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Payback The Multi Partner Devotion Program Marketing Essay

Payback is Europes greatest and Indias first devotion program. Payback is a pioneer in multichannel devotion program. Customers acquire things from more than 480+ stores, online shops and redeem these for vouchers, rewards. Payback offers companies an opportunity to learn the actual needs and purchase patterns of the online and offline customers and customize products for them. This helps in better demand estimation and customer retention. Companies can also position their brand prominently, choose the apt deals and make customized offerings for the customers. Targeted keeping content will help companies to boost cross advertising and up-selling. Primarily, Payback provides support for customer acquisition, reacquisition and helps with customer commitment. This helps partners and the advertising industry to conduct particularly successful and effective communication. In India PAYBACK has more than 65 associates in the network, a few of them being ICICI loan company, HPCL, BIG Bazaar, makemytrip, Megamart, UniverCell, Hometown, Food bazaar, Ezone, Central, Brand factory, bookmyshow. com, Letsbuy. com and flipkart. com.

Literature Review

Loyalty cards are a comparatively new concept being pursued by several large sections in India in an attempt to create a strong a sustainable consumer base for their products and services. The idea of loyalty cards or schemes reaches a nascent stage in India and not a lot of dedicated general market trends has gone into it. In the absence of proper historic reference point data, we made a decision to look beyond the restrictions of the country to have important idea and understanding of the drivers of this market. A fundamental literature review was carried out by us, largely using preceding research data outside India, to provide us a knowledge of the motorists of the market, to provide description and a construction for this task. The books review explored some previous research done in this specific field and it was instrumental in culminating a feeling of path and understanding of the methodologies to be utilized in the job.

Extent of Previous Research

Business properties in India are slowly waking up to the realization of capturing and sustaining a stable consumer foundation as a buffer to the increasing competition. This specific trait can well be related to the admittance of increasingly more foreign MNCs in to the regular Indian market foray. Although new in India, the source of Customer devotion can be dated back again to 1990s in america where the consistent flier programs were predominant and are attributed to be the start stages of Commitment schemes. Our first point of research has been the question asked by Lisa O'malley "Can loyalty plans really build devotion?". The study predominantly asked the next questions and came up with insights about Devotion schemes across the globe:

What is the foundation of Loyalty plans?

What is loyalty and exactly how is loyalty increased?

Loyalty techniques and the idea of value.

What should be the objectives of the devotion program?

How well do commitment schemes manage devotion?

The respond to these created a platform for all of us to unveiling into our research study and provide profound insights into the market dynamics. It described a few critical areas of focus which includes the lack of a definitive measurement criterion. The qualitative characteristics of the info makes it hard to convert it into an application or quantitative product of measurement. It also highlights the collateral destruction of such strategies promoting the "deal" rather than the "brand". The most important contribution of the paper was perhaps the Categories of loyalty which greatly helped us by providing a deep understanding in to the STP analysis of our own research.

This particular books survey was aptly adopted up by a far more detailed and quantitative study on "The impact of Loyalty Programs on do it again purchase behavior". The research paper looked at quantifying the reach and aftereffect of loyalty programs across the world. Even though it was still not evident whether commitment programs actually influence repeat purchasing behavior, they again emphasized on the fact that data & strategy incapability hinder proper evaluation of the reach of commitment programs. The high light of the study project was the reason & usage of the NBD/Dirichlet multinomial model which added by elaborating and outlining empirical methods using the idea of Repeat Buying, which has been widespread over 40 years. It unveiled to us the variables like penetration and average purchase consistency per brand and per category, may be used to forecast and comprehend various aspects of loyalty behaviour. The paper publishes the strategy and its matching ends in details and will form the platform for us to engage inside our research.

The methodologies and insights provided in these documents will form the building blocks for u=our strategy towards unravelling the yet nascent commitment market circumstance in India. We will heavily rely on our understandings from these papers to structure our job and analyze the results from both quantitative & qualitative perspectives, and provide a fruitful perception into the market.

Secondary research on conditions based in Germany

As payback is relatively new in India, we centered on supplementary data collection from German companies. We've studied two circumstances where Payback has improved the customer acquisition and retention rate.

Case Study Aral AG

Fig. Aral AG Card

Aral is a make of automobile fuels and gasoline stations present in Germany and Luxembourg. Till 2006 Aral used a separate customer card. ON, MAY 2006 they migrated to Payback program.

Why Payback, a multi-partner devotion card?

1. A multi-partner programme is more attractive for customers.

2. It is a perfect tool for receiving clients. Payback card has already been carried by a broad customer base, making the prospect of winning new customers specifically large.

3. Customers also have the possibility to collect points in a variety of spheres of each day life and to exchange these tips for attractive rewards.

Benefits of using Payback

After producing Payback, Aral could win market share from its direct competitors. According to Aral, identified value of these products in the eye of the client increased. Comparative cost of turning over to Payback card was more than offset by the perceived value for customers and purchased market share. Almost every second customer buying energy used payback cards. Market share of Aral advanced half a percent to around 23 percent.

Key Takeaways

Aral used Payback card to gather data about consumers and used to segment customers based on behavior clusters. Customers enjoyed the program as it offered them rewards and it acted as a motivation to utilize Aral over the competitors.

Case Study-Galeria Kaufhof

Galleria Greeting card

Galleria Kaufhof is one of Europe's leading office store chains. Till 2000 they used Galleria cards, a stand-alone commitment card. In Oct 2000 they shifted to Payback.

Why Payback, a multi-partner commitment card?

1. A multi-partner programme reaches a lot more individuals, which justifies the ventures in systems and know-how.

2. A multi-partner programme offers clear cost advantages for the service functions which is often employed by all partners.

Benefits of using Payback

Use of payback upgraded the direct selling management. Kaufhof acquired many clients because of Payback and was able to retain them efficiently. People who have Payback card spent more than others and this improved upon the sales figures of the business. Competitive good thing about the company increased as it received more information about the consumers and their buying patterns. They were capable of produce differentiated and target marketing campaigns because of their customers.

A review done by Kaufhof on the effects of issuing Payback greeting card reveals that

1) Customer satisfaction - Users of PAYBACK tend to be satisfied with the services of Kaufhof than non-members

2) Goal to make additional acquisitions - Members are more likely to make yet another purchase than non-members

3) Intention to get again - People are more likely to purchase again, in comparison to non-members

4) Price sensitivity - Members are less price-sensitive than non-members

5) Further suggestion - Users recommend Kaufhof to others a lot more frequently than do non-members

6) Customer devotion (aggregation of most components) - Users display much increased customer commitment than non-members

Key Takeaways

In a brilliant market it is extremely profitable to utilize payback cards. In a minimal price high amount scenario it is much easier to entice the client in to by using a loyalty credit card. Customer data management provides competitive edge over others. Company can come up with specific campaign scheme based on the pattern found from evaluation of the Payback data. From the customer end, he/she will be happy when they get personalised discounts and rewards.

Industry Scenario

Retail Industry in India

The Retail industry in India keeps growing at an instant rate. Matching to Global Retail Development Index 2012, India rates fifth among top 30 appearing market segments for retail. How big is India's retail sector is estimated at $ 450 billion. With the changing trends, this is expected to increase to $900 billion, matching to a report by PricewaterhouseCoopers. Relating to A T Kearney, the global consulting firm, this sector is expected to grow at more than 15% each year.

The reasons for the progress of the retails sector in India are multiple. The Indian market is growing and since the disposable earnings of Indians are increasing, resulting in a rise in the purchasing power. Purchasing movements are also changing, with increasing readiness to spend on luxury and top quality goods in categories like outfits, accessories, bookstores, boots and electronics. A large part of the retail sector is still unorganized and organized sector sums to only 5% of the industry. The reforms of the Indian administration regarding Foreign Direct investment (FDI) is appealing to global retail majors to create stores in India. Bharti-Wal Mart, Reliance Companies Ltd and Future Group are among the groups investing heavily in the Indian retail industry.

The areas that are essential in the retails industry are


Fashion and Lifestyle

Food and Beverage



E-Commerce Sector in India

E Commerce or online retail business has a higher potential for expansion. Presently at $360 million, is expected to grow to about $ 1. 25 billion by 2015. A Nielsen Global Online Shopping Report of 2012 showed that almost 25% of Indians spend 11% of these monthly shopping expenditure on online purchases. Another study demonstrates 4 out of 5 internet users shop online, which means a 50 million strong online consumer bottom.

Loyalty Program Market

The first commitment program was began by North american Airlines. Their frequent flier program aimed to reward duplicate customers and thus, build loyalty into the brand. Since that time, commitment programs have been launched by companies throughout the world. The Indian market segments have seen the development of loyalty programs increase during the last decade. India's commitment program market is believed at $ 4 billion. Around 25% of purchasers in India have chosen a loyalty programme and 42% of Indians from SEC A, B, and C are a part of at least one devotion program. However, only 15% of the individuals who are a part of a devotion program actually use their loyalty credit cards. The major reason behind the less use of loyalty programs is the complication mixed up in process of being a part of such a program to finally redeeming the items earned.

Competition in the client Loyalty Space

First Resident - Chandru L Raheja Group

First Citizen is the customer loyalty program made available from Buyers' Stop, an Indian team store chain founded in the entire year 1991.

Consumer Basic: At present there are 2 million users enrolled because of this loyalty program which huge customer base attributes to almost 73 % of Consumers Stop's total sales throughout the united states.


- Being in the multi-brand retail market since 2 decades Consumers Stop has outlets almost in every the major places in India.

- 'First Resident Citibank Titanium Credit Credit card' a Co-branded visa or mastercard with Citibank, through which the customer can also earns points for acquisitions at other outlet stores.

Card Approval: Points attained only on buys made in Shopper Stop shops. However, through the First Citizen Citibank Titanium Credit Card customer can also earn factors for purchases at other retailers.

USP: The name "First Citizen" displays our determination to proclaiming to offer you the best shopping experience.

Empower Program - TATA Group

This is India's first multi brand devotion program. This program can be an exclusive advantage of the Empower Greeting card and the Tata Credit Card. So, holders of any of these credit cards could avail this program.

Consumer Platform: 5 million plus

Competency: TATA group as an erstwhile group has leading brands across a wider set of institutions. Through Coalition devotion, customers reach earn and redeem points across a wider set of establishments.

Card Approval: Valid across all the TATA companies.

USP: The Empower Program, a distinctive ever before growing alliance of leading brands, that allows customers to earn and redeem points across brand they use regularly.

SWOT analysis of Payback Cards


Partnership with 67 leading outlets, giving its customers a multitude of choices

A strong online presence through social press. Payback India's Facebook page has 183, 184 supporters (as on 01-12-2012)

Partners get a wide pool of customers and information regarding their shopping patterns. They can use this data to make a competitive advantages over others

Innovative marketing ideas like Payback Fridays, Twin points for several products etc. are beneficial for lovers and end consumers


CRM is a relatively new theory in India and Payback gets the early mover benefits. This will give payback a chance to tap in to the wide opportunities

Rural market for this product is completely untapped.

Payback can look for relationship with other product segments like skin care, drug stores, films etc.

A cross country incentive point system will make payback a preferred choice for premium section people who travel a great deal.


Fear about the personal data that Payback gathers among the list of consumers

Long wait to obtain a reward

Not within all segments and all locations

Partners play a major role in creating consciousness. This might sometimes lead to suboptimal performance.


Stand-alone cards given by companies.

Consumers not ready to go to a new reward system

Lack of awareness on the list of consumers

Consumer loyalty concept still in nascent level in India

Business Model

Loyalty Programs round the world can be broadly divided in to three

Exclusive program offered by a single solid - This is basically designed to raise the loyalty of the firm's most important customer, so it more narrowly focussed Eg. Bloomingdale's in the US and De Bijenkorf in holland.

Offered by a single firm to the majority of its consumers - This is basically programmed to improve the consumer loyalty bottom part all together. A single organization will have link ups with many outlet stores Eg. Tesco in the united kingdom, Jet Mls in India

Cross Company Programs - This is offered by a third party seller. Main idea is to market cross selling. As this is a joint program, operation range and benefits for customers are large. Payback loyalty cards falls under this category.

Payback uses combination company programs as a business model. Companions pay payback service and license fee for taking care of their devotion programs and direct marketing services provided by Payback. Customers get discounts through accumulated tips. Payback offers consumers a unique opportunity to pool rewards from multiple stores. That is their main point of differentiation compared to stand alone devotion schemes. Because of this patrons will be able to accumulate points faster. A coalition with strong companions who offers good redemption choices is another benefit of payback.

Direct marketing using mails and adverts from payback to get rid of customers. End customers can redeem their points on multiple product categories. They will get customized offers from payback.

Partners Pay service and Certificate Cost to payback for taking care of their customers loyalty programs and then for immediate marketing service

Partners access database containing details about the consumers and their buying behaviours. End customers get a broad selection of shopping destinations

Analysis of Targeted Market Research

We did a targeted review on the customers of Central mall (Make reference to Appendices C and D). We frequented the store and asked specific customers about their tastes after explaining the several variables involved in the survey. Thus we made sure that our test set depicts the real world scenario as tightly as is possible. We talked to a complete 90 consumers in which we discarded the info of 26 customers because lack of quality in their answers. So finally we have a sample group of 64 customers.

As the principal target of the survey was to review about the usage of loyalty cards we limited the number of respondents who do not use Payback cards to about 20%. So all our data in essence explains to about the consumers who use Payback credit cards. As we can easily see from the graph 70% of the folks who shopped from central mall that day falls in an age band of 30-50. This is expected as this is the age group who be buying because of their family and mainly take the role of decision creators. The average get older of consumers who use payback was 38. 6, with maximum years 65. 53% of the respondents were female. 56% of the responds where wedded with children. This developed the basis for out focusing on and positining.

Of the individuals who have found out about payback cards 84% used it. This shows that the change from awarness to trial is very high regarding payback.

Our survey demonstrated that majority of individuals who uses payback cards choose to buy electronics, apparel or clothing from a shop which 70% of people spend more than INR 4000 monthly on shopping. That is consistent with our other studies that show that payback customers are in essence urban customers with a higher degree of throw-away income.

People would rather get cash back as the praise followed by lifestyle products. This sorts the foundation of Payback's reward programme planning. We claim that Payback must prefer giving more money backs as rewards and also present more lifestyle products as reward gift items.

People choose to use Payback majorly as a result of simple point redemption and use. So more target must be given to make both these much simpler. Use of M business and producing mobile and tablet programs can help in further simplifying the process.

Educating people regarding the benefits of using loyalty credit cards is a necessity. And among those people who uses some commitment cards payback must stimulate the necessity for utilizing a multichannel loyalty cards. This can be achieved through increased spending in promotional activities like advertisement, waiting for you promotions, sponsoring some incidents etc.

People aren't yet alert to the Tata Empower card, so Payback must use this time to gain maximum market show and to leverage the first mover edge. Brand equity of Tata can't be currently matched up by Payback, so focussed attention much given in creating trust among the clients, so that in the long-term when Tata credit card spreads to other strategies payback won't lose consumers. So the focus should maintain connecting with Indian consumers and building a brand equity based on trust, innovation and client satisfaction.

Analysis of In-depth interviews of Payback Partners

This particular survey was targeted at the lovers of Payback. The questionnaire was prepared with two essential proportions in mind:

Penetration of Payback

Effectiveness of Payback

From the reactions recorded (Make reference to Show E) from the three subject matter interviewed, the next salient points enter into view:

The retail portion is witnessing increasing penetration and awareness of Payback cards.

There is not enough information to select the amount of success of Payback in retaining customer devotion.

The stores have observed a good increase of coming back customers redeeming present vouchers and redemption coupons.

The stores are mostly using word of mouth publicity to impart more Payback cards.

It is closely found in petrol pumps but there appears to be no way or necessity to distribute Payback cards from these outlet stores.

The generation of 30+ appears to be the primary users of Payback Credit cards.


The segmentation for Payback concentrate on users was done using two split media. The principal research was done through an online survey with a sample questionnaire (Show A). The info registered through the review pointed out to the following sections of users:


Amit, a 22 year old college pupil is outgoing in dynamics. Busy along with his academic work he also participates in different activities. Like all the students of his time, he loves to party. He also prefer to go for shopping to get things of his choice, but is constrained by the fix way to obtain pocket money which he gets from his parents. He keeps himself kept up to date with recent technical advances and loves to purchase new sophisticated devices. Whenever he gets a while for leisure he locates a nice e book to learn, go to movies and also goes on a bike head to with his friends. He's also enthusiastic about trying out brand clothing. Due to perpetual scarcity of money, which students generally face, he always searches for deals which can be affordability. Mostly he buys catalogs, music and movie seat tickets through online websites. He goes to multiple websites to find the best deal. From last twelve months he has been transporting a loyalty greeting card which he received after shopping with one of the top quality franchise. He utilizes the factors accumulated through the card, but he complains that he can't use this card in other top quality store or any other online websites. He has seen some of the fuel channels are taking commitment cards but seems disappointed that his card is not qualified to receive fuel channels.


29 year old Ritika is employed in a multinational company. She is image mindful and she calls for her own decisions. To break the monotony of work, she goes for a long drive in her car with her friends. Every weekend she complements her colleagues for brunch in restaurants. She is a shopaholic, who wants to buy everything which is new and trendy. She's taken membership of different fashion magazines through which she keeps herself up to date with new and future trends of fashion. She has taken account of different branded stores and various supermarkets. When she received her first account cards, she found it very interesting due to fascinating offers. But after accumulating multiples cards she finds it very complicated. She has credit cards for different brands, a greeting card for fuel station and membership of different online sites. Now she actually is looking for something simple, which can remove the complication of this multitude of credit cards.


Rakesh, a 45 year old vice leader of an exclusive bank, is mind of four member family including him. He always seems time crunch scheduled to his small schedule. Due to this he always looks for less time consuming options and would go to supermarkets for shopping where he gets variety in selection of options and must invest less time. His choices are also affected by his family members. Being from the top middle class segment, he is considerably affluent in his financials and does not mind spending the excess buck for convenience. He is aware of the current developments of the business world and has consciously attemptedto profit from the growing brand promotional activities. He's brand conscious and generally acquisitions for his entire family. He is not too eager on keeping extra by consciously focussing on devotion schemes and on the whole carries 2-3 different loyalty credit cards but utilises them almost never. He has the perception that a single card to replace all others will be a good idea.

Following this paid survey, we made a decision to carry out a far more in-depth research and study on the topic. This was facilitated by way of a targeted survey of consumers at a retail store. This location was chosen to discover a more diverse test of consumers for review. This review also empowered us to find a more diverse test according to age group of consumers. After conclusion of the survey and consolidation we developed a new segment of consumer which was absent from our previous survey:


Neha is a 35 time old, founded and successful law firm, who has come up the corporate ladder through the years. Being a attorney, she is very critical and scrutinizing in mother nature. She is married and has a kid. She is consolidating her family and is very aware of her family's financials. They are planning meticulously on her behalf child's future and don't mind finding discounted prices and will be offering during her shopping. She and her spouse both own an automobile each and love spending family together in the evenings in the malls, theatres and restaurants. She was presented to the concept of membership cards in early stages in her profession and carries a number of of these in her purse. She is alert to the benefits associated with these credit cards and regularly revisions them with her purchase. Having taken them for quite some years now, she has had the opportunity to earn sufficient details and redeem rewards. She mainly retail outlets for clothes and accessories apart from frequent visit to restaurants with friends and family. She found the thought of a single membership greeting card from ICICI lender interesting and believes it will help reduce the clutter in her wallet.

From the above data, we carried out the segmentation according to various variables as specific below. The prospective consumer(s) was picked by a mixture of these parameters.

Geographic Segmentation

The target group of Payback Greeting card users will be primarily powered by the spending capability of the consumers. This includes two aspects, throw-away income and availability of Payback partner stores to invest it on. Payback should target School 1 & 2 cities and metros. This gives them a broad and diverse base of consumers to target. This task will also provide Payback with the following fringe benefits:

Consumers with the ability and method of purchase.

A consumption pattern enabling higher penetration and use of Payback credit cards.

Exposure to mass media and increased understanding levels.

High marketing support infrastructure.

Apart from the above mentioned target geographies, one more possible target could be places with high internet penetration, disposable income but low retail infrastructure. Modern industrial towns like Jamshedpur, Rourkela are such probable targets.

Demographic Segmentation

The basic requirement of loyalty cards is high throw-away income coupled with an capability & desire of spending. This primarily boils right down to an generation of 30-50. This summary comes from our in-depth market survey on the following parameters,

Disposable income

Shopping pattern

Awareness degree of benefits of loyalty cards

Availability of internet

Family pattern

After analysis of these parameters, developed the next results for the target consumers of loyalty cards:

Age : 30-50 years

Family Size : Nuclear home, hitched with upto two kids or young unmarried professional.

Income : Upper Middle income and above with an annual income of INR 1. 5 lacs or above. The socio economical category corresponding to the prospective group would be A1, A2, B1 & B2.

Occupation : The prospective group will include both hired and self employed consumers. The group will encompass businessmen, enterprisers, medium & older level professionals from various professional backgrounds.

Education : The prospective group will contain graduate/post graduates from an over-all as well as professional qualifications.

Psychographic Segmentation

The psychographic segmentation was done using the VALS framework. We identified the principal motivating factors that will motivate loyalty greeting card users :

Achievement : People looking for products and services demonstrating their success to peers will be more susceptible to spend a higher fraction of their disposable income

Self-expression : People in this category express aspire to for sociable & physical exercise. They seek variety and risk. These characteristics feature high expenditure towards gratifying their wishes.

So the groupings to be looked at for primary aim for should have higher resources. They could be earmarked as

Innovators : They are simply successful, sophisticated, lively, upscale people. Their preferences are shown through their purchase and lifestyle. Their flavour is relatively upscale, topic products and services.

Achievers : This is actually the second largest target group for devotion card market. They are really successful, goal focused people with give attention to career and family. These are partial towards prime products and are beneficial for loyalty cards because of the partnership with such product residences. The amount of disposable income and expenditure is perfect for loyalty cards.

Experiencers : They are really young, enthusiastic and impulsive people seeking variety and excitement. They spend a relatively high proportion of income on fashion, entertainment & socializing. This behavioural structure makes them the primary goal group for loyalty cards.

Additionally to comprehend the potential of product in an improved way we've considered some data items from Germany, where Payback is working the product very successfully. We have made a account for that as well to understand the difference in market of Germany and India.

In synchronization with this learning from literature review, we decided to correlate our segmentation decisions with similar segments outside India. This is a mindful decision taken as a result of absence of any benchmark research about the Indian devotion market. Thus, with the mark of creating a foundation for validating our research, we decided to explore the German market and identify similar sections. By using our acquaintances in the united states, we conducted a similar survey and developed the next results:

The first portion is of young men of 23-28 years of age, who is a student. He generally retail outlets from shopping centres and online. He is a loyal end user of loyalty cards and his purchase decisions are frequently governed by possible savings using these cards.

The second segment is of users in this bracket of 50+, who understand the power of cost savings. They use commitment techniques very frequently in shopping centres, hotels, postoffice and online. He/she owns more than one loyalty greeting card but is circumspect of how such companies uses their personal data.

We also found a contrasting section on the market with completely different dynamics and ideologies. They are really again of the same age bracket of 23-30, who find loyalty credit cards not worth the effort. Their primary concern is that it requires too long to earn anything significant using these cards and their shopping selections is not reliant on loyalty schemes. They may be critical with their privacy and aren't eager to utilise any devotion schemes even if dished under an individual card.


In order to finalise our aim for group, we made a decision to evaluate the various segments determined through survey on the following parameters :


Income level


Action ability

Perceived Loyalty

Willingness to spend

These teams were rated on the scale of just one 1 to 5 (1: lowest ; 5: Highest) and the cumulative report was used for finalising our focus on segment(s).











Income Level










Action Ability





Perceived Loyalty





Willingness to spend










From this analysis we find that "Ritika" & "Neha" are our top quality target segments followed closely by "Rakesh". "Amit" is an opportunity at best, since he has very low levels of throw-away income at this moment. But he could be an important concentrate on group keeping because the actual fact that he'd soon graduate from college or university and transfer to a corporate and business life. At this point of amount of time in future, this portion can be an important aim for for Payback.

After the primary target segment has been determined, we decided to evaluate the permanent attractiveness of the market/market segments using Porter's five causes framework :

Threat of Intense Section Rivalry : This specific service caters to a market that is currently highly fragmented with few major, prepared players offering multi brand commitment credit card program. Instead the marketplace is cluttered with several shops, restaurant chains, travel providers and e-commerce sites offering their specific loyalty schemes targeted at preserving their consumer bottom part. This happening can be attributed to absence of multi brand retails and absence of market penetration by big commercial houses in the buyer retail sector. This provides Payback with a lucrative opportunity to assume the early beginner good thing about consolidating this fragmented market and developing a loyal user bottom part. There's a perceivable danger from Tata eMpower which is wanting to consolidate the market which consists of own great business chain.

Threat of New Entrants : The section, being fragmented and unorganized at the moment, provides lot of chance of new entrants. Nig corporate and business homes like TATA, Reliance etc will be the biggest danger to Payback because they will be targeting the very same segments. Building a long term marriage with this segment can help Payback have a competitive benefits over new entrants. Another advantage that may be leveraged by Payback would be its brand success in international market if it could be translated to the Indian consumers.

Threat of Substitute Products : Multi Brand devotion credit card can face risk from similar products from debit and credit cards issued by lenders. But because of the diverse situation of the banking industry in India, hazard from substitute products is not identified to be major

Threat of Buyer's Growing Bargaining Ability: As the market of India expands, so will the buying electric power of individuals. It will be imminent in the near future that several other companies will attempt to enter the loyalty greeting card market and provide superior offers and deals. This will boost the bargaining vitality of users and the threat of substitution should come into picture. Payback must keep an eye on this by continually upgrading its prize offerings and items framework with a birds eyeball view of the market.

Threat of Supplier's growing bargaining electric power: As the retail industry in India grows along with penetration of e-commerce, the bargaining ability of companions will surely increase. This may enable Payback companions to demand lower licensing fees and increased consumer retention. This will likely inevitably put pressure on the cost-revenue framework of Payback. This is countered by creating a huge user basic, high brand collateral and superior service quality. This will likely put Payback in a position to leverage its talents while bargaining using its partners.


The point of differentiation (POD) for our product would be the cornerstone of the marketing research. Taking a look at the consumer sections and insights about their requirements from our preliminary survey we've decided to follow a specific string of value propositions in order to potion our product exclusively.

We are concentrating on setting our product as:

One credit card solution

One loyalty brand spanning different industry

Hassle free transfer.

Guaranteed personal data security

The main positioning of your product will be as the multichannel loyalty program which is customer centric and safe. Presently in India no other organization being positioned so. This gives us an early on mover edge. The closest competition that Payback has is from Tata, whose devotion program focusses only on Tata band of companies. In the future our target is to focus on more online shops also in order to become make payback synonymous with the term shopping in any form. Currently payback has more of an B2B placement which needs a relook as B2C is also vital for the development of payback.

Marketing Plan


The Tata group initially possessed a group-wide customer loyalty program. This program was more of a discount program and did not use the benefit of having a customer repository. However, it has tied up with Aimia, the devotion management group. With a partner whose strength is customer devotion management, the Tata group is designed to reach out to a more substantial volume of customers. The program, called Tata Empower, includes the Tata brands like Westside, Croma, Taj and Ginger group of hotels. Furthermore, it has other partners like Plane Airways and programs to tie up with an increase of partners going forward. The program is designed to mine the info collected so that special deals can be targeted to customers who value them the most.

The major points of differentiation for the Tata Empower program are:

The Tata brand 's been around for decades and the Indian people associate it with trust and interpersonal responsibility. It generally does not need to put in any effort to create recognition for the brands.

Since it currently focuses on the Tata group brands, it includes an improved control over the brands associated with the program and the campaign they give to the loyalty program.

Because of its brand equity and brand value, the Tata group can easily enter partnerships with other retail brands and gain market share in the loyalty program market quite speedily.

Points of Parity (POPs) of Payback

Multi-brand commitment program

Ease of membership, use of cards and redemption of points

Accumulated factors are redeemable

To offset the brand value of the Tata group, Payback should take good thing about being the first entrant into this market. From our studies, 80% of the clients who shop in Central are aware of Payback, while only 30% of customers were alert to the Tata Empower program. The major differentiation factors are highlighted below.

Points of Differentiation (PODs) of Payback

Payback is associated with more than 65 retail partners while Empower is associated with no more than 10 retail partners.

Payback covers a wide variety of retail brands offering different varieties of products and services, where as Empower protects only Tata brands, apart from Aircraft Airways.

Payback is an international brand and has been in the area of customer loyalty since 2000. The international experience that Payback has bought through the years can be put to use in the Indian market.

The growing e-commerce is given high representation on the list of Payback partners, with an increase of than 50% of associates being online partners.

Payback provides ease of enrolling. Furthermore to completing a simple application at the retail stores owned by a Payback spouse, a person can also signing up for Payback on its website, which is much

Direct marketing, in the form of personal e-mails, is very effective in reaching out to a wider data source of customers and informing them about offers that happen to be most highly relevant to them.

Payback targets petrol pumps through tie-up with Hindustan Petroleum. Since petrol is a item and has to be purchased frequently, a whole lot of customers find an incentive to utilize Payback here. Thus, this ensure perennial income for Payback.

5Cs of Marketing


The retail industry in India is likely to develop at more than 15% yearly and is currently approximated at $ 450 billion. The progress of how big is the India middle income, growing overall economy of India, and increasing throw-away earnings are contributors to this progress. The e-commerce market is also likely to grow from the existing $360 million to about $ 1. 25 billion by 2015. In such a situation, a multi brand devotion program like Payback has a higher quantity of opportunities for development.

India's commitment program is predicted at $ 4 billion. A lot more than 2/5th of Indians from SEC A, B, and C are an integral part of at least one devotion program but a much lesser percentage of these actually use their devotion cards. From whatever we discovered from our market research, wed recognized the complication involved in the process of being a part of such a program to finally redeeming the factors earned, and the uncomfortableness in carrying multiple number of loyalty cards as the primary reasons for this. Payback, whose value proposition include solitary credit card for multiple brands and easy membership, can thus become an important player in this segment in the future.


Payback's main opponents in today's Indian market are First Citizen, the loyalty program of Shoppers' Stop, and Empower program which is the Tata group's loyalty program. While First Citizen is exclusive to Shopper's Stop, Empower program of the Tata group protects multiple brand belonging to the Tata steady and Jet Airways. Tata group has a better brand equity because of the years of trust built about the Tata group. However, till sometime back again, this program only centered on giving discounts and did not have any analytics set up. Payback, on the other hands, performs extensive analytics on customer data and does indeed direct marketing in line with the consumers' personal preferences. Payback also has the first mover benefit of being the first company to present multi brand loyalty program in India.


Collaborators of Payback will be the lovers with whom Payback has tangled up with. These companions come from a multitude of sectors. Some of them are ICICI bank or investment company, HPCL, BIG Bazaar, Make my trip, Megamart, UniverCell, Hometown, Food bazaar, Ezone, Central, Brand stock, bookmyshow. com, Letsbuy. com and flipkart. com. Payback's biggest edge is the large number of partnerships they have. Having an umbrella of retail lovers decreases the risk of switching loyalty of customers. Customers have an improved value proposition from a commitment program like Payback because of the large number of partners.

The benefits obtained by the lovers include upsurge in sales and customer repository, amongst others. Payback subsequently gets license cost and other payment from the partners. This can be talked about in details in the next parts of the article.

Company skills

Payback has a relationship with 65+ top outlets, this provides you with a huge choice to consumers. It's online existence through social mass media help in reaching out to a large variety of customers better value. The main promotional activity of Payback is immediate marketing. Payback customers get regular mails from Payback indicating the recent offers that will be appealing to the targeted consumer. Its huge directories and data analytics skills are highly beneficial for Payback as well as its lovers. Payback also announces several interesting offers and events like Payback Fridays to get customers.


Customers of Payback are

Partners, who take advantage of the services Payback offers in conditions of customer repository, increased sales and offers.

Shoppers, typically metropolitan middle class and upper middle income, who reside in cities and spend a considerable amount of money shopping at retails stores and petrol pumps, among others.

4Ps of Marketing Mix


The features of Payback, as discussed previously, include easy membership, easy use and redemption of details. The points gathered from buys made at the various retail lovers of Payback can be redeemed either as cash special discounts, or on products such as clothing, accessories and gadgets. Payback promotes it companions through immediate marketing to customers, informing about the various discounts and offers available. As well as the existing product features, we propose to add the following features.

Payback must have its own mobile application concentrating on smartphone users. This software would be synced with the user's Payback consideration. It could thus have information about the customer's buying routine and also GPRS information about the customer's current location. Based on this, it could give ideas about the offers available in shops located close to the client. Such personalized services add more value to a person.

We also propose to add three degrees of cards, as resistant to the single card that exists currently. Based on the quantity of usage, customers would get three different cards, the basic version for beginners, Sterling silver Card for medium level use and a Gold Credit card for higher use. Having a Metallic or Gold greeting card adds to the status perception of the users. The amount of points that one may accumulate for each and every purchase would increase with the increasing degree of the Payback cards kept, with a Silver card holder acquiring maximum quantity of tips.

Another fringe benefit we intend to add is - additional points for purchases made on the cards uses birthday. On this part of the program, any purchase made by the cards holder on his/her birthday would accumulate 10 times the number of points in comparison to a regular purchase


The pricing system by which Payback raises money is based on the benefits which Payback delivers to its partners. Essentially Payback is not charging its customers straight. Payback commitment model is based on B2B and B2C transactions. Payback provides its services right to B2B associates who in turn reap the benefits from this program. In return for these benefits, the partners pay an total annual license payment to Payback for their subscription. The sorts of benefit which a partner derives from Payback membership are:

Extensive database of customers

Increased sales

Expertise from Western european markets in creating promotional activities

Ahead of other Devotion programs

For these services a partner pays Payback a percentage of more sales. Aside from this, Payback also partcipates in promotional activities of partners, for which the companions pay Payback.

The pricing regarding B2C is dependant on the behavioural areas of a person. The greeting card which a partner offers to its customer is completely free. For somebody who uses the Payback cards your options available are huge. He doesn't have to stick to one brand but they can go for different stores included in Payback. The price benefits which a customer gets after applying this card are summarized below:

Zero price result: This effect works similar to a mental factor. A person does not have to pay money for using this card, but once registered he always obtain the points added to his bill whenever he goes for shopping and uses his Payback credit card. The more details he accumulates the better products he can redeem after utilizing those points. He has nil to lose but he has an additional incentive for additional shopping to maximize his tips.

Silver coating: Any purchase made by a customer is perceived as a lack of money. An increased purchase amount implies a higher lack of money. However, when a customer gets tips on a devotion credit card proportional to his spending, the magic lining principle comes into play. The client perceives the points made as increases because they can be redeemed against other products or services. This acts as an incentive for the customer to get more.

Different volume of details for different associates: Based on what kind of stores a person appointments he can increase his things by knowing about the sort of offer that Payback is providing with the store. Different stores are experiencing different kind of ideas associated with them and Payback notifies its documented participants regularly about the offers through email and other promotional activities. For a few stores it provides as high as 4 points for each purchase of Rs. 100 and for some it offers 1 point for every purchase of 100. This gives customer yet another reason to visit a store that provides 4 things, hence increasing the sales of that store.


The sections which we've discovered as potential goal are mostly metropolitan middle and upper class and suburban upper class. To target these customers Payback has selected appropriate partners, such that it can reach to the customer base and subsequently can improve the customer platform effectively. We've selected different companions to do this goal of achieving the target customers. Further we've segmented these partners on the basis of their potential reach. The major segments are:

National Partners like Future group, HPCL, ICICI etc.

Online associates like Flipkart, Myntra, Jabong etc.

Regional associates like Univercell, Local restaurants etc.

Tata has also started a brand known as Tata Empower which also specializes in Loyalty card business model. But given the limited brand offering which majorly includes Tata group companies it generally does not have immediate threat to Payback. They don't really have any online relationship which really is a very good point-of-differentiation (POD) for payback. But Payback has to build more Brand Equity as being one of the oldest business residences of India; they can use Brand Collateral as POD. To counter this Payback must further consolidate it brand offering such that it can offer excellent and non substitutable value proposition to its end customers. To increase its current collection Payback can aim for some new retail chain, consolidate its partnership with petrol pumps and reach new handles mobile recharge services.


Given the type of the service which we are providing the promotional activity retains excellent importance in the marketing combine. The worthiness proposition which we are offering to our companions is the increased sale that they will experience after interesting with Payback. While carrying this out we also need to stress on our product differentiation, so that we can maintain our position vis-a-vis competition. The major promotional exercises in which we will indulge ourselves are:

Before shopping advertising: Increase in shelling out for advertising directly targeting end consumers. Different types of press like radio, tv advertisement and magazines may be used to generate more understanding about the merchandise. Selecting magazines, radio programs and tv shows for ad should be done very carefully. Blindly going for advertising the merchandise on these medium may not attract desired aim for segment. If we are selecting a magazine that journal should be lifestyle publication, sometimes in the supplements of nationwide newspaper which handles lifestyle can also make healthy interest about Payback. Ad on FM radio channels and Tv set stations like TLC, NDTV Good Times can be very helpful in generating the correct interest among the prospective customers. Small billboards near a major shopping mall and near official hub can also turn into a major road of before shopping advertising. Tata Empower as a brand is having more brand awareness credited to Tata brand, to outpace them and also to speak Payback value proposition to the end consumer. These promotional activities have to be performed to generate appropriate awareness on the market.

Point of sales promotion: Among the most important ways to market the Payback cards is to point of sales promotion. At the idea of sales the salesperson can illustrate about the top features of the credit card to customer and what kind of benefit they can derive by using the card. They can also apprise the consumer about different kind of offer which they will be availing after registering for Payback. The multi channel notion which Payback has pioneered can also be emphasized at this point. The ease of shopping which payback provides can also be communicated at this time. Some of the offers like direct personalized mail, in which a person receives mail on his shopping behaviour and similar of the kind of nuances can be detailed at the idea of deal.

After shopping advertising: Once a person becomes the member of Payback network, he regularly receives email related to shopping offers. A mobile request can be developed which will be synced with the credit card volume of customer, this request will keep tab of the positioning of the customer and will notify him about the offers near his location. This may build good brand collateral for Payback as it is bring more convenience to the end customer.

Partner with corporate: Among the innovative way by which American Exhibit has improved upon its customer bottom part is by partnering with commercial. Similar kind of strategy can be applied by Payback for generating recognition about the brand. This corporate and business user could work as ambassadors for Payback plus they can generate excitement in the market about the product. The employee of these companies will get extra factors on each purchase. Hence extra reason behind more shopping.

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