchy cultures. The clan culture is a culture that incorporates working together and team members communicating and developing a commitmentShow MoreRelatedGeneral Strategic And Cultural Change At Chrysler Group1582 Words   |  7 Pages****** 1. Sergio Marchionne Undertakes Major Strategic and Cultural Change at Chrysler Group (p.86) ********************************************************************************************************** 2. What are the observable artifacts, espoused values, and basic assumptions associated with Chrysler s culture. Explain Student Answer: According to the text, there are three layers of organizational culture: observable artifacts, espoused values, and basic assumptions (Kreitner KinickiRead MoreOrganizational Behavior ( Ob ) Studies The Influence That Individuals, Groups, And Organizational Structure1486 Words   |  6 PagesOrganizational behavior (OB) studies the influence that individuals, groups, and organizational structure have on behavior within organizations. More succinctly, it is the study of how people interact in organizations. This paper will briefly review the following five topics that are included in the organizational behavior study process: 1. Managerial Functions 2. Corporate Culture 3. Organizational Culture 4. Strategic Planning 5. 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Strengths Based Social Work Assessment Transforming The...

READING RESPONSE Strengths-Based Social Work Assessment: Transforming the Dominant Paradigm Name Institution Strengths-Based Social Work Assessment: Transforming the Dominant Paradigm Today, the modern medical model worldview bases its functions on the concept of deficit-based and disease process as a means of understanding human behavior, as advanced by the DSM and psychopathology. However, the medical society fails to recognize the impact of this worldview on an individual’s view about all human behavior, and human inability to designate behavior in various contexts. According to the article, Graybeal (2001) argues that this approach is commonplace in social services, where people’s perception about behavior influences how services are provided, which in turn limits access to services. The worldview also considerably affects the perceptions of customers and practitioners in the world (Graybeal, 2001). Graybeal (2001) states that the tension between conflicting paradigms is often dismissed as insignificant and avoided because of threatening and disturbing consequences associated with attempts to address it. There is a contrast that persists between the need for social work knowledge to align with the bio-psycho-socio-spiritual environment and the depressing stories of other individuals living in adversity due to lack of services, owing to conflicting paradigms (Graybeal, 2001). Practitioners and customers remain powerless becauseShow MoreRelatedMy Experience At Temple University1878 Words   |  8 Pagesthat has afforded me the opportunities to cultivate many strong beliefs and ideologies in my personal, academic, and social life. 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Tata’s Takeover of Jaguar and Land Rover Bumpy Road or Smooth Ride Free Essays

Tata’s Takeover of Jaguar and Land Rover: Bumpy Road or Smooth Ride? In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands – Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2. 3 billion. We will write a custom essay sample on Tata’s Takeover of Jaguar and Land Rover: Bumpy Road or Smooth Ride? or any similar topic only for you Order Now Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the world’s cheapest car – the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial scepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all. The takeover has been greeted with jubilation, especially in India, because of the prestige of these marquee brands. On the other hand, sceptics have also been wondering how this acquisition fits in with the Tata Group’s overall strategy. What can the Tata’s do differently than Ford to ensure that the acquisition pays off? What major challenges will Tata Motors face in integration and marketing? I personally find it a very fascinating deal. It’s clearly not a deal that is trying to build economies of scale in just one business and just reach into new markets. It’s quite a differently motivated deal. For Tata it’s not the first time that they’ve reached for a brand with some prestige value as part of expanding their global visibility. So I think viewed as an acquisition that they intend to learn a great deal from, it could very well make sense. How to cite Tata’s Takeover of Jaguar and Land Rover: Bumpy Road or Smooth Ride?, Essay examples

The Learning Organization as Change Tool-Free-Samples for Students

Question: Your task is to choose two, and critically evaluate their usefulness to effect change for both a Manufacturing Company and a Service Company. Answer: Introduction The essay highlights on the critical evaluation of two different change tools for their effectiveness in a manufacturing and a service Company. The manufacturing and the service company that is chosen for this study are Apple and Centre Bank that is headquartered in USA. The two change tools that are selected for evaluation are TQM (Total Quality Management) and the learning organization. Organizational change refers to the procedure in which the firm changes its strategies, technologies, structure and operational method to impact change within the company and effects of changes on the company (Anderson 2012). The organizational change might occur for distinct time period. This change in the organization has huge significance as it helps in building competition and enhances their growth. In addition, organizational change also permits the employees to investigate new opportunities, learn to develop skills and exercise creativity in varied ways that benefits the companies through inc reased commitment and new ideas. TQM change tools facilitate the companies to recognize, analyze and examine both qualitative as well as quantitative data in relation to business. The learning organization as change tools helps learning of the workers so that the companies can transform itself (Anderson 2016). It mainly develops owing to pressures facing the present organizations as well as enables them for remaining competitive in business environment. The scope of this essay is to elucidate on the significance of change tools on the organization. Discussion TQM as change tool and its working TQM refers to the management philosophy that seeks to amalgamate all the functions of organization including- marketing, design, customers service, finance and total production etc to concentrate on meeting the requirements of customers and the organizational objectives. It is basically concerned with improvement in work that ranges from high strategic planning level and decision making to the execution of job elements. The organizations implement TQM for managing quality, quality control, quality assurance and quality improvement. The primary step in the implementation of TQM is to examine the present reality of the organization. They use TQM as strategy for instituting it at the business level for having the desired effect. This change tool works for improving the quality of goods and service and processes of operation (Shani, Pasmore and Woodman 2012). In the TQM effort, the staffs of the companies also participate to improve the culture in workplace. TQM works in the companies ba sed on some principles that includes- total involvement of employee Process centered- The fundamental part of TQM basically focuses on the process thinking. In this process, the inputs are taken from suppliers and then transforms it into output , which are delivered to customers. Communication- This involves strategies and method used for motivating the employees at every level. These elements are vital for TQM that several companies define them as core principles at which they operates (Goetsch, David L and Stanley 2014). Integrated system- Although the companies consist of numerous functional specialists organized into departments structured vertically, it is the horizontal procedure interlinking these functions that becomes the focus of TQM. Strategic approach- The approach usually includes formulation of the strategic plan, which amalgamates quality as basic component. The learning organization as change tool and its working The learning organization as change tools has been commonly hailed as panacea for the success of company in the dynamic economy. This tool aims to bring about innovative methods, new ideas and debate issues. The implementation of this tool helps to enhance the change pace within the company. It also helps them to improve the organizations image by helping them to become more customer oriented (Santos-Vijande et al. 2012). The learning organization is mainly characterized by involvement of total workers in the process of collectively accountable variation that is directed towards shared principles. This change tool foster environment in which the individuals create the outcome that they desires. The main characteristics of the learning organization upon which it works includes- companys structure, Culture- The learning organizational change tool works on strong culture, which promotes openness and creativity among the members. HR (human resource) practice- This change tool works according to HR practice that focuses on the provision of individual learning. This also facilitates in motivating the employees within the organization and improves their performance. Leadership- The learning organization tool mainly depends on effectual leadership. The leaders of the company models openness, communicate vision of this change tool and provide empathy that is required to lead other individuals towards it. Information system-The learning organization tool needs the information system for controlling the business operations and improves practices. Similarity and difference between Apple and Centre Bank The Centre Bank is locally owned community bank that is headquartered in USA. The service provided by this bank includes- relationship banking, decision- making locally, involvement of community and local ownership. The main features of this bank are providing exceptional service and products to the customers with reasonable fees. Being the community bank, they are mainly obsessed with consumer service, having best workers and taking care of their staffs. This bank has developed over the last few decades through successful implementation of TQM principles in the banking industry. Apple Inc is the biggest American multinational software and electronics organization headquartered in California. This organization has become the leader in technology sector by producing price worthy goods that possess huge value in account of technological design. The hardware products produced by this company includes iPhone smartphone, iPad tablet, watches, TV, iPod etc. In addition, this company also p roduces software products such as- macOS, iOS operating systems, Web browser etc. The products manufactured by this company are sold globally through their online stores, resellers and wholesalers. In the recent decades, this entity focuses on the expanding their business through utilization of advanced concepts of design and reengineering of products. The similarity between these two companies is to provide total quality service to their customers. These companies analyze their customers requirement in order to provide better service and manufacture product based on this. On the contrary, the difference between these two organizations is the implementation of change management tool within the business. This means that the strategy formulation by these two organizations differs from each other (Cummings, Thomas and Christopher 2014). Application of TQM on the Apple Inc This company applies integrated team work for improving their objectives including quality, timeliness and cost. They ensures steadiness in product delivery in line with specification of design, quality of product, launch process etc. TQM is based not only on features of product but also on consumer satisfaction and service level provided by them. It also involves both the external as well as internal staffs to supply chain for meeting their consumer needs at lowest cost. This organization adopts TQM with the support as well as commitment from their management by upholding consumer centric focus on their products, processes and services (Oakland 2014). The management of Apple ensures that their decisions in business comply with laws and regulations. Even their adaptive design also works for their competitive environment that demands flexibility to deal with changing circumstances (Kim et al. 2012). Moreover, this entity does their business in safe working situations, treats their wor kers with respect and also utilizes environmentally responsible production process. They also encourage internal teamwork within the organization for achieving TQM as well as competitive advantage against their rivals. In fact, they also formulate strategies in different section by focusing on their customers requirements. One shortcoming that occurs for application of TQM in Apple is that at times there occurs miscommunication gap between the managers and team, which in turn creates fear among employees. However, this lowers morale of the employees and total productivity in business. Application of TQM on the Centre Bank of USA The Centre Bank provides quality service through three ways that includes- Providing high level training to their employees Analyzing the requirements of customers Developing measurement systems for attaining regular feedback One of the strategies applied by this company is provide training to the employees so that they can deliver quality service. They provide non- traditional training to their employees in which the branch managers mentor their employees. The managers coach their consumer service representatives as well as tellers after being coached by the supervisors. Their coaching program also involves videotaping participants during their role play. During these sessions, these employees learn about process of interaction with their customers for determining their financial requirements. In fact, during this interaction they pay special attention to the voice tone, attitude and facial expression of their customers (Bon, Abdul Talib and Esam 2013). The management of this bank also analyzes the requirement of customers through this process in order to deliver high quality service to them. This bank also adopts effective methods of gathering customers feedback in order to improve their service. This i n turn helps to satisfy their customers and attain good reputation. As quality service arises from leadership, this bank strategizes to introduce leaders to help their employees make spot decisions regarding customers interest (Carter et al. 2012). One shortcoming of TQM application in this bank that occurs is production disruption. As the bank provides training to some of their employees, it reduces productivity and puts workload pressures on other employees. In addition, this also reduces the total output of other employees working in this bank. Application of learning organizational tool on Apple The learning organization mainly requires knowledge management for supporting distribution of knowledge and learning. As this learning organization occurs at higher level, it involves higher knowledge management (Rasula et al. 2012). Every organization requires both knowledge management and the learning organization in order to succeed in competitive marketplace. The linkage between this change tool and knowledge management help in creating new ideas for adapting to changes in organization. Apple encourages their employees to create new ideas and let them learn from their experience in order to be successful. Although they face several failures or mistakes in their product line, they continue to innovate new ideas in product. Moreover, they learn from this failure and improve it while manufacturing next product. This company also utilizes best practice in this change tool in order to understand which strategy is success and failure. This in turn helps them to have new idea for creati ng the product. The shortcoming that arises in this case is that few products of Apple did not achieve success in the market due to implementation of new ideas in products. Application of learning organization on the Centre Bank This bank in USA applies team learning in which this change tool and global functions in business is integrated under same roof. Through this change tool the bank make the decision relative to customer service and this bank. Moreover, the managers of this bank have the responsibility to implement this change tool within all divisions (Jacobs et al. 2013). The individuals within the bank have given the permission to share their vision with other staffs for creating the commitment sense to long term. In addition, this bank involves the staffs at all levels who have the capability of personal mastery for implementing this change tool. This learning organizational change tool aids personal mastery through creation of environment favorable to individual pursuits. However, this tool helped this bank to gain competitive advantage against their rivals. Conclusion The conclusion that can be drawn from the above study is that implementation of change tool impacts both positively and negatively to the organization. There are some of the vital factors that influences success or failure of the companies, which includes- lack of proper plan, poor management during the change procedure, mismatch between the entitys context and change plan. Most of the organization around the globe learns lessons from their failure and manufactures product with higher quality as well as provides better services to their customers. Moreover, effective implementation of TQM and the learning organization change tool helps both the manufacturing and service companies to enhance their productivity and maximize profitability level. This change tool also aids the companies to improve their financial performance and attain good reputation in the competitive market. References Anderson, Donald L.Organization development: The process of leading organizational change. Sage Publications, 2016. Anderson, Donald L. 2012.Cases And Exercises In Organization Development Change. Los Angeles: Sage. Argote, Linda.Organizational learning: Creating, retaining and transferring knowledge. Springer Science Business Media, 2012. Benn, Suzanne, Dexter Dunphy, and Andrew Griffiths.Organizational change for corporate sustainability. Routledge, 2014. Bon, Abdul Talib, and Esam MA Mustafa. "Impact of total quality management on innovation in service organizations: Literature review and new conceptual framework."Procedia Engineering53 (2013): 516-529. Burke, W. Warner.Organization change: Theory and practice. Sage Publications, 2017. Burke, W. Warner, and Debra A. Noumair.Organization development: A process of learning and changing. FT Press, 2015. Carter, Louis, Dave Ulrich, and Marshall Goldsmith, eds.Best practices in leadership development and organization change: How the best companies ensure meaningful change and sustainable leadership. Vol. 18. John Wiley Sons, 2012. Cummings, Thomas G., and Christopher G. Worley.Organization development and change. Cengage learning, 2014. Fugate, Mel, Gregory E. Prussia, and Angelo J. Kinicki. "Managing employee withdrawal during organizational change: The role of threat appraisal."Journal of Management38, no. 3 (2012): 890-914. Goetsch, David L., and Stanley B. Davis.Quality management for organizational excellence. Upper Saddle River, NJ: pearson, 2014. Jacobs, Gabriele, Arjen van Witteloostuijn, and Jochen Christe-Zeyse. "A theoretical framework of organizational change."Journal of Organizational Change Management26, no. 5 (2013): 772-792. Kim, Dong-Young, Vinod Kumar, and Uma Kumar. "Relationship between quality management practices and innovation."Journal of operations management30, no. 4 (2012): 295-315. Oakland, John S.Total quality management and operational excellence: text with cases. Routledge, 2014. Rasula, Jelena, Vesna Bosilj Vuksic, and Mojca Indihar Stemberger. "The impact of knowledge management on organisational performance."Economic and Business Review for Central and South-Eastern Europe14, no. 2 (2012): 147. Santos-Vijande, Mara Leticia, Jos ngel Lpez-Snchez, and Juan Antonio Trespalacios. "How organizational learning affects a firm's flexibility, competitive strategy, and performance."Journal of Business Research65, no. 8 (2012): 1079-1089. Shani, Abraham B. (Rami), William A Pasmore, and Richard W Woodman. 2012.Research In Organizational Change And Development. Bingley, U.K.: Emerald. Valmohammadi, Changiz, and Shervin Roshanzamir. "The guidelines of improvement: Relations among organizational culture, TQM and performance."International Journal of Production Economics164 (2015): 167-178.

Urbanization free essay sample

A paper which discusses the problems resulting from rapid urbanization in developing countries. The paper discusses how rapid urbanization in third world countries is creating many social and economic problems. This is because most developing countries are unprepared to accommodate a rapidly increasing population because of lack of resources and sufficient job opportunities. The paper shows that it is for economic reasons mostly that people in rural areas are forced to migrate to urban centers where they feel they would be able to improve their standard of living. The paper looks at meaningful and effective policies to help stop or divert this influx to a certain extent. For example in India and Pakistan, tens of hundreds of young men and women are moving to the United States and more developed countries because the pay scale is usually higher than it is in their own lands. But while it leads to brain drain in the native countries, it also creates several problems for the adopted countries. We will write a custom essay sample on Urbanization or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page For example the one big problem that western countries have faced because of increased immigration is that not only its won citizens have lost jobs rapidly, there has been an increase in ethnic violence too. In the past many years we have noticed that people from Pakistan, Bangladesh, India and some other poor countries have moved to the western countries and since they were willing to work for less, they were offered the jobs that American citizens rightfully deserved. Now this creates a sense of animosity between the locals and the foreigners and also has a negative impact on the economy of the adopted countries.

Winston and Julia essays

Winston and Julia essays Ever since the fist time Winston laid eyes on Julia he really didnt like her all that much. What would bring two very contrary persons together? Julia is a vibrant young woman that is a member of an anti-sex league. To Winston, Julia looks like a stuck up girl with important things to do. On the other hand, Winston is a rather old man that isnt exactly the greatest looking guy in the world. Sometime into the novel Winston suspects that Julia may be following him. Winston figures that she is a spy, while she was following him he even considered killing her by taking a cobblestone and clubbing her head with it. A little later in the novel, Winston sees Julia trip and fall in the hallway, when he helps her up she slips him a piece of paper that read I love you. Winston tried to find some time to meet up with Julia. Time eventually passed and Winston began to wonder if Julia had changed her mind about what she wrote. During lunch one day Winston saw Julia sitting by herself in the middle of the cafeteria. He sat down and they began to talk secretly underneath their breath. Julia came up with an elaborate plan to meet up secretly later on. Later, Julia and Winston meet up in the Proles district. While they were together Winston found out that Julia was a lot like himself even though they appear to be completely opposite. Julia and Winston discovered that they both indulge in pleasures of the flesh and normal human pleasures, that is what brought them together. ...

Religious Symbolism Research Paper Example | Topics and Well Written Essays - 2500 words

Religious Symbolism - Research Paper Example It has been known for a long time that religion plays a critical role in the existence of human beings mainly because of helping people to connect with others and with a higher being. Religion serves many human needs that are aimed at helping people in dealing with mortality. Specifically, it helps in answering most of the questions that are beyond the human understanding that include but not limited to the afterlife and the soul (Molloy 9-10). The questions that underlie the idea of death are beyond human understanding and religion comes in to answer most of these hard to proof questions. These answers help in comforting people. Such congregation brings the aspect of socializing which improves the human psychology. Religion is also responsible for ensuring that people have belonging and an identity. This is very important because people’s mental health also rely on identity. When people belong to a group, that group provides a specific form of fulfillment. In order to express themselves, human beings have a need that prompts them to create artistic forms. As such, religion stimulates art, dance, and music. In fact, religion has been behind an inspiration to create the most fascinating buildings or structures of art in the world today. This brings out the issue of symbolism in religion. A symbol is a representation of something as it pertains to a specific field. As for symbols in religion or religious symbols, these are representations of certain aspects of a specific religion. For instance, in religion such as Christianity, the cross is a symbol of belonging and faith in that specific religion.

Geology cpr essay Example | Topics and Well Written Essays - 500 words

Geology cpr - Essay Example The banded iron deposited in these areas are said to have the biggest economic values and hence mining is quite economical, (Kesler, Stephen 443) During the formation of the banded iron, the earth was covered with acidic medium that to a large extent facilitated the formation of the banded iron. In addition, the great oxygenation that took place facilitated the formation of the hard mineral. This oxygen was fixated by primitive microorganisms that existed during the formation. Photosynthetic bacteria were largely attributed to the formation of banded iron. These bacteria synthesized their food in chemical processes that released oxygen gas. It is important to note that iron is highly reactive with oxygen and hence, it readily formed iron oxide that settled at the bottom of ancient oceans, (Kesler, Stephen 473). This is the most relevant theory that explains the large existence of iron oxide in several iron ores. Before the formation of the banded iron, oxygen gas did not exist, (Trendall 1). The gas only became existence as result of chemical reactions in the photosynthetic bacteria. Geologists agree that as the cyanobacteria became numerous in the earth, the oxygen emanating from the photosynthesis accumulated in the atmosphere and hence that is the reason why we have the precious oxygen. In the earth’s ocean, dissolved iron combined with oxygen forming insoluble oxides of iron. The iron oxides then precipitated out leading to a formation of a thin coat on the ocean floor. The thin layer formed into cherts and shale resulting into a complete cover all over the ocean floor. This brought about the stratification of the oceans and hence the ocean waters is "stratified" Over millions of years ago, iron oxide and silica were precipitated repeatedly over a long period. This resulted in the deposition of alternating layers of hematite (which is red),

Describe How Human Resource Management helps in increasing and Research Paper

Describe How Human Resource Management helps in increasing and improving employee efficiency and perfomance in work place - Research Paper Example HRM Effects on Employees in a Workplace: The human resource management team in a workplace has a significant effect on the performance and improvement of the organizational employees. There are several measures that an HRM team considers in order to realize the potential and capability of the employees, their chances of improving and hence the methods to help them out for enhancing their work and career opportunities. It is for this reason that HRM is one of the most essential parts of every organization as it deals with the employee performance, their training and development as well as their retention in the organization for a longer period of time. This also involves planning of compensation packages strategically such that the employees may be motivated and encouraged to give their best performance for their organization. Considering such an important role of the HRM, some of the concepts that the team follows in regard to their employees are discussed in this research. Training and development involve learning and developing the skills required for any task to be completed by the workforce (Bhatia 257). The HRM of an organization provides its employees with such training and development such that their job skills are enhanced. As a result the performance of the employees improves. Moreover, with training, the enhanced performance of the employees is maintained for a longer period of time. Development reflects on the growth of the employees in terms of their performances as well as skills (Bhatia 257). Thus with development of the employees, organizational employees obtain an overall growth which is focused towards their career as well. Training and development are the roles of the HRM in a workplace positively affecting the performance of the employees. Performance management is another role of the HRM that is focused on the development of the working teams as well as of the individual employees thereby enhancing their capabilities and enabling gain of suc cess by the organization. Appraisals involve organized assessment of the performances of employees in a workplace associated with their behavior and effective completion of tasks depending on which they might be rewarded or trained accordingly (Tatichhi 196-197). Thus performance management and appraisals allow an understanding of the present status of an employee in terms of his performance which can accordingly be rewarded or improved. Thus this measure can be said to have positive implications on the performance of the employees who would try to give their best to achieve positive feedbacks for their work. Strategic plans are often utilized by HRM while planning for the compensation packages of the employees. Establishment of strategic pay plans is considered as a strategic measure of the HRM in a workplace that is focused on planning of the compensations in a manner such that the right people can be attracted to the organization. This compensation planning may not match with tha t prevalent in the marketplace (Kumar 284). Thus such strategic plans as followed and implemented by the HRM of an organization can be said to be effective in improving the performance of the employees. This is primarily because, with increased pay and rewards, the employees would be further encouraged towards considering their

Effect of Loyalty Cards on Customer Loyalty

Effect of Loyalty Cards on Customer Loyalty Background of the topic: The purpose of this dissertation is to analyze and investigate the effect of the loyalty cards on customer loyalty and how does it helps large organizations to achieve its goals. When shopping in supermarkets there is one experience that everyone has, when customers finish with their shopping and get to a checkout, the assistant will ask the customers, whether they have a clubcard. This will continue every time whenever those customers without a clubcard shops in the future, the assistant will keep on asking them for a clubcard unless they get one for themselves. Now there is a question that will come across every customers mind, what is a clubcard and why does every company insist them and every customer to be a part of the clubcard family? Now people become curious and they want to get a clubcard too. The assistant says to fill up a form with the customers general details like name, address and contact details and the day customer fills the form, next day they will receive a clubca rd. Impressive, now why companies offer clubcards to their customers, how do companies benefit from these schemes they provide for their customers? Background of this research title is concerned with the highly competitive market where retail giants have to survive and maintain their competitive edge to always stay ahead in the race or even to survive the downfall whenever necessary. Unlimited majors are taken and a huge amount of time and money is spent to attract customers who bring revenue to the company. Having a large number of competitors around, it is very difficult to have a competitive advantage. Basic mean for this subject matter is to identify the purpose and importance of relationship marketing, and its benefits to make strategic decisions. Loyalty cards can significantly boost business profits whilst simultaneously building customer loyalty. Studies show that loyalty cards are one of the most cost effective ways to build brand loyalty and improve customer retention. Loy alty cards are used by all the major retail and supermarket chains as a vital tool to improve profitability, but one does not need to be a national high street store in order to run a profitable reward card scheme. One of the reasons the supermarkets are taking business away from independent retailers are the incentives offered in their loyalty card schemes. The loyalty cards market in the UK is one of the most significant in the world and forms the backbone of marketing and customer retention planning. With over 85% of UK Households possessing loyalty cards it is really a case where companies can afford not to offer a loyalty card service to their customers. There are different companies who offer loyalty schemes for their customer and give customers shopping vouchers after they spend certain amount of money through those loyalty cards. Main objective behind loyalty cards is to keep customer loyal with the company by offering them discounts and gifts on their shopping so they spend more money in their shops and markets. Most common example of loyalty card is Tesco club card, Sainsbury nectar card and other such cards offered by different companies in the country. But most of the people wont understand the idea behind those loyalty cards that how they work. The success of the Tesco Clubcard has been well documented, in 2002 a Market and Opinion Research Poll found that Tescos Clubcard had been more successful than the programmers offered by rival supermarkets (Smith, 2004). Rationale: Why is this study being done Tesco got a huge amount of success with its loyalty schemes unlike its competitors. The reason behind this study is to find out why Tesco was so successful with their Loyalty cards, Tesco Club cards, as they are named, and how it played a very important role in maintaining their customers loyalty, which is very important for any business today. The theory behind this concept is Relationship Marketing, and how it was used by Tesco to grow its business. Background of this research title is concerned with the highly competitive market where retail giants have to survive and maintain their competitive edge to always stay ahead in the race or even to survive the downfall whenever necessary. Unlimited majors are taken and a huge amount of time and money is spent to attract customers who bring revenue to the company. Having a large number of competitors around, it is very difficult to have a competitive advantage. Basic mean for this subject matter is to identify the purpose and importance of relationship marketing, and its benefits to make strategic decisions. Companies offer such countless schemes for their customers to retain and maintain customer loyalty for their store. There are many other factors behind these loyalty schemes where companies benefit. Loyalty card schemes are not only beneficial for the customers, but are equally beneficial for the companies as well. Significance: How does the study contribute The aim of the research is to identify the impact of the Tesco Clubcard on customer loyalty. This will contribute to contrast customer perceptions of the Clubcard, staff and â€Å"feeling valued† to identify which factor has the greater impact on customer loyalty to store. The paper is useful to both practitioners and academics in the fields of relationship marketing and loyalty. The research provides some initial insight into consumer perspectives in the value of loyalty cards. Tesco has succeeded with the strategy of loyalty cards, but its competitors did not. Retailers like Sainsburys and ASDAs who are the competitors of Tesco, did not manage to promote their business using their loyalty cards as Tesco did. Tesco got a huge amount of success with its loyalty schemes unlike its competitors. Tesco has been known for their best customer service where as its competitor, Asda have been known for their best value and low competitive prices. Now why has Tesco chosen such a marketi ng strategy to attract customers and increase revenue? The reason behind this study is to find out why Tesco was so successful with their Loyalty cards, Tesco Club cards, as they are named, and how it played a very important role in maintaining their customers loyalty, which is very important for any business today. The theory behind this concept is Relationship Marketing, and how it was used by Tesco to grow its business. Tesco has chosen a marketing strategy where they need to gain customers faith and trust to maintain a good relationship with them. Hence they need to know everything about their customers individually. How will they keep a track of each and every customer they have? There are many strategies to know your customers and Tesco uses such strategies to have a good track of their customers. The best way to do this is by the method of loyalty cards. Companies can know much more about their customers through loyalty cards. This study will show how Tesco collects data of t heir customers and use that data to improve their customer service in order to gain customer satisfaction. Aims Objectives: The aim of the research is to investigate the influence of the Tesco Clubcard on customer store loyalty. In 1995, Tesco introduced the loyalty Clubcard that was to offer, â€Å"Benefits to regular shoppers whilst helping the company discover more about its Customer needs†. The main aim of this research will be to compare the Loyalty schemes of Tesco Clubcards with its competitors like Sainsburys and ASDA, and find out why Tescos Clubcards were a huge success unlike Sainsburys Nectar and Asda loyalty cards did not succeed in promoting their business. The study also focuses on the need of customer loyalty and what steps were taken by Tesco to retain and maintain its customer loyalty. (www.tescocorporate.com) Sign Posting: A glance at the major and successful organizations around the globe shows that their success is partly due to their ability to apply the theory of relationship marketing. In the contemporary business arena, all organizations, large or small improve their effectiveness and efficiency by applying this theory, thus improving their customer service and customer relations which play a very important role for any business organization. This study shows the brief idea of the Relationship Marketing and how it has been used by the retail giant, Tesco to gain their customers loyalty and retain it for a long time. Tesco is the company on which this whole study has been based on. At the first there is some information and idea has been explained about Relationship Marketing and how is plays a vital role in companys marketing strategies. It also discusses about the benefits of the relationship marketing and how it is used by the company to achieve its aims and objectives. This will later on conti nue with the main topic, that is, the success of Tescos loyalty cards other than its competitors. It will discuss the concept of the loyalty cards and the different strategies used by Tesco and even its competitors to get a competitive edge in the surviving market. The later part of the study also shows how Clubcards are beneficial for the customers as well as the company. Then research methodology is identified that how the research will be conducted, it includes that how the research will designed means the ways through effective data can be find out. Literature Review In this discussion outcomes from the previous research will be demonstrate to provide the clear understanding to the topic. In this chapter views of different authors and researches will be quoted to support the research. It will include the work of researchers who have worked on this matter and have reached to some conclusion. As a literature review chapter it will consist of basic definitions of customer loyalty, customer relationship, loyalty cards and the most important one relationship marketing. This chapter will also explain these theories and how are they applicable for the strategies used by the companies to achieve their goals and success. Customer Relationship: What does it mean for an organisation and its customer to have a relationship with each other? What kind of a relationship would they have with each other? Do customers have relationships with enterprises that do not know them? Is it necessary that the companies know their customers or the other way around? What kind of a relationship would that be if both the parties are unaware of the relationship they have? Can the enterprise be said to have a relationship with a customer it does not know? Is it possible for a customer to have a relationship with a brand? It can be said that customers would know the products but not the company. Experts have studied the nature of relationships in business for many years, and there are many different perspectives on the fundamental purpose of relationships in business strategies. It can be said that the only aim of the company is not only to gain maximum profits out of their customers or having the greatest market share or the rank the company is. Instead, to be successful in the era of interactivity, when it is possible to deal individually with separate customers, the business objective must include establishing meaningful and profitable relationships at least with the most valuable customers, and making the overall customer base more valuable. Technology plays a very crucial role in maintaining this relationship between companies and customers. In short, the company strives to get a customer, keep that customer for a lifetime, and grow the value of the customer to the organisation. Relationships are the crux of the customer-strategy enterprise. Relationships between customers and enterprises provide the framework for everything else connected to the customer-value business model. This is the same model used by Tesco in order to gain a competitive advantage in the most competitive markets in the world. The exchange between a customer and the enterprise becomes mutually beneficial, as customers give information in return for personalized service that meets their individual needs. Because we are talking about relationships between businesses and their customers, it is important that we agree on a few of the elements that make up a genuine relationship. And while dictionary definitions are not bad as starting points, the most important issue for us to consider is how well our own definition of relationship helps companies succeed in the â€Å"customer dimension† of competition. Lets list some of the distinct qualities that should characterize a relationship between an enterprise and a customer. First, a relationship implies mutuality. In order for anyone to consider a relationship, both the company and its customer have to participate in and be aware of the existence of the relationship. This is the most common factor which is needed to be realized by both the parties. This means that relationships must inherently be two-way in nature. Second, relationships are driven by interaction. When the company and the customer interact, they exchange information, and this information exchange is a best tool for building the relationship. This, of course, also implies mutuality. But interactions dont have to take place by phone or in person or on the Web. An interaction takes place when a customer buys a product from the company that sells it. This is where the customer and the company are in face to face for a reason which builds up this relationship. Every interaction adds to the total information content possible in the relationship. This leads to the third characteristic of a relationship: It is iterative in nature. That is, since both the customer and the company are interacting mutually, the interactions themselves build up a history, over time—a context. This context gives a relationships future interactions greater and greater efficiency, because every successive interaction represents that the company and the customer is growing into a healthy relationship than before by communication and a benefit for both the parties. The mo re that company communicates with its customer, the less they need to say the next time around to get their point across. Another characteristic of a customer relationship is that it will be driven by an ongoing benefit to the customer and the company. The customers convenience is one type of benefit, for the customer, but not the only one. Participating in a relationship will involve a cost in money, time, or effort, and no customer will engage for long in any relationship the company wont be more beneficial for that customer, of it that customer is not getting more benefits that before. However, precisely because of the context of the relationship and its continuing benefit for the customer and the company, each party in a relationship has an incentive to recover from mistakes. Relationships also require a change in behavior on the part of both, the customer as well as the company, in order to continue. After all, what drives the ongoing benefit of a relationship is not only its c ontext, its history of interactions, developed over time, but also the fact that the customers and the companys current and future actions reflect that previous context. This is an important characteristic, because companies sometimes mistakenly believe that interactions with a customer need is always the same, the communication from the companys side, cannot deliver same behavior pattern to every customer. In other words companies need to have relationships with their customer individually because the behavior of every customer is not always the same, which can result in different kind of relationship pattern with the company. But unless the companys actions toward a particular customer are somehow different, there is a possibility of miscommunication and can ruin the relation between that customer and the company, which will be no ongoing benefit for the customer, and as a result the customer might not continue the relationship. Every relationship is different. Relationships are c onstituted with individuals, not with populations. This means relationships are with the individual customer and not the whole segment of the customer population of the company. As a result, a company who wants to engage its customers in relationships must be prepared to participate in different interactions, remember different customers and their behavior or spending habits, and engage in different behaviors toward different customers.(Peppers .D, Rogers. M 2004) During the last few years there has been a growing interest in studying the economics and markets of long-lasting customer relationships where customer relationships play a vital role for every company. This kind of relationship can help to increase revenue for the company which can be a long term process and a continuous growth of the relationship between the organization and the customer. Heskett introduced the concept of market economies, which means achieving results by understanding the customers behavior instead of by concentrating on developing scale economies. (Heskett, J.L., 1987) A mutually satisfactory relationship between the company and its customers makes it possible for customers to avoid significant transaction costs involved in shifting from one company or a service provider which can be beneficial for both, the customer and the company. However, customer retention is not enough. Some long-lasting customer relationships, where the customers are obviously satisfied with what they get, are not profitable even in the long run, as Storbacka says. There is clear evidence that from a profitability point of view intelligent relationship building where company can be beneficial to the customer as well as themselves in the long run, then only such a management make sense. (Storbacka, K., 1993) Customer Loyalty: The whole point of a relationship is to keep your customers, and simultaneously grow new customers. So what is customer loyalty? Those whove tried to answer that question have approached it from two different directions: attitudinal (what Barnes calls â€Å"emotional†) and behavioral (what Barnes calls â€Å"functional†). Although each of these two definitions of loyalty is valid, they have different implications and lead to very different prescriptions for businesses. The attitudinal definition of loyalty implies that loyalty is a state of mind. Customers are loyal to a brand or a company if they have a positive, preferential attitude toward it. They like the company, its products, or its brands, and they therefore prefer to buy from it, rather than from the companys competitors. In purely commercial terms, the attitudinal definition of customer loyalty would mean that someone who is willing to pay a premium for Brand A over Brand B, even when the products they represe nt are virtually equivalent, is loyal to Brand A. But the emphasis is on willingness, rather than on actual behavior, per se. In terms of attitudes, then, increasing a customers loyalty is virtually equivalent to increasing the customers preference for the brand. It is closely tied to product quality and customer satisfaction. Any company wanting to increase loyalty, in attitudinal terms, will concentrate on improving its product, its image, or other elements of the customer experience, relative to its competitors. The behavioral definition of loyalty would mean that someone is willing to pay a premium for Brand A over Brand B, even without respect to the attitudes or preferences that underlie that conduct. By this definition, customers are loyal to a company if they buy from it and then continue to buy from it. Loyalty is concerned with repurchase activity, regardless of any internally held attitudes or preferences. In the behavioral definition, loyalty is not the cause, but the re sult of brand preference. A company wanting to increase customer loyalty will focus on whatever tactics will in fact increase the amount of repurchase behavior— tactics that can easily include, without being limited to, raising consumers general preference for the brand or their level of satisfaction with it. (Peppers .D, Rogers. M 2004) Customer loyalty could be termed a â€Å"customers commitment to do business with a particular organization, purchasing their goods and services repeatedly, and recommending the services and products to friends and associates†. It is a term which is neither easy to gain nor maintain, rather it is vulnerable, where â€Å"even if its customers are satisfied with the service they will continue to defect if they believe they can get better value, convenience or quality elsewhere†. (McIlroy, A. and Barnett, S. (2000) In order to investigate the concept of loyalty, we see the framework of Sopanen (1996) to reveal six different types of loyalty: (1) Monopoly loyalty, where there are no available choices. (2) Inertia loyalty, where customers do not actively seek substitutes. (3) Convenience loyalty, where loyalty is solely defined by location. (4) Price loyalty: where customers are influenced by the lowest price. (5) Incentivized loyalty, where loyalty relates to the benefits gained from reward cards and programmers. (6) Emotional loyalty, where customers are influenced by factors such as brand. From this we can observe that loyalty programs such as Tesco Clubcard can be considered an incentivized type of loyalty, which can be exhibited by customers, but the strength of this loyalty is often questioned. â€Å"As organizations become increasingly customer focused and driven by customer demands, the need to meet the customers expectations and retain their loyalty becomes more critical† (Disney, 1999, p. 491). Customer loyalty is one of the fundamental goals of marketing (Selnes, 1993). Not only does it guarantee repeat customers, but it also decreases the need for companies to spend large portions of their budgets on advertising and promotion in order to attract new customers. Mittal and Lassar (1998) identified that customer loyalty is very often thought of as an outcome of customer satisfaction. This explains why customer satisfaction has become an essential concept in marketing and its quest is one of the most important goals for businesses (Webster, 1994) Relationship Marketing: Relationship marketing is very much interlinked with the notion and practice of customer care. There is no doubt that the development of relationship marketing has had and will continue to have major implications for the marketing managers. Comprehensive accounts of the development, meaning and implications of relationship marketing for the contemporary marketer are given by Lancaster and Massingham. As so often, there are many different views as to the precise nature and hence definition of relationship marketing. So, for example, Groonroos stressed the element of mutual exchange ad trust in relationship marketing as follows. â€Å"Relationship marketing is a process including several parties or actors, the objective of which has to be met. This is done by mutual exchange and fulfillment of promises, a fact that makes trust an important aspect of marketing†. Stone and Woodcock on the other hand put more emphasis on the traditional tool of sales, communication and customer care techniques. Again we see overlap between these two areas. â€Å"Relationship marketing involves the use of a wide range of marketing, sales, communications and customer care techniques and processes to: identify named individual customers, create a relationship between the company and these customers, and manage that relationship to the benefit of both the customer and the company†. Perhaps one of the simplest and yet the most powerful summaries of what relationship marketing is however, is that provided by Buttle. â€Å"At its best, RM (relationship management) is characterized by a genuine concern to meet or exceed the expectations of the customers and to provide excellent service in an environment of trust and commitment to the relationship†. Buttle goes on to indicate what is involved in successful relationship marketing and the commitment of the company required to generate this success. â€Å"To be successful relationship marketers, companies must develop a supportive organizational culture, market the RM idea internally, intimately understand customers expectations, create and maintain a detailed customer database, and organize and reward employees in such a way that the objective of RM, customer retention, is achieved†. This illustrates that relationship marketing has major implications for both how we think about marketing and our approach to the practice of marketing. It affects and includes the provision of marketing information, organizational systems and procedures, and the elements of marketing strategy. Relationship Marketing refers to Promotional and needs and maintain the relationship. This proposal is concerned with Relationship management and marketing at how it is been used by companies to maintain existing customers, retain lost customers and attract new customers. (http://www.businessdictionary.com/definition/relationship-marketing.html) Relationship marketing is systems-oriented, yet it includes managerial aspects. A systems approach is well suited as a basis for a general theory of marketing, because it makes it possible to include all relevant actors, environmental influence, and even the process nature of marketing. (Kuhn, T.S. (1957) The concept of relationship marketing has emerged within the fields of service marketing and industrial marketing. The phenomenon described by this concept is strongly supported by ongoing trends in modern business. Grà ¶nroos defines relationship marketing in the following way: Marketing is to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises. Such relationships are usually but not necessarily always long-term. Establishing a relationship, for example with a customer, can be divided into two parts: to attract the customer and to build the relationship with that customer so that the economic goals of that relationship are achieved. (Grà ¶nroos, C. (1990) More businesses are moving toward relationship marketing in dealing with their customers as more customers expect a personalized experience. Considering relationship marketing vs. transactional marketing for http://searchcrm.techtarget.com/generic/0,295582,sid11_gci1253633_mem1,00.html) Relationship marketing is a marketing strategy that emphasizes customer loyalty, customer retention and long-term customer engagement. Using the relationship marketing approach, an organization aims to develop strong, long-term connections with customers by providing them with information directly suited to their needs and interests. This approach often results in increased word-of-mouth activity, long-term purchasing behavior and a willingness to provide information. The goal of every enterprise, once you strip away all the activities that keep everybody busy every day, is simply to get, keep, and grow customers. Whether a business focuses its efforts on product innovation, operational efficiency and low price, or customer intimacy, for that firm must have customers or the enterprise isnt a business—its a hobby. This is true for nonprofits (where the â€Å"customers† may be donors or volunteers) as well as for-profits, for firms large and small, for public as well as private enterprise. What does it mean for an enterprise to focus on its customers as the key to competitive advantage? Obviously, it does not mean giving up the product edge, or the operational efficiencies, that have been successful in the past. It does mean using new strategies, nearly always requiring new technologies, to focus on growing the value of the company by deliberately and strategically growing the value of the customer base. Companies needed to build compr ehensive customer databases. Companies had been maintaining product databases, sales force databases, and dealer databases. Now they needed to build, maintain, mine, and manage a customer database that could be used by company personnel in sales, marketing, credit, accounting, and other company functions. As customer database marketing grew, several different names came to describe it, including individualized marketing, customer intimacy, technology enabled marketing, dialogue marketing, interactive marketing, permission marketing, and one-to-one marketing. Modern technology makes it possible for enterprises to learn more about individual customers, remember those needs, and shape the companys offerings, services, messages and interactions to each valued customer. The new technologies make mass-customization (otherwise an oxymoron) possible. At the same time, technology is only a partial factor in helping companies do genuine one-to-one marketing. The following quotes about custome r relationship management (CRM) make this point vividly: â€Å"CRM is not a software package. Its not a database. Its not a call center or a Web site. Its not a loyalty program, a customer service program, a customer acquisition program or a win-back program. CRM is an entire philosophy.† (Steve Silver) â€Å"A CRM program is typically 45 percent dependent on the right executive leadership, 40 percent on project management implementation and 15 percent on technology.† (Edmund Thompson, Gartner Group) (Peppers .D, Rogers. M 2004) Loyalty Card: Any retailer running a loyalty card scheme could call up customer details and purchase history from incoming phone numbers. In many firms, loyalty cards are used for direct marketing and not much else. Using them to dramatically improve customer service seems a fitting reward for loyalty. Marketing program designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and his customer. Successful loyalty programs encourage the consumer to buy frequently, to increase the amount spent each time, and to concentrate all or most of their related purchases on that brand. Most loyalty programs offer perks for membership in a club or program and reward purchases. Rewards may be based on the dollar value of purchases made or on the frequency of purchases. The most well-known loyalty programs are airline frequent-flyer programs that offer discounts against future travel called award miles. Most large supermarket chains now have frequent-buyer clubs that offer no-coupon discounts as well as newsletters and http://www.answers.com/topic/loyalty-program) A loyalty card program is an incentive plan that allows a retail business to gather data about its customers. Customers are offered product discounts, coupons, points toward merchandise or some other reward in exchange for their voluntary participation in the program. A secondary goal of a loyalty card program is to build repeat business by offering participating customers something that isnt available to non-participating customers. Loyalty cards often resemble plastic credit cards but they can also be keychain fobs or stickers. Typically a loyalty card has a barcode or magnetic stripe thats scanned at the point of sale (POS). The card identifies the customer and sends information about what the customer bought to a database. The information in the database is used to help the retailer understand and influence his customers buying habits. According to research carried out by Boston Universitys College of Communication, eighty-six percent of American shoppers are listed in a loyalty database; a majority of survey respondents said receiving the card was worth giving up some measure of privacy. Loyalty schemes are necessary for the retailers because it helps them in attracting the customers and when they came to them they try to retain them by offering their services on discounted rates and by offering them further discounts and services. Smith states the importance of loyalty cards and schemes in the following sta tement â€Å"if Effect of Loyalty Cards on Customer Loyalty Effect of Loyalty Cards on Customer Loyalty Background of the topic: The purpose of this dissertation is to analyze and investigate the effect of the loyalty cards on customer loyalty and how does it helps large organizations to achieve its goals. When shopping in supermarkets there is one experience that everyone has, when customers finish with their shopping and get to a checkout, the assistant will ask the customers, whether they have a clubcard. This will continue every time whenever those customers without a clubcard shops in the future, the assistant will keep on asking them for a clubcard unless they get one for themselves. Now there is a question that will come across every customers mind, what is a clubcard and why does every company insist them and every customer to be a part of the clubcard family? Now people become curious and they want to get a clubcard too. The assistant says to fill up a form with the customers general details like name, address and contact details and the day customer fills the form, next day they will receive a clubca rd. Impressive, now why companies offer clubcards to their customers, how do companies benefit from these schemes they provide for their customers? Background of this research title is concerned with the highly competitive market where retail giants have to survive and maintain their competitive edge to always stay ahead in the race or even to survive the downfall whenever necessary. Unlimited majors are taken and a huge amount of time and money is spent to attract customers who bring revenue to the company. Having a large number of competitors around, it is very difficult to have a competitive advantage. Basic mean for this subject matter is to identify the purpose and importance of relationship marketing, and its benefits to make strategic decisions. Loyalty cards can significantly boost business profits whilst simultaneously building customer loyalty. Studies show that loyalty cards are one of the most cost effective ways to build brand loyalty and improve customer retention. Loy alty cards are used by all the major retail and supermarket chains as a vital tool to improve profitability, but one does not need to be a national high street store in order to run a profitable reward card scheme. One of the reasons the supermarkets are taking business away from independent retailers are the incentives offered in their loyalty card schemes. The loyalty cards market in the UK is one of the most significant in the world and forms the backbone of marketing and customer retention planning. With over 85% of UK Households possessing loyalty cards it is really a case where companies can afford not to offer a loyalty card service to their customers. There are different companies who offer loyalty schemes for their customer and give customers shopping vouchers after they spend certain amount of money through those loyalty cards. Main objective behind loyalty cards is to keep customer loyal with the company by offering them discounts and gifts on their shopping so they spend more money in their shops and markets. Most common example of loyalty card is Tesco club card, Sainsbury nectar card and other such cards offered by different companies in the country. But most of the people wont understand the idea behind those loyalty cards that how they work. The success of the Tesco Clubcard has been well documented, in 2002 a Market and Opinion Research Poll found that Tescos Clubcard had been more successful than the programmers offered by rival supermarkets (Smith, 2004). Rationale: Why is this study being done Tesco got a huge amount of success with its loyalty schemes unlike its competitors. The reason behind this study is to find out why Tesco was so successful with their Loyalty cards, Tesco Club cards, as they are named, and how it played a very important role in maintaining their customers loyalty, which is very important for any business today. The theory behind this concept is Relationship Marketing, and how it was used by Tesco to grow its business. Background of this research title is concerned with the highly competitive market where retail giants have to survive and maintain their competitive edge to always stay ahead in the race or even to survive the downfall whenever necessary. Unlimited majors are taken and a huge amount of time and money is spent to attract customers who bring revenue to the company. Having a large number of competitors around, it is very difficult to have a competitive advantage. Basic mean for this subject matter is to identify the purpose and importance of relationship marketing, and its benefits to make strategic decisions. Companies offer such countless schemes for their customers to retain and maintain customer loyalty for their store. There are many other factors behind these loyalty schemes where companies benefit. Loyalty card schemes are not only beneficial for the customers, but are equally beneficial for the companies as well. Significance: How does the study contribute The aim of the research is to identify the impact of the Tesco Clubcard on customer loyalty. This will contribute to contrast customer perceptions of the Clubcard, staff and â€Å"feeling valued† to identify which factor has the greater impact on customer loyalty to store. The paper is useful to both practitioners and academics in the fields of relationship marketing and loyalty. The research provides some initial insight into consumer perspectives in the value of loyalty cards. Tesco has succeeded with the strategy of loyalty cards, but its competitors did not. Retailers like Sainsburys and ASDAs who are the competitors of Tesco, did not manage to promote their business using their loyalty cards as Tesco did. Tesco got a huge amount of success with its loyalty schemes unlike its competitors. Tesco has been known for their best customer service where as its competitor, Asda have been known for their best value and low competitive prices. Now why has Tesco chosen such a marketi ng strategy to attract customers and increase revenue? The reason behind this study is to find out why Tesco was so successful with their Loyalty cards, Tesco Club cards, as they are named, and how it played a very important role in maintaining their customers loyalty, which is very important for any business today. The theory behind this concept is Relationship Marketing, and how it was used by Tesco to grow its business. Tesco has chosen a marketing strategy where they need to gain customers faith and trust to maintain a good relationship with them. Hence they need to know everything about their customers individually. How will they keep a track of each and every customer they have? There are many strategies to know your customers and Tesco uses such strategies to have a good track of their customers. The best way to do this is by the method of loyalty cards. Companies can know much more about their customers through loyalty cards. This study will show how Tesco collects data of t heir customers and use that data to improve their customer service in order to gain customer satisfaction. Aims Objectives: The aim of the research is to investigate the influence of the Tesco Clubcard on customer store loyalty. In 1995, Tesco introduced the loyalty Clubcard that was to offer, â€Å"Benefits to regular shoppers whilst helping the company discover more about its Customer needs†. The main aim of this research will be to compare the Loyalty schemes of Tesco Clubcards with its competitors like Sainsburys and ASDA, and find out why Tescos Clubcards were a huge success unlike Sainsburys Nectar and Asda loyalty cards did not succeed in promoting their business. The study also focuses on the need of customer loyalty and what steps were taken by Tesco to retain and maintain its customer loyalty. (www.tescocorporate.com) Sign Posting: A glance at the major and successful organizations around the globe shows that their success is partly due to their ability to apply the theory of relationship marketing. In the contemporary business arena, all organizations, large or small improve their effectiveness and efficiency by applying this theory, thus improving their customer service and customer relations which play a very important role for any business organization. This study shows the brief idea of the Relationship Marketing and how it has been used by the retail giant, Tesco to gain their customers loyalty and retain it for a long time. Tesco is the company on which this whole study has been based on. At the first there is some information and idea has been explained about Relationship Marketing and how is plays a vital role in companys marketing strategies. It also discusses about the benefits of the relationship marketing and how it is used by the company to achieve its aims and objectives. This will later on conti nue with the main topic, that is, the success of Tescos loyalty cards other than its competitors. It will discuss the concept of the loyalty cards and the different strategies used by Tesco and even its competitors to get a competitive edge in the surviving market. The later part of the study also shows how Clubcards are beneficial for the customers as well as the company. Then research methodology is identified that how the research will be conducted, it includes that how the research will designed means the ways through effective data can be find out. Literature Review In this discussion outcomes from the previous research will be demonstrate to provide the clear understanding to the topic. In this chapter views of different authors and researches will be quoted to support the research. It will include the work of researchers who have worked on this matter and have reached to some conclusion. As a literature review chapter it will consist of basic definitions of customer loyalty, customer relationship, loyalty cards and the most important one relationship marketing. This chapter will also explain these theories and how are they applicable for the strategies used by the companies to achieve their goals and success. Customer Relationship: What does it mean for an organisation and its customer to have a relationship with each other? What kind of a relationship would they have with each other? Do customers have relationships with enterprises that do not know them? Is it necessary that the companies know their customers or the other way around? What kind of a relationship would that be if both the parties are unaware of the relationship they have? Can the enterprise be said to have a relationship with a customer it does not know? Is it possible for a customer to have a relationship with a brand? It can be said that customers would know the products but not the company. Experts have studied the nature of relationships in business for many years, and there are many different perspectives on the fundamental purpose of relationships in business strategies. It can be said that the only aim of the company is not only to gain maximum profits out of their customers or having the greatest market share or the rank the company is. Instead, to be successful in the era of interactivity, when it is possible to deal individually with separate customers, the business objective must include establishing meaningful and profitable relationships at least with the most valuable customers, and making the overall customer base more valuable. Technology plays a very crucial role in maintaining this relationship between companies and customers. In short, the company strives to get a customer, keep that customer for a lifetime, and grow the value of the customer to the organisation. Relationships are the crux of the customer-strategy enterprise. Relationships between customers and enterprises provide the framework for everything else connected to the customer-value business model. This is the same model used by Tesco in order to gain a competitive advantage in the most competitive markets in the world. The exchange between a customer and the enterprise becomes mutually beneficial, as customers give information in return for personalized service that meets their individual needs. Because we are talking about relationships between businesses and their customers, it is important that we agree on a few of the elements that make up a genuine relationship. And while dictionary definitions are not bad as starting points, the most important issue for us to consider is how well our own definition of relationship helps companies succeed in the â€Å"customer dimension† of competition. Lets list some of the distinct qualities that should characterize a relationship between an enterprise and a customer. First, a relationship implies mutuality. In order for anyone to consider a relationship, both the company and its customer have to participate in and be aware of the existence of the relationship. This is the most common factor which is needed to be realized by both the parties. This means that relationships must inherently be two-way in nature. Second, relationships are driven by interaction. When the company and the customer interact, they exchange information, and this information exchange is a best tool for building the relationship. This, of course, also implies mutuality. But interactions dont have to take place by phone or in person or on the Web. An interaction takes place when a customer buys a product from the company that sells it. This is where the customer and the company are in face to face for a reason which builds up this relationship. Every interaction adds to the total information content possible in the relationship. This leads to the third characteristic of a relationship: It is iterative in nature. That is, since both the customer and the company are interacting mutually, the interactions themselves build up a history, over time—a context. This context gives a relationships future interactions greater and greater efficiency, because every successive interaction represents that the company and the customer is growing into a healthy relationship than before by communication and a benefit for both the parties. The mo re that company communicates with its customer, the less they need to say the next time around to get their point across. Another characteristic of a customer relationship is that it will be driven by an ongoing benefit to the customer and the company. The customers convenience is one type of benefit, for the customer, but not the only one. Participating in a relationship will involve a cost in money, time, or effort, and no customer will engage for long in any relationship the company wont be more beneficial for that customer, of it that customer is not getting more benefits that before. However, precisely because of the context of the relationship and its continuing benefit for the customer and the company, each party in a relationship has an incentive to recover from mistakes. Relationships also require a change in behavior on the part of both, the customer as well as the company, in order to continue. After all, what drives the ongoing benefit of a relationship is not only its c ontext, its history of interactions, developed over time, but also the fact that the customers and the companys current and future actions reflect that previous context. This is an important characteristic, because companies sometimes mistakenly believe that interactions with a customer need is always the same, the communication from the companys side, cannot deliver same behavior pattern to every customer. In other words companies need to have relationships with their customer individually because the behavior of every customer is not always the same, which can result in different kind of relationship pattern with the company. But unless the companys actions toward a particular customer are somehow different, there is a possibility of miscommunication and can ruin the relation between that customer and the company, which will be no ongoing benefit for the customer, and as a result the customer might not continue the relationship. Every relationship is different. Relationships are c onstituted with individuals, not with populations. This means relationships are with the individual customer and not the whole segment of the customer population of the company. As a result, a company who wants to engage its customers in relationships must be prepared to participate in different interactions, remember different customers and their behavior or spending habits, and engage in different behaviors toward different customers.(Peppers .D, Rogers. M 2004) During the last few years there has been a growing interest in studying the economics and markets of long-lasting customer relationships where customer relationships play a vital role for every company. This kind of relationship can help to increase revenue for the company which can be a long term process and a continuous growth of the relationship between the organization and the customer. Heskett introduced the concept of market economies, which means achieving results by understanding the customers behavior instead of by concentrating on developing scale economies. (Heskett, J.L., 1987) A mutually satisfactory relationship between the company and its customers makes it possible for customers to avoid significant transaction costs involved in shifting from one company or a service provider which can be beneficial for both, the customer and the company. However, customer retention is not enough. Some long-lasting customer relationships, where the customers are obviously satisfied with what they get, are not profitable even in the long run, as Storbacka says. There is clear evidence that from a profitability point of view intelligent relationship building where company can be beneficial to the customer as well as themselves in the long run, then only such a management make sense. (Storbacka, K., 1993) Customer Loyalty: The whole point of a relationship is to keep your customers, and simultaneously grow new customers. So what is customer loyalty? Those whove tried to answer that question have approached it from two different directions: attitudinal (what Barnes calls â€Å"emotional†) and behavioral (what Barnes calls â€Å"functional†). Although each of these two definitions of loyalty is valid, they have different implications and lead to very different prescriptions for businesses. The attitudinal definition of loyalty implies that loyalty is a state of mind. Customers are loyal to a brand or a company if they have a positive, preferential attitude toward it. They like the company, its products, or its brands, and they therefore prefer to buy from it, rather than from the companys competitors. In purely commercial terms, the attitudinal definition of customer loyalty would mean that someone who is willing to pay a premium for Brand A over Brand B, even when the products they represe nt are virtually equivalent, is loyal to Brand A. But the emphasis is on willingness, rather than on actual behavior, per se. In terms of attitudes, then, increasing a customers loyalty is virtually equivalent to increasing the customers preference for the brand. It is closely tied to product quality and customer satisfaction. Any company wanting to increase loyalty, in attitudinal terms, will concentrate on improving its product, its image, or other elements of the customer experience, relative to its competitors. The behavioral definition of loyalty would mean that someone is willing to pay a premium for Brand A over Brand B, even without respect to the attitudes or preferences that underlie that conduct. By this definition, customers are loyal to a company if they buy from it and then continue to buy from it. Loyalty is concerned with repurchase activity, regardless of any internally held attitudes or preferences. In the behavioral definition, loyalty is not the cause, but the re sult of brand preference. A company wanting to increase customer loyalty will focus on whatever tactics will in fact increase the amount of repurchase behavior— tactics that can easily include, without being limited to, raising consumers general preference for the brand or their level of satisfaction with it. (Peppers .D, Rogers. M 2004) Customer loyalty could be termed a â€Å"customers commitment to do business with a particular organization, purchasing their goods and services repeatedly, and recommending the services and products to friends and associates†. It is a term which is neither easy to gain nor maintain, rather it is vulnerable, where â€Å"even if its customers are satisfied with the service they will continue to defect if they believe they can get better value, convenience or quality elsewhere†. (McIlroy, A. and Barnett, S. (2000) In order to investigate the concept of loyalty, we see the framework of Sopanen (1996) to reveal six different types of loyalty: (1) Monopoly loyalty, where there are no available choices. (2) Inertia loyalty, where customers do not actively seek substitutes. (3) Convenience loyalty, where loyalty is solely defined by location. (4) Price loyalty: where customers are influenced by the lowest price. (5) Incentivized loyalty, where loyalty relates to the benefits gained from reward cards and programmers. (6) Emotional loyalty, where customers are influenced by factors such as brand. From this we can observe that loyalty programs such as Tesco Clubcard can be considered an incentivized type of loyalty, which can be exhibited by customers, but the strength of this loyalty is often questioned. â€Å"As organizations become increasingly customer focused and driven by customer demands, the need to meet the customers expectations and retain their loyalty becomes more critical† (Disney, 1999, p. 491). Customer loyalty is one of the fundamental goals of marketing (Selnes, 1993). Not only does it guarantee repeat customers, but it also decreases the need for companies to spend large portions of their budgets on advertising and promotion in order to attract new customers. Mittal and Lassar (1998) identified that customer loyalty is very often thought of as an outcome of customer satisfaction. This explains why customer satisfaction has become an essential concept in marketing and its quest is one of the most important goals for businesses (Webster, 1994) Relationship Marketing: Relationship marketing is very much interlinked with the notion and practice of customer care. There is no doubt that the development of relationship marketing has had and will continue to have major implications for the marketing managers. Comprehensive accounts of the development, meaning and implications of relationship marketing for the contemporary marketer are given by Lancaster and Massingham. As so often, there are many different views as to the precise nature and hence definition of relationship marketing. So, for example, Groonroos stressed the element of mutual exchange ad trust in relationship marketing as follows. â€Å"Relationship marketing is a process including several parties or actors, the objective of which has to be met. This is done by mutual exchange and fulfillment of promises, a fact that makes trust an important aspect of marketing†. Stone and Woodcock on the other hand put more emphasis on the traditional tool of sales, communication and customer care techniques. Again we see overlap between these two areas. â€Å"Relationship marketing involves the use of a wide range of marketing, sales, communications and customer care techniques and processes to: identify named individual customers, create a relationship between the company and these customers, and manage that relationship to the benefit of both the customer and the company†. Perhaps one of the simplest and yet the most powerful summaries of what relationship marketing is however, is that provided by Buttle. â€Å"At its best, RM (relationship management) is characterized by a genuine concern to meet or exceed the expectations of the customers and to provide excellent service in an environment of trust and commitment to the relationship†. Buttle goes on to indicate what is involved in successful relationship marketing and the commitment of the company required to generate this success. â€Å"To be successful relationship marketers, companies must develop a supportive organizational culture, market the RM idea internally, intimately understand customers expectations, create and maintain a detailed customer database, and organize and reward employees in such a way that the objective of RM, customer retention, is achieved†. This illustrates that relationship marketing has major implications for both how we think about marketing and our approach to the practice of marketing. It affects and includes the provision of marketing information, organizational systems and procedures, and the elements of marketing strategy. Relationship Marketing refers to Promotional and needs and maintain the relationship. This proposal is concerned with Relationship management and marketing at how it is been used by companies to maintain existing customers, retain lost customers and attract new customers. (http://www.businessdictionary.com/definition/relationship-marketing.html) Relationship marketing is systems-oriented, yet it includes managerial aspects. A systems approach is well suited as a basis for a general theory of marketing, because it makes it possible to include all relevant actors, environmental influence, and even the process nature of marketing. (Kuhn, T.S. (1957) The concept of relationship marketing has emerged within the fields of service marketing and industrial marketing. The phenomenon described by this concept is strongly supported by ongoing trends in modern business. Grà ¶nroos defines relationship marketing in the following way: Marketing is to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises. Such relationships are usually but not necessarily always long-term. Establishing a relationship, for example with a customer, can be divided into two parts: to attract the customer and to build the relationship with that customer so that the economic goals of that relationship are achieved. (Grà ¶nroos, C. (1990) More businesses are moving toward relationship marketing in dealing with their customers as more customers expect a personalized experience. Considering relationship marketing vs. transactional marketing for http://searchcrm.techtarget.com/generic/0,295582,sid11_gci1253633_mem1,00.html) Relationship marketing is a marketing strategy that emphasizes customer loyalty, customer retention and long-term customer engagement. Using the relationship marketing approach, an organization aims to develop strong, long-term connections with customers by providing them with information directly suited to their needs and interests. This approach often results in increased word-of-mouth activity, long-term purchasing behavior and a willingness to provide information. The goal of every enterprise, once you strip away all the activities that keep everybody busy every day, is simply to get, keep, and grow customers. Whether a business focuses its efforts on product innovation, operational efficiency and low price, or customer intimacy, for that firm must have customers or the enterprise isnt a business—its a hobby. This is true for nonprofits (where the â€Å"customers† may be donors or volunteers) as well as for-profits, for firms large and small, for public as well as private enterprise. What does it mean for an enterprise to focus on its customers as the key to competitive advantage? Obviously, it does not mean giving up the product edge, or the operational efficiencies, that have been successful in the past. It does mean using new strategies, nearly always requiring new technologies, to focus on growing the value of the company by deliberately and strategically growing the value of the customer base. Companies needed to build compr ehensive customer databases. Companies had been maintaining product databases, sales force databases, and dealer databases. Now they needed to build, maintain, mine, and manage a customer database that could be used by company personnel in sales, marketing, credit, accounting, and other company functions. As customer database marketing grew, several different names came to describe it, including individualized marketing, customer intimacy, technology enabled marketing, dialogue marketing, interactive marketing, permission marketing, and one-to-one marketing. Modern technology makes it possible for enterprises to learn more about individual customers, remember those needs, and shape the companys offerings, services, messages and interactions to each valued customer. The new technologies make mass-customization (otherwise an oxymoron) possible. At the same time, technology is only a partial factor in helping companies do genuine one-to-one marketing. The following quotes about custome r relationship management (CRM) make this point vividly: â€Å"CRM is not a software package. Its not a database. Its not a call center or a Web site. Its not a loyalty program, a customer service program, a customer acquisition program or a win-back program. CRM is an entire philosophy.† (Steve Silver) â€Å"A CRM program is typically 45 percent dependent on the right executive leadership, 40 percent on project management implementation and 15 percent on technology.† (Edmund Thompson, Gartner Group) (Peppers .D, Rogers. M 2004) Loyalty Card: Any retailer running a loyalty card scheme could call up customer details and purchase history from incoming phone numbers. In many firms, loyalty cards are used for direct marketing and not much else. Using them to dramatically improve customer service seems a fitting reward for loyalty. Marketing program designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and his customer. Successful loyalty programs encourage the consumer to buy frequently, to increase the amount spent each time, and to concentrate all or most of their related purchases on that brand. Most loyalty programs offer perks for membership in a club or program and reward purchases. Rewards may be based on the dollar value of purchases made or on the frequency of purchases. The most well-known loyalty programs are airline frequent-flyer programs that offer discounts against future travel called award miles. Most large supermarket chains now have frequent-buyer clubs that offer no-coupon discounts as well as newsletters and http://www.answers.com/topic/loyalty-program) A loyalty card program is an incentive plan that allows a retail business to gather data about its customers. Customers are offered product discounts, coupons, points toward merchandise or some other reward in exchange for their voluntary participation in the program. A secondary goal of a loyalty card program is to build repeat business by offering participating customers something that isnt available to non-participating customers. Loyalty cards often resemble plastic credit cards but they can also be keychain fobs or stickers. Typically a loyalty card has a barcode or magnetic stripe thats scanned at the point of sale (POS). The card identifies the customer and sends information about what the customer bought to a database. The information in the database is used to help the retailer understand and influence his customers buying habits. According to research carried out by Boston Universitys College of Communication, eighty-six percent of American shoppers are listed in a loyalty database; a majority of survey respondents said receiving the card was worth giving up some measure of privacy. Loyalty schemes are necessary for the retailers because it helps them in attracting the customers and when they came to them they try to retain them by offering their services on discounted rates and by offering them further discounts and services. Smith states the importance of loyalty cards and schemes in the following sta tement â€Å"if