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.

12MARKETING
The only negative aspect of the given technique is that, the training costs come out as a
burden for the organization specially like Tesco who has been facing competition from other
retail brands like Woolworths, ALDI and others.
4.0 Recommendations to improve current CRM techniques.
The suggestions for Tesco to improve its operations are as follows:
 Prioritizing the customers- Tesco needs to prioritize the customers and formulate
different strategies for them. The loyal customers along with the bulk buyers need to be
provided with special programs and tools so as to see to it that they make consistent
purchases.
 Setting goals right- Tesco needs to see to it that the goals and mottos set by them are
reflected in their Customer Relationship techniques (Burns, Bush and Sinha 2014). If
they aim to increase the market, they should be applying strategies that go a long way in
grabbing the attention of the potential customers.
 Adopting rewards for employees- In order to motivate the employees, whenever it is
observed that they are making consistent efforts to improve the organization relationship
with the employees; they must be given rewards for their efforts.
 Analyze and Improve- Lastly, the CRM strategy of Tesco must not be static but a
revolving one which changes with respect to organizational needs and desired.

13MARKETING
Question 2
5.0 Promotional Mix techniques
5.1 Key terms and definition
 Promotional mix can be described as a combination of various promotional variables that
are chosen by a company in order to help the organization to match its aims and
objectives. Promotional mix can also be described as a subset of the marketing mix.
There are optimal ways of allocating the various budgets for different aspects within the
promotional mix but the most important elements are as follows :
 Advertising- Advertising is a paid presentation whereby the ideas goods or the services
are promoted in a mass medium on the request of sponsored. The advertising may be
done in a television channel, newspaper, online on websites, Sms advertising or on the
radio (Pasquier and Villeneuve 2017). Other examples of Advertising include billboard,
direct mail, web pages, mobile applications, posters and catalogs.
 Personal selling- This is a process whereby a sales executive conducts a one to one
communication with the customer and engages in persuasion to convince the customers
to buy the given product. This method is generally delivered in the form of an oral
presentation, telephonic conversation, meetings and training. The sales executive is lured
by the incentive scheme to engage in more revenue generating sales.
 Sales promotion- These refer to the media and non-media marketing techniques that are
generally used for a limited time period to increase the consumer demand and improve
the availability of the product. For this method certain incredible offers are provided for a
limited time period in order to improve the brand image also.

14MARKETING
 Public relations- This occurs when the product of a company is marketed by a third
person in a manner which is indirect. For this method there exists free publicity as well as
paid efforts (Coombes and Nicholson 2013). These days celebrities tend to use this
method, on instagram and facebook whereby the tend to put up photographs of the
product which can then be viewed by millions of followers.
Figure 2: Promotional Mix Aspects (Source: Coombes and Nicholson 2013).
 Sponsorship- In this case an event or a program is sponsored by a major company who
wants a maximum view from the customers.
 Direct Marketing With this method, the consumers tend to directly communicate with the
customers through methods like email, website online displays and others/
5.2 Promotional mix techniques used by Tesco
Promotional mix Method Examples

15MARKETING
Sales Promotion Club cards and
Tesco Applications
The company has various loyalty
programs whereby certain regular
members are offered club membership
and they tend to get various discount
offers on daily products.
Tesco has also launched a website and a
movie application whereby the various
customers can shop online and fulfill their
requirements.
Direct Marketing Email messages
and text messages
Tesco has formed a database of various
customers with the help of which it sends
various offers and promotional messages
to them to inform them about the latest
offers available.
Media Campaigning TV Commercials
and interactive
websites
Tesco advertises in various medias so as
to gain the attention of the different
customers. They engage in home channels
to attract the home makers. They also
display their advertisements on various
billboards as well (Rothaermel 2015).
Public Relations
management
Tesco diet and
Talking Tesco’s
Through this the customers can give in
their advice or get their grievances

16MARKETING
addressed. Through the Tesco diet, the
company offers fitness advice to its
customers.
This has a two way effect whereby the
company becomes popular among the
employees and the company can even
advertise its products in that diet plan
5.3 Evaluation of the current promotional mix techniques used Tesco
Tesco makes use of a very simple promotional mix strategy by keeping in mind the target
market of the organization. The methods used by the company are as follows:
Direct Marketing
The direct marketing strategy of Tesco is one of the most popular ones in the given
industry. The procedure which is followed by them is very simple. Whenever, a customer
registers through the official website of the company, the company maintains a direct interaction
with the customers with the help of various calls, emails and text messages occasionally and
during peak season ns. The given method is very successful and popular amongst the customers
and through this method the company attracts around 20% of its consumer base. However, the
only disadvantage of this system is that the customers often find it disturbing when they receive
the texts and calls from the company (Stead and Stead 2013).

17MARKETING
 Emails Messages- Under direct marketing the first strategy used by Tesco is sending
newsletters and offer lists to the consumers. They even send special offers and new
product deals to the Consumers in order to lure them to buy the necessary product. All
the given mails sent are personalized and offers are reflected on only those products
which are usually purchased by the given customers. After the consumer has purchased
the product, they send them feedback forms to keep upgrading their systems. Through
this method, the company also comes to know about the different choices of the
customers.
 Text Messaging- The other method used by the company is text messages (Tesco.com.
2018). The grocer keeps sending the consumers about new offers and launch of new
products with the help of text messages. This tactic is made to ensure that the customers
never miss out in any offer.
Media campaigning
Although Tesco`s presence in the market is very huge, the company ensures that it spends
a huge amount in media campaigning. According to Wheelen et al. (2017), Tesco believes that
Media is one of the most powerful tools and elements of the overall promotional strategy of the
firm.
 TV Commercials-Through the Television commercials, the grocery retail invests hugely
on the media aspect of the promotional strategy. Through these commercials, they stress
on healthy eating and organic products. The company believes that through Television
commercials, the customers will get attracted to certain eye catching details in the
advertisement which help in creating lasting impressions. However, certain percentage of

18MARKETING
the population who do no watch television may miss out on this aspect. Secondly, TV
Commercials are a very expensive method of advertisement.
 Interactive Websites- In this modern age, internet is a very important aspect of
everyone`s life therefore, the company has made its primary website quite comprehensive
and also launched various other websites like Tesco Diet, Tesco apps and Talking Tesco
in order to get more popular among the customers. These links are attached to that of the
main website and it is very prominent. Not all people are accustomed to the working
technique of the websites and therefore, not all customers can be reached out through this
method.
Sales promotion
Tesco understands that the key criteria of dealing with competition is moving forward
with designing techniques and offering that value to the customers which are quite different from
that of its competitors. Hence, it designs various innovative promotional strategies through which
the customers get a better experience even during rough phases’ of the economy (Khodakarami
and Chan 2014). Rewarding the customers is one of the key methods of Tesco to attract a large
crowd.
 Club Card Points- As stated previously, apart from being an integral CRM strategy, the
Club Card Points serve as a strategy which makes shopping a fun experience and they
can get discounts on various other experiences as well. The customers can collect these
extra points while shopping online or through the different stores. They can encash these
points later on. However, giving these offers often tend to become a burden on the
company. However, they are quite effective.

19MARKETING
 Tesco Apps-The TESCO application and website helps the consumer to shop for
groceries at the convenience of their homes. The grocery items shall then get delivered to
the customers at their homes. Through this application the customers can also make a
specialist customer list in order to shop smart. This app serves an innovative promotional
technique for the company and helps in attraction of those customers who do not have
time for shopping. Some customers tend to take advantage of the given method and keep
on returning the items due to some complaints. Even the cost of this application is also
very huge.
Public relations
Tesco believes that the company can make use of Public Relations to maintain the image
and have a long lasting impression in the minds of the consumers. They believe that through the
indirect method of promotion, they can create a positive image of the firm.
 Talking Tesco- Through this application, the customers can share their experience with
other consumers and a kind of interactive environment is created. The given method also
helps in addressing the grievances of the customers. This method is quite transparent
however, through the bad experience of the customers; the loyal customers can derive a
tainted image of the store.
 Tesco Diets-Tesco uses this method as an extra activity to help out the customers with
their fitness plans. This also helps the firm to advertise their fitness products in the eyes
of the customers. According to Trainor et al. (2014), this initiative has been very
successful in attracting the different customers who subscribe to the website in return for

20MARKETING
diet plans, tips and recipes. This also helps in creation of a positive image which goes a
long way in securing the relationship of Tesco with its employees.
5.4 Suggestions of other promotional mix strategies which could be used Tesco
As per the analysis done on the company`s promotional strategy, it could be witnessed
that the company is already using both Above the line strategy where mass media tools are used
and below the lines where the customized strategies are used. Therefore, TESCO has been
extremely successful in applying the concept of Above the Line and Below the Line concept of
advertising.
A suggestion in the present scenario can be made with regard to the use of the AIDA
strategy of marketing.
The acronym AIDA represents Attention, Interest, Desire and Action. This has become
one of the most rising concepts in promotion. According to Goetsch and Davis (2014), any
promotional activity or advertising technique must include all the four AIDA steps, else it will
fail. Simply stated the advertisement of Tesco should be able to grasp the attention of the
consumers and develop an interest in them. This interest can then give rise to a desire which shall
instigate them to make a purchase. The concept can largely be use in social media advertising
and commercials. The advertisements should be made in a way in which the company is able to
grasp the attention of the customers easily and initiate in them an interest which will eventually
lead to a positive action for the company.
6. 0 Conclusion
Therefore, from the given analysis and study it can be concluded that the supermarket
chain Tesco has been constantly adapting to the changing needs of the business environment and

21MARKETING
developing new techniques and ideas so as to gain and maintain a larger share of the market. The
grocery retail realized the importance of Customer Relationships in order to have a good stand in
the market and as witnessed from the year 1995, it has been engaging itself in massive CRM
techniques so as to make shopping a simple and fun experience for its employees. Through its
application of Above the Line and Blow the Line strategy for its promotional mix, the company
has been quite successful in maintaining the right balance and reach to the larger crowd as well
as the individual customer easily.

22MARKETING
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Bresler, M. and Lubbe, I., 2014. Marketing management.
Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Boston, MA, USA:
Pearson.
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
Choudhury, M.M. and Harrigan, P., 2014. CRM to social CRM: the integration of new
technologies into customer relationship management. Journal of Strategic Marketing, 22(2),
pp.149-176.
Coombes, P.H. and Nicholson, J.D., 2013. Business models and their relationship with
marketing: A systematic literature review. Industrial Marketing Management, 42(5), pp.656-664.
Foxall, G., 2014. Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.
Gronroos, C., 2016. Service Management and Marketing: Managing the Service Profit Logic.
John Wiley & Sons.

23MARKETING
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education
Limited.
Keller, K.L. and Kotler, P., 2016. Marketing management. Pearson.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management
(CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Kotler, P., 2015. Framework for marketing management. Pearson Education India.
Meffert, H., 2013. Marketing-Management: Analyse—Strategie—Implementierung. Springer-
Verlag.
Pasquier, M. and Villeneuve, J.P., 2017. Marketing management and communications in the
public sector. Routledge.
Ramaswamy, S.K. and Mosher, G.A., 2013. Marketing Management.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sheth, J.N. and Sisodia, R.S., 2015. Does marketing need reform?: Fresh perspectives on the
future. Routledge.
Stead, J.G. and Stead, W.E., 2013. Sustainable strategic management. ME Sharpe.
Tesco.com. ,2018. Tesco - Online Groceries, Homeware, Electricals & Clothing. [online]
Available at: https://www.tesco.com/ [Accessed 11 Mar. 2018].