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Impact Of Customer Satisfaction And Loyalty

Answer :

1) Introduction

1.1 Context Of The Research

The business in the present world is getting competitive day by day and to become successful in the business world, it is vital for the business entities to emphasize on customer satisfaction and customer loyalty aspects. Both the terms are related to services of the company and both have inverse relationship with repeat purchase (Alexander and Sinnett, 2005). Customer satisfaction is a marketing tool that drives the business to enhance the level of service efficacy and this also creates positive impression among the customers after they purchase and consume the products or services.

Customer loyalty shows that customers are highly satisfied with the consumption of products and services and they show loyalty through purchasing the products on repeat basis. Both customer satisfaction and customer loyalty plays important role in enhancing company's performance (Fraering and Minor, 2013). Customer satisfaction as well as customer loyalty both the aspects are affected by various factors like products quality, service quality, product price and other business environment. Hence, in such context, the research work will analyze how the customer satisfaction and customer loyalty affects the overall company performance of the Tesco PLC in UK. Tesco PLC has been selected since it is a large retailer in UK and it has thousands of retail stores, supermarkets and hyper markets in 12 different countries.

1.2 Rational And Issues Of The Research

According to Duffy (2003), customers are considered as the essential elements for business success because they have direct relationship with company's products and services. Consumers purchase products from company in exchange of money which needs to be a valuable transaction for facilitating customer loyalty. However, on the other hand, Gerson (2010) argued that customers are those requisites for a business organization which aids the entity to acquire greater success and profitability (Cheung and Prendergast, 2006). In order to accelerate company's profitability aspects, it is vital to bring quality products at the market place as that will also encourage the clients to facilitate repeat purchase. It is imperative for the business organization to satisfy the customers so that better outputs can be derived (Ennew, Binks and Chiplin, 2015).

Tesco PLC is considered the third largest retailer on the basis of profits and revenue in the entire retail industry of UK (Evanschitzky and Prykop, 2015). According to many surveys and research work, it has been identified that Tesco has 500,000 employees which helps in operating all the business activities. As Tesco is among the largest retailer; thus the customers are considered as more critical for the company. This company is highly affected by the competitor's policies and strategies (Chen and Huddleston, 2000). Hence, to sustain in the competitive environment, the company should be more careful about the customer retention and satisfaction aspects. Further, the research topic has been selected so as to highlight all the factors which impacts customer satisfaction and loyalty aspects.

Sales volume is an important indicator of any retail company and for Tesco too; thus sales volume determines performance of the company. Customer satisfaction and customer loyalty both are vital for the purpose of increasing sales volume. It also assists in retaining the customers for longer time span (Cheung and Prendergast, 2006). Therefore, in such respect, Tesco should maintain customer satisfaction and loyalty aspects in the company so as to improve its performance.

The reason for which the present topic has been selected is to highlight the factors through customer satisfaction and loyalty can be increased. The study is also presenting effectiveness of customer satisfaction and its role in success aspects for Tesco PLC (Chiarini and Douglas, 2015). It is imperative for Tesco to retain the customer so as to sustain in the competitive market of UK and all across the world. The research will critically analyze how Tesco PLC can maintain satisfaction through delivering various products and

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