As the Marketing Consultant for Business Consultants Ltd. I would like to through some light on the background of the marketing tactics adopted by your organization Tesco along with some suggestions for more progressive results.
Tesco PLC is a multinational retailer for groceries and general merchandise having its headquarters situated in United Kingdom. It was founded by Jack Cohen as a group of market stalls in the year 1919. Tesco store was first opened in 1929 and later on expanded rapidly all over the word with around 6,553 stores in the year 2017 (Tesco, 2017). It is a company listed on the London Stock Exchange engaged in the retailing of books, apparels, furniture, toys, electronic products, petrol, internet facilities, financial facilities, telecommunication and software. It has now become one of the largest retailers in the world in terms of profits. The basic purpose of Tesco is to provide its Britain’s customers a little better experience every time with a view to make their lives easier by providing them great products at great prices.
Marketing planning can be simply defined as formulation of a strategy involving the advertising and marketing efforts along with marketing objectives regarding upcoming year. The marketing planning gap occurs when the actual results are not equivalent to the desired results (Dibb and Simkin, 2008).
For the purpose of overcoming this gap, there are several ways like intensive growth (further possible development opportunities are recognized within the prevailing businesses, Integrative growth (acquisition or development of businesses having connection with the current businesses) and diversification growth (addition of businesses that are completely unrelated with the current businesses) (Kowalik, 2011).
The key marketing objectives of Tesco include achieving a foremost position in its respective field i.e. retail industry in each and every market it functions in. Secondly, Tesco wants to be recognized by everyone as a brand with highest quality and lowest prices. Another purpose of marketing by Tesco is the promotion of their flexibility as a multi- channel retailer along with the aim of keeping their Britain customer’s satisfaction as the prime focus. Somewhere and somehow some deviation occurred from the set objectives but Tesco took steps to get back to its desired position.
Marketing mix consists of factors that have ability the influence the users of the product to purchase it and is under the control of an organization (Richter, 2012). This strategy is popular among new ventures, small, medium and large scale business firms (Lamb, Hair and McDaniel, 2011). There are 4 factors involved in the Marketing mix also known as 4Ps of marketing- product, price, place and promotion of a product (Pearson, 2013).
Product- a large range of products is provided by Tesco with a view to satisfy each and every probable requirement of its buyers. Its product range includes food, electronics, clothing, etc. Within every category, a variety of choice is provided in terms of brand, type, local produce, intercontinental cuisines in food and various other choices such that the ultimate satisfaction of the consumers can be achieved.
Price- Tesco aims to provide highest quality of products at the lowest possible prices. It is the Tesco’s strategy of keeping the low prices which has made it popular among the consumers and helped it in attaining the leading position in the market leaving all old brands behind. The economies of scale enjoyed by the organization are passed on to the customers in the form of cost advantages which keeps the customers satisfied. Club card system is also used by the organization which allows collecting points on purchases which can later be converted into money.
Place- The headquarters of Tesco is situated in England, United Kingdom and its stores are spread all over the world. The products and services are offered through two channels of distribution i.e. online and offline. Moreover, its offline units are separated by six different kinds of stores- Tesco Express, Tesco Metro, Tesco Compact, Tesco Extra, Tesco Homeplus and Tesco Superstore. There big stores for people who are comfortable with it and at the same time there are some smaller stores which provides easier accessibility to the consumers. The online forum of the organization is available on the website – www.tesco.com.
Promotion- The complete focus of the advertisements by Tesco is on it low prices which are even its biggest advantage. The organization frequently provides offers like ‘half price’, ‘buy one get one free’, etc. to attract its customers. Tesco uses a lot of strategies to attract their customers for purchasing their products. Such strategies include- email messages, text messages, interactive websites, clubcards for loyalty customers, TV commercials, etc.
In the year 2013 and 2014, wrong investment decisions and the horse meat scandal led to heavy quarterly losses for Tesco which ultimately resulted in the loss of consumer confidence in the brand and plagued its reputation. Such loss of trust began to be reflected in the sales of the organization. The company adopted effective communication strategy involving an email response from their chief executive officer. Moreover, a special website was also established only for the purpose of updating their customers with fresh information on how Tesco was handling the problem associated with horse meat scandal (Budgol and Jedynak, 2014). After this, the company had to adopt new form of marketing in its Christmas advertisement. The advertisement used the actors from its earlier commercial with a new story and humor as its base (Smart Insights, 2017).
After suffering from crises in 2014, Tesco introduced a brand guarantee scheme in the year 2015. Under this scheme the customers were promised to get a refund if the branded basket of ten or more products were more costly than that sold by their competitors. The bills represented the difference between the amount actually paid by the customers and the amount they would have paid at their competitor’s store. For this purpose, Tesco appointed an independent agency so that the prices at the rival’s store can be checked on daily basis.
The marketing strategy adopted by Tesco involves a deeper analysis of the market. This helps to determine the latest trend, fashion, customer requirements, etc. It undertakes a market research regarding various aspects involved before making a decision about a marketing strategy. The strategies adopted for the promotion of their products involved marketing campaigns, advertising on TV and radio or in newspaper and magazines, press releases, billboard campaigns and internet advertisement.
In the year 2016, Tesco adopted the strapline “Every Little Helps” to regain the trust of their clients and stakeholders in their brand. This message was conveyed to their customers with the use of sales promotion, print and media advertising, public relations, etc. Various methods of sales promotion techniques was introduced such as clubcard, free gifts, point of sale materials and many more.
Moreover, they stated building up warmth and emotional connections with their customers by maintaining an active presence on Youtube and Facebook. Seasonal promotions and advertisements are regularly updated on their Facebook timeline. It often receives feedback and questions using their Facebook page where customer officers from Tesco provide quick replies and clarifications.
Currently, Tesco even changed the method used by them in marketing and started focusing on the problems faced by their customers. They identified that people are not responding to their offers like ‘buy one get one free’ instead they want real people and stories in marketing. (Purpose Media, 2017) Tesco has made a big difference in the way it makes a discussion about food in its advertisements. Instead of endorsing individual items or products, it has launched a major food campaign where it presents food love stories representing the important role food plays in their lives. This advertisement ran on television, print and outdoor media and also on radio. This campaign was meant to inspire the customers to prepare delicious meals on every event.
The Clubcard service used by Tesco helps them to study and analyze the market trends along with the demand patterns of their consumers. It offers various benefits to the cardholder including the gathering of points which can be later on used as cash vouchers. This helped in cultivating brand loyalty the result of which made Tesco the largest food retailer in UK leaving behind its closest rival, Sainsbury’s. It is often said that the success of Tesco is synonymous with the clubcard scheme.
Adoption of humor as the base of Christmas commercial was a big risk for the organization since humor is something that is not appreciated by everyone. This is the reason behind its avoidance by most of the companies in their profitable times. But it became a huge success for Tesco in its difficult time.
Furthermore, it created venture brands which sold the products absent from the market. These products were considered as the premium products and attained a huge success against other premium brands. Also, brand guarantee created brand loyalty in minds of the customers and also provided them satisfaction as they received a strong signal that Tesco is listening to them and is always there to help (Mason and Evans, 2015). Its social media presence plays a very important role in updating the customers regarding the daily offers. Moreover, it was only the marketing strategies adopted by Tesco that helped it from recovering from the downfall.
Tesco is involved in almost each and every way of marketing of the products. Furthermore, it can use the following ways in future with some innovation since it has already applied most of the marketing tactics.
Tele- shopping- Tesco can launch a channel specially for the purpose of promoting its products. There can be special offers and discounts for the customers who purchase the products from such channel within the specified time limit.
Cold calling- Cold calling can be used for the purpose of familiarizing the customer with the introduction of new range of products within the stores. Moreover, it can be used for ensuring that the last visit to the store provided a great experience to the customer.
Show sponsoring on radio- Tesco can sponsor a show on radio where promotions of various offers and products can be made in an attractive way. Also, it can produce some show to be telecasted on radio where the experiences of the visitors can be shared and offers can be promoted.
Association and Trade Shows- Trade shows can be planned for the purpose of interacting with the customers and other industry leaders. It can help Tesco in getting customer reviews and on the other hand, it will help the prospective buyers of the organization to gain trust in the services provided by them.
Print Advertising- Print advertisements can be used with some innovation since it is already being used by the organization. Tesco can include a URL or QR code within the advertisement. The visitors of such special URL will receive special offers, discounts, etc. This will help the organization in expanding business in both the channels i.e. – online and offline (Harr, 2017).
TV Interviews- Special TV interviews can be conducted by experts of the organization explaining the services offered by the organization and how the satisfaction of their customers is ensured every time with large amount of planning.
Products as Contest Prizes- Tesco can organize charity events and donate the products as the prizes to the winners. In this way, Tesco will be able to create a personal connection with the public and also help them in gaining referrals (Schock, 2017).
Digital marketing supports an organization in the promotion of its products and services with the help of electronic media (Dodson, 2016). It involves online marketing through banner ads, websites, interactive emails, etc. (Kingsnorth, 2016) Nowadays, the busy schedule of people restrict them to go out and prefer offline shopping as it is very much time consuming. The limitation of time led them to switch over to online shopping of products and services (Parkin, 2009). Tesco has identified this situation and used this concept (Ryan, 2016). With the help of digital marketing by Tesco, people residing in different parts of the world can gain access to the information provided regarding the products and services offered by them.
Search Engine Optimization or SEO is a process which involves optimization of website of the company in a way such that it is ranked on the first page of search results. This process plays a very important role in the success of online business of any company. Tesco.com has also joined hands with Bigmouth media for its SEO campaign for its non-food range to achieve its objective of becoming the most profitable online grocer in the world.
E-marketing is a strategy in which information related to the products and services is sent to the existing and potential customers. Tesco involved email marketing as the key element in its online marketing strategy and now it gains majority of its online revenue through this.
Online advertisement is one of the most operative process of advertising placing the advertisements on the website of the company (Chaffey, 2008). Tesco promotes its products through its online advertising campaign, for example- promotion of chocolates and flowers for valentine’s day, wine and flowers in Christmas time.
Facebook and Twitter played the most important role in maintaining a closer relationship with the present and potential customers for Tesco. Their aim is to promote social media activities with a view to create awareness among customers about the target items (Evans, 2010). Through this, Tesco gained the ability to instantly update their customers about various offers, discounts, introduction of new products, etc. This helped them in improving personal relationships with its customers and creating a sense of loyalty.
It is also uses strategies like content marketing, press releases, affiliate marketing programs and also maintains a blog for regularly updating every information about the organization.
The website of Tesco provides the access to diversified option to the user. The customer can easily shop different items like groceries, furniture, toys, products related to sports, garden, clothing and accessories, books, beauty products, etc. In each of these categories, various sub-categories are provided with a view to provide greater options to the customers. For the purpose of purchasing any item, the user need to create an account with Tesco by providing the details required for the , address, etc.
Apart from the provision of products, Tesco also has a separate tab ‘Contact Us’ where the users of the website can easily access the various helpline numbers in case of any query or default. It also provides help and FAQ’s to provide instant support to the customers, store locator, terms and conditions, privacy policy and career options on its website.
5Ss of digital marketing was developed by Dave Cheffy with a view to make sure that all the points associated with digital marketing are covered. These are complete set of principles which must be taken into consideration before confirming a digital marketing strategy. These 5Ss of digital marketing are- sell, save, speak, serve, and sizzle.
Sell- Customers make use of internet to gather information related to a variety of products and services such as prices, any other special offers, etc. Therefore, the companies face the requirement to change their strategies and provide both online and offline experience to their customers. Tesco has also adopted the same strategy with its website Tesco.com it provides a large range of its products online to provide its customers a better experience which also saves time.
Save- It means making the use of internet to attain increased efficiency and thereby reducing costs (Chaffey and Chadwick, 2012). Tesco also estimated the saving of time and money if they serve their customers online. Online functions like FAQ’s can help the customers in solving their problems. This enables the company in serving the requirement of many customers in very less time. Tesco also save lot of time by sending special offers, promotions and annual report through email.
Speak- It is the use of internet as an inbound, outbound and social communication tool associated with other media (Chaffey and Smith, 2017). In order to improve their relationship with their customers, Tesco makes the use of chat rooms, questionnaires and forums. Tesco also uses discussion forums to assist its customers in searching relevant information with regard to their queries, products and prices.
Serve- It involves making the use of internet for serving the customers and adding value. The way Tesco has set up its website itself increases its value among its customers. Customer oriented website has been prepared by Tesco so as to provide the best experience with extra benefits and value to its customers. The website makes the use of browsing history of a customer to recommend the relevant products. In other words, Tesco was able to introduce personalization along helping their customers in collecting information quickly and easily.
Sizzle- The various opportunities and advantages offered by internet marketing must be taken up by every organization. Tesco has made the most efficient use of internet marketing to add some ‘sizzle’ to their brand. This has helped Tesco in improving their brand image with the addition of new and unique features. These interactive facilities provided its customers an unforgettable experience and supported the organization by building its value.
Since most of the digital marketing tactics have already been introduced, all the organization can do is to make innovations in the existing strategies itself. The following are the strategies which can be adopted by Tesco in future for better promotion of their products and services.
Conversion Optimization- Conversion Optimization is a method in which attempt is made to increase the number of visitors to the website that are converted into customers. Tesco can make the efficient use of this form of marketing to increase the traffic on tesco.com (DeMers, 2016).
Search Engine Marketing- It is a type of internet marketing in which the visibility of the websites in increased on the search engines in order to promote a website. This strategy will help Tesco in receiving increased traffic whenever people will search for related products.
Opt-In Email List- It will allow the customers of Tesco to come and sign up to get campaigns and correspondence. This will also allow Tesco to connect with some new customers (Lake, 2017).
Link Building- Link building can result in increased brand awareness as it is a proven marketing tactic which will improve the ranking of the website on search engines. It will assist Tesco in increasing the number of high quality links directing towards its website.
Affiliate Marketing- Though the organization has already set up an affiliate marketing program still some changes can be made in their current strategy. They can offer higher commissions than its competitors which will motivate more people to place their ads on their own websites. This strategy will allow the customers to view ads related to their interest and hence increases the chance of them clicking on the link.
Therefore, it can be concluded that Tesco has achieved success due to its perfect marketing strategies even after facing a sudden downfall. The recommendation provided above must be taken into consideration for the purpose of formulation of future marketing tactics for better results.
References
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