Research Article
A study for effective operation of customer loyalty program and alliance discount card in bakery industry - by the comparison of family restaurant industry
1 Seoul School of Integrated Sciences and Technologies
Published: January 2011 · Vol. 14, No. 3 · pp. 105-134
Full Text
Abstract
Customer reward (loyalty) program has been implemented in food service industry for decades. However it is also observed that discount cards allianced with consumer banks, credit cards and mobile telecommunication companies are rapidly spreading. The alliance card discount program seems to be invented by the convergence of the conventional price discount promotions and the concept of marketing alliance with different industries. In spite of these trends, bakery industry has less utilized alliance discount cards than family restaurants. However the increasing competition drives bakery brands to consider the expansion of alliance card for future marketing strategy against competition. To identify the alternatives for future growth, was reviewed the case of family restaurants. And new variables and criteria for program evaluation were developed through the review of studies of related subjects and industry opinion because so far not enough studies conducted for the comparison between point reward card and alliance discount cards. Suggested four alternatives from the study were the expansion of alliance discount card, the increase of point reward ratio, the integration of point programs of other brands or industries, and the introduction of all time discount to loyalty program members. Those ideas were evaluated by the new measures mentioned above. Additionally how to improve executional excellence in alliance discount card operation was discussed in terms of profitability and sales impact. In this study, by the cost efficiency analysis of each program, it is found what the consideration variables should be in the selection of alliance partners and in the cost-share negotiation with them. The understanding of motivation factors and consideration variables is supposed to be a substantial assistance to develop future marketing strategy in food service industry.
