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timer Asked: Dec 6th, 2015

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Topic 2: Loyalty and Distribution Methods

  • Are loyalty programs more likely to be successful for certain kinds of products and service than for others?
  • Given the proliferation of loyalty programs, how can you differentiate your program from competitors programs?
  • What are your thoughts on using a franchise as a method of distribution for a business?
  • Describe the pros and cons referenced with examples to support your thoughts.

STUDENT 1 Response

Loyalty programs are basically a marketing strategy a retailer, or other type of business come up with in hopes to keep the consumer coming back.  I believe it’s easier to sometimes keep a customer than to gain new ones.  However, when having a loyalty program and a current customer speaks highly of the store and another customer is curious, they will also shop at that store and become a part of the loyalty program.

I have so many of these wonderful loyalty cards, that it’s difficult to keep up with them and I’m quite glad most of them had resorted to using your phone number, so I just need to remember which stores I shop at.  I currently hold cards for Ralph’s, Food 4 less, Big lots, PetSmart and I can’t even remember the rest of them. 

I believe a loyalty program could work for my company if I know what the competitor’s programs are; I can have a program that supports a point system as to where if you spend so much money you can use those points as a credit towards your bill or be able to save the points for a larger discount towards a purchase.  I would make it to the points either never expire or expire after three to six months or make it a roll over program.

The most profitable loyalty program I had was probably Mazda.  I would always take my car to them for service and at one point I didn’t have to pay much for a service because I had $300 in loyalty cash that I was able to put towards that service which cut my bill down tremendously.

I can see the pros as there are so many of them, yet I can also see the cons of possibly losing money or if there is a fee based program.  Hence Barnes & Noble they sucker you in to their loyalty program, but it’s like $50 a year if not a little more, I can’t remember.  That may be a great thing if I were to shop there all the time and spend tons of money in there, but I generally only shop there once or twice a year and to me it’s not worth it.  Most times I can get the same book at Walmart or Target for a cheaper price and not need a rewards program.


Dhar, R. R. (2013). Marketing Management, VitalSource for Kaplan University, 4th Edition. [VitalSource Bookshelf Online]. Retrieved from https://kaplan.vitalsource.com

Toporeki, Adam. (Jun 2012).  What is a Loyalty Program?  Retrieve from http://customersthatstick.com/blog/what-is/what-is-a-loyalty-program/

STUDENT 2 Response

A purely point based loyalty systems are successful because they encourage consumers to buy new products instead of used ones, and also offers exclusive products that can only be accessed through the rewards system, extra purchases so the customers can reach their reward goals. The most common loyalty program is the tier based affinity program. Tier based affinity program is the same as the points systems, and these programs create an entire strategy out of their loyal customers. Tier Based Affinity programs give customers something in the beginning then over more as they progress.

I can make my loyalty programs different by being creative how the customers can earn their loyalty points (McEachern, 2014). An example of creative is giving away points for their birthday. Be creative on how a customer can spend their points. An example of this is having a website where the loyalty customers can go spend their points on products.

I believe that owning a franchise, as a method of distribution will be great because it will help the company get out their products faster. The pros of owning a franchise with an investor are that you will receive more financial help and you will have more control without having a full partner. The cons of owning a franchise with an investor are a partner can put you in a delicate position and you may still have to be on your own when making business decisions (Wilson, 2013). People should think before opening a franchise for distribution.


McEachern, A. (2014, November 10). 6 Strategies For A Creative Loyalty Program [Web log post]. Retrieved from https://www.sweettoothrewards.com/blog/differentiate-with-creative-loyalty-program/

Wilson, S. (2013). Pros and Cons of Franchise Partnerships | AllBusiness.com. Retrieved from http://www.allbusiness.com/pros-and-cons-of-franchise-partnerships-15629445-1.html

Winer, R. S., & Dhar, R. (2011). Marketing management (4th ed.)

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