MG526 Customer Experience: Strategic Improvement for Tesco Customers

This report provides a comprehensive analysis of Tesco's customer experience, beginning with an overview of the company's value propositions, which focus on price, value, convenience, and trust. It details how Tesco manifests its customer experience through diverse channels and discusses customer demographics based on frequency of use. The report applies the Six Pillars of Customer Experience model (Integrity, Resolution, Expectations, Empathy, Personalization, Time and Effort) to Tesco, assessing the company's performance in each area. Furthermore, it examines the implications of digital disruption on Tesco's customer experience delivery and concludes with strategic recommendations for enhancing customer experience to benefit both customers and the organization. The analysis draws from various sources to provide a well-rounded perspective on Tesco's customer experience strategies.

Customer Experience

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Setting out the value propositions of Tesco.................................................................................3
Setting out how Tesco manifests itself and delivers the customer experience............................4
Setting out the customers by frequency of use by key demographics. .......................................4
Setting out what is The Six Pillars of Customer Experience Model............................................5
Applying the Six Pillars of Customer Experience Model to Tesco.............................................6
Implications of digital disruption to the delivery of customer experience for Tesco..................7
Setting out the strategic recommendations on how to improve the customer experience for
customers of Tesco on the basis of customer experience model and digital disruption..............8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Customer experience refers to the customers behavioural response to the product/service
during all the stages of consumption from pre- purchase to post- purchase stages. The current
report elaborates the customer experience of the UK bases retail giant Tesco. Tesco Public
Limited is a British multinational retail industry located in England. It is the third largest retail
chain in the world in terms of gross revenues. The current report provides information about the
customer experience in relation to the Tesco industries. The report contains value propositions of
organization and how it manifests itself and delivers to the customer experience. The purpose of
this report is to abstract the key factors that affect the frequency of customers around the world.
Applying the Six Pillars of Customer Experience Model to the Tesco industries. The customer
experiences with this organization are demonstrated in detail.
MAIN BODY
Setting out the value propositions of Tesco.
Value proposition is an assurance of value that may be delivered to the customers. It is a
belief about how the value may be delivered, experienced and acquired by the customer. Tesco
customers are price driven and look for value and convenience (Leroi-Werelds and et.al., 2021).
According to its own website, its customers have been looking for price, value, convenience and
trust. Therefore, the company's value proposition is to provide customers their desired product at
a fair price. Tesco executes this proposition through multiple channels such as hypermarkets,
grocery stores, convenience stores and online channel (Chaffey, 2020). The value proposition is
a statement that demonstrates clear and measurable benefits that a customer will get after buying
a particular product or service.
Tesco convince customers that their product and services are better than others and try to
create a competitive advantage in the market. It is valuable because of the recognition, trust, and
loyalty that it inspires in its customers. It not only benefits the growth of company's initial
grocery retailing business but also its new business investments such as e- tailing and non- food
retailing. It is a leading expertise in buying, distribution and physical outlets which has been
benefiting the customers and shareholders over the years. Its large scale operations allow
creating low price valuable products and maintain profitability at the same time. Tesco focus on
delivering high quality products at an affordable price. And to achieve this goal, it has focussed
on advanced marketing techniques like social media to cut down marketing cost and target

particular audience. However large scale production and marketing does well in adding value to
the industry but most of its strength is based on the quality of product and the global trust it has
built over the years (Hoyer and et.al., 2020).
Setting out how Tesco manifests itself and delivers the customer experience.
Tesco has always focused on demonstrating its products and services in order to create a
positive brand image and deliver great customer experience. It sells a variety of products that
include grocery, food, clothing, cosmetics, financial services etc. With its rapid expansion, it
catches to every possible demand of the customer. Apart from the collaborated products it has its
own line of products such as electronics, clothing etc. Huge range of products are presented on
different types of stores/platforms depending on the market.
Tesco customers are price driven, hence pricing strategy of this company is the key
factor that influence the customer experience of Tesco. The company tries to keep the price as
low as possible without compromising with the quality. Due to its huge network of suppliers,
Tesco enjoys global reach efficiently reduce prices. Even after the intense competition in the
market Tesco has cemented its place strongly in the market and played major price wars against
its discounters. The place and distribution strategies of Tesco have updated fairly. With more
than 7000 stores around the world it has a major market share in online retailing as well. It uses
bot online and offline channels to reach out as many customers as the can. The distribution also
depends on the type of customer and availability of supply chain.
Tesco has consistently updated its promotion strategies, from newspapers to television
and from television to the use of social and internet to convey its message to its customers. It has
a strong brand image which continuously increases the conversion rate of its customers
(Evanschitzky and et.al., 2020). It is the biggest investor in marketing and advertisements among
all other UK retailers. In addition, Tesco provides discount cards, offers and shopping points to
retain its customers. Technological development, employee training and customer assistants are
key factors Tesco considers in order to deliver great customer experience.
Setting out the customers by frequency of use by key demographics.
Customer demographics are the categories of population suitable for the business purpose
or the process of categorizing the target audience in business context. Some factors of
differentiation are age, gender, location, family structure, income, level of education, ethnicity,
religion, occupation and the intent of customer (Yu, Kim and Kim, 2021). Tesco has a price

driven customer base therefore it attempts to produce better value products in affordable price
range. An efficient supply chain network allows them to take advantage of the economies of
scale and offer products/services at the lowest rates possible without sacrificing the profits. Large
scale production helps the retail giant to cut down costs.
In the social media era where most people, especially the young generation spend a lot of
time on social media and Tesco use these platforms for engaging regularly through ads and
promotions. This way the online platform creates high frequency of customers. The income level
and availability of product/service according to the choice of the customer directly affects the
buying intent of the customer. Tesco counter this situation by displaying wide variety of products
from low to high range to target all categories of customers and fulfil the demands in the market
(Keiningham and et.al., 2020).
Tesco is a global retail chain and all of its business strategies including price planning,
marketing, type of product and technology are highly influenced by the location. Different
locations have different demands, for example cold areas demand warm clothes, educational
hubs demand tech- equipments, low income countries demand affordable price, rich countries
demands brand status and the amount of sales depend on the population and purchasing power of
the customers of the particular location. Customer demands can be influenced due to the cultural
and religious presence as well. Various occasions can influence the customers in different phases
of the year.
Setting out what is The Six Pillars of Customer Experience Model.
Customer experience model is a comprehensive perception of their experience with the
organization/brand. It is a result or all the interaction a customer had with the brand from buying
the product/service to consuming and customer assistance service (Micu and et.al., 2019). There
six pillars of customer experience model are:
Integrity, organizations that maintains reliability on a consistent basis create a strong
foundation of integrity. Trust building strategies and social campaigns and events helps
organization and its managements to increase integrity. Customers consider promises that are
delivered as the measurement of a brands worthiness and integrity. It outlines an organization's
social, moral and ethical purpose.
Resolution is important to recover lost customer due to bad experience. Sometimes
things does not go as planned but engaging the customers back in the brand family is important

in saving the customer count and negative promotion. The recovery experience also need to be
effective enough to fix the problem as quick as possible. The Best successful resolution ideas are
sincere apology and urgency in correcting the mistakes.
Expectations of customers are limitless. The best brands understands the high
expectations of the customers and make strategies to satisfy their needs according to their
standards and requirements. Top organizations always try to keep up to their brand promises and
interactions and fulfil them to deliver the best customer experience.
Empathy- Understanding the customer situation and establishing a strong relationship is
possible with empathy creating behaviours. Understanding customer's experience emotionally is
the best way to judge customer experience. It allows the customers to know the feelings of
customer and provide solutions based on the understanding.
Personalization is one of the most valuable pillar of the customer experience model.
Individualized interaction can attract more audience. Analysing specific customer circumstances
and adapting accordingly is key part of personalization. This personal experience can be created
through customer preferences, past interactions, collecting data etc. It makes the customer feel
more valued, important and in control. It creates comfortable and reliable experience.
Time and Effort are very important components of buying and selling these days.
Customers look for instant response and fulfilment due to lack of time. Removing bars that
delays buying process and minimize customer effort to achieve their objective by creating
frictionless processes is the key to increase loyalty. Time and effort may be used as competitive
advantage unless it does not compromise other pillars (Cruz and et.al., 2019).
Applying the Six Pillars of Customer Experience Model to Tesco.
Integrity- Tesco may maintained customer reliability on a consistent basis and has
created a strong foundation of integrity. It may always prioritized the trust building strategies and
management in order to maintain its social, moral and ethical image. Tesco may maintain its
worthiness and integrity by delivering its promises consistently in the market.
Expectations- Modern day customers demand quality products at affordable price. Tesco
may rise up to make strategies and provide better product/services according to the needs and
standard of the customers. It may fulfil customers expectation and maintain brand promise to
deliver the best customer experience possible and this can also be a competitive advantage for
Tesco.

Resolution- No matter what strategies are made, there can still be a failure. In situations
of downfall, it is important for Tesco to recover the lost customer and get them back in to save
their customer count. Tesco should follow the bad experiences with apology and corrections
through customer assistance facility and make the recovery experience effective enough to fix
the problem as fast as possible.
Empathy- The organization may understand the customer situation and establish a strong
relationship with them through empathy creating behaviours. It may understand the customers
feelings emotionally and create solutions by analysing that experience.
Personalization- The company may use this idea for individualized interaction in order
to attract more audience. Analysing specific customer circumstances and adapting accordingly is
the key part of personalization. Tesco may evaluate these personal experiences through
feedbacks, preferences, past interactions and collecting data. This can make customer feel more
in control, valued and important. Displaying product/service accordingly may create comfortable
and reliable environment for Tesco (Purcărea, 2018).
Time and effort- Tesco may remove obstacles that delay the buying process and
minimize customer effort in achieving their goal by creating a frictionless process. Due to time
shortage in the lives of modern day customers, it may use this element as a competitive
advantage by improving their services and maintaining cost and profits.
Implications of digital disruption to the delivery of customer experience for Tesco.
Digital disruption is the evolution that occurs when new and advanced digital
technologies and business models enter the market and challenge the value proposition of
existing goods and services and the technology that is being used in the business process. Digital
disruption occur when present technology is no longer effective in rising competition. It is a shift
from old standards to new and advanced standards and being up to date with the present
competition levels (Natorina, 2018). Customers today demand more variety, innovation and
choices. Tesco may use this digital disruption in its favour by analysing consumer behaviour
patterns and plan their strategies to increase sales and profits. Management of this bulk of data is
easy. This digital disruption not only benefits organizations but also customers as well.
Customers today are more aware, can compare and go through the reviews and options
frequently to chose the best option.

In case of customer experience, Tesco may apply or implement the concept of digital
distribution in term of utilizing technologies such as management tools, software services and
data analysing technology.
Digital disruption may be a great advantage for Tesco in the past few years. It is the
biggest spender on digital advertising and promotions among all the retailers of UK. A constant
rise in revenues is seen over the past few years especially after Tesco climbed on the e-
commerce platform. It also influences the workflow due to advanced management tools,
software services and data analysing technology (Evanschitzky and et.al., 2020). These features
make the customer experience more satisfying and convenient. Digital disruptions not only
improved marketing and information but also influenced the production process and costs that
indirectly benefits the customers.
The best digital disruption that benefited the Tesco industries to improve their customer
experience is the e- commerce platform. It can reach maximum level of audience and use the
data and information to analyse and interact to the customers to create positive experience with
them.
Setting out the strategic recommendations on how to improve the customer experience for
customers of Tesco on the basis of customer experience model and digital disruption.
 Tesco can maintain reliability with the customers to establish strong foundation of
integrity. It can prioritize trust building strategies and consider social, moral and
ethical concepts in their marketing strategy to create a healthy brand image.
Effectively delivering promises consistently can be a measurement of their
worthiness and integrity.
 Recovering lost customers due to bad experience is very important in saving
brand image. Tesco can make effective strategies and policies to fix this problem.
It can be done through personal interactions and apologies and assurance of better
service in the future.
 Tesco can attempt to understand the customer feelings emotionally and with
empathy and provide solutions based on that experience. It is important in
establishing strong relationship with the customers.

 Tesco can meet the expectations of its customers based on their standards and
demands. It should keep its promise of quality products at affordable price for a
good customer experience.
 Analysing the personal experiences through preferences, interactions and data is
very important in order to make customer experience smooth and comfortable.
Tesco can use the personalized interaction to build customer importance,
customer value and dependability and attract more audience.
 Time saving techniques such as the use of e- commerce platform, internet reviews
and social media marketing can be used by Tesco to remove bars that delay
buying process.
 Tesco can use the technological advantages in their favour by using advanced
production techniques, low cost management and digital marketing to reach big
audience out of their initial boundaries.
CONCLUSION
From the above report, it can be concluded that customer experience is one of the most
important concern for any organization or industry. The industry maintains its value proposition
by recognition, trust, loyalty and the promises it delivers to the customers. It always focuses on
demonstrating its products and services in a way to create a positive brand image. It considers
pricing strategies, locations and promotion tactics in order to manifest itself and delivering
customer experience. Various customer demographics influence the business of the supermarket
all around the world but it walks hand in hand with all the instabilities. It follows the basic pillars
of the customer experience model and adopted the digital disruptions to improve their services
and maintain a smooth and progressive run in the market.

REFERENCES
Books and journals
Becker, L. and Jaakkola, E., 2020. Customer experience: fundamental premises and implications
for research. Journal of the Academy of Marketing Science. 48(4). pp.630-648.
Chaffey, D., 2020. Online Value Proposition (OVP). Retrieved April. 13. p.2021.
Cruz, E. and et.al., 2019. An augmented reality application for improving shopping experience in
large retail stores. Virtual Reality. 23(3). pp.281-291.
Evanschitzky, H. and et.al., 2020. Digital disruption in retailing and beyond. Journal of Service
Management Research.4(4).
Hoyer, W.D. And et.al., 2020. Transforming the customer experience through new
technologies. Journal of Interactive Marketing. 51. pp.57-71.
Keiningham, T. and et.al., 2020. Customer experience driven business model innovation. Journal
of Business Research. 116. pp.431-440.
Leroi-Werelds and et.al., 2021. Value proposition dynamics in response to external event
triggers. Journal of Business Research, 136. pp.274-283.
Micu, A.E. and et.al., 2019. Online customer experience in e-retailing: implications for web
entrepreneurship. International Entrepreneurship and Management Journal. 15(2).
pp.651-675.
Natorina, A., 2018. Retail in the digital transformation period: nature and targeting. Economics
and 2018 Finance. p.4.
Purcărea, T., 2018. The future of retail impacted by the smart Phygital era. Erişim Tarihi. 11.
p.2021.
Yu, J., Kim, H.S. and Kim, W.G., 2021. Understanding Customers. Culinary Science &
Hospitality Research, 27(9). pp.1-10.

11