Putting a Price Tag on Loyalty : The Relationship of Customer-Segment Pricing and Student Loyalty in the Case of the Mecenat Card at Jönköping International Business School, Sweden

Abstract: Background      Catering to customer needs and wants by, at the same time, reaping maximum profits has, since the beginning of trade, been a tricky task for companies. Customer-segment pricing, i.e. offering lower prices to different target group segments, and its retail manifestation, student discounts, cater to students’ budgetary constraints, serving not only their particular needs but in return offering the company the possibility to reap long term profits from loyal students. High levels of price sensitivity among students provide companies a welcome point of action to address students and make them both attitudinal and behavioural loyal customers by means of financial incentives. The Mecenat card grants students access to those discounts – but does it help to make them loyal? Purpose            The purpose of this thesis lies in the exploration and description of a potential relationship between customer-segment pricing, i.e. student discounts and the formation of student loyalty. This exploration shall further be accompanied by a thorough analysis of the Mecenat card as a loyalty program and its ability to evoke student loyalty within the student body of Jönköping International Business School. Method             The research interest was served best by conducting qualitative prior to quantitative research. The focus groups allowed for a first insight into the topic and students’ opinions. These findings were then described by means of content analysis and further processed in quantitative research. An electronic survey was used to collect data from a sample drawn out of the total population of JIBS students. The data then was processed by means of descriptives, correlations, T-tests and factor analysis. Conclusion        Students at JIBS are a highly profitable customer segment, willing to be both attitudinal and behavioural loyal to stores that cater to their budgetary constraints by offering student discounts. The Mecenat card, however, due to low awareness and usage levels within the student body does not facili-tate, but rather hinders, the development of student loyalty. Thus, the find-ings were also processed into managerial implications that could help im-prove the service, such as improvements in communication