Tesco: Sales and Marketing Analysis and Recommendations

This report provides a detailed analysis of Tesco's sales and marketing strategies. It begins with an introduction outlining Tesco's position as a leading multinational retail chain and the significance of technology and customer data in enhancing customer relationships and understanding customer experiences. The main body of the report delves into the role of data in improving relationship marketing, managing customer expectations, and achieving service excellence. It then presents an STP (Segmentation, Targeting, and Positioning) analysis of Tesco, examining its geographic, demographic, psychographic, and behavioral segmentation, along with its targeting strategies and positioning techniques. The report also discusses the importance of preparing for new customer segments. The report concludes with recommendations for improving Tesco's marketing strategy, including suggestions for product and service adjustments. The analysis highlights the importance of data-driven decision-making, customer-centric approaches, and the effective use of digital marketing to maintain and enhance Tesco's competitive edge in the retail market.

Sales
&
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
a. Role of data improving relationship marketing, for managing customer’s expectation and
service excellence........................................................................................................................3
b. STP Analysis of Tesco.............................................................................................................5
c. New customer segment............................................................................................................8
Marketing Mix...........................................................................................................................10
d. Recommendation...................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
The report is on sales and marketing analysis and techniques which play an important role in
decision-making and growth of the organisation. The study is based on Tesco which is a British
multinational retail chain spread over around 13 nations. The retail chain deals in grocery and
merchandise involving personal care, beauty care products. Apart from it, the company also has
its product as clothing chain. The role of technology like internet and social media have been
highlighted which is used to improve personal touch with the customers. The significance of the
customer data has been emphasised as to how it lets the company know the customer experience
of their products. STP Analysis of the company gives information about its segmenting
techniques, target customers and positioning techniques. It also discusses the beforehand
preparation needed to enter in a new customer segment and the measures to be taken to promote
the company to that segment. The changes in strategy regarding product and service have also
been discussed with recommendations given on improving marketing strategy of the company.
MAIN BODY
a. Role of data improving relationship marketing, for managing customer’s expectation and
service excellence.
In today's world full of technology and online streams, technology has played a very
crucial role in the life of people. While most of the population are on internet, company using
this as advantage for marketing their brand and their product which help them to achieve the
target sale in financial year. Tesco, leading company of trading in multinational groceries and
merchandise retailer is the third largest retail store in the world. They use the latest technology in
their big stores for easy convince of both consumer and for company. Technology help
companies to transform from traditional marketing to modern marketing which was more
effective and reach wider market with low cost of marketing shows the quick results. However,
technology is also used to build relationship between the consumer and the company that help
company to build trust and loyal customers for the long run (Peeroo, 2019). Tesco uses online
internet services for the customer benefits that help them to use the online services for
purchasing and selling of goods and service. Consumer can purchase through their website or
app from mobile and laptop which is very convenient for the consumer to use and save time and
cost of consumer through ordering from home, office or anywhere where the consumer wants.

Digital transforming is adopting digital technology to all department of business which
can increase convenience to costumer. While using the social media now days help company to
connect and market their product too globally. As many of the population is using the internet
and social media apps like Facebook, Instagram, link din. Company are using these apps to
promote their product and reach new customer every day. This not only promote the product but
also build the relation between the customer and company for long run. Company interact
between the customer and their questions arise for the product which are gradually solved by
company and create the loyal customer for the company.
As these online platforms aware almost free to use and companies like Tesco are using
these apps to promote their product. Digital marketing is one of growing industry in future as
technology updated and all activities are done through online process only. As this is convenient
to use for customer which can ordered from home and office (Ramanathan, Subramanian, and
Parrott, 2017). Online marketing is the modern marketing which are adopted by every company
because it is very less in cost compare to traditional marketing and online reach is unlimited.
This is also used for customer service where quick respond to customer quires and connect
quickly with social media. Social media help company to build brand awareness which are
offering by the company bring the potential customers through online and engage the customer
with long term relationship.

In Tesco, this is one of the major task that is been carried out that is to consolidate the
data accumulated from several channels such as call, mails etc. This good practice of
consolidating the data from diverse communication channels helps Tesco in understanding the
customer's preferences (Robson, and Pitt, 2018). Missing such essential factors can make the
company losing the competition from its rivals, this is one of the significant element that would
enhance Tesco's customer experience. Basically the customer's service platforms is incorporated
across several channels and enables Tesco to see the complete picture of their customers need so
that it can implement the best.
These days the way company is tackling the problems of customers have the great impact
on its position and growth this is major reason behind the increased focus on the customer needs
and evolution of customer service. Tesco's customers have some expectations from it, they
expect the ease in customer service do not want any hurdles in conversation such transfer of calls
from different executives for solving their issues. This hurdles in the executive and customers
expectations builds frustration and sometimes customers lose their interest in the company

(Rosnizam and et.al., 2020). To cater such issues Tesco has incorporated such technology and
software through which the basic and general customer issues and problems are solved with the
technical facility without involving the customer service executive and for the major problems
the helplines and simple feature to contact the executive is mentioned through which customer
can directly connect and the executives are well-trained by company. Such advance technologies
in Tesco are adopted to provide the excellent customer service experience.
Tesco researcher always carries out analysis to find the gap between their service and
expectations in order to work on providing greater customer satisfaction and always enhance it.
This collection of data helps in reducing the gap and forces Tesco to see the reality of ongoing
situation. Through the help of data, Tesco can easily compete from other from its rivals (Tse, and
et.al., 2018).
Tesco to compete in recent times has its active presence on social media platforms such
as Facebook, Instagram etc. Through this platforms company accumulate the data and works on
building the trust and loyalty among its customers by doing conversations. This quick support
from Tesco such platforms also develops the faith and gives benefit of company as increased
sales.
b. STP Analysis of Tesco
Segmentation
A company needs to chalk out its customer segment in a way that it identifies with who are the
customers of the company by dividing into geographic, demographic, psychographic and
behavioural bases. It helps to identify the needs, tastes, habits of the company. Speaking of
Tesco, the geographic region has been spread in most parts of UK along with around 13 other
nations. The density where the population is based is both rural and urban. The demographics
include age categories of the group 20-60 years (Nabila and Hasnul, 2020). The income status of
customers is both low and middle income category who have an average household income of
£47,000. The occupations of the customers range from students to employees to professionals.
Education of the group is from high school to graduate degrees. The social status is mainly the
working class and skilled working class. Family size ranges from single, nuclear to extended
families. Speaking of psychographic factor the lifestyle is mainly a traditional one but willing to
experiment with new products. The personality traits are free minded and determination. The

behavioural traits generally speaking are cost advantageous with seeking better quality and a
positive attitude. The segmentation also informs about customer experience requirements and
their changing tastes and expectations.
Targeting
This means when a specific customer segment has to be targeted which can generate revenues
for the company by focusing on its needs and expectations. This is usually done by doing
specific advertisements focused on that group and doing product innovation so as to attract the
customers. Also special offers and discounts are given on the products seasonal or otherwise to
increase sales.
Speaking of Tesco, the target segment is the middle class people having an average
household income of £ 47,000 and who are cost conscious along with looking for quality. The
pricing of Tesco products is done in a way that it is low priced along with fair quality. The
company's products including grocery, household goods, beauty care products and personal care
products are priced in such a way that they are reasonable for middle class income group
(Millington and Ntounis, 2017).
Targeting can be done in ways through advertising aimed at general public signifying their
interest choice. It is usually done through placing big banners and hoardings where public visit
the most. The big banners catch the attention of public when passing through highways and can
lead them to make up mind to buy the product if it appeals to them. New launches always attract
the target segment when it is a new product. People will have a tendency to look for the same in
their nearby store or on online website of the company. The company in this case also has to
remain active online as the target customers would like to search over the product online (Nabila
and Hasnul, 2020). The digital marketing techniques used can make the online traffic go less
and take the targeted segment directly to the product they are searching for. This can prompt
online purchase and thus the company has to accordingly make its delivery service intact to
receive and deliver the orders. There are also other ways of targeting the audience through
advertisements which involve common people to which the regular customer can relate to. These
advertisements depict the usual life of the customer and how can the product influence changes
in customer’s life. Discounts and coupons are also done as a part of target marketing which are
usually given occasionally at season times to attract customers.

Speaking of other segment of Tesco's targeting, there is also a segment which is looking
for high quality and does not mind paying more for the product. In these cases, Tesco charges a
premium on these products and it has got a following of its own. Tesco being a brand name in
retail is thus also seen by high income group for quality. These customers having average
household income of more than £ 70,000 are generally given membership cards in which on
making purchase to a certain amount they get some privilege benefits like concession on movie
tickets, concession at petrol pumps, concession at restaurants etc. This creates a customer
relationship with the company and in this way they are reminded of the company whenever they
use these cards at the places mentioned.
Positioning
This term refers to the activity of creating unique features in the product to make the product
stand out in competition and position itself in the minds of its customers of an image people look
up to. It uses a blend of marketing mix to promote the product also (Millington and Ntounis,
2017).

Speaking of Tesco, it has positioned itself as a low price with quality brand for its
customers. People over the years have used the products with a faith in the products Tesco has
met up to. Secondly, Tesco has always made an environmental approach towards sustainability
by participating in events which are of environmental concern. It has also taken sponsorships of
environment related programmes which has given the company an image of environmental
sustainability. Customers are encouraged by involvement of corporate in such activities as the
company takes up CSR measures and does its duty towards other segments like donations to
charity and social causes. Company has also taken responsibility to reduce its carbon emissions
by 20% till 2025 and thus has support of government too. This also helps corporate abiding by
government regulations to get government support in needed times. The next factor which
positions Tesco speaking of food products, it is that customers have become health-centric and
prefer organic foods. Tesco catching this wave spread among customers has started keeping
organic foods in a separate segment for health conscious people. The packaging also gives a
description of the farms from where the products have their origin and the route which is
followed to reach the stores through suppliers. This makes the customers think that the company
is transparent in providing information about the authenticity of products and forms a faith in
them (De Villiers, Tipgomut and Franklin, 2020).
Speaking of advertisement regarding positioning, the products with their prices shown in
pamphlets along with a segment of eco- friendly products fulfils the need. People reading
newspapers can come to a know how of these products and accordingly discuss when going for
shopping which is now done in bulk and once approach. The varieties of products offered at low
prices seem reasonable to the customers too. The news of company doing its CSR activities also
get reflected in daily newspapers.
c. New customer segment
Company doing well in one of the segments may look for untapped potential in another segment.
It has to first identify whether the size of this untapped market is large enough to cater to and
whether new investments done can generate decent revenue from these customers. It will require
a different marketing scheme altogether to appeal to this segment. The process of developing
marketing strategies will also be different. This requires firstly to know the needs and
requirements of the new segment and do a study of the prevalent tastes, habits and income of the

age group. The company may also require to do new product launch regarding the appeasement
of its customers (De Villiers, Tipgomut and Franklin, 2020).
Speaking of Tesco, the new customer segment can be youth of the country. The youth
comprising of the age group 18-34 have an optimistic look at life and want to live life according
to the modern trends. The youth nowadays has also become health conscious and wants to
include healthy products in its lifestyle. They are also inclined towards adventure and sports
activities like river rafting, mountaineering etc. and want them to be included in their lifestyle.
Some of them are movie buffs who are influenced by sitcoms and admire the celebrities. The
youth in their mid 20s are job concerned people passionate about their jobs and are influenced by
corporate culture. Also some executives are in awe of fast-paced cars. The income range is not
too high as they are at the onset of their careers but would surely like to invest money where they
are getting quality.
From points mentioned above, the company gets to know the needs and likings of the
customer segment. They can now focus on doing product research and advertising. Product
research will involve catering into a newer segment of products which appeals to the youth.
Speaking of clothing line, it can be sports T-shirts, jerseys, rugged jeans and stylized jackets
which may appeal to the youth. Regarding people working in corporate, they will prefer light
coloured shirts and comfortable trousers which go well with executives. Presentations may

require coats and suits which company can delve into (Endress, Friedrich-Baasner and Heim,
2019).
Speaking of food products, youth has a segment which likes to have diet conscious foods
high in protein. Company can go for these products which are organic and healthy in nature.
Protein shakes can be added to the store as a health supplement. Personal care products has
generally been an arena for women. But as of now, young males are also equally taking interest
in personal grooming. There has been an increase in male personal care products like after shave,
face wash, beard oils etc. which Tesco can enter in. This will increase the male youth foot fall in
the stores and also will motivate them for other products they may require. Youth generally
appreciate branded products also in this segment as the rates are not too high and can suit their
pocket.
Coming to the advertisement strategy, as the target segment is youth from 18-34, the ads
also should appeal to their sentiments. As generally, youth are more hooked towards TVs and
gadgets. They are the online surfers of today. The advertisements can be musical, a bit fast-paced
and celebrities treated as youth icons can be roped in to do these ads. These ads can also have an
adventurous sports look in them. Company can also promote its advertisements online with a
catchy slogan and offers for a time period specified. Digital marketing techniques can take the
segment straight to the products they are searching for. Various offers specially for the youth can
be given to attract youth attention (Endress, Friedrich-Baasner and Heim, 2019).
Speaking of the environment in which the business operates, can be expanded by
involving company in new activities. The activities can be taking up sponsorship of sports events
like river rafting, yachting and other water sports. This will increase company's awareness in the
minds of youth who are more of a sport freak at this age. Company can launch ads of
concessions on passes for youths. These events generally have dress code with the game logo on
T-shirts. Company can take up orders of these T-shirts and sell on discounts to the youth
segment.
Lastly, there is also a large segment of youth who appreciate the CSR initiatives of an
organisation. Tesco can increase participation in environmental concerns and own up
sponsorships of events like tree planting, cleaning of water resources, giving donations to charity
etc. This will attach youth more towards the company.

Marketing Mix
Product
Tesco products should be sold through online platforms on other segments which are not dealing
by Tesco in current market. It satisfies customers that purchase more varieties of products at a
same place. It also leads to increase in market share and compete in competitor market. New
product segments should be introduced by company to enter in new market (Robson, K. and Pitt,
L., 2018).
Price
Tesco tries to maintain low price strategy as much as possible for the company without reducing
the quality of goods and services. Tesco majorly focuses on their customers and their satisfaction
is a primary thing for the company. This particular strategy helps the organisation to serve
customers expectations over many years and become the leading super market chain in UK.
Place
Tesco uses two main channels of distribution for products and services-online and offline. Its
offline forum has stores of different kinds- Tesco Express, Tesco Extra, Tesco Metro, Tesco
Compact, Tesco Homeplus and Tesco Superstore. Tesco also makes smaller stores for people
who do not feel comfortable in big showrooms (Peeroo, S., 2019).