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Effectiveness of Loyalty Programs on the profitability of companies in the FMCG sector.

Presented by
Nada Mohamed Hassan
Class 53A

Supervised By
Dr. Ahmad Shalaby
July 2018
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1 Chapter One 3
1. Introduction: 3
1.1. Research Problem: 3
1.1.1. Loyalty marketing: 4
1.1.2. Loyalty program: 4
1.1.3. FMCG: 5
1.1.4. Profitability: 6
1.2.1 What are tha main key performance indicators of a succesful loyalty program? 6
1.2.2 What are the advantages / potentials of using loyalty programmes generaly, and in the FMCG sector particulary? 6
1.2.3 What are the trends of using loyalty tactics in the FMCG sector to increase companies profitability ? 6
1.2.4 What are the means by which companies can collect information about consumers through loyalty programs.hence; achieve a proper consumer targeting which will consequently increase their profitability ? 6
1.2.5 How can loyalty programms increase companies profitability ? 6
2 Chapter Two 7
2. Literature Review: 7
2.2 What are tha main key performance indicators of a succesful loyalty program? 7
2.3 What are the advantages / potentials of using loyalty programmes generaly, and in the FMCG sector particulary? 9
2.4 What are the trends of using loyalty tactics in the FMCG sector to increase companies profitability ? 11
2.5 What are the means by which companies can collect information about consumers through loyalty programs.hence; achieve a proper consumer targeting which will consequently increase their profitability? 14
2.6 How can loyalty programs increase companies profitability ? 15
2.7 Conclusion and recommendations 19
3 Chapter Three 20
3.1 Customer Experience: 20
3.1.1 Demand for Loyalty program 20
3.2.1 Consumers evaluations of alternatives rather than Loyalty programs 25
3.2.2 Determinants of the evaluated set : 27
3.2.3 Criteria of Choice of loyalty program and their importance: 30
3.2.4 The availability of Information 32
3.4.1 Consumption and user experience 36
3.4.2 Communication 36
3.4.3 Word of mouth 37
4 Recommendations to improve customer experience 38
5 References: 41

1 Chapter One

1. Introduction:

1.1. Research Problem:

Our problem here is the effectiveness of loyalty programs in the FMCG industry achieving the expected profitability versus spent that companies are seeking for, by strengthening the bond between consumers and the brand
Referring to Reinartz and Kumar study