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AN ANALYSIS OF THE IMPACT OF CUSTOMER SATISFACTION ON BRAND LOYALTY: A CASE STUDY OF TESCO PLC, UK

Abstract

This research is done to understand the effect of the customer satisfaction in the brand loyalty in the Tesco plc. The main issue of the research has been focused in the context and the study is done to overcome the issues that has been channelizing in the Tesco plc. There are various theories and models are discussed in the literature review that helps in understanding the concept of the variables of the research topic. The various factors of the customer satisfaction has been discussed in the context.

The researcher have used the positivism theory in the methodology and deductive approach. The data and information for the study of the research has been collected from both primary and secondary sources and the data is analysed using quantitative and qualitative analysis methods. A sample of fifty customers are taken for the conduction of the survey and close ended questions are asked to the participants. There are six open ended questions asked to the three managers of the Tesco and the data are recorded for the analysis. The outcomes o9f the research are shown graphically and in tabular form. The outcomes of the study has successfully fulfilled the objectives of the research.

1. Introduction

1.1 Introduction

Each and every organisation in the market has to satisfy their customers. An effective reaction of the customers helps the organisation to develop in the market and achieve its success. In the context of the big companies, customer satisfaction is the meeting the expectation and needs of the customer by the involvement of good quality of products and services that the customer needs. Therefore, this research deals with the various concepts and factors that deals with the satisfaction of the customers in the TESCO plc. There are different theories and models discussed on the given topic that helps in understanding the concept of the variables in the topic. The research has followed many methodology and analysis of data is properly done to meet the goals and objectives of the research.

1.2 Research Background

This research deals with the effect of the customer satisfaction on the brand loyalty of the Tesco plc. The reaction of the customer for the quality of the products and services offered by the company determines the satisfaction of the customer. There are many cases where the companies are not able to maintain the relationships with the customers and they started losing their interest in the company. The loyalty of the customers started decreasing that causes a huge loss to the sales of the company. This research helps in identifying the major factors that evolves in the satisfaction of the customers and the role of the brand performance in gaining the loyalty of the customers. There are many theories and models discussed in the research that helps in understanding the concept of the customer satisfaction in the development of the company. The researcher has used various types of methodology in the research and proper selection of the data analysis method to improvise the outcome of the study.

1.3 Company background

Tesco plc is a UK based company that deals with the grocery and general merchandise retailer brand in the country. It is the largest retailer company in the UK with over 3500 stores and 310000 colleagues. Tesco has able to maintain its brand name on the market and able to attract many customers in the market with its quality product and services provided to the customers. With the over years, it has shown decrease in the customer satisfaction due to the loss in the value of the shares in the stock exchange.

1.4 Research rationale

What is the issue?

Customer satisfaction is a precious element in the development in an organisation.  The main issue of the research is the dissatisfaction of the customer. The companies are unable to satisfy the needs and expectation of the customers. There are many companies that are unable to attain a healthy relationship with the customers and started losing their customers. The CRM department of the organisation starts losing its control on the employees that depletes the brand name of the company in the market.

Why it is the issue?

The dissatisfaction of the customers of the Tesco plc has led to many interrupt in the business of the company. This topic has gained many attention in the recent market as many companies including Tesco plc is unable to satisfy its customers in the market. Companies are using the brand name for the sales of its products but there are some loopholes in the loyalty of the company towards their customers that leads to misleading of the customers.

Why it is an issue now?

In the current context the customer satisfaction has one of the important part of the progress of the company. Recently, Tesco has payed a bill of £235 million for buying a prosecution for ‘cooking the books’ and inflating the profits. The company has to pay a fine of £129 million to Serious Fraud Office under the Deferred Prosecution Agreement (DPA). There is a interest of £85 million to the stakeholders that are misled by the profit of the company. Therefore, this fraud case of Tesco has also misled the customers of the company and they have started showing least in the products of the company. Therefore, the company is running in loss and the share value of the company has decreased due to this offense.

How this research shed light on the issue?

With the above fraud case by the Tesco plc, this research shed light in the various factors that has influenced the brand loyalty and the effect of customer satisfaction on the brand loyalty. This research has able to find the role of the performance of the brand in the loyalty and satisfaction of the customer. There are recommendation provided in the end of the research that helps in improving the satisfaction of the customers in brand loyalty.

1.5 Research Aim

The aim of the research is to analyse the effect of the customer satisfaction on the brand loyalty of the Tesco plc, UK.

1.6 Research objectives

Following are the objectives of the research:-

  • To discuss the different factors that influence brand loyalty
  • To examine the effect of customer satisfaction on the brand loyalty
  • To identify the role of the brand performance in customer satisfaction and loyalty
  • To recommend improvements in satisfaction of customers in brand loyalty

1.7 Research Questions

The research questions are mentioned below:-

  • What are the factors that influence the brand loyalty?
  • How the customer satisfaction affects the brand loyalty?
  • What is the effect of the brand performance in customer satisfaction and loyalty?
  • What are the recommendation for the improvement in customer satisfaction in brand loyalty?

1.8 Significance of the research

This research signifies the importance of the research topic in the market. This research helps the management of the Tesco plc to understand the faults and challenges in the strategy of the company that helps in identifying the factors that promotes the customer satisfaction ion the company. This research also helps the future researcher to work on this topic. The outcomes of the research is clear and understandable for the future purpose and research works. This research helps the learner to understand the importance of the customer satisfaction in the development of the company.

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