Assignment

1945 words - 8 pages

Introduction
Customer loyalty according to Loyalty Research Centre (2014) “can be defined as customers continuing to believe that one organisation’s product/service offer remains the best option. It meets their value purchasing decision”. Consumer Loyalty (2014) breaks this definition down to its simplest form by stating, “Consumer loyalty is all about attracting the right customers, getting them to buy, buy often, buy higher quantities and bring even more customers”. They go on to list five ways in which loyalty can be built (see figure 1). However this paper looks to exemplify the benefits that learning theory presents when improving customer loyalty with particular emphasis on behavioural learning and cognitive learning.

Figure 1 - Building Loyalty – Consumer Loyalty (2014)
Learning Theory
There are several theories that aim to provide an understanding of the process that is taken when learning. Solomon, Bamossy, Askegarard and Hogg (2013) provide a definition of learning which reads, “Learning refers to a relatively permanent change in behaviour which comes with experience”. This paper therefore explores the two most commonly used learning theories that have been built around this framework.
Behavioural Learning
Behavioural Learning can be classified as an umbrella of theories that “assume that learning takes place as the result of responses to external events” (Solomon, Bamossy, Askegarard and Hogg, 2013). A definition provided by Owen (2014) reads “a process in which experience with the environment leads to a relatively permanent change in behaviour or the potential for a change in behaviour” forms an understanding of this umbrella term that has been built through the work of “Pavlov, Thorndike and B.F.Skinner” (Bailey, 2014). According to Owen (2014) there are three ways behavioural learning can be approached; classical conditioning, operant conditioning or vicarious conditioning. When looking to improve customer loyalty behavioural learning can be utilized through the use of the operant conditioning approach.
This approach is structured around B.F. Skinner’s framework which states “Behaviour which is reinforced tends to be repeated” (McLeod, 2014). Thus meaning ‘good’ actions result in positive reinforcement. Competitors in the supermarket sector (Waitrose, Sainsbury’s and Tesco) are making use of this in the form of ‘loyalty card’. This marketing strategy means customers are receive a reward that takes the form of a points scheme where the customer is rewarded when making a purchase, with the size depending on the quantity of items purchased and the amount spent. Thus providing an incentive for the customer to return. However according to Allpsych (2014) there is a
limitation to the implementation of operant conditioning, “the reward does not often make up for the added negative result”. When applied to the supermarket sector this can be understood to mean as a result of the wide spread use of loyalty card schemes the customer is...

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