Business Consultants Ltd: Tesco Marketing Tactics Report and Analysis

This report, prepared as a marketing consultant for Business Consultants Ltd., offers a comprehensive analysis of Tesco's marketing tactics. It begins with a background of Tesco, discussing its origins and growth as a multinational retailer. The report then explores the theory of marketing planning gaps and Tesco's key marketing objectives. A detailed examination of Tesco's marketing mix, encompassing product, price, place, and promotion, is provided. The report delves into Tesco's marketing tactics over the last five years, including its responses to crises and the evolution of its advertising campaigns. An evaluation of the success of these tactics, including the Clubcard service and humor-based advertising, is presented. Finally, the report offers recommendations for future marketing tactics, including tele-shopping, cold calling, show sponsoring, and print advertising innovations, providing a forward-looking perspective on Tesco's marketing strategy.

RUNNING HEAD: Principles and Practice of Marketing
Principles and Practice of Marketing

Principles and Practice of Marketing 1
Contents
Background of Tesco.......................................................................................................................2
Theory of Marketing Planning Gap.................................................................................................2
Marketing Mix of Tesco..................................................................................................................3
Marketing Tactics of Tesco over the last 5 years............................................................................5
Evaluation of success of the Marketing Tactics..............................................................................7
Recommendations for Future Marketing Tactics............................................................................8
Digital Marketing by Tesco.............................................................................................................9
Analysis of website of the company..............................................................................................10
Application of 5Ss in Tesco’s digital marketing plan...................................................................11
Range of additional Digital Marketing Techniques.......................................................................13
References......................................................................................................................................14

Principles and Practice of Marketing 2
As the Marketing Consultant for Business Consultants Ltd. I would like to through some light on
the background of the marketing tactics adopted by your organization Tesco along with some
suggestions for more progressive results.
Background of Tesco
Tesco PLC is a multinational retailer for groceries and general merchandise having its
headquarters situated in United Kingdom. It was founded by Jack Cohen as a group of market
stalls in the year 1919. Tesco store was first opened in 1929 and later on expanded rapidly all
over the word with around 6,553 stores in the year 2017 (Tesco, 2017). It is a company listed on
the London Stock Exchange engaged in the retailing of books, apparels, furniture, toys,
electronic products, petrol, internet facilities, financial facilities, telecommunication and
software. It has now become one of the largest retailers in the world in terms of profits. The basic
purpose of Tesco is to provide its Britain’s customers a little better experience every time with a
view to make their lives easier by providing them great products at great prices.
Theory of Marketing Planning Gap
Marketing planning can be simply defined as formulation of a strategy involving the advertising
and marketing efforts along with marketing objectives regarding upcoming year. The marketing
planning gap occurs when the actual results are not equivalent to the desired results (Dibb and
Simkin, 2008).

Principles and Practice of Marketing 3
For the purpose of overcoming this gap, there are several ways like intensive growth (further
possible development opportunities are recognized within the prevailing businesses, Integrative
growth (acquisition or development of businesses having connection with the current businesses)
and diversification growth (addition of businesses that are completely unrelated with the current
businesses) (Kowalik, 2011).
The key marketing objectives of Tesco include achieving a foremost position in its respective
field i.e. retail industry in each and every market it functions in. Secondly, Tesco wants to be
recognized by everyone as a brand with highest quality and lowest prices. Another purpose of
marketing by Tesco is the promotion of their flexibility as a multi- channel retailer along with the
aim of keeping their Britain customer’s satisfaction as the prime focus. Somewhere and
somehow some deviation occurred from the set objectives but Tesco took steps to get back to its
desired position.
Marketing Mix of Tesco
Marketing mix consists of factors that have ability the influence the users of the product to
purchase it and is under the control of an organization (Richter, 2012). This strategy is popular
among new ventures, small, medium and large scale business firms (Lamb, Hair and McDaniel,
2011). There are 4 factors involved in the Marketing mix also known as 4Ps of marketing-
product, price, place and promotion of a product (Pearson, 2013).
Product- a large range of products is provided by Tesco with a view to satisfy each and every
probable requirement of its buyers. Its product range includes food, electronics, clothing, etc.
Within every category, a variety of choice is provided in terms of brand, type, local produce,
intercontinental cuisines in food and various other choices such that the ultimate satisfaction of
the consumers can be achieved.
Price- Tesco aims to provide highest quality of products at the lowest possible prices. It is the
Tesco’s strategy of keeping the low prices which has made it popular among the consumers and
helped it in attaining the leading position in the market leaving all old brands behind. The
economies of scale enjoyed by the organization are passed on to the customers in the form of
cost advantages which keeps the customers satisfied. Club card system is also used by the

Principles and Practice of Marketing 4
organization which allows collecting points on purchases which can later be converted into
money.
Place- The headquarters of Tesco is situated in England, United Kingdom and its stores are
spread all over the world. The products and services are offered through two channels of
distribution i.e. online and offline. Moreover, its offline units are separated by six different kinds
of stores- Tesco Express, Tesco Metro, Tesco Compact, Tesco Extra, Tesco Homeplus and
Tesco Superstore. There big stores for people who are comfortable with it and at the same time
there are some smaller stores which provides easier accessibility to the consumers. The online
forum of the organization is available on the website - www.tesco.com.
Promotion- The complete focus of the advertisements by Tesco is on it low prices which are
even its biggest advantage. The organization frequently provides offers like ‘half price’, ‘buy one
get one free’, etc. to attract its customers. Tesco uses a lot of strategies to attract their customers
for purchasing their products. Such strategies include- email messages, text messages, interactive
websites, clubcards for loyalty customers, TV commercials, etc.

Principles and Practice of Marketing 5
Marketing Tactics of Tesco over the last 5 years
In the year 2013 and 2014, wrong investment decisions and the horse meat scandal led to heavy
quarterly losses for Tesco which ultimately resulted in the loss of consumer confidence in the
brand and plagued its reputation. Such loss of trust began to be reflected in the sales of the
organization. The company adopted effective communication strategy involving an email
response from their chief executive officer. Moreover, a special website was also established
only for the purpose of updating their customers with fresh information on how Tesco was
handling the problem associated with horse meat scandal (Budgol and Jedynak, 2014). After this,
the company had to adopt new form of marketing in its Christmas advertisement. The
advertisement used the actors from its earlier commercial with a new story and humor as its base
(Smart Insights, 2017).
After suffering from crises in 2014, Tesco introduced a brand guarantee scheme in the year 2015.
Under this scheme the customers were promised to get a refund if the branded basket of ten or
more products were more costly than that sold by their competitors. The bills represented the
difference between the amount actually paid by the customers and the amount they would have
paid at their competitor’s store. For this purpose, Tesco appointed an independent agency so that
the prices at the rival’s store can be checked on daily basis.
The marketing strategy adopted by Tesco involves a deeper analysis of the market. This helps to
determine the latest trend, fashion, customer requirements, etc. It undertakes a market research
regarding various aspects involved before making a decision about a marketing strategy. The
strategies adopted for the promotion of their products involved marketing campaigns, advertising
on TV and radio or in newspaper and magazines, press releases, billboard campaigns and internet
advertisement.

Principles and Practice of Marketing 6
In the year 2016, Tesco adopted the strapline “Every Little Helps” to regain the trust of their
clients and stakeholders in their brand. This message was conveyed to their customers with the
use of sales promotion, print and media advertising, public relations, etc. Various methods of
sales promotion techniques was introduced such as clubcard, free gifts, point of sale materials
and many more.
Moreover, they stated building up warmth and emotional connections with their customers by
maintaining an active presence on Youtube and Facebook. Seasonal promotions and
advertisements are regularly updated on their Facebook timeline. It often receives feedback and
questions using their Facebook page where customer officers from Tesco provide quick replies
and clarifications.
Currently, Tesco even changed the method used by them in marketing and started focusing on
the problems faced by their customers. They identified that people are not responding to their
offers like ‘buy one get one free’ instead they want real people and stories in marketing.
(Purpose Media, 2017) Tesco has made a big difference in the way it makes a discussion about
food in its advertisements. Instead of endorsing individual items or products, it has launched a
major food campaign where it presents food love stories representing the important role food
plays in their lives. This advertisement ran on television, print and outdoor media and also on
radio. This campaign was meant to inspire the customers to prepare delicious meals on every
event.

Principles and Practice of Marketing 7
Evaluation of success of the Marketing Tactics
The Clubcard service used by Tesco helps them to study and analyze the market trends along
with the demand patterns of their consumers. It offers various benefits to the cardholder
including the gathering of points which can be later on used as cash vouchers. This helped in
cultivating brand loyalty the result of which made Tesco the largest food retailer in UK leaving
behind its closest rival, Sainsbury’s. It is often said that the success of Tesco is synonymous with
the clubcard scheme.
Adoption of humor as the base of Christmas commercial was a big risk for the organization since
humor is something that is not appreciated by everyone. This is the reason behind its avoidance
by most of the companies in their profitable times. But it became a huge success for Tesco in its
difficult time.
Furthermore, it created venture brands which sold the products absent from the market. These
products were considered as the premium products and attained a huge success against other
premium brands. Also, brand guarantee created brand loyalty in minds of the customers and also
provided them satisfaction as they received a strong signal that Tesco is listening to them and is
always there to help (Mason and Evans, 2015). Its social media presence plays a very important

Principles and Practice of Marketing 8
role in updating the customers regarding the daily offers. Moreover, it was only the marketing
strategies adopted by Tesco that helped it from recovering from the downfall.
Recommendations for Future Marketing Tactics
Tesco is involved in almost each and every way of marketing of the products. Furthermore, it can
use the following ways in future with some innovation since it has already applied most of the
marketing tactics.
Tele- shopping- Tesco can launch a channel specially for the purpose of promoting its products.
There can be special offers and discounts for the customers who purchase the products from such
channel within the specified time limit.
Cold calling- Cold calling can be used for the purpose of familiarizing the customer with the
introduction of new range of products within the stores. Moreover, it can be used for ensuring
that the last visit to the store provided a great experience to the customer.
Show sponsoring on radio- Tesco can sponsor a show on radio where promotions of various
offers and products can be made in an attractive way. Also, it can produce some show to be
telecasted on radio where the experiences of the visitors can be shared and offers can be
promoted.
Association and Trade Shows- Trade shows can be planned for the purpose of interacting with
the customers and other industry leaders. It can help Tesco in getting customer reviews and on
the other hand, it will help the prospective buyers of the organization to gain trust in the services
provided by them.
Print Advertising- Print advertisements can be used with some innovation since it is already
being used by the organization. Tesco can include a URL or QR code within the advertisement.
The visitors of such special URL will receive special offers, discounts, etc. This will help the
organization in expanding business in both the channels i.e. - online and offline (Harr, 2017).
TV Interviews- Special TV interviews can be conducted by experts of the organization
explaining the services offered by the organization and how the satisfaction of their customers is
ensured every time with large amount of planning.

Principles and Practice of Marketing 9
Products as Contest Prizes- Tesco can organize charity events and donate the products as the
prizes to the winners. In this way, Tesco will be able to create a personal connection with the
public and also help them in gaining referrals (Schock, 2017).
Digital Marketing by Tesco
Digital marketing supports an organization in the promotion of its products and services with the
help of electronic media (Dodson, 2016). It involves online marketing through banner ads,
websites, interactive emails, etc. (Kingsnorth, 2016) Nowadays, the busy schedule of people
restrict them to go out and prefer offline shopping as it is very much time consuming. The
limitation of time led them to switch over to online shopping of products and services (Parkin,
2009). Tesco has identified this situation and used this concept (Ryan, 2016). With the help of
digital marketing by Tesco, people residing in different parts of the world can gain access to the
information provided regarding the products and services offered by them.
Search Engine Optimization-
Search Engine Optimization or SEO is a process which involves optimization of website of the
company in a way such that it is ranked on the first page of search results. This process plays a
very important role in the success of online business of any company. Tesco.com has also joined
hands with Bigmouth media for its SEO campaign for its non-food range to achieve its objective
of becoming the most profitable online grocer in the world.
E-mail Marketing-
E-marketing is a strategy in which information related to the products and services is sent to the
existing and potential customers. Tesco involved email marketing as the key element in its online
marketing strategy and now it gains majority of its online revenue through this.
Online Advertising-
Online advertisement is one of the most operative process of advertising placing the
advertisements on the website of the company (Chaffey, 2008). Tesco promotes its products
through its online advertising campaign, for example- promotion of chocolates and flowers for
valentine’s day, wine and flowers in Christmas time.

Principles and Practice of Marketing 10
Social Networking-
Facebook and Twitter played the most important role in maintaining a closer relationship with
the present and potential customers for Tesco. Their aim is to promote social media activities
with a view to create awareness among customers about the target items (Evans, 2010). Through
this, Tesco gained the ability to instantly update their customers about various offers, discounts,
introduction of new products, etc. This helped them in improving personal relationships with its
customers and creating a sense of loyalty.
It is also uses strategies like content marketing, press releases, affiliate marketing programs and
also maintains a blog for regularly updating every information about the organization.
Analysis of website of the company
The website of Tesco provides the access to diversified option to the user. The customer can
easily shop different items like groceries, furniture, toys, products related to sports, garden,
clothing and accessories, books, beauty products, etc. In each of these categories, various sub-
categories are provided with a view to provide greater options to the customers. For the purpose
of purchasing any item, the user need to create an account with Tesco by providing the details
required for the purpose of home delivery of such an item like name, address, etc.

Principles and Practice of Marketing 11
Apart from the provision of products, Tesco also has a separate tab ‘Contact Us’ where the users
of the website can easily access the various helpline numbers in case of any query or default. It
also provides help and FAQ’s to provide instant support to the customers, store locator, terms
and conditions, privacy policy and career options on its website.
Application of 5Ss in Tesco’s digital marketing plan
5Ss of digital marketing was developed by Dave Cheffy with a view to make sure that all the
points associated with digital marketing are covered. These are complete set of principles which
must be taken into consideration before confirming a digital marketing strategy. These 5Ss of
digital marketing are- sell, save, speak, serve, and sizzle.
Sell- Customers make use of internet to gather information related to a variety of products and
services such as prices, any other special offers, etc. Therefore, the companies face the
requirement to change their strategies and provide both online and offline experience to their
customers. Tesco has also adopted the same strategy with its website Tesco.com it provides a
large range of its products online to provide its customers a better experience which also saves
time.
Save- It means making the use of internet to attain increased efficiency and thereby reducing
costs (Chaffey and Chadwick, 2012). Tesco also estimated the saving of time and money if they