Nectar Case Write

Steven Giovanny Nectar : Making Loyalty Pay In March 2004 Justin King had ust taken over as !hie" e#ecutive at Sains$ury%s& the second largest su'er(arket chain in )K $ehind *esco& and +e i((ediately noticed the signi"icant a(ount o" (oney ,as $eing s'ent on Nectar& a loyalty 'rogra( designed to $oost $oost Sains$ Sains$ury ury%s %s sales sales a(idst a(idst co('et co('etiti itionon- *esco *esco Led the ,ay in )K grocery grocery indust industry ry ,ith ,ith 2./ o" share& share& ,hile ,hile S1 and Sains$ury Sains$ury each $oasted $oasted 3/ o" the do(estic do(estic (arket& slightly slightly $ehind the( ,as Morrison%s Morrison%s ,ith its Safeway   $rand- *esco and S1 occu'ied lo, cost 'ositions and co('ete on 'rice& aitrose and Marks 5 S'encer (et the de(and "or 're(iu(67uality "ood- Sains$ury $elieved its 'roduct ,as o" $etter 7uality in co('arison to *esco and S1 and $elieved that its slightly higher  'rice 'oint ,as usti"iedNectar is a "re7uent sho''er 'rogra( designed $y LM)K that ,as "or(ed $y Mills& Gierkink and others- Si(ilar to (ost its kinds& Loyalty 'rogra( are co((only designed to retain custo(ers and increase the a(ount o" individual custo(er s'ending in the designated "ranchise& e7ui''ed ,ith the a$ility to allo, custo(er to redee( selected 'ri8e $ased on 'oints accrued over ti(e- hat distinguished Nectar card "ro( other )K "re7uent sho''er 'rogra( in 2000 ,as that they allo,ed custo(ers to earn 'oints not only at Sains$ury $ut they also engaged several hand6'icked 9s'onsors such as the gasoline retailer ;P& the credit card issuer ;arclaycard and 1e$enha(s& a de'art(ent store retailer as the "our "ounding s'onsors- *hey ,ere soon oined $y several nota$le (erchants such as *hresher& da(s& ncourage rede('tion o" the 'ri8e& ,hen collectors are ai(ing to redee( a 'articular re,ard& they ,ould likely to increase consu('tion and s'ending to o$tain the selected re,ards i((ediately- Nectar should also 'rovide incentives in the "or( o" 'oints "or ne, (e($ers to sign u' and to inactive custo(ers to return-