Case Study

The case talks about the business plan of Nectar and how will company introduce new way of loyalty program or continue doing business with Nectar. Nectar is British largest rewards program. Justin King took over as Sainsbury group chief executive. Justin had couple options on what to do with the loyalty program. He could continue with the Nectar program, start his own loyalty program, or another option was also he could adapt the strategy followed by ASDA. I believe Justin King should go with the first option and continue with Nectar Program.

Nectar provides Sainsbury with valuable information about their customers that helps keep Sainsbury successful in target marketing, self stocking and etc. Approximately 57% of the revenue is generated by Nectars loyalty program. Cost is dispersed among the partners. Staying with Nectar would also increase in number of buyers due to a large number of partners. The down site of Nectar is that it costs the company more than 120 million pounds towards the loyalty program, that’s why the earnings are decreasing. It has a tough competition with the great competitors and it has to maintain in the competition in the market.

What Rob Gienkirk should do to improve relationship with Sainsbury’s? The Sainsbury’s advantages if it remains associated with the Nectar Program, the program’s management is outsourced to LMUK, which allows its partners to concentrate on their own business. By having a share cost of multiple partners, the cost would be greatly reduced. It helps with the section of different products, which was purchased in many different outlets. For customer advantages, Nectar cardholders will collect points and redeem them for flights, meals, vouchers and other deals. Nectar points are exchanged for Nectar vouchers and that is more reasonable due to a number of different loyal partners where they can redeem them.

How Nectar can improve relationship with other partners? Share acquired customer information with partners...