Aim: The aim of this study is to investigate how retailer’s customer loyalty program can influence the channel power and what relationship between retailer with manufacturer can be created when channel power changes.

Method: A case study was adopted, and a qualitative research and face-to-face interview were used to collect the fundamental data.

Result & Conclusions: The results exhibit that the customer loyalty program implemented by retailer can increase its channel power (both in basic power and market power) and create a dominant relationship with high channel conflict with its manufacturer. Based on the research of the case company, I found a close relationship with cooperation and trust could be developed based on the customer loyalty program between retailer and manufacturer to create benefit for the both.

Suggestions for future research: Only adopted one case and one interview in the research is the main limitation. Additionally, the limited sample size limited the research in some generalizations. It is difficult to use only one case to represent the whole situation of the market. In the further, a larger sample size adopted in research can increases the reliability of researcher’s generalization.

Contribution of the thesis: The research discloses how retailer’s customer loyalty program can influence the channel power. The drawbacks of the dominant relationship which caused by channel power rising have been researched. How to develop close relationship and what benefit it can bring to retailer have also been investigated in the end.