“STUDY ON LOYALTY PROGRAMME ADOPTED BY APPAREL

RETAILER TO RETAIN CUSTOMER”

Project Report submitted in partial fulfillment of the requirements for the award of degree of Master of Business Administration of

Bharathiar University, Coimbatore

By

RAGHAVENDRAN.V

Reg.No.1035F0982

Under the Guidance and supervision of

Prof:K.Srinivasan

JANSONSSCHOOL OF BUSINESSApproved by AICTE & Affiliated to Bharathiar University

An ISO 9001-2008 certified and NBA-AICTE accredited institution Karumathampatti, Coimbatore-641659.

SEPTEMBER 2011

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_________________________________________________ BONAFIDE CERTIFICATE

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JANSONS SCHOOL OF BUSINESS

Approved by AICTE & Affiliated to Bharathiar University

An ISO 9001-2008 certified and NBA-AICTE accredited institution

Karumathampatti, Coimbatore-641659.

Ph: 0421-2336161 Fax: 0421-2334742 E-Mail: info@jsb.ac.in

BONAFIDE CERTIFICATE

This is to certify that the Project Report entitled “STUDY ON LOYALTY

PROGRAMME ADOPTED BY APPAREL RETAILER TO RETAIN

CUSTOMER” submitted to the Bharathiar University in partial fulfillment of the

requirement for the award of the Degree of Master of Business Administration is a

record of original and independent research work done by RAGHAVENDRAN.V

during the period of study from 02/05/11 to 17/06/11 under my supervision and

guidance and the thesis has not formed the basis for the award of any Degree/

Diploma/ Fellowship/ Associate ship or other similar title of any candidate of any

university.

CEO Signature of the Guide

Viva –voce held on _________________

INTERNAL EXAMINER EXTERNAL EXAMINER

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__________________________________________________COMPANY CERTIFICATE

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__________________________________________________________ DECLARATION

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DECLARATION

I, RAGHAVENDRAN.V, hereby declare that the Project Report entitled

“STUDY ON LOYALTY PROGRAMME ADOPTED BY APPAREL

RETAILER TO RETAIN CUSTOMER” submitted to the Bharathiar

University in partial fulfillment of the requirements for the award of the Degree

of Master of Business Administration is a record of original and independent

research work done by me during the period of study from 02/05/11 to 17/06/11

under the supervision and guidance of PROF K.SRINIVASAN and MRS

SOWMYA MARKETING AREA MANAGER OF PANTALOONS AT

CHENNAI it has not formed the basis for the award of any Degree/ Diploma/

Fellowship/ Associate ship or other similar title of any candidate of any

university.

Date: Signature of the student

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_______________________________________________________ACKNOWLEGEMENT

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ACKNOWLEDGEMENT

First and foremost I would be grateful to LORD for providing me strength to complete the Project.

My very special gratitude and heartfelt thanks to our beloved CHAIRMAN AND VICE CHAIRMAN, for his blessings and best wishes to carry out my project work.

I would like to express my deep gratitude to our CEO Mr.S.MOHAN who is responsible for molding our thinking to complete this project.

It is my great pleasure to express my sincere gratitude and thanks to my project guide PROF:K.SRINIVASAN, for his valuable guidance throughout the project on using Statistical Tools

I wish to express my sincere thanks to the company guide MRS. SOWMYA ,AREA MARKETING MANAGER OF PANTALOONS ,CHENNAI .who is my external guide for his kind support and guidance to complete my project.

I am also thankful to all the FACULTY MEMBERS OF THE JANSONS SCHOOL OF BUSINESS for their kind and valuable cooperation during the course of the project.

I extend my sincere thanks to all CUSTOMERS who helped me in my project

I would also like to thank my LOVING PARENTS, FRIENDS and well-wishers who encourage me to complete this project successfully.

Date: Signature of the Candidate V.Raghavendran

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________________________________________________________________CONTENTS

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EXECUTIVE SUMMARY

Marketing theory and practice has become more and more customer

centered, and managers have increased their emphasis on long-term client relationships

because loyalty, stronger relationships and therefore longer customer lifetimes likely are

associated with a greater degree of cross-buying, a more significant level of transactions and

therefore higher profits. This makes Customer retention rates and customer share of category

purchase as important metrics in customer relationship management. To maximize these

metrics, many firms use relationship marketing instruments, and loyalty programs or

frequency reward programs. But these programs along with being beneficial are also highly

costly. Thus it is important to find out whether these loyalty programs are influencing the

buying behavior of customers or not and if they are influencing then how impactful is there

influence.

Definition of Loyalty card program: The loyalty program provides gratification to those who

require rewards for purchases and avoids additional costs for those who would buy even

without them. Loyalty card program is an integrated system of marketing actions that aims to

make customers more loyal by developing personalized relationships with them. Relationship

marketing focuses on the customer, in the sense that the firm seeks to create long-term

business relations with existing prospects and customers.

Retailing is one of the oldest business activities in India. But until the liberalization

and deregulation of the Indian economy in the 1990s, it was dominated by small one-man

retail units.

Today's customers have more choice, are better informed and are more

demanding of value and return for their spending money. They look not only for the products

and services that meet their needs at the price they are willing to pay, but for the merchant

that recognizes, appreciates and rewards their patronage. Now a day’s all big apparel retailers

have started the loyalty program with different benefits in order to satisfy customer needs and

wants

Top retail players like pantaloons ,shopper stop ,Globus have adopted loyalty

card and The loyalty program is used as a tool for retaining a customers now a In India the

retailers plays vital role in selling goods to the ultimate customer and day by day number of

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retailers are increasing tremendously and ultimate end users are being confused and

customers keep on changing the retail store

The questionnaire survey was taken from 150 customers randomly and most of

them have purchased before at pantaloons. The loyalty program at pantaloons plays a vital

role in retaining a customer and nearly 75% of the customers are using the green card for

more than two year’s Satisfaction level in shopping experience, services, quality and

discount are very high

69.8% of customers who’s using pantaloons green card for more than 2 years says

that the current loyalty program is excellent

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CHAPTER 1

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INTRODUCTION TO RETAIL INDUSTRY The word retail is, in fact, derived from the French word retailer, which means – “to cut off a piece or to break bulk.”A retailer may be defined as a dealer or trader who repeatedly sells goods in small quantities.

Retailing is the business where an organization directly sells its products and services to an end consumer and this is for his personal use. By definition whenever an organization be it a manufacturing or a whole seller sells directly to the end consumer it is actually operating in the Retail space. The growth in Indian Retail segment was mostly attributed to factors like increasingdisposable income, favorable demographics, changing lifestyle, growth of the middle classsegment, high potential for penetration into rural markets, and progressive FDI norms It is an Industry which is heavily dependent on consumer spending. In this ecosystem consumers play the most important role. Retail sales are generally driven by people’s ability (disposable income) and willingness (consumer confidence) to buy goods and services.

"Retailing is one of the oldest business activities in India. But until the liberalization and deregulation of the Indian economy in the 1990s, it was dominated by small one-man retail units. However since the past five years, it has become more structured and formalized and is moving towards international standards. Today, the organized retail sector is an industry

Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing.

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Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.

ISSUES IN RETAILING: How can we best serve our customers while earning a fair profit?

How can we stand out in a highly competitive environment where consumers have too many choices?

How can we grow our business, while retaining a core of loyal customers?

Retailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy

EVOLUTION OF INDIAN RETAIL:

Informal retailing Sector Typically large retailers

Greater enforcement of taxation mechanisms

High level of labor usage monitoring

Formal Retailing Sector Typically small retailers.

Evasion of taxes

Difficulty in enforcing tax collection mechanisms

No monitoring of labor laws.

TYPICAL CHANNEL OF DISTRIBUTION

MANUFACTURE RETAILER WHOLESELLER FINAL CONSUMERA retailer sells to consumers through multiple retail formats

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Web sites

Physical stores

Cont.... Retail consumer markets today include high rates of personal expenditures, low interest rates, low unemployment and very low inflation. Negative factors that impact retail sales involve weakening consumer confidence.

One of India’s major retailers with presence in following two segments: Lifestyle Retailing : Pantaloons, Central, Fashion Station, aLL, MeLa. Value Retailing :Big Bazaar, Food Bazaar.

Retailing is the world’s largest private industry:

Retail is the world’s largest private industry with global retail sales of roughly USD 8 trillion. Retailing is also one of the biggest contributors to the Gross Domestic Product (GDP) of most countries and also one of the biggest employers. (Source CII McKinsey Report titled “Retailing in India, the Emerging Revolution”)

In India, however, the retail sector has seen a high level of fragmentation with a large share held by unorganized players.

BOOMING OF APPAREL RETAIL INDUSTRY

In india the retailers plays vital role in selling goods to the ultimate customer and day by day number of retailers are increasing tremendously and ultimate end users are being confused and customers keep on changing the retail store

The apparel retailers try to adopt change with new fashion and promotional activities to ultimate customers now a day’s many franchise apparel retail store are being increased and so that number of stores are increasing easily and retaining a customer by apparel retailers are becoming very difficult and in order to retain customers now top apparel retail giant like pantaloons, lifestyle, globus, shopper stop, Westside and many more apparel retailers try to retain customer using various customer program because relationship with customer is more important or else they may move easily to other retail store

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LOYALTY PROGRAM: “Loyalty is one of the great engines of business success”.

The word loyalty has different explanation and it all refer to way of Services. It is important to define exactly: what is meant by loyalty in the context of Business Development and Retention.

Several broad definitions exist, including the following:• “The commitment of customers to a particular brand or company”

• “The extent to which your customers continue with key loyalty behavior whenCompetitors offer more attractive prices, products, and/or services”

• “Faithful to any person or thing conceived of as deserving fidelity... characterizedby or showing faithfulness” For this report, loyalty is defined as follows: “Loyalty is a positive belief,Generated over the course of multiple interactions, in the value that a company and Its products and/or services provide, which leads to continued interactions andPurchases over time.” Loyalty should not be confused with customer satisfaction. Although loyalty is builton satisfaction, organizations can have satisfaction without loyalty. CustomerSatisfaction is an “opinion measure” about company performance and howCustomers feel their needs were met in past interactions or by past purchases,Whereas customer loyalty is a results measure that includes expectations of futurebehavior. For example, 75 percent of consumer wireless customers are “satisfied” with theircurrent service, but 72 percent would be willing to switch to a competing provider.Thus, when designing a rewards program to build loyalty, it is critical to thinkabout how to encourage true long-term customer loyalty and not just fleetingcustomer satisfaction.

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LOYALTY PROGRAM BASICS

Companies typically have several goals when launching loyalty programs, all ofwhich are focused on generating greater profits from the program’s members.These goals include

• Improving knowledge of the customer

• Leveraging that knowledge to increase the sales of undersold and/orhighly profitable products/services

• Increasing customer retention and purchase frequency The most common type of loyalty program begins when a customer enrols. Fromthat point forward, the organization accurately tracks information about that “member,” captures the member’s purchases, credits points to the member based on the rules stored in a loyalty “engine,” categorizes the member in tiers or groups based on the member’s value to the organization, and enables the member to redeem points for products or services when various point levels are attained. The specific types of behaviour that are tracked and rewarded are unique to each industry/company and are typically linked to the organization’s profitability drivers.

BENIFITS OF LOYALTY PROGRAM: “Greater Customer Knowledge” A loyalty program enables a company to gain detailed knowledge about its customer base with the customer’s consent; customers actually want to provide transaction and detailed profile information to ensure that they receive the full benefits of being a member of the program. In some market segments—such as business-to-business—companies already possess significant knowledge about their customers. As a result, these firms will not see customer knowledge as an important component of a loyalty program’s value. However, for most business-to-consumer companies, gaining this level of intimate customer knowledge is a critical benefit of a loyalty program. In such B2C industries, loyalty programs enable companies to match their faceless customer purchase data (what was bought, when, at what store) with specific customer profile information, which can then be used to create targeted marketing promotions or redesign services around high-value customers’ needs.

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The loyalty program helps to get a good relationship with customers because without responding or not providing any special benefit the may don’t think to come again for purchase to the particular store so Customer Relationship Management makes it very useful CRM is not just a technology, but rather a comprehensive customer-centric approach to an organization’s philosophy in dealing with its customers. This includes policies and process, front-of-house customer service, employee training, marketing systems and information management. Hence it is important that any CRM implementation considerations stretch beyond technology, towards the broader organizational requirements.

Managing the customer experience, maintaining a more reliable data base, improving service operations. Fostering customer loyalty, embracing the characteristics of high performance marketing and other related subjects. The loyalty program gives a good benefit’s to apparel retailers to do more and more service to customer

INCREASED CUSTOMER RETENTION

A well-honed loyalty program improves customer retention rates, by increasing amember’s “switching costs,” which are costs a member would bear in order toswitch to a competing provider.

These costs can include decreased service and the time and resources required to build a new relationship. The higher a member’s switching costs, the more likely that member is to remain loyal.

Most loyalty programs today do not create high enough switching costs formembers. For example, airline industry frequent-flier programs all provide virtually the same product (a seat, perhaps with a few extra inches of legroom) and the same membership benefits (separate customer service number, priority boarding, priority upgrades, and bonus miles). If gold-tier members on one airline want to switch to a competitor because the competitor just added nonstop service on their favorite routes, all they have to do is fax the competitor their last frequent-flier statement, and they will immediately be made gold members of the competitor’s frequent-flier program. Because the products and services these two airlines and their loyalty programs provide are virtually identical, the members can switch to a competing carrier at virtually no cost to themselves. However, if the first loyalty program offered a unique set of benefits that thecompeting carrier could not easily duplicate, it would be much less tempting formembers to switch. Companies use their loyalty programs to create these switchingcosts, by

• Leveraging in-depth member profile and transaction data to create unique offersand product/services that a competitor, which does not know as much about themember, cannot match

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• Providing targeted service consistently across all channels By using the personalized data provided by their loyalty program, companies cancreate a win-win relationship with their members that cannot easily be replicated bytheir competitors.

Businesses are quickly learning that being the best is no longer enough. Every consumer demands the highest quality goods or services at the best prices, conveniently delivered to them through whatever means and at any time they choose. So the retailers have to do everything to meet those demands. At the same time, invest time and resources to hire and train the staff to be courteous, friendly, helpful and trustworthy when facing customers.

Today's customers have more choice, are better informed and are more demanding of value and return for their spending money. They look not only for the products and services that meet their needs at the price they are willing to pay, but for the merchant that recognizes, appreciates and rewards their patronage.

Given this wide acceptance and popularity of reward & recognition-based loyalty programs, merchants have leveraged, and continue to employ, programs to compliment their traditional efforts in responding to a variety of challenges.

Now a day’s all big apparel retailers have started the loyalty program with different benefits in order to satisfy customer needs and wants

ATTRACTING, RETAINING AND GROWING CUSTOMERS

A) Customers are becoming harder to please.

B) Companies seeking to expand profits and sales have to spend considerable time and resources searching for new customers.

Suspects are people or organizations that might conceivably have an interest in buying but many not have the means or real intention to buy.

Prospects—customers with the motivation, ability, and opportunity to make a purchase

Customer churn—high customer defection

Two main ways to strengthen customer retention:

Erect high switching costs.

Deliver high customer satisfaction.

C) Most companies now recognize the importance of satisfying and retaining customers.

D) Satisfied customers constitute the company’s customer relationship capital.

Acquiring new customers cost five times more than the costs involved in satisfying and retaining current customers.

The average company loses 10 percent of its customers each year.

A 5 percent reduction in customer defection rate can increase profits by 25 percent to 85 percent depending on the industry.

Customer profit rate tends to increase over the life of the retained customer..

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TOP PLAYERS IN APPAREL RETAIL STORES ADOPETED LOYALTY PROGRAM

Pantaloons : Green Card (GC)

Shopper Stop : First Citizen (FC)

Lifestyle : The Inner Circle (TIC)

Westside : Club West

STATEMENT OF PROBLEM

To know at what extend the loyalty program pulls customers to purchase apparels at

pantaloons and to know the satisfaction level of customers whether loyalty program increase

the sales of pantaloons

OBJECTIVE

To know the loyalty program adopted by pantaloons and other apparel retailers.

To know how pantaloons retain customers using loyalty program.

LIMITATIONS

The study was taken on at Chennai region

The survey was taken only 150 customers

CHAPTERIZATION

In this project:

Chapter 1: Deals with introduction, statement of the problem, objectives and limitations

Chapter 2: Gives industry and company profile.

Chapter 3: Gives review of literature and research methodology, section 1 gives review of literature and section 2 gives research methodology

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Chapter 4: Gives analysis and interpretation is percentage analysis, cross tabulation

Chapter 5: Gives findings ,recommendation conclusions.

CHAPTER 2

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FUTURE GROUP

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Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s leading business houses with multiple businesses spanning across the consumption space. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloons Retail, the group operates over 16 million square feet of retail space in 73 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloons Retail employs around 30,000 people and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail.

The group’s specialty retail formats include supermarket chain - Food Bazaar, sportswear retailer - Planet Sports, electronics retailer - eZone, home improvement chain -Home Town and rural retail chain - Aadhaar, among others. It also operates popular shopping portal. www.Futurebazaar.Com.

Future Group believes in developing strong insights on Indian consumers and building businesses based on Indian ideas, as espoused in the group’s core value of ‘Indianness.’ The group’s corporate credo is, ‘Rewrite rules, Retain values.’

Future Groups Includes- Future Retail- Covering all retail business. Future Capital- covering consumers finance, insurance and advisory services. Future brands- covering all brands owned and managed by company. Future space- which includes development and management of real states. Future logistics- which manages supply chain and distribution. Future media- which develops and manages retail media spaces.

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LEADERSHIP The Future Group employs over 30,000 people and was counted among 15 best employers in India in a survey conducted by Hewitt Associates in 2007 in association with The Economic Times.

The Group has developed a strong senior management team with cross-functional expertise in multiple businesses and is led by its Founder and Group CEO, Kishore Biyani.

Kishore Biyani founded Pantaloons in 1997, followed by a number of popular retail formats including Big Bazaar, Central, Food Bazaar, Brand Factory and Home Town that now cater to almost the entire consumption basket of a wide cross-section of Indian consumers.

In the recent years, Kishore Biyani has led the group’s transformation into one of India’s leading business houses with presence in capital, consumer finance, insurance, brand development, retail real estate development and logistics.

FUTURE GROUP

GROUP VISION Future Group shall deliver Everything, Everywhere, Everytime for every Indian consumer in the most profitable manner.

GROUP MISSION

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We share the mission and belief that our customers and Stakeholders shall be served only by creating and executing . Future scenarios in the consumption space leading to economic development. We will be the trend setters in evolving delivery formats, creating retail realty, making consumption affordable for all Customer segments – For classes and for masses we shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost conscious, and committed to Quality in whatever we do. We shall ensure that our positive attitude, sincerity, Humility and united

determination shall be the driving force To make us successful.

CORE VALUES

Indianans: Confidence in ourselves. Leadership: To be a leader, both in thought and business. Respect and Humility: To respect Every individual and be humble in our conduct. Introspection: leading to purposeful thinking. Openness: To be open and receptive in new ideas, knowledge and information. Valuing and Nurturing Relationships: To build long term Relationships. Simplicity and Positivity: Simplicity and Positivity in our thought, business and action. Adaptability: To be flexible and adaptable, to meet challenges. Flow: To respect and understand the universal law and nature.

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PANTALOONS

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Pantaloon Retail (India) Limited (PRIL) is the flagship company of Future Group, a business group catering to the entire Indian consumption space. PRIL is India’s leading retailer that operates multiple retail formats catering to the needs of both the value and lifestyle segment of the Indian consumer market. The company which started its operations from Kolkata is now headquartered in Mumbai (Bombay), India’s commercial capital. The company operates over 7 million square feet of retail space, has over 1000 stores across 53 cities in India and employs over 25,000 people. The company operates in diverse formats.

Pantaloons – “A Chain Of Fashion Outlets”

The first Pantaloons was opened in Gariahat in 1997. Over the years, it has undergone several transitions. When it was first launched, this store mostly sold external brands. Gradually, it started retailing a mix of external brands while at the same time introduced its own private brands. Initially positioned as a family store, it finally veered towards becoming a fashion store with an emphasis on 'youth' and clear focus on ‘fresh fashion’. Today, the fashion store extends to almost all the major cities across the country. Pantaloons has established its presence with stores not just in the metros, but also in smaller towns. Today there are around 46 Pantaloons store across the country.

It is Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet of retail space in over 71 cities and towns and 65 rural locations across India. The group owns several leading formats including Pantaloons, Big Bazaar, Food Bazaar, Home Town, eZone and Central. 

Pantaloons is among India's largest chains of fashion stores. Pantaloons Fresh Fashion, with its focus on 'fresh look, feel and attitude' offers, trendy and hip collections that are in sync with the hopes and aspirations of discerning young and 'young-at-heart' consumers. Pantaloons Fresh Fashion stands out as a fashion trendsetter, on the lines of how fashion is followed internationally. This 'fresh fashion' destination allows customers to shop for the latest in fashion apparel and accessories throughout the year in an attractive and visually stimulating ambience.

Pantaloons Fresh Fashion stores have presence with stores not just in Metros but also in smaller towns. All stores have a wide variety of categories like casual wear, ethnic wear, formalwear, party wear and sportswear for Men, Women and Kids.

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MISSION: Pantaloons shall strive to provide ultimate Value and satisfaction to its customer in terms of quality control with price.

Through excellence in technology break Through Management enterprise Through Total Quality Management.

To make it a preferred organization for both present and future employees, suppliers, customers, shareholders related agencies and society and large and continue its march towards progress and retain its front line positions.

VISION:

Pantaloons India, in association with The Future group shall deliver every time, everywhere, and everything for every consumer of India in a profitable way.

Pantaloons India shares the belief that the potential stakeholders and customers shall be provided by executing and creating future developments in the leading consumption space to the economic development.

MOTTO:

“Customer Satisfaction is our real motto”

Customer is our real boss and our real master.

A Customer is not an interruption in our work; he is the purpose of it.

CORE VALUES:

Confidence in ourselves. To be a leader, both in thought, business and in innovation. Respect every individual and be humble in our Conduct. Leading to purposeful thinking. To be open and receptive to new ideas, knowledge and information. To build long term relationships. Simplicity and positively in our thought, business and ideas. To be flexible and adaptable, to meet challenges

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CUSTUMER RELATIONSHIP MANAGEMENT AT PANTALOONS

WHY CRM?

Want to focus both on acquisition & Retention To convert daily footfalls into loyal customers Extraordinary service and customer satisfaction Increase customer share

CRM AT PANTALOONS:

• In Future Group only Pantaloons is following Customer Loyalty Program• CRM is practiced through the “GREEN CARD” program (GC)• Green Card loyalty program contributes approx. 65% in profitability of Pantaloons

across country• Pantaloons maintains a customer database of 33 lakh across India• Software used is the ‘Customer Loyalty Program’

PANTALOONS GREEN CARD PROGRAM:

INITIAL STEPS :

• Informing the Customer about the loyalty program• To become a green card member

-Filling of form -Enrollment payment of Rs. 100

• While filling the form various customer details like -Name -Address -Date of Birth -Phone No. -e-mail id -Income -Relationship Status etc. are collected to form the customer database

SPECIAL BENEFITS ON ENROLLMENT:

• 200 Gift Voucher• Friday 5%• Pizza Hut 20%

and many more initial benefits are provided by pantaloons stores for retaining the customer

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PANTALOONS GREEN CARD PROGRAM

“Your Green Card Is Your Passport To A Whole New World Of Exclusive Benefits And Privileges.”

Instant discount* for every time you shop at Pantaloons Exclusive shopping days to get hold of latest merchandise Regular updates on collections and promos via catalogues, sms and email Special invites to the most happening events Extended exchange periods and complimentary drops for alterations Exclusive billing counters and much more

CATEGORIES VALID FOR GREEN CARD DISCOUNTS: Apparel, perfumes & cosmetics, toys, bluesky, all, depot, planet sports & accessories. valid on categories within pantaloons only.also valid at standalone bluesky and all stores.

SHOP WITH GREEN CARD, GET REWARDED INSTANTLY,Online purchases are currently not eligible for Green Card discounts or counted in purchases. This feature would be available in the near future.

1 STAR MEMBERS

Gift Voucher worth Rs. 200 on enrolment

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3 STAR MEMBERS

5% discount on every purchase

5 STAR MEMBERS

An exclusive 7.5% discount on every purchase

7 STAR MEMBERS

A whopping 10% discount on every purchaseSwipe card at the time of purchase to avail these discounts.

MOST RECENT PURCHASE HELPS TO UPGRADEPANTALOONS upgrade is not dependent on the date of enrolment or calendar year. They now upgrade on the basis of purchases immediately based on the preceding 12 months from current shopping date.

MEMBERSHIP & 12 MONTH PURCHASE-BASED UPGRADING SYSTEM:• THREE STAR CARD - Upgrade to a 3 star status by shopping for Rs. 8000/-

immediately preceding 12 months of current shopping date.

• FIVE STAR CARD - Upgrade to a 5 star status by shopping for Rs. 20000/- immediately preceding 12 months of current shopping date.

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• SEVEN STAR - Upgrade to a 7 star status by shopping for Rs. 40000/- immediately preceding 12 months of current shopping date.

EXCLUSIVE BENEFITS AND PRIVILEGES:

• FASHION FRIDAY (additional 5% discount to all members)

• Instant discounts for every time you shop at Pantaloons.

• Regular updates on themes, collections and promos (beginning & end) via catalogues, SmS and email.

• Special invites to the most happening events.

ADDITIONAL BENEFITS

Green Add on Cards- 1 and 3 star member : 1 add-on

card - 5 and 7 star member : 2 add-on

cards Green Days: End Of Season Sale Green Channel: special billing counter

during End of Season sale Green Offers Green Service Desk Green Exchange Green drop

7 STAR PRIVILEGES – A BIG “WOW”Exclusive benefits for green card members

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EXTRA BENEFITS TO 7 STAR CUSTOMERS:

• Free parking space

• Free gifts

• Stock manager personally deal them

• Promotion is communicated first

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BENIFITS 3 STAR 5 STAR 7 STAR

INSTANT DISCOUNT 5% 8% 10%

ADD ON CARD 1 2 2

GREEN OFFERS AND PROMOTION

YES YES YES

GREEN SERVICE DESK YES YES YES

GREEN EXCHANGE 60 days 60 days 90 days

COMPLEMENTARY HOME DELIVERY

YES YES YES

COMPLEMENTARY HOME DROP

NO YES (EXCEPT SALES PREVIEW)

YES

(AROUND THE YEAR)

FREE PARKING YES YES YES

EXCLUSIVE BILLING COUNTER

YES YES YES

COMPETITOR LOYALTY PROGRAM STUDY The other major players in apparel retail store are

Shopper stop Westside etc

SHOPPER STOP

Shoppers Stop is one of the leading retail stores in India. Currently they have 28 stores across the country and three stores under the name HomeStop. Shoppers Stop has also begin operating a number of specialty stores, namely Crossword Bookstores, Mothercare, Brio, Desi Café, Arcelia. Shoppers Stop retails a range of branded apparel and private label under the following categories of apparel, footwear, fashion jewellery, leather products, accessories and home products. These are complemented by cafe, food, entertainment, personal care and various beauty related services. Shoppers Stop launched its e-store with delivery across major cities in India. The website retails all the products available at Shoppers Stop stores, including apparel, cosmetics and accessories.

LOYALTY PROGRAMShoppers Stop’s has a loyalty program called First Citizen. They also offer a co-brandedcredit card with Citibank for their members.

FIRST CITIZEN:First Citizen is the Loyalty Programme of Shopper’s Stop.

The First Citizen program has 3 tiers - Classic Moments (entry level), Silver Edge and Golden Glow. Members fall into the various tiers on the basis of their spends with thecompany.

THE BENEFITS THAT CAN BE OBTAINED BY BECOMING A MEMBER ARE MENTIONED BELOW:

Reward Points for every time you shop at Shoppers Stop- Every 100 Rs add up as 1point in the account. 1point equals 70 paise.

Exclusive benefits & privileges- Reserved Car parking, dedicated counters for billing,

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information about latest offers and promotions through mails/calls. Exclusive offers for card holders Bonus points accumulated on buying with First Citizen Credit Card Updates on what you can look forward to shop for at Shoppers Stop, depending on

your past shopping history. Extended and exclusive shopping hours - especially during the festive season Home delivery of altered merchandise. Exclusive First Citizens lounge at select stores to relax after hectic shopping

PROS:

Loyal customer base of above 20 lakh and growing. Presence in various segments: apparel, lifestyle, and electronics. Online shopping portal, and dedicated all India toll free customer helpline add to the

customer satisfaction levels. Cobranded credit card along with Citibank helps to leverage reach of Citibank to

increase Loyal Sales.

CONS:

Integrating online shopping account with FC card is complex and requires assistance. Terms and Conditions for members to redeem points, as to what merchandise is available for redemption is not very clearly mentioned.

WESTSIDE

Established in 1998 as a part of the Tata group, Trent Ltd operated Westside. The Westside stores have numerous departments to meet the varied shopping needs of customers. These include Menswear, Women’s wear, Kid’s wear, Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts. The company has already established 52 Westside departmental stores (measuring 15,000 - 30,000 square feet each) in about 21 locations.

LOYALTY PROGRAMME:

West side has a Loyalty Programme called Club West.The 30,000-plus members of this club get rebates at restaurants and on holiday packages from the Taj Group of Hotels, home delivery of alterations, and best of all, special shopping hours on the first day of any discount sales event organized by the chain. Clubwest is a two tier programme, which consists of Clubwest Classic and Clubwest Gold. The chain currently has over eight lakh

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members, who generate over 50% of sales. Clubwest Classic card can be availed by spending Rs 2000/- on a single day, or alternatively by paying Rs 150/-.On the other hand Clubwest Gold can be availed by spending Rs 5000/- on a single day.

THE BENEFITS AVAILABLE FOR MEMBERS ARE:

Earn points every time you shop at Westside. These points can be exchanged againstSubsequent purchases made in the store.A dedicated Clubwest desk for a member's assistance at each of the stores.Exclusive shopping hours only for members during sales.Unprecedented access to a host of privileges and services through our exclusive tie-upsfrom time to time.Advance intimation of all in-store promotions and special offers through direct mailers.Special discounts on dining at select restaurants round the year.

PROS:Round the year discounts on selected dining restaurants and other partner companies forClubwest members.Tie ups with other companies bring in attractive offers for the Clubwest members.

CONS:The two tier Loyalty Programme system generates confusion and a barrier amongmembers.

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CHAPTER 3

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LITERATURE REVIEW:

LOYALTY PROGRAMS: BUILDING CUSTOMER LOYALTY TO BUILD

PROFITS

“Loyalty is one of the great engines of business success”

Frederick F. Reicheld, author of the loyalty effect

Today’s successful readymade garment retailers recognize the importance of

customer retention in their efforts to grow operational profits. to achieve this, more and more

retailers are implementing loyalty programs as a competitive marketing strategy to build

long-term relationships with customers, allocate marketing rupees based on the customer’s

value and derive as much as revenue as possible from them over a lifetime. of course, loyalty

is more than a business strategy. It is an ongoing, two-way relationship based on respect, trust

and commitment – a relationship in which the customer feels all-important. A successful

loyalty program builds and nurtures such a relationship by accomplishing two critical tasks.

the first is to gather information that will help retailers understand their customers’ tastes,

needs and expectations. The second is to offer recognition and rewards (loyalty card,

rewards card, points card, advantage card, or club card) that are relevant to their

customers as a reward for their loyalty – and as a trade for the personal and transactional data

that starts the loyalty cycle and keeps it going. by tracking members’ transactions, companies

can identify the various segments of their customer base to create strategies that keep their

customers coming back for more.

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CUSTOMER INFORMATION IS KEY: Effective loyalty programs generate incremental

spending – more rupee spent, more frequently, from customers whose needs and expectations

are understood and met. with 80% of retailers’ business being generated from as little as 20%

of their customers, identifying and understanding their needs and expectations of this 20% is

crucial. by gathering customer information, retailer can make intelligent marketing decisions

that will keep their best and most profitable customers more loyal. they can also leverage this

thinking to increase sales the under-performing segments of their customer base. the most

valuable loyalty programs to retailers are those which utilize advanced technology to collect

data at the point of sale, track valuable information about customer purchase behavior, and

provide access to rich database reports and analysis that can be used to increase the

effectiveness of retailers’ marketing campaigns. what customers expect:

today’s consumers are more savvy and sophisticated than ever. they expect loyalty programs

to offer:

easy participation

instant rewards

flexible rewards

fast accumulation of rewards

rewards claimed at any participating establishment

special offers

instant win opportunities

membership cards

greetings on special occasion

gifts

coupons/vouchers

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.RESEARCH METHODOLOGY:

1 RESEARCH BACKGROUND

Research - Quantitative

Research design - Descriptive study

Data collection - Primary Data

Sample area - Chennai

Sample size - 150 customers

Sampling design - Non-probability technique

Sampling Technique - Convenience sampling

Research approach - Survey method

Research instrument - Questionnaire

Sampling tool - Structured Questionnaire method

Statistical package - SPSS

Analytical tool - Percentage, cross tabulation

2.RESEARCH METHODOLOGY

Research method is an academic activity and as such as the term should be used in a

technical sense. This research comprises of defining and redefining problem, formulating

hypothesis or suggested solution; collecting; organizing and evaluating data; making

deduction and reaching conclusion; and at last carefully testing the conclusion to determine

they fit the formulating hypothesis. By this way proper methodology is an essential step in

conducting research study.

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3. RESEARCH DESIGN

A research design is the arrangement of condition for collection and analysis of data

in a manner that aim to combine relevance to research purpose with procedure. The research

design adopted for this study is descriptive type. The objective of such a study is to answer

“who, what, where and how” of the subject under investigation. It is used because of its

extensive flexibility, scope and convenience. A descriptive research study is basically

concerned with narration of particular individual or group with specific predictions.

3.1 IMPORTANCE OF THE DESCRIPTIVE RESEARCH

To describe the demographic characteristics of certain group.

To estimate the proportion of people in a specified population who behave in a certain

way.

To make specific predictions.

To determine whether certain variables are associated.

RESEARCHKNOWN DATA UNKNOWN DATA

3.2 RESEARCH APPROACH

The survey method was adopted for collecting the primary data. Survey research is

the systematic gathering of data from respondents through questionnaire.

3.3RESEARCH INSTRUMENT

The data for this research was collected by survey techniques using interview method,

guided by questionnaire.

4. SAMPLING

Sample denotes only a part of the universe / population. The sample represents the

population and is having the same characterizing as the population.

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5. SAMPLING METHOD

Non – probability sampling

This type of sampling technique gives no assurance that every element has some

specifiable change of being included. It is clear that for the non – probability samples, there is

no way of calculating the margin of error and the confidence level.

5.1 CONVENIENCE SAMPLING

Sampling refers the method of selecting items to be observed for the study. The

samples have been selected for the study based on the convenience of the researcher. The

method used here is convenient sampling, where the samples are selected based on the

convenience of researcher.

5.2 SAMPLING SIZE

Sampling size is the number of items to be selected from the universe to constitute the

sample. In this study, a sample study of 150 has been chosen.

5.3 SAMPLING AREA

This study was undertaken at pantaloons chennai.

5.4 PERIOD OF STUDY

The study was undertaken between May 2011 and July 2011

5.5 DATA COLLECTION DESIGN

A marketing researcher has to make a plan for collecting data which may be primary

data, secondary data or both.

5.5.1PRIMARY DATA

The primary data was obtained by administering survey method, guided by

questionnaire to collect information from customers. The questionnaire are both open and

Closed ended questions

These methods were adopted since the data which is required is highly focused on customer

satisfaction

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5.5.2 SECONDARY DATA

The secondary data are collected through various sources like

1. Secondary data are collected through internet related to industry, company,

competitors, etc

2. Review of articles being published on the topic in various magazines and newspapers

3. Data are also collected from the company brochures etc

5.5.3 QUESTIONNAIRES:

The best way to collect the data is to personally administer the questionnaires. The

advantage of this method is, the data can be collected from the respondents within a short

period of time. Any doubts that the respondents might have on any question could be

clarified on the spot.

5.6 ANALYSIS DESIGN

The study has used various statistical tools for the analysis of data. They are

1.Percentage analysis

2.Cross tabulation.

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ANALYSIS

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1. PURCHASED BEFORE AT PANTALOONS Since there are many apparel retailers at Chennai we should know whether customers have purchased before or not at pantaloons

PURCHASED BEFORE AT PANTALOONS

PURCHASE FREQUENCY PERCENT

YES 141 94.0

NO 9 6.0

TOTAL 150 100.0

INFERENCE:From the above table we conclude that 94% of the customer have purchased before at pantaloons

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2. HOLDING PANTALOONS GREEN CARD This helps to know how many respondents are holding pantaloons green card

HOLDING GREEN CARD FREQUENCY PERCENT

YES 100 66.7

NO 50 33.3

TOTAL 150 100.0

INFERENCE: From the above table we conclude that nearly 66.7% of customers are holding pantaloons green card and other 33.3% are not having green card

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3 .FREQUENCY OF PURCHASE AT PANTALOONS:

FREQUENCY OF PURCHASE FREQUENCY PERCENT

AS PER NEEDS 102 68.0

MONTHLY 9 6.0

ONCE IN 3 MONTHS 39 26.0

TOTAL 150 100.0

INFERENCE:From the above table it is concluded that nearly 68% of customers are purchasing as per need at pantaloons an remaining 26% are purchasing once in 3 months

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4. SATISFACTION LEVEL ON OVER ALL SHOPPING EXPERIENCE This helps to know the satisfaction level of customers at pantaloons

INFERENCE:From the above table we come to know that 93.3% of the customers are highly satisfied in the overall shopping experience at pantaloons

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OVER ALL SHOPPING

EXPERIENCE FREQUENCY PERCENT

SATISFIED 10 6.7

HIGHLY SATISFIED 140 93.3

TOTAL 150 100.0

4. SATISFACTION LEVEL IN QUALITY AT PANTALOONS This helps to know about the satisfaction level on quality because quality is more important in apparels and it helps to decide for next purchase.

INFERENCE: From the above table we come to know that the satisfaction level in quality of goods and services in which 85.3% of customers are highly satisfied and only 2% of the customers are not satisfied in the quality

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QUALITY FREQUENCY PERCENT

UNSATISFIED 3 2.0

SATISFIED 19 12.7

HIGHLY SATISFIED 128 85.3

TOTAL 150 100.0

5. SATISFACTION LEVEL IN DISCOUNTS AT PANTALOONS: The discount is one of the main factor for pulling

customer to purchase more

and more so we should know the

satisfaction level at pantaloons

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DISCOUNTFREQUENCY PERCENT

HIGHLY UNSATISFIED 4 2.7

UNSATISFIED 8 5.3

NUETURAL 42 28.0

SATISFIED 37 24.7

HIGHLY SATISFIED 59 39.3

TOTAL 150 100.0

INFERENCE:From the above table we conclude that nearly 39.3% of the customers are highly satisfiedAnd only 5.3% of the customers are highly unsatisfied

6. SATISFACTION LEVEL OF CUSTOMERS IN SERVES:

The serves is an important factor at retail because if the retailer does not

provide a best serves then the wont come back so we should provide better serves so we

should know the satisfaction level

SERVES FREQUENCY PERCENT

UNSATISFIED 8 5.3

NUETURAL 62 41.3

SATISFIED 43 28.7

HIGHLY SATISFIED

37 24.7

TOTAL 150 100.0

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INFERENCE:

From the above table we come to know that 24.8% of customers are highly satisfied and

41.3% of the customers are in neutral level

7.SATISFACTION LEVEL ON FREE PARKING FACILITY AT PANTALOONS:

Parking facility is one of the big problem today and certain customers hesitate to

purchase if there is no parking facility so customers should be satisfied in parking facility

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INFERENCE:From the above table we conclude that 41.3% of the customer are highly satisfied with free parking facility provided by pantaloons

8.SOLVING PROBLEM AND QUIRES: In retail sectors customers are more important without customers it’s very difficult to survive so solving of customer problem and should clear the quires

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PARKING FREQUENCY PERCENT

HIGHLY UNSATISFIED 7 4.7

UNSATISFIED 8 5.3

NUETURAL 28 18.7

SATISFIED 45 30.0

HIGHLY SATISFIED 62 41.3

TOTAL 150 100.0

SOLVING PROBLEM AND QUIRES FREQUENCY PERCENT

DISAGREE 2 1.3

NUETURAL 50 33.3

AGREE 61 40.7

STRONGLY AGREE 37 24.7

TOTAL 150 100.0

INFERENCE:

From the above table we conclude that nearly 40.3% of the customers are agreeing and

only 1.3% of the customers disagree the problem solving and quires

9. PERODIC AND PROPER UPDATES:

Relationship with customer is more important we should have a close touch in

order to earn profit and increase the sales

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Periodic and proper updates Frequency Percent

Yes 107 71.3

No 43 28.7

Total 150 100.0

INFERENCE:

From the above table we come to know that 71.3% of the customer get periodic and

proper updates from pantaloons

10. CURRENT LOYALTY PROGRAM

This helps to know how effective is current green card program at pantaloons

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CURRENT LOYALTY PROGRAM

TOTALUSING GREEN CARD EXCELLENT GOOD AVERAGE

YES 91.3% 64.6% 41.0% 66.7%

NO 8.7% 35.4% 59.0% 33.3%

100.0% 100.0% 100.0% 100.0%

INFERENCE: From the above table we come to know that 91.3% of the customers using green card says that the current loyalty program is excellent.

11. RECOMMENT OTHERS TO ENROL GREEN CARD: Customers should be satisfied with green card then only they will recommend others to enrol green card this helps to know people using green card are they willing to recommend others

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USING GREEN CARD

RECOMMEND TO ENROLLED IN THE GREEN

CARD PROGRAM

TOTALYES MAY BE

0-1YEAR 1.8% 9.3% 5.0%

1 - 2 YEARS 19.3% 34.9% 26.0%

MORE THAN 2 YEARS 63.2% 30.2% 49.0%

TOTAL 100.0% 100.0% 100.0%

INFERENCE:From the above table we conclude that 63.2% of customers using pantaloons green card for more than 2 years say’s they will recommend their friends to enrol in green card program

12. HOLDING OTHER LOYALTY CARDS Now a days many apparel retailers have started providing green card this helps to know how many customers are using other loyalty card

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HOLDING OTHER PRIVILAGE CARD

TOTAL

MONTHLY INCOME

SHOPPER STOP LIFESTYLE GLOBUS WESTSIDE OTHER

20000 18.8% 14.3% 7.7% .0% 16.7% 14.0%

21000 - 35000 16.7% 9.5% 15.4% 14.3% 16.7% 13.3%

36000 - 50000 29.2% 34.9% 46.2% 85.7% 33.3% 37.3%

ABOVE 50000 35.4% 41.3% 30.8% .0% 33.3% 35.3%

TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

INFERENCE:From the above table we conclude that people having monthly income of more than 50000 are using loyalty card where 41.3% of customer using lifestyle card

APPENDIX:STUDY ON LOYALTY PROGRAMME BY APPAREL RETAILERS TO RETAIN CUSTOMER

1. PERSONAL INFORMATION:Name ________________________

Gender: ○ Male ○ Female

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Age: ○ (<18 ) ○ (19 – 25) ○ ( 25 – 40) ○ (40 – 60) ○ (> 60)

Occupation ○ Student ○ Self employed ○ Govt job ○ Other

Marital status ○ Single ○ Married

Monthly income ○ (20k) ○ (21k – 35k) ○ (36k-50k) ○ (above 50k)

2. Have you purchased earlier in pantaloons? ○ yes ○ no3. Do you have pantaloons green card? ○ yes ○ no>If yes since how long you’ve been a member of green card programme? ○ (0-6 months) ○ (6 months – 1 year) ○ (1-2 years) ○ (more than 2 years)4. How frequently do you shop in pantaloons? ○ As per needs ○ monthly ○ once in 3 months 5. In a year how much do you purchase in pantaloons? ○ Less than 8000 ○ 8000 - 20000 ○ 20000-40000 ○ above 40000 6. How satisfied are you with the purchase you made in pantaloons - rating scale? (5-higly satisfied 4-satisfied 3-nutral 2-unsatisfied 1-highly unsatisfied)PARTICULAR 5 4 3 2 1

Overall shopping experience Quality

Service

Discounts

Free Parking

Home Delivery

7. All problems and queries are solved and answered satisfactorily at the green card desk?○ Strongly Disagree ○Disagree ○Neutral ○Agree ○Strongly Agree8. Do you receive periodic and proper updates regarding offers and promotions (mail/sms/calls) from pantaloons? ○ yes ○ no9. What do you think about the current loyalty program? ○ Excellent ○ Good ○ Average10. Would you recommend your friends to get enrolled in to the green card program pantaloons? ○ Yes ○ No ○May be/can’t say11. Do you hold privilege cards of any other retailer? If yes, which one? ○ Shopper stop ○Lifestyle ○Globus ○Westside ○OtherRECOMMENDATION:

Sitting area should be there for children and old people Provide Complimentary drinks for customers Provide out store offers to green card customers

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Billing counter should be placed on two sides at every floor for convenience Entertainment game’s should be conducted in store Valet parking should be provided for convenience A trained employees has to be at each floor to satisfy need of customer More Advertisement has to be done to increase the foot fall

CONCLUSION I conclude by telling that today many retailers are selling apparels so retaining customer is very difficult and its not very easy we have to pull customers for

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repeated purchase .the loyalty program plays a vital role in pulling customers to purchase apparel

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