Loyalty Cards & Schemes - Research, Survey & Questionnaires

• Loyalty Cards & Schemes Introduction   ::   
• Relationship Marketing

Review of previous literature discovered the importance loyalty card in relationship marketing.

3.0 METHODOLOGY

This section will discuss the research procedure, the sampling frame, sampling, methodology, questionnaire design, the survey and method of analysis employed.

3.2 THE SURVEY

As discussed recently, issues associated with the effect of loyalty card in relationship marketing have become more evident. Furthermore, decreases over the past decide number of companies using loyalty card has occurred. The study sought to investigate whether loyalty card are effective in relationship marketing

3.3 DEFINITION OF POPULATION

“The primary step to sampling is to define the population that is to be sampled, subsequently determine the sampling frame, the method, select the sample, collect the data and the validate the sampling results” (Ghauri, Gronhaug and Kristianslund 1995)

A study population is the aggregate of the element for which the sample is drawn (Jankowicz, 1994)

The sampling frame for the survey comprises of both male and female who use loyalty card at Tesco.

3.4 RESEARCH PROCEDURE

According to Flink (1995), “a survey is a system for collecting information, comparing, or explaining knowledge, attitudes or behaviour. Survey involves setting objectives for information collection, designing, research preparing, collection instrument, administering and scoring the instrument, analysing data and reporting the results”.

In addition to the above factors research ethics were at the core of the survey. As outlined by the ‘Ethical Principles and Guideline for Research with Human Participation’, “All researchers, whether they are members of staff, postgraduate or undergraduate students are advised to check the Ethical Research Code before carrying out their research”. When collecting the data, the investigator strictly adhered to the Ethical Principles and Guideline for Research with Human Participation, as well as two codes, the Marketing Research Society Code of Conduct and The Data Protection Act, as the research was aware of the importance of these codes in conducting a professional research.

3.5 SAMPLING

In principle, there are two main types of sampling, probability and non-probability. For this research probability sampling was chosen. In probability sampling each element of the population has an equal chance of being selected (Kinnear and Taylor 1991).

3.6 PROBABILITY SAMPLING

There are five main probability sampling techniques, namely random, systematic, stratified, cluster, and area sampling. Each technique possesses unique characteristics that will affect it’s application in a given research project. Random sampling was chosen for the research.

Probability sample have been used in the research, as the population was know and each consumer had an equal opportunity of being included in the sample. By selecting the unites of the researched sample randomly, the author attempted to ensure that “each score of the population had an equal chance to be included or sampled.

Moreover, random sampling procedure allows the establishment of a statistical relationship between the sample estimates and the population value. What probability sampling permits is the calculation of the likely extent according to which the sample value differs from the population (Grimm 2000).

According to Saunders, Lewis and Thornhill (1996) many researchers for example Moser and Kalton (1986) and Henry (1990) argue that using sampling enable a higher overall accuracy. They point out that the smaller number of cases for which you need to collect data led to more time can be spent designing and piloting the means of collecting data. Collecting data from few enables cares as well as the collection of more detailed information.

However the sampling procedure has its own limitation, which the researcher was fully aware of.

3.7 LIMITATON OF PROBABILITY SAMPLING

There are various limitation and potential errors associated with the chosen kind of sampling. According to Ghauri, Gronhaug and Kristianslund (1995) probability sampling are easy to draw, but they may give misleading results, in spite of the research judgement, which could lead to unrepresentative results of the findings. The cost of obtaining the sample can also be high if the units are geographically scattered. One other major drawback of probability sampling is that the sample gives no basis for evaluating the size of the sampling variation and the error of estimation.

3.8 SAMPLE FRAME

The sample frame was Tesco consumer with loyalty card, which according the supermarkets are around 100,000 per month. Each consumer stopped was asked if they buy have a Tesco loyalty card. If they did, they represented the 100,000 Tesco club card shoppers. Asda and Tesco were chosen for the research primarily due to the fact that the retailer using the loyalty scheme.

However, having chosen only one supermarket retailer, the researcher recognise the fact that there is an element of bias. Due to resource and time limitation, it was not possible to carry out the survey on all the retailers’ supermarket in the area.

3.9 DETERMINATION OF SAMPLE SIZE

According to Jankowicz, (1994) generalisation about the population from data collected using any sample is based on probability. In order to be able to generalise about the research finding to the population, it is necessary to select samples of sufficient size. A large sample size will in general improve the quality of the research. A large sample size is always better than a small one. Saunders, Lewis and Thornhill (1996) also point out that the larger the sample size, the lower the likely error in the generalising to the population.

When the population size is known, the most commonly and appropriate formula to determine the size is (Katou, 1998) :

2 (Za/2) x P (1-p) x N n= 2 2 e x (N-1) +(Za/2) x P (1-p)

Firstly the sample size is the monthly Club card consumer of Tesco as stated previous is around 100,000. The variance p was estimated. The difference between p1 and p2 is defined; p1 is the percentage of people who took part in the research (p1=0.60) and p2 the percentage of the total population of consumers who buy shop at Tesco in Battersea. A confidence level of 95% (the commonly used one). Statistically a 95 % confidence level includes standard error. From the equation the following resulted are found:

N1= 86.66 and n2=368.66
N1and N2=86.66+368.66= 517 sample unites.

Since the sample size was very big, it would be very hard to examine the whole sample size due to time and cost constraints. Therefore for this reason, the survey was only carried out on 20% of the sample size. This did not affect the validity of the survey; therefore the final sample size will be 20 % of 517, which were 106 people. Ghauri, Gronhaug and Kristianslund (1995) identified that “there is no limit of a sample that can be useful. A sample of 100 can be often giving interesting and valuable results”. Based on Ghauri, Gronhaug and Kristianslund’s guideline, this is a good sample size for the survey.

3. 10 QUESTIONNAIRE

A questionnaire is a formalised pre-formulated written set of questions scheduled to collect data from the respondent (Sekaran 1992). A questionnaire is therefore an efficient data collection mechanism whose objective is to measure behaviour attitudes and respondents’ characteristics.

Questionnaires were the chosen mode to gathering information from consumers. This gave the researcher an opportunity to get first hand unbiased information from the respondents. Guidelines as to how to respond to the questionnaires were given when appropriate to eliminate unnecessary ambiguity and reduce time commitment.

However questionnaires do pose ethical problems associated with the use of interviewers, such as contact with strangers and the avoidance of possible embarrassing questions. To avoid this ‘Ethical Principles and Guideline for Research with Human Participation’ was followed.

Apart from ethical issues, in order to eliminate any obscure intent and wrong order of questions such as awkward expression and leading questions so as to capture the much-needed information, a pilot survey was carried out.

For easy analysis, the questionnaire was short, easy and related a great deal to the hypothesis and research objectives. This was done in order to answer the research question as well as to evaluate the hypothesis developed.

In question focused on asking the 4 main questions:

By asking these questions the researcher was able to determine how loyal consumers are to Tesco. Furthermore the vital point of consumers switching from one retailer to the other was determined by asking f consumers own other cards.

However because the questionnaire was made up of 4-point scale, there was not midpoint, which one could argue introduce the element of bias.

3.11SOURCE OF ERROR AND BIAS

Knowledge of sources of error and an examination for their presence is a pre-requisite for all studies involving data analysis (Moser and Kalton (1986). An overview of total error and its components is given in figure below. Potential errors/biases concerned the researches are highlighted and are dealt with below.

3.12 MEASURING INSTRUMENT BIAS

The instrument structure was similar to that by Kinnear and Taylor (1991). An issue of concern is whether offering a neutral position on a likert type of scale in the questionnaire, respondents would have a tendency to opt for middle of the road reply this leading to bias (Lockhart and Russo 1994; Schuman and Presser 1981; Moser and Kalton 1979). A decision was therefore taken to use a 4-point likert scale without a neutral position.

3.13 VALIDITY

“The validity if constructs is a necessary condition for theory development testing and therefore, construct validity lies at the very heart of scientific progress in marketing”(Flink 1995). Constructs or question validity is the degree to which a question achieves the empirical and theoretical meaning (Ghauri P, Gronhaug and Kristianslund 1995). The two attributes of measurement concerning research are reliability and validity (Jankowicz, 1994). Saunders, Lewis and Thornhill (1996) define reliability as “the amount of agreement between independent attempt to measure the same theoretical concept”.

For the research to have construct validity, the investigator strictly adhered to the Ethical Principles and Guideline for Research with Human Participation (appendix). This gave the research more validity and reliability and helped in reducing some of the bias shown in the figure above.

3.14 RELIABILTY

Sekaran (1992) and Bell (1993) argue “respondent are more likely to volunteer a neutral response if the interviewer offers it as an option. In the study a neutral option was not offered at the likert scale 1 to 4. Before the interview began an explanation was given to each interviewee on (1) how to answer the questions and (2) how to interpret their response. This was to reduce the concern potential neutrality bias.

3.15 INTERVIEW BIAS

To maintain low levels of this type of bias a single interviewer conducted the who survey, the author. This ensured consistency of asking, explaining and recording. A single interviewer introduced uniform and systemic bias. It was felt this would lower and preferable to the divergent bias resulting to no bias.

3.16 SAMPLE FRAME BIAS

A potential bias resulting from an unrepresentative sample frame was considered. Although the survey was confined to Asada and Tesco in Battersea area only, the sample finding were generalised to represent the branded and private label water consumer. However in more research, a sample is used and the findings are generalised to the whole population.

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3.17 PILOT SURVEY

According to Saunders, Lewis and Thornhill (1996) before using your questionnaire to collect data it should be tested. The purpose of the pilot test is to define the questionnaire that respondents will have no difficulties in answering the questions as well as recording the data. In addition, it enabled the researcher to obtain some assessment of the questions ‘validity and reliability’ of data collected.

There is a temptation in a study to go straight to the questionnaire, but however hard pressed for time you are, do your best to give questionnaire a trial run…. (Bell 1994). Pilot survey refers to the initial testing of one or more aspect of the research design (Sekaran, 1992). Therefore for these reasons before the questionnaire was ready for the field operation, a pre-tested or pilot survey was undertaken. The researcher pre-tested the questionnaire among the prospective research participates of 30 respondents at Tesco where the survey was going to be conducted. According to Bell (1994) , 10 questionnaires is a good minimum for a pilot study. Therefore 30 subjects was a reasonable good number for a trial run (pilot).

The 30 subjects were of the same characteristic to the sample that was going to take part in the research. Furthermore the pilot was carried out in the same location the research survey took place.

Spelling and grammar mistakes were discovered in the questionnaires. Minor adjustments were made to the questionnaire for the final data collection. Moreover the piloting determined that time needed for each questionnaire was 4-6 minutes for each respondent.

318 DATA COLLECTION

Data was collected by means of questionnaire outside Tesco. This was only done having gained permission to do so from the respective retailer management. The questionnaire was carried out on Saturday and Sunday for one hour during the morning, midday and afternoon. Consumers were stopped, permission to ask them was sought to spare their time in answering the questionnaire. Furthermore, consumers were assured that their information was going to be kept strictly confidential. Having gained their permission and trust, the researcher went ahead to ask the question.

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