Case Introduction : Loyalty Management UK (LMUK) manages British supermarket chain Sainsbury's frequent-shopper card program, called Nectar. LMUK uses Sainsbury's sponsorship as the magnet to attract other retailers into a profitable, multisponsor loyalty network. We examine the economics and consumer behavior of retail loyalty programs and allow comparison of the brand-building power of a single-sponsor program to the promotional power of a multisponsor program. LMUK has had a very humble beginning and was introduced by Keith Mills in 1988.The concept behind the function of LMUK was simple. Consumers who bought products from participating companies of LMUK were given banknote like scrip that they could redeem from any of these companies at a future point. Around 2002, it started its program in the UK. By the end of 2004, it is the largest loyalty program in Britain. The Nectar card scheme is available at a number of major retail outlets including: Sainsbury's, Debenhams, BP, AMEX, Adams Kids, Thresher Group, Ford, Winemark, Hertz, Magnet, Brewers Fayre, Beefeater, ebookers and Doll......

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