The Marketing Book 5th Edition

Loyalty schemes

Service(s)

Design

Branding

Advertising

Location

Price

1970s 1980s 1990s

Retailing 789

identification of gaps does not alone ensure
their attractiveness. A sophisticated blend of
financial and psychological modelling is
required to predict the viability of the new
market position. Neither is simple, but the
prediction of consumer preferences is undoubt-
edly the greater challenge. It requires an under-
standing of the complex systems of trade-offs
that consumers make when choosing a store.
Figure 30.5 offers a simple but useful
summary of this difficult area of analysis. At

4.2 The marketing strategy triangle of the 3Cs

must be a focus upon value, as perceived by
the target customer. In general, they seek
more of the positive attributes, less of the
negative attributes, such as cost, risk, time
effort and stress. A better understanding of
the response patterns and trade-offs within
the ‘value equation’ is, without doubt, a
worthwhile area of investigation in the new
science of retailing.

Loyalty: schemes or strategies?

It is appropriate to conclude this section with

comments on one of the major preoccupations

of retail strategy in recent years: loyalty

schemes. It is hard to deny that there have been

distinct waves of emphasis in retail strategy

over the last 30 years, as illustrated in Figure

30.6. We can all argue exactly when each phase

started and ended; more difficult to argue is the

fact that these emphases, for a short period of

time, become obsessions, if not fixations. This

leads us to a sad conclusion: most retail strategies

have been formed in someone else’s head office!

One beneficial difference between this

‘wave’ and previous ones is that it focused upon

the consumer, rather than upon a specific aspect

of the mix. Loyalty schemes are driven by the

philosophy that it is cheaper to retain a customer

than it is to attract a new one, or to recover a lost

one. They come in many different shapes and

Figure 30.6 Waves of emphasis in retail strategy
Source: McGoldrick and Andre (1997).