Marketing Communication Strategies of Tesco and Sainsbury's

Desklib provides solved assignments and past papers to help students succeed.

Marketing communication
1

Table of Contents
Introduction......................................................................................................................................3
Research findings on the marketing communication.......................................................................4
Discussion......................................................................................................................................11
Conclusion.....................................................................................................................................15
Bibliography..................................................................................................................................16
2

Introduction
Business communication may take different forms and marketing communication is one of the
most important functions of businesses. Marketing communication is important for moving
product ideas from the manufacturers to the users. It helps to build a strong relationship with
customers and other stakeholders of a business. A company can convey a unique and creative
message to their customers with the help of marketing communication strategies. This study aims
to provide guidance on the marketing communication forms, which will be beneficial for the
growth of the company. The analysis will be conducted on two supermarket chains named as
Tesco and Sainsbury.
Tesco is a British multinational general merchandise retailer, which is headquartered in Welwyn
Garden City. It is considered as third largest supermarket chain based on its gross revenues. The
organization has expanded business in more than seven countries (tesco.com. 2019).
John James founded Sainsbury in 1869. The company currently holds 16.9% share of market
share in UK. This supermarket chain is considered as the third largest supermarket chain in UK
(sainsburys.co.uk. 2019).
3

Research findings on the marketing communication
Introduction
Marketing communication process can be categorised into two parts such as online marketing
communication and offline marketing communication. This section will provide guidance on
forms of marketing communications and its benefits.
a. What proportion of their marketing communications budget is allocated to offline and
online marketing communications?
According to recent reports Sainsbury has estimated marketing budget £41 million pound for
marketing communication in 2018 (statista.com, 2019). They have spent £4.6 million pound for
advertising on TV and press media (statista.com, 2019). The organisation has conducted offline
marketing communication by promoting the tagline, which states that the organisation only deals
with high valued products. They have spent £10 million pound on store decorations and
hoardings. Sainsbury has used £26.4 million pound for conducting its online marketing
communications (statista.com, 2019). They have promoted their brand over internet and social
media sites, which was beneficial for driving customers. Sainsbury has also launched nectar
loyal card, which was advantageous for building a good bonding with the customers. Nectar
loyalty card is used for availing two points for every £1 spent in a Sainsbury store
(sainsburys.co.uk. 2019). In recent times, 19 million people are using this card so that it can be
stated that the online marketing communication was fruitful for customer engagement. Thus, it
has been observed that 35.60% of the total marketing has been allocated to the offline promotion
and 64.39% of the marketing budget has been invested to the online marketing promotion.
4

Figure 1: marketing budget graph chart Sainsbury
(Source: statista.com, 2019)
Tesco has the marketing budget of £54 million in 2018 among which they have spent £13 million
for TV, radio, sports and cinema advertisements (statista.com, 2019). This can be observed
clearly that they have sponsored several events for conducting offline marketing campaign. They
have also spent £12 million for decorating their stores and print posters. According to a recent
report, Tesco has invested 68.2% more money on the above the line advertisement procedure
than previous years (statista.com, 2019). The organisation has spent £29 million on below the
line marketing or online marketing communication. This organisation has provided customers
with some gift cards and bonuses while shopping online. Thus, it can be observed clearly that the
organisation has spent 53.70% on online marketing communication and 46.29% on offline
marketing communication.
5

Figure 2: marketing budget graph chart Tesco
(Source: statista.com, 2019)
b. Their use of marketing research to help them understand their customers
Sainsbury has used marketing research for finding out more information about customer
demands and perceptions. This market research has helped companies to understand what
products it should position for customers for obtaining better results. The organisation has set
their aims and objectives before carrying out market research. This has been observed that
customers of UK have become more health conscious day by day. Sainsbury has conducted
research on the obesity rate and food habit of customers (Dekimpe and Geyskens, 2019). After
evaluating outcomes of market research, they have been able to understand that they should
launch diet and low calorie products for the customers. The organisation has launched low fat
sausages and other products for attracting customers. Sainsbury has provided customers with the
facilities of dietician consultation and positioned these products online as super chef diet recipes.
In this way, they have used marketing communication for consumer engagement. The company
6

is acquiring the information of customer demands by conducting surveys. A customer service
team has been formed with some employees who are collecting responses from the customers
through telephone calls and preparing a report on it. This report is presented to the top
management of the organisation and the marketing department. In this way, the information is
collected.
Tesco has used market research for developing their product quality and services. Tesco has
prepared a questionnaire for the survey. Representatives of customer service have sent this
questionnaire to the customers through email and messages. The customer service employees
have also called employees for collecting responses (Brace, 2018). The organisation has been
able to change their packaging style product quality as per these responses. For example, the
company has used front label packaging style, as the customers think it is more user-friendly.
They have also used low fat products for developing product quality. Other competitive brand
such as Sainsbury has developed their product quality to low calorie products, which has been
highly accepted by the customers. Tesco has also conducted research on the consumer perception
on Sainsbury’s products and Sainsbury marketing process for obtaining better results. The
marketing team of this company has conducted research on products and marketing style of other
competitive brands and customer service team has collected customer responses. In this way, this
two department has worked together for understanding customer demands and positioning
products according to it.
c. The various forms that their advertising takes
Sainsbury has used various forms of marketing for promoting products. The organisation has
featured culinary superstars for promoting its grocery items. This was beneficial for attracting
customers. This organisation has recently sponsored British Paralympics association for
promotion. Most of the citizens of UK are sports addict so that sponsoring sports event was
intelligent for driving youngsters of the countries. Sainsbury has also developed creative
advertisements and conveyed social messages through video advertisements such as Christmas
advertise of this company. Sainsbury has also established itself as a major sponsor of British
Athletics (Legg and Dottori, 2017). It is also stated that Sainsbury is conducting promotional
campaign on facebook and twitter, which has increased sales significantly. According to the
marketing manager of Sainsbury, the company has been able to understand rising demands of
7

social media marketing and they are using these platforms for increasing customer engagements.
Nectar loyal card is another form of promoting the company. The organisation has encourages
customers to purchase from their brands Thus, it can be observed that the organisation has used
TV advertisement, sponsorships, endorsements, bonus cards, Video advertise, festival campaigns
and newspaper for promoting their brand.
According to the reports, Tesco has made decision on sponsoring England’s team in World cup
(Stobart, 2016). As discussed before, citizens of UK are sports lovers so that the organisation
will be able to attract customers by this process. This has been observed that the organisation is a
sponsor of Cancer research UK. In recent times, customers are more likely to buy products from
the company, which is demonstrating their interest on social issues. The company has performed
their corporate social responsibility by contributing to this project, which was also beneficial for
developing corporate image. Tesco has also used e-catalogues for promoting products and saving
extra expenditures. However, the brand has also invested money on radio and vehicle marketing.
Thus, it is observed that Tesco has used both the above and below the line platforms for
advertisements.
d. How the supermarkets use content online to engage with their customers
Sainsbury is using technology for customer engagement. They have developed customer service
infrastructure so that customer engagement process can be developed. According to the
marketing manager of Sainsbury, they provide online customers with high quality services and
products for improving experiences so that they can be able to develop the brand image of the
company. The mission statement of the company is to be the most trusted retailer and they have
promoted this statement online and offline for ensuring better customer engagement. The
organisation has created several video advertisements such as Sainsbury’s Christmas
advertisements and others for attracting customers. They promote advertisements and updates of
offers on social media for attracting customers. The company uploads product information
regularly in their official website and some diet plans are shared at their social media pages so
that customer engagement can be developed. The slogans of these brands have also played major
role in customer engagement. The slogans were beneficial for demonstrating that the company is
concerned about living standards of customers and it has positioned high quality healthy
products in market. In this way, it has earned customer satisfaction by providing high quality
8

products at a lower price rate. The board of marketing head of this company, Sarah Warby has
promoted the slogan of making shopping process easier.
Marketing management of Tesco has chosen celebrity endorsement for attracting youths of this
country. Tesco always focus on posting contents related to the low prices of products on social
media and official websites so that customers can be attracted easily. The organisation has also
promoted taglines such as every little help from customers will be helpful for supporting poor
people in Christmas. This company invests in several charitable trusts so that they can be able to
position itself as a socially responsible brand on online platforms. In recent times, Tesco has
become the first brand to run an advertisement on Twitter moments (Peeroo et al., 2016). They
have created video contents regarding the social issues of the society, which was helpful for
connecting with the customers. It has been observed that 83% of customers have spent money on
the responsible products for contributing towards a better cause (Gavana et al., 2018). Tesco has
developed bonding with such customers by addressing social issues in a proper manner.
e. The role that corporate communications plays in building brand loyalty for the
supermarkets
Corporate communication is a process, which is used for maintaining communication among all
the internal, external stakeholders and the company. This process is beneficial for developing the
ways in which internal and external stakeholders perceive the company and its products. This
process is effective for managing customer relationships and understanding customer demands.
Corporate communication plays a major role in demonstrating the ways by which the
stakeholders of a company can perceive brand image. Sainsbury has used emotional branding for
building brand loyalty. Corporate communication strategy has helped Sainsbury to respond to
the market trends effectively. The brand has developed strategies for improving employee
satisfaction, as it is stated that the employees are the first consumers of a company. Satisfied
employees have promoted this brand through the word of mouth. Sainsbury has communicated
their brand value to the consumers so that they can be able to achieve brand loyalty. As stated by
the Sainsbury’s head of brand communication, sponsorship of several sports event was beneficial
for consumer and employee engagement. This supermarket has also introduced active kids
challenge for developing the brand communication. Sainsbury has also provided stakeholders
9

with joint venture opportunities in Sainsbury bank. In this way, they have used corporate
communication processes for earning brand loyalty.
Tesco has set their goals in 1990 and after that, it has undergone through a process for clarifying
its mission, vision, values and strategies. The CEO of Tesco, Sir Terry Leahy has named their
corporate communication strategy as steering wheel (tesco.com, 2019). The brand has
communicated its value to the customers and influenced buying behaviour of customers. The
customer service department of this company has responded to customer queries and resolved it
effectively. This was beneficial for achieving customer satisfaction. In this way, satisfied
customers have turned into loyal customer bases of this company. Tesco is also related to many
charitable organisations so that brand loyalty has been achieved easily.
Conclusion
This section concludes that these two markets have developed proper planning and strategies for
conducting marketing communication. Both the company has invested to online and offline
marketing procedure. These organisations has also used different tactics for improving customer
engagement and achieving customer loyalty
10

Discussion
Sainsbury has used above the line and below the line marketing technologies for promoting their
brand. Sainsbury has followed communication theory of cultivation analysis. This theory refers
to the mediating factors of the communication process (Rosenberry and Vicker, 2017).
Mediating sources are responsible for the developing sense of reality among customers. These
mediums are effective and but there is a chance of rising conflicts due to excessive information
or communication. Sainsbury has researched on the customer demands and developed some of
low calorie products for the customers. They have provided customers with some diet plans from
specialists also. These steps were beneficial for developing communication with customers.
Customers have been able to know about the healthy food habits so that they have become loyal
customer of this company.
Tesco has not provided customers with such facilities. Tesco has not focused on the sports and
sponsorships. Tesco has also developed strategies for contributing towards social issues and
causes. The brand has developed some video contents for developing sense of reality among the
customers. This was another effective way for developing customer engagement. Thus, it has
been observed both the organisations has followed the cultivation analysis theory for obtaining
better results but the mediating factors are different for both the company.
Tesco has used cultural approach theory of communication. According to this theory, people
love to be engaged in a network. Therefore, this theory also states that different organisations
have different symbols for conveying particular meaning and the culture of these organisations
are represented by specific stories (Ting-Toomey and Dorjee, 2018). This has been observed that
Tesco has conducted several promotional campaigns for developing social awareness among
customers. The brand has also promoted specific tagline for demonstrating importance of culture
and events. They have promoted importance of Christmas through their stories. On the other
hand, Sainsbury has not taken initiative for promoting their stories or contributing to the social
causes. This can be clearly observed that the brand has failed to establish itself as a socially
responsible brand.
11

Figure 3: Marketing growth report of Sainsbury, Tesco and other competitive brand
(Source: statista.com, 2019)
Tesco has been able to follow the organisational information theory. This theory states that
some organisations make communication in an ambiguous way. Any organisation is considered
as successful if it becomes able to avoid ambiguity. It has been observed that Tesco has been
able to avoid ambiguity while processing information and communicating with its stakeholders.
Internal stakeholders refer to the employees and external stakeholders refer to the customers and
others. It has promoted products in a clear way. Tesco has used low pricing strategy and it has
created advertises about the low prices of the products. There was no hidden terms and
conditions on the products so that the customers have trusted this brand. There were
controversies of ambiguous offers from other competitive brands. On the other hand, Sainsbury
has used rational dialectics communication theory for connecting with its customer base. This
theory states that the organisation will prioritise customer relationship more than other things
(Baxter and Norwood, 2015). Sainsbury is using new technologies for developing customer
experiences. It is stated that Sainsbury is the first organisation in Europe, which had
implemented automatic check in services. The organisation has developed several measures for
12