The title of this issue paper is "Key Success Factors of Loyalty Programs in the Cosmetics Market in Thailand". The purpose of this paper is to identify the key success factors that should not be missed when establishing a loyalty program in the cosmetics industry in Thailand. One of the largest loyalty programs in the world is the program: "Beauty Insider" of cosmetics stores Sephora.
The purpose of this paper is to identify the key success factors of loyalty programs in the cosmetics market in Thailand. In other words, we will try to find out what makes a loyalty program successful in this market. The goal is to create a method to help cosmetics companies launch a new loyalty program in the Thai market.
To answer this question, we will first look at what theories related to the success factors of loyalty programs exist in different markets, in different countries. By analyzing the responses to this questionnaire, we will identify the key success factors for loyalty programs in the cosmetics industry in Thailand and be able to rank them. In this paper, the expected outcome is to find a way to create successful loyalty programs specifically designed for the cosmetics industry in Thailand.
LITERATURE REVIEW
- Attract new customers vs retain existing customers
- Customer analysis
- What is customer loyalty?
- Loyalty programs
- What are the outcomes of loyalty programs?
- Does true loyalty really exist?
- Customer information management in loyalty programs
- Different types of loyalty programs
- What makes a loyalty program successful?
- Loyalty in emerging markets
- Loyalty programs in Thailand
A loyalty program is a program designed to reward customers who purchase frequently and in significant quantities, or through more complex loyalty programs that have a wider range of objectives according to different membership levels. There are many different types of loyalty programs and not all have the same purpose. There is a mathematical model to estimate how successful a loyalty program can be by analyzing past customer behavior in terms of cumulative purchases and forward-looking factors such as expectations of future prices and loyalty rewards.
This model allows the company to see evidence that the loyalty program effectively increases repeat purchase rates. Collect information about purchases made using the Loyalty program. type and location of retail outlet, type of product, price..). There is a 10-step framework for developing, implementing and controlling an effective loyalty program (Berman, 2005).
This scheme is very interesting because it reflects the fact that the most important goal that the company wants to achieve is the loyalty program. Merchandise is frequently purchased: A loyalty program should be implemented to promote products that customers purchase frequently. The customer can choose between providers: a loyalty program is useful in a competitive market where customers can choose between several providers (brands).
Providers have equivalent offers: if the products proposed by the providers are too different, the loyalty program cannot work. A customer's membership has several levels: the loyalty program must be customized and propose different statuses according to the quantity or frequency of purchase. The customer experience is fundamentally different at the highest levels: one of the main roles of a loyalty program is to increase the value of products and improve the customer's shopping experience.
In Thailand, it is easier to develop customer loyalty through a loyalty program than in Vietnam. A loyalty program in Thailand can be very successful; the information that companies gain from this about their customers really helps them develop their business (Paul, 2010).
The framework
Social media presence H14: For cosmetic products in Thailand, people prefer to shop more in-store. This framework reveals the hypotheses that will be tested in the study and the variables related to those hypotheses. These variables are potential key success factors for loyalty programs in the cosmetics market in Thailand.
RESEARCH METHODOLOGY
- The survey
- Structure of the questionnaire
- Composition of the sample
- How we gathered the samples
- How we made the measurements
Title and presentation: We first stated the title of the questionnaire and then explained in two sentences my project and the purpose of this study. So people know why we're doing this survey and understand what it's all about. This question is very important to get information from people that we are targeting (cosmetics consumers).
We used this method to be able to compare and rank the different factors that people consider important in relation to loyalty programs in the Thai cosmetics market. These questions allowed us to know more about the respondents and get an accurate analysis of the answers from the previous questions. People are usually used to using Google products, so they don't mind answering the questionnaire.
Cosmetics for men are becoming more and more popular and this could become a huge market in the coming year. So we decided not to set any sampling requirements and to distribute the questionnaire to everyone. To be sure not to miss any cosmetic customer's behavior towards loyalty programs, we did not exclude anyone from the questionnaire.
Since the study concerns the Thai cosmetics market, we target people living in Thailand (of any nationality). Since we had a very limited time to get the answers to the questionnaire (one week), we decided to use the Internet to distribute it. We used the most popular social networks in Thailand to share the link to answer the questionnaire.
We asked all my friends to share the link so we can reach as many people as possible. This is not a true random technique, but this is the fastest and the least comprehensive way to obtain a heterogeneous sample.
DATA ANALYSIS
- Profile of the respondents
- Effectiveness of the loyalty programs
- Enrollment
- Social media
- Mobile application
- Social Rewards
- Compatibility
- Rewards
- Approved and rejected hypothesis
77% of respondents agree or strongly agree that they shop more at stores that offer loyalty programs. This shows that loyalty programs push customers to buy more and are effective in the cosmetics market in Thailand. Almost 80% of respondents in the survey would like to be informed about the offer of loyalty programs on social media.
A very large majority of respondents want to be connected to the loyalty program through social media to get information and offers. The content should be updated very regularly and the company should respond to customer comments, questions and complaints. It means that 74% of the population does not use the internet and it is very important to reach as many people as possible.
They are easy to find in your device's app browser (such as the Apple Store or Play Store). More than half of respondents (53%) do not want to receive social rewards on social networks (such as a Facebook post for a certain amount of purchase, such as a badge on Foursquare). But 87% of respondents like programs that offer members exclusive limited offers (such as VIP sales).
A loyalty program should definitely have some exclusive and limited offers for key customers and emphasize the VIP aspect. 80% of respondents prefer a loyalty program that is compatible across many different stores over a loyalty program that only works in one store, for only one brand. As outlined in the first part of this article, there are several ways to reward loyal customers through loyalty programs.
H2: For cosmetic products in Thailand, people prefer to sign up for store loyalty programs. H3: For cosmetic products in Thailand, people prefer to sign up for loyalty programs over the phone. H9: For cosmetic products in Thailand, people prefer loyalty programs that operate in many stores.
H14: For the cosmetic products in Thailand, people prefer to buy more in-store and suggest loyalty programs.
CONCLUSION
- The Enrollment
- The online presence
- The compatibility
- The type of reward
- Limitations and further studies
To be successful in the Thai cosmetics market, a loyalty program must be compatible with many companies in different industries. Targeted discount: the company gives a discount on the products that members buy more often. It will push the customer to buy more and increase the likelihood that the customer will buy the product.
Extra discount: The company offers members an extra discount if they purchase over a certain amount. This article has been written to provide advice to companies in the cosmetic industry in Thailand who want to set up a loyalty program. By identifying the key success factors of loyalty programs in the Thai market, the companies can know what their loyalty programs should have and what is important in their development.
The research conducted is interesting to know the general trends in terms of expectations regarding loyalty programs in the Thai market. It would be very interesting to know the customers' expectations in terms of loyalty products according to different categories of cosmetic products. We can do more research to find out if we can identify different behaviors in the use of loyalty programs in the cosmetic market in Thailand.
The effect of customer loyalty program and service quality on customer loyalty: a hypermarket in Bangkok.
APPENDICES
APPENDIX A: Questionnaire
For cosmetic products, the best loyalty programs are the ones that offer me a free product when I buy for a certain amount. For cosmetic products, the best loyalty programs are the ones that give me discounts on the products I buy most often. For cosmetic products, the best loyalty programs are the ones that give me points that I can exchange for gifts or products.
I prefer a loyalty program that works in many different stores (example: cosmetic store and gas station). I prefer loyalty programs that offer social rewards in the form of badges on Foursquare or posts on Facebook. I prefer loyalty programs that offer exclusive offers to members (VIP offers) 1: Strongly disagree; 2: Disagree; 3: Undecided; 4: Agree; 5: Strongly agree A further response is possible.
I would like to be kept informed of special offers from a loyalty program via social media 1: Strongly disagree; 2: Disagree; 3: Undecided; 4: Agree; 5: Strongly agree.
