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Customer Loyalty Programs: Target Market

Choose a retail chain where you have shopped and/or worked. Imagine that you are a VP ? Customer Engagement for that store.

The CEO has asked you to prepare a memo for the Board of Directors. You are asked to comment on whether the Pathmark strategy of debit/loyalty cards would be appropriate for your store. Your discussion should cover these topics. You are encouraged to use sub-headings related to each question.

(a) Would this type of card be appropriate for your target market? Why or why not?
(b) How can the program be modified to fit your particular retail chain and its target market? Why would your target market be especially responsive? For example, Victoria's Secret offers its credit card holders a free gift every month with an extra on their birthdays. Their target market is women with discretionary income and a sense of fun, so gifts are appealing to them. Macy's has sales with an extra 10% off to credit card holders. They have a much broader market than Victoria's Secret. (Do not use these examples in your own report. Create your own example.)
(c) What kind of backlash can you anticipate from this program? What concerns customers (e.g., privacy loss)? Why?

Solution Preview

To: Wal-Mart Inc.

From: VP Customer Engagement


Customer loyalty programs are a way to influence the buying behavior of customers, who are loyal towards the products and services of the company (Byron & Sharp, 1997). These kinds of programs are the marketing efforts of the organizations, which encourage the customer to maintain a long term relationship with the company (Kumara & Shah, 2004).

Pathmark Strategy of Debit/loyalty cards is a mean to maintain a long term relationship with the customers. According to this strategy the customer, who purchases various products from the retail store, they get a loyalty card from the store. In this plan they receive some points for their shopping (HSBC, Pathmark Plan Loyalty Rewards Debit Payment Card Program, 2009). After collecting a fixed number of points such as 100, 200, etc. the customer wins a gift or discounts over their purchases (HSBC, Pathmark Plan Loyalty Rewards Debit Payment Card Program, 2009). My retail store is Wal-Mart, which is the world's top retailer company.

About Retail Store:
Wal-Mart is situated in the United States. The company is world's largest corporation in the generation of revenue (Kotler, 2002). The main objective of the company is to save money of the people more and more so that they can live a better life (Wal-Mart, 2009). Presently, the company is running more than 7000 retail stores all over the world. It severs about 170 ...

Solution Summary

The solution examines customer loyalty programs and target markets. How to modify programs for particular retail chain is determined.