Pizzerias but not hairdressers : Market characteristics and customer reward programs

Abstract: Firms commonly offer purchase incentives to customers to make them purchase repeatedly. One such strategy is to offer customer reward programs. Customer reward programs are one of the most widely studied areas within marketing and one of the most widely implemented marketing initiatives by practitioners. In this thesis I will focus on simple, non-data collecting customer reward programs, an example of such a customer reward program is used in pizzerias in Sweden, a stamp card that rewards the customer with a free meal after a specified number of repeated purchases. Previous research has indicated that the profit of customer reward programs is inconclusive for businesses. Despite that, reports indicate that customer reward programs are becoming more and more common. This indicates that this part of marketing, customer reward programs, needs to be further examined. The phenomenon observed was that this type of non-data collecting customer reward programs were commonly offered by pizzerias but not by hairdressers. The gathering of empiric data was done through qualitative interviews with respondents for the industries mentioned above. The analysis consists of my gathered empirical data in relation to chosen theories. Based on this material and my hypothesis the conclusions were drawn.