THE LEVEL OF EFFECTIVENESS OF LOYALTY PROGRAMS ON THE
SALES AND MARKET DYNAMICS OF FOOD BUSINESSES IN
TUGUEGARAO.
INTRODUCTION
Loyalty programs have become increasingly popular in the food, grocery,
and beverage industry, revolutionizing how businesses engage with
customers. Loyalty programs have proven instrumental in building brand
loyalty, increasing sales, and creating a win-win situation for both businesses
and their valued customers in the food, grocery, and beverage industry. (Aira
Mehta, 2023)
Food Business is a lucrative market in the Philippines. One of the fastest
growing markets is food business which have taken the retail industry by
storm. The development of food business is mainly associated with factors
such as rise in population and industrial development. Food businesses have
expanded their business not only in the national market but have spread its
divisions in the international markets as well. Due to this global expansion
they have managed to sweep maximum profits. In Tuguegarao City alone,
food businesses are everywhere such as Jollibee, McDonald’s, Bakeries,
Panciterias and many more. However, we are in the competitive global
economy, therefore in order to thrive in the business is quite challenging in
the long run especially in food businesses, the competition has touched
higher standards, is highly competitive, and has a major failure rate
associated. For food business owners, it becomes necessary to level up the
marketing efforts. Better marketing efforts, coupled with a trust-building
approach among the customers, help create a trustworthy brand.
And so for the sole intention of increasing sales and reaping profits, these
food businesses have adopted various marketing strategies and techniques
to attract customers and to retain them through customer satisfaction. Such
marketing strategies are devised in order to gain maximum number of
customers and increase their sales. The purchasing power of the customer is
therefore influenced by these marketing incentives which result in customer
loyalty. Loyalty is developed through a strong relationship that the
organization builds with its customer in order to sustain them. This
relationship is built and sustained though persistent purchases done over a
predetermined time period. According to (Gefen, 2002; Rowley & Dawes,
2000)
A loyal customer provides the foundation and permits such business to
allocate their resources and energies to other business affairs and ventures
in order to increase their sales. To achieve customer loyalty, Loyalty
Programs are formulated. They are meant to make the customer believe he
is making a profitable purchase ultimately by purchasing the same product
through the same medium. One unquestionable marketing tool to enhance
customer loyalty is the customer’s keen interest in using loyalty cards.
Loyalty cards are a marketing strategy that rewards customers for their
repeat visits and purchase. They are a useful marketing tool that can help
business owners retain their customers and build their brand. In the food
business, retaining guests is critical. Implementing a strategy to incentivize
current customers into returning time after time will help boost food business
‘sales. Loyalty programs are a simple and effective way to encourage repeat
guests and increase food business’ sales.
Lal and Bell (2003) and Noordhoff et al. (2004) have found that loyalty
programs do affect purchase behavior and therefore should affect the
business profitability positive, on the other hand, Sharp and Sharp (1997)
and Magi (2003) presented mixed results whether loyalty programs do
generate any effect on purchase behavior and therefore has no effect on
profitability. The fact of mixing evidence makes this subject an interesting
topic to study since the outcome is hard to predict. This study therefore
explains and evaluates the level of effectiveness of loyalty programs on the
sales and market dynamics of food businesses in Tuguegarao.
