A Report on Tesco's Promotional Mix Strategies and Implementation

This report provides a detailed analysis of Tesco's promotional mix strategies, examining the various tools and techniques employed by the supermarket chain to promote its products and services. It covers advertising, direct marketing, and public relations, highlighting specific examples of Tesco's campaigns and initiatives. The report also explores the application of marketing theories such as the AIDA model and above-and-below-the-line activities. By evaluating Tesco's promotional efforts, the report aims to provide insights into the effectiveness of different marketing approaches in the retail sector and their impact on the company's market share, profitability, and brand image. The document is available on Desklib, a platform offering a wealth of study resources for students.

Running Head: Principles and Practices of Marketing
0
Principles and Practices of Marketing
Report
Student Name
3/18/2019

Principles and Practices of Marketing
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Table of Contents
1.0 Introduction.....................................................................................................................................2
2.0 Task 1 - Promotional Mix.......................................................................................................................3
2.1 Advertising.........................................................................................................................................4
2.2 Direct Marketing................................................................................................................................7
2.3 Public Relation.................................................................................................................................11
3.0 Task 2 - Promotion strategies..............................................................................................................13
3.1 AIDA Model......................................................................................................................................13
3.2 Above and below the line activities.................................................................................................14
4.0 References...........................................................................................................................................16

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1.0 Introduction
TESCO is a supermarket chain of UK and is the world largest British retailer in term of sales and
market share. The company was founded by Jack Cohen in 1919 as a grocery shop later on it
expanded into other sectors. TESCO has 3,739 stores in UK in 2017 and 500,000 people are
employed worldwide in 7000 stores and its product portfolio includes food and beverages,
clothing, home appliances and financial services (TESCO, 2019). Most of the company profit is
generated through the sales in UK and some other from European and Asian countries. The
biggest competitors of TESCO on the basis of market share are Asda and Sainsbury. The current
scenario in this retail industry is that most of the customers are attracted towards discounted
outlets such as Lidl or Aldi which is affecting the sale of these big giants in high street
supermarkets (Vizard, 2018).
Tesco took a step to take over the food wholesaler Booker for £4bn, this major step was taken to
survive in the market and to respond the challenges the retail sector faced. Merger and
acquisitions become the way to compete in the market and to grow market share. The deal with
Booker gave an edge to company by accessing to wholesale market that is growing faster than
retail sector (Rovnick & Odell, 2018). The company focuses on consumer needs through its two
core values; no one tries harder for consumers and, treats people how we like to be treated. Tesco
follow different schemes to promote their brand in different countries firstly through spending in
advertisement that include banners, billboards, television and print media. The loyalty scheme
Club Card for customers is another way of promotion. Indeed they use direct marketing to
connect with people and to make an emotional touch with them (Turner, 2016). All these things
basically connected with the implication of practical theories of promotion that are AIDA model
and above and below the line activity.
The aim of this project is to evaluate the different promotion mix strategies of the Tesco and its
practical implication. In the first task, promotion mix would be explained briefly followed with
the strategies employed by Tesco. Further the evaluation of the theories of promotion and its
impact on the company.

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2.0 Task 1 - Promotional Mix
Promotional Mix is a mixture of different tool opted by the companies to promote their products
or helps in to create the demand of goods and services. Promotion is included in 4 P’s of
marketing mix; promotion means to reach the audiences and make them aware about the
products to initiate the purchase and the promotional mix is considered as integration of some
tools that help in reaching to the customer that are advertising, personal selling, public relation,
digital marketing and direct marketing (Blakeman, 2018).
Elements of Promotion Mix
Promotion mix is a strategy that is used to create brand awareness for selling of product and
services. This include several factors to keep in mind such as the goal of the company, target
market for understanding the customer behavior, designing the content that is to be delivered,
setting up of promotion budget and then choosing the best promotional tool to reach the
audience. To compete in the market promotion become an essential element every company
promote their product by using different ways for gaining larger market share. The concept of
promotion mix can be better understood with the example of TESCO a giant supermarket chain
in the UK. Tesco used different techniques for promoting their product which include billboard,
discount code, television ads, in-store announcements and social media marketing.
Promotion
Mix
Advertising
Direct
Marketing
Public
Relations
Sales
Promotion

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2.1 Advertising
Advertising is paid form of promoting the ideas, goods or services by a company or it is a
medium of communicating essential information to the user to initiate purchase of a product
(Kotler, et al., 2016).
There are various ways to promote a product via advertisement that are newspapers, billboards,
magazines, radio, television and social media. All these mediums can be used to convey the
message to the public or building a brand, good advertisement can build a strong brand for the
company and wrong promotion leads to product fail (Griffith, et al., 2015). TESCO main
strength in their huge investment in advertisement, they invest in different sources to advertise its
products that lead to a great promotion and boost up the sales of the company.
Tesco do in-store advertising that includes poster and sales in the stores to increase the footfall of
customers.
In Store advertising
Source: (Gwynn, 2018)
Coupon Offers by Tesco Source: (Gwynn, 2018)

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Out of store advertisement is done by Tesco using banners, billboards, television ads and
website.
Stations Source: (Hill, 2018) Billboard Source: (Reid, 2018)
Social Media Advertising: Facebook Source: (Facebook, 2019)

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Advertising is the tool that can give huge benefits to the company if used effectively. Tesco
brand image is the result of good advertising strategy and its high investment that can be well
understood with the help of SWOT analysis of TESCO.
Strengths Weaknesses
 Tesco mainly offers low cost product
and focused on customer needs
 Strong market position in the UK into
various sectors
 High customer base and customer
loyalty
 Best marketing strategy- club card,
offers, vouchers
 Majorly based on the market of UK and
most of the profit comes from this area
 High employee turnover rate in the
company
Opportunities Threats
 Diversify in different sectors and can
use the online platform more
effectively for boosting sales
 Expansion in Asian region will prove to
be the biggest advantage to the
company
 Low profit margin in near future
because of high competition
 Tough competition from discounted
outlets such as Lidl or Aldi
Tesco biggest strength is their brand value and market share that makes brand more valuable for
the customers and its expansion strategies are successful because of huge investment in the
advertisement for long run. The total expenditure on advertisement by the supermarkets was
£73.9 million or approximately 68.2% in the year 2017. Tesco was the second biggest advertiser
in retailer after McDonald’s and spends £89.5 million in advertising as compare to others in this
field they invested Lidl (£70.5m), Aldi (£48.8m), Asda (£59.5m) and Sainsbury (£44.4m)
(Ebiquity, 2018).
Tesco gained the market share because of its heavy investment in the advertisement, the pretax
profit of the company during the year 2017-2018 was £1.3bn or 800% increase in sales. The
impact of advertisement is greater in the retail segment mainly for supermarkets, due to huge
investment in this promotion tool Tesco gained an overwhelming profit that was more than
expected in compare to the previous year profit (Marketingweek, 2018).

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2.2 Direct Marketing
The main aim of direct marketing is to get the response or feedback from the customers for
further improvement or for changing the behavior of target customers regarding the brand.
Generally contacting the customers through various media to make direct response is called
direct marketing (Housden & Thomas, 2012).
Response of direct marketing can be easily understood with its implementation in Tesco, The
Company updated its marketing strategy and to solve the problems faced by their customers and
for taking direct feedback from them. They got to know that customers were not interested in
responding to the mass media campaign that include “buy one get one free” offers and after that
Tesco started to market its product by using real people and real stories (Latestdeals, 2019).
Tesco identified a new marketing technique that was “Tesco Food Love Stories” to connect with
the customers by involving them in responding to the campaign with the dishes they made for
any specific reason using Tesco products (Retailweek, 2019). Company started to connect with
the customers by bringing the campaign into the home by delivering a direct message to the
people that worked to boost its campaign.
Some of the direct marketing campaigns used by Tesco are Club Card for the loyal customers of
the product, online offers on tesco.com, weekly offer and join delivery saver option for
maintaining customer relationship (Felgate & Fearne, 2015).
Tesco Delivery Saver Source: (Tesco, 2019)

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Tesco Promotional Offers Source: (Tesco, 2019)
Tesco Weekly Offers Source: (Tesco, 2019)
Tesco Club Card
Source: (Deeney, 2016)

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Tesco Twitter Account Source: (Twitter, 2019)
Tesco’s segmenting, targeting and positioning (STP) model:
Segmentation: Tesco cover all segments and reached to them using flyer, television, brochure
and catalogue or through direct mailing. The market segment is big and profitable to serve which
was captured by their effective marketing techniques and mainly to reach whole market by
offering low price positioning in the market.
Targeting: Tesco is using mass marketing targeting strategy to capture the customers. This
strategy targets the large population or target the whole market with similar offers without
focusing on the particular area they appeal to common needs of the customers with their lower
price product. Hence, Tesco used to target the common needs of customer rather than focusing
on differentiate the customers.
Positioning: Tesco marketed itself as the giant or leading player in the retail market by focusing
on their customers and not only on pricing. Through their changing campaign they showed their
customers that how easily Tesco fits into their lives and solves the problems faced by them. This
help the brand to positioned itself as the low price product supermarket with qualitative goods.
Now customers have trust and confidence on Tesco that will last for the longer time (Smigielska
& Stefanska, 2017).
Tesco opted many marketing strategies to engage its customers but they finally opted for the
customer focus marketing that was implemented successfully by targeting the customer need
which helped the company to increase its market share, profitability and sales. Through focusing
on customers Tesco again repositioned itself as the most demanded supermarket by the people,
the company maintain relationship with customers by using their marketing tactics and believes

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that if a company understand its customers they can bring their business in line because without
the trust of customers and loyalty there is no business.

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2.3 Public Relation
In today’s competitive environment businesses need to have an image that makes them different
in the crowd so here public relation comes in the picture. A public is group who has interest in
the growth and activities of the company or a group which has greater impact on the company
potential to attain its objectives.
Public relation simply means maintain good relation with the people or publics who have interest
in the company that is done by obtaining positive publicity, maintaining corporate image and by
handling harmful rumors, stories and events related to the company. Public relation includes
various activities to promote the company image that is done with the help of media and public
(Kim, 2016).
The main reason for public relation is to develop the positive image of the company as this is
consider as the automatic marketing strategy that do not want any investment by the company. It
can be better understood by knowing the public relation building activities or programs run by
Tesco.
Tesco got advantage from their corporate social responsibility activities as seen below they
collected and then redistributed food to needy people on Christmas and that reflects Tesco’s
positive image to society.
Tesco CSR activity on Christmas
Source: Edie.net 2018