Business Studies Tesco Introduction 2 Business Studies Relationship Marketing

Business Studies
Relationship Marketing
Tesco

BUSINESS STUDIES 1
Table of Contents
Introduction................................................................................................................................2
Overview of Tesco.................................................................................................................2
Task 1.........................................................................................................................................2
P1 Development of Relationship Marketing in Tesco...........................................................2
Benefits of Relationship Marketing to Tesco.....................................................................3
Benefits Relationship Marketing to Customers.................................................................3
P2 Relationship Marketing.....................................................................................................4
Ladder of Customer loyalty...............................................................................................4
M1 Aim and Objective of Tesco............................................................................................5
Strategies of Relationship marketing.................................................................................6
D1 Contribution of Relationship Marketing..........................................................................6
Task 2.........................................................................................................................................7
P3 Methods of Attracting and Retaining Customers of Tesco’s Supermarket......................7
M2 Analysis of Effectiveness of the Methods of Retention and Attraction..........................8
Task 3.........................................................................................................................................8
Quality Gap Analysis.............................................................................................................8
P4 & M3 Quality Gap Analysis of Tesco..........................................................................9
Benchmarking..................................................................................................................10
D2 Recommendations for Improving Customer Relationship.............................................11
Task 4.......................................................................................................................................11
P5 Customer Relationship Management used in Tesco.......................................................11
Conclusion................................................................................................................................12
Bibliography.............................................................................................................................14

BUSINESS STUDIES 2
Introduction
An aspect of CRM (Customer Relationship Management) which concentrate on the long-term
engagement of customer and customer loyalty in place of short-term goals such as individual
sales and customer acquisition is known as Relationship marketing1. This report is being
prepared in order to perform a detailed analysis of the influence and impact of relationship
marketing and for this Tesco, Company has been selected. The concept of development and
implementation of relationship marketing in the company will be highlighted. Besides this,
various methods used for customer retention will be described. The identification of various
techniques used to recognize the quality gap will be done. Further, the use of customer
relationship management system in Tesco will be explained.
Overview of Tesco
Tesco is the general merchandise retailers with headquarter in England, United Kingdom. It
is known as the world’s ninth largest retailer by revenue and third largest retailer by profit. It
the company has its stores in approx. 12 countries along with this it has acquired the leading
position in UK, Thailand, Hungary, and Ireland2.
Task 1
P1 Development of Relationship Marketing in Tesco
Since 35 years company has grown its revenue to £62 billion by creating a strong brand,
global expansion, and acquisition. Along with this they have also enhanced their relationships
with their customers, driven sales growth, and aided in customer retention by a strategy of
1 Thorsten Hennig-Thurau and Ursula Hansen, Relationship Marketing: Gaining Competitive Advantage
Through Customer Satisfaction and Customer Retention (1st edn, Springer Science & Business Media 2013).
2 Tesco PLC, ‘About us’ (Tesco PLC, 2018) < https://www.tescoplc.com/about-us/> accessed 21 March 2018

BUSINESS STUDIES 3
customer relationship management. The methods that Tesco use for relationship marketing
are credit card, Tesco online, and club card. The company makes use of these basics to gather
the customer's information, history of customer’s purchase, get personal information, on
which type of product they spend more money, and their buying behaviour. In 1995, the club
card of Tesco was launched which provided them a lot of consumer trend's information and it
offered the consumer a reason to shop at Tesco. It allows Tesco to advertise its products with
the information of customers which is based on habits of buying, place and time they shop.
Recently a credit card was introduced by Tesco. The credit card allows the company to have
a look at the buying habits of the customers more largely across all services and products and
this offers extra information about the customer’s preferences3. In 1997, the company
introduced ‘Tesco Direct' and became the first supermarket in 2007 to provide the option of
home delivery. Tesco.com permits the company to interact with the customers and make a
strong relationship in order to retain and grow their business4.
Benefits of Relationship Marketing to Tesco
 Enhances customer loyalty 5
 Assists in identifying new customers
 Simplifies marketing and sales processes
 Effective internal communication
Benefits Relationship Marketing to Customers
 Customers receive enhanced services
 Customers receive various discounts, offers, coupons and club card facility.
3 Tesco Bank, ‘See how our credit cards could reward you’ (Tesco Bank, 2018) <
https://www.tescobank.com/credit-cards/> accessed 21 March 2018
4 Relationship Marketing, ‘History Of How Tesco Have Used Relationship Marketing Over The Past 35 Years’
(Relationship Marketing, 2018) < https://relationshipmarketingbg.weebly.com/history-of-tesco-relationship-
marketing.html> accessed 21 March 2018
5 Joseph Ruiz, ‘5 Benefits of a Relationship Marketing Strategy’ (Strategic Driven, 2012)
<http://www.strategicdriven.com/marketing-insights-blog/5-benefits-of-a-relationship-marketing-strategy/>
accessed 21 March 2018