Financial Resource

gave personal information about their address, how many people live in the house, employment status, number of children and so on. Companies can analyse consumer segmentation based on this database.

In addition, retailers use loyalty card knowledge to find new markets, such as planning new range rollouts and managing fresh food. In the process they can save a fortune in costs. Another benefit is companied may save in advertising and outsourcing market research costs because now the company has its own database to analyse the individual customer.

Recommendation

UK food retail industry is one of the most competitive in the world and also oligopolistic in nature with the top four or five accounting for around 60% of the market (Shabi, 2003).

The focus of customer relationship management has evolved from customer satisfaction to the creation of values for the customer. It is important to look at customers from the customers’ point viewpoint and not from the product or multiple channels. Consumer behaviour is affected by many uncontrollable factors therefore issuing loyalty cards can help in understanding consumer behaviour.

Morrisons is now facing severe problems. It has to become more customer-centric in in future in order to survive. Morrisons is poised to make a U-turn on its decision to shun
loyalty schemes, and is in talks with suppliers about possible options. In the past, Sir Ken Morrison, has said that the company would never offer a loyalty card as customers are interested in ‘pounds not points’. However, it is now believed that the combination of added value for consumers and the useful data that can be gathered has persuaded the supermarket to introduce a loyalty scheme. Secondly, using this database to analyse consumer segmentation can help match consumer needs and wants. Thirdly, this database can be used to create a new marketing mix strategy in terms of the right product at the right price through the right channels and promoted in the right way.

References

Dibb, S., Simkin, L., Pride, W.M & Ferrell, O.C. (2001) Marketing Concept and Strategy, 4th Edition, Houghton Mifflin Company, Boston

Field, J (2005)
First Safeway became Morrison, is change driving shoppers away?, Sunday Herald, Glasgow, 3 April, p.5

Finch, J (2005)
First loss at Morrisons but Sir Ken intends to stay on for three years, The Gardian, London, 21 October

Mowen, J.C & Minor, M (1998)
Consumer Behaviour, 4th Edition, Prentice-Hall Inc, New Jersey

Olson, C. J & Peter, J.P (1994)
Understanding Consumer Behaviour,

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