Tesco Marketing: CRM, Promotional Mix, and Strategic Recommendations

This report provides a comprehensive analysis of Tesco's marketing strategies, focusing on customer relationship management (CRM) and promotional mix techniques. The report begins with an introduction to marketing principles and provides background information on Tesco. It then delves into CRM, defining the concept, exploring market orientation and customer-centric approaches, and detailing various CRM techniques employed by Tesco, such as loyalty programs and staff development. The report also offers recommendations to enhance these CRM strategies. The second part of the report examines Tesco's promotional mix, including key terms, techniques used, and an evaluation of their effectiveness. It explores concepts like the AIDA model and above-the-line and below-the-line strategies, and suggests additional promotional mix strategies that Tesco could implement. The report concludes with a summary of the findings and recommendations, providing valuable insights into Tesco's marketing approach.

Running head : MARKETING
MARKETING
Name of the Student
Name of the University
Author Note

1MARKETING
Executive Summary
The given report throws light on the marketing component of a company named Tesco. Tesco is
a grocery retail chain which branches in various parts of the world. The report has been divided
into two parts whereby in the first part the customer relationship management (CRM) aspect of
the company has been discussed in detail. Several strategies as to how Tesco can improve its
CRM strategy have been given. The second part of the assignment concentrates on the concept of
a Promotional Mix whereby the vigorous promotional mix strategies used by Tesco have been
stated and analyzed. Suggestions to improve these strategies such as the AIDA and above the
line and below the line have been discussed.

2MARKETING
Table of Contents
1.0 Introduction...........................................................................................................................4
1.2 Background on Tesco............................................................................................................4
Question 1........................................................................................................................................6
2.0 Understanding Customer Relationship Management................................................................6
2.1 What is Customer Relationship Management (CRM)?.........................................................6
2.2 Market orientation.................................................................................................................7
2.3 Customer Centric...................................................................................................................7
3.0 CRM Techniques.......................................................................................................................8
3.1 Range of CRM techniques.....................................................................................................8
3.2 Range of CRM techniques for Tesco and its effectiveness.................................................10
3.2 .1 The first CRM Strategy that is adopted is a Loyalty program.........................................10
3.2.2 Staff Development............................................................................................................11
4.0 Recommendations to improve current CRM techniques.........................................................12
Question 2......................................................................................................................................13
5.0 Promotional Mix techniques....................................................................................................13
5.1 Key terms and definition.....................................................................................................13
5.2 Promotional mix techniques used by Tesco........................................................................14
5.3 Evaluation of the current promotional mix techniques used Tesco.....................................16
5.4 Suggestions of other promotional mix strategies which could be used Tesco....................19

3MARKETING
6. 0 Conclusion..............................................................................................................................20
References......................................................................................................................................22

4MARKETING
1.0 Introduction
Marketing revolves around the customers. The primary motive of any marketing activity
is to see to it that the company is getting the right kind of products to the right customers. For
this purpose, the company`s often engage in customer relationship management technique to
retent its customers and apply various promotional techniques. The given report aims advice the
Marketing Director of Tesco by analyzing the marketing strategy of the brand. The report will be
throwing light on the marketing strategy of the company followed by their Customer
Relationship Management Techniques. Concepts like market orientation and customer centric
will be covered adequately (Kotler 2015). Certain recommendations may be provided so as to
improve them. The second part of the report will be based on the promotional mix of the
organization along with concepts like AIDA and above the line and below the line. The report
will be providing certain suggestions for improvement.
1.2 Background on Tesco
Tesco was found by Jack Cohen back in 1919. The business leads him to sell his own
product under the brand name Tesco in 1924. The first store came up in 1928 and since then
there has been no turning back. Tesco was the first brand to begin the trend of computerized
checkouts in the stores and became a petrol retail seller as well.
Through its Customer Champions policy, the brand became a huge retailer in the organic
domain (Tesco.com. 2018). The company expanded its operations to South Korea and other parts
of Asia. The company entered the e-commerce domain and is currently the most active online
supermarket with huge sales of around 800 million.

5MARKETING
The marketing strategy of the brand involves proper analysis of the market in order to
figure out the range of customers it wants to target and how to approach them. Tesco started in
Europe and wanted to retain its position in the continent therefore it aimed at selling products
which had a European aura about it along with customization for the local markets.
Tesco believes in research and stresses on undertaking a detailed market research before
any decision regard the company is taken with respect to the pricing of the products, customer
perception about the brand and their habits (Armstrong et al. 2015).
The marketing campaigns adopted by the brand are as follows:
 Radio and Television advertising during the prime hours at regular intervals.
 News paper advertising and home magazine advertising
 Press releases and sharing of future plans by their alliance partners. They reflect these
releases on the national as well as the regional platform.
 By introducing environmental friendly products the brand has become popular among the
large masses.
 The organization also advertizes through bill board advertisements which often have the
capable of catching the eyes of the customers driving down the town.
 It has also indulged in internet advertising on various websites.
 The brand uses direct marketing techniques such as emails and text messages for its
active customers. This serves as a good way in reminding the customers about the brand
along with certain offers. It has a system of club cards as well.

6MARKETING
However, recently with constant pressure from competing grocery brands Tesco
revolutionalized its marketing strategy and grabbed the opportunities by:
 Creating new product lines: The store has reviewed its marketing mix and introduced and
rebranded products like fish, beef, pork and fruits.
 Adopting Digital marketing: Social media marketing has been adopted by the company.
 Overhauling product packaging`; the store has recently started packing high quality
goods in high quality packages so as to increase the sales (Keller and Kotler 2016).
 Customizing media: The brand wants to enhance customer experience by customizing the
advertisement for its consumers based on their previous purchases and choice.
 Competing with smaller chains: With substantial deals ad new offers, Tesco has aimed to
compete with the smaller chains like Aldi.
Question 1
2.0 Understanding Customer Relationship Management
2.1 What is Customer Relationship Management (CRM)?
`Customer relationship management (CRM) is a continually evolving domain and now social
media technologies have revolutionized the way businesses and consumers interact. `
(Choudhury and Harrigan 2014)
'Customer Relationship Management (CRM) affiliates business processes with customers
strategies to build customer loyalty and to increase profit long term. ` (Sheth and Sisodia 2015)

7MARKETING
Understanding and example.
Therefore, from the given definitions by the author it can be understood that customer
relationship management is an effort and style adopted b the organization to maintain a constant
interaction with their customers. For example, Apple has an integrated CRM system which
allows the customers to link their apple accounts with the company and receive assistance.
2.2 Market orientation
`Marketing orientation is a business model that focuses on delivering products designed
according to customer desires, needs, and requirements, in addition to product functionality and
production efficiency .` (Hollensen 2015)
`Market orientation is a company philosophy focused on discovering and meeting the needs
and desires of its customers through its product mix. ` (Bresler and Lubbe 2014)
Link to CRM
It can be reflected that market orientation is guidance to the company which helps them
in taking actions which are closely related to the desire of the customers. This is connected to
Customer Relationship Management because; the customer relationship management helps in
gathering the data which is used in market orientation.
2.3 Customer Centric
, Client centric is an approach to doing business that focuses on creating a positive experience
for the customer. Client centric businesses ensure that the customer is at the center of a
business's philosophy, operations or idea. ` (Meffert 2013)

8MARKETING
`Customer centric is a way of doing business with your customer in a way that provides a
positive customer experience before and after the sale in order to drive repeat
business, customer loyalty and profits. And a customer-centric company is more than a
company that offers good service. ` (Ramaswamy and Mosher 2013)
Understanding
It can be observed that the client centric approach helps the company to maintain their
focus on the welfare of the customers. KFC has a good CRM system which allows the firm to
develop products based on the needs of the customers. It is connected to CRM because CRM
helps the organization in remaining customer centric.
3.0 CRM Techniques
3.1 Range of CRM techniques
CRM Technique Further explanation
Tracking customer contacts When the customer contacts are tracked the company can
easily contact the different customers and keep
informing them about new offers and promotional
activities with respect to the company. This helps the
company to stay in touch with the consumers.
Staff Development The staff needs to be trained effectively. They have to be
trained with respect to the treatment of customers and
methods to contact them and build a relationship with

9MARKETING
them.
Loyalty programs The organization can also keep a loyalty program
whereby the customer can be given huge discounts and
attractive offers (Foxall 2014).
Customer Relationship Management refers to managing the relationship between the
organization and the customers. There are various techniques which can be used in order to
attract the customers and make them visit the store again. Therefore, the organization needs to
employ techniques like tracking their contacts so as to send mails and messages, training their
staff so that they behave ell with them. They can also conduct various loyalty programs in order
to retent the customers.
Figure 1: CRM Attributes (Source: Meffert 2013)

10MARKETING
3.2 Range of CRM techniques for Tesco and its effectiveness
Tesco is the number one grocery company in the United Kingdom. It follows a rigorous
customer management program with the help of which it has been able to become extremely
successful as a brand (Chernev 2018).The two primary strategies used by the brand are given as
follows:
3.2 .1 The first CRM Strategy that is adopted is a Loyalty program
The Club card Scheme:
The club card scheme of Tesco was launched in the year 1995. The company had a
database of around 12 million customers and the company set a benchmark by starting the
excellent technique of Customer Relationship Management.
The technique involved providing great discounts to the customers when they shopped in
store. Different categories of products had different discount schemes. Later on to make the
program more attractive the company started discount schemes on partnered associates like
hotels, petrol, car hire and others
The families were targeted in a manner such that there was an item for everyone and
anyone. The Tesco Kids Cub was given for the children whereas the World of Wine club was
given to the adults. This helped in diversification and the increase in value proposition.
The data which was collected from the schemes was then used to create a better product
and helped the company in getting an idea of what the consumers actually want. The scheme was

11MARKETING
quite effective in increasing the sales of the company and the profits increased by 5% in the
following years.
However, one negative aspect about the scheme was that, loyalty program served to be
quite appositive n expensive exercise for the company and secondly not all data can be relied
upon (Baker and Saren 2016).
3.2.2 Staff Development
The Staff development program is often formulated in order to train the employees so
that they are able to communicate well with the customers. In the past, various employees of
Tesco have received various complaints that they have no knowledge about the products and are
unable to provide any kind of information about the products and this tends to provide
dissatisfaction to the customers. According to Weinstein and Pohlman (2015), the treatment
given to the customers by the employees goes a long way in figuring out whether the customer
will be making a repetitive purchase or not. Therefore, after the given complaint is received, the
organization has started a system whereby different training techniques were used to make the
employees at par with the organizational standards and rules. This way they are able to provide
help to the customers and assist them.
The positive aspect of the given Customer Relationship Management technique is that it
helps in retention of customers and increases their loyalty towards the brand. According to
Gronroos (2016), the store footfall increases by 20% if the employees have a good idea about the
products.