Product details

Opinions are divided in the marketing community about the true value and purpose of loyalty schemes. Their detractors describe them as ''electronic Green Shield stamps'', claiming that they are simply short term, tactical sales promotions that do nothing to bolster loyalty but reduce returns right across the sector. Others view the rush into loyalty schemes as a knee-jerk reaction and a frenetic attempt to address growing competition in the food retailing sector. However, Tesco is seen by many as having scored a notable success. The case opens at the launch of their Clubcard in February 1995, the first national supermarket loyalty card in the UK. It charts the success of the scheme, in attracting members and also in boosting profits for the company, with its Clubcard initiatives setting the parameter for other retailer loyalty card schemes. The case follows the reactions of the other major supermarket chains, which ranged from launching similar schemes or, as in Sainsbury''s case, dismissing it as ''a glorified sales gimmick''. However, one year on, customers at Sainsbury''s were to see the launch of the company''s Reward Card. In the same week Tesco launched Clubcard Plus which brought the supermarkets into the financial services sector. Competitors were quick to follow and they also formed partnerships with high street banks in a bid to offer a range of banking services. The case can be used to highlight the advantages and disadvantages of card schemes to build customer loyalty. It illustrates their value of part of a long-term integrated strategy, rather than a ''bolt on'' sales promotion tactic. It also focuses on the potential that a well designed scheme can have in helping to build longer term relationships with customers. Transparencies ''598-032-7'' are available to accompany the case.