Strategic Marketing Planning: Tesco

Topics: Marketing, Customer relationship management, Loyalty program Pages: 12 (4334 words) Published: May 30, 2012


Tesco company has become increasingly aggressive in the last few years as the company increased its market share steadily but it remained a constant distance behind Sainsbury's. This shows that Tesco is looking to build on its leadership by constantly working to ensure that it is maintained. However, one of Tesco's key weapons in the battle for retail supremacy has been its Clubcard loyalty scheme and the subsequent launch of the Clubcard Plus debit card. These have shown Tesco taking a clear initiative and then building rapidly on its advantage. One footnote to this is that loyalty cards should be seen as a longer term marketing tool since they enable retailers to learn more about their customers' shopping habits and respond accordingly with tailored offers. The key to the success of the loyalty scheme is not launching it but how it is used within the total marketing mix. Tesco followed with its Unbeatable Value range, potentially precipitating a price war. The impact of promotions will boost short term volume, rather than build brand empathy, with most pressure on those retailers that have always sold on price. A mix of retail positionings could lead to a confused offer and, possibly, a cynical consumer.

Furthermore, it will encourage consumers to become promiscuous, shopping at whichever store has the price promotion. This does not engender loyalty to the store. A sustainable competitive advantage is much more difficult to achieve but this is what the major players need to aim for, and that on a regular basis to create and maintain leadership. Growth through building new stores is no longer viable now that superstore saturation appears to have been reached. Growth must now come through attraction and retention of customers, increasing share of a customer's total expenditure moving into related, but relevant, products and services. However, there is a clear danger that price-cutting will be used for short-term share gain, even though its long-term effects would appear to be less positive. Tesco, announced fresh price cuts restarting a price war with its rivals and pre-emting the government's response to an inquiry into supermarket profits. It said the practice of selling items below cost was against the public interest because it damaged small grocers. It also criticised the policy of charging different prices for the same goods in different parts of the country according to the amount of local competition. Tesco said its new cuts would lower the price of a typical shopping basket by 11% for a pensioner, 9% for a young family and 12% for a student. They would not impinge on the company's profitability as they were targeted at everyday items rather than Tesco's profitable 'finest' range of premium goods.


Customer Relationship Management (CRM) is a business strategy that is facilitated and enabled by specialized technology. In conjunction with deploying new technology and initiating information engineering and knowledge management, no project of this scope should be launched if it does not address re-engineering processes across the service delivery model and the enablement and optimization of the people and the leadership that oversee it. (1991) Customer Relationship Management (CRM) is evolving from a evolving from a staff intensive business strategy based on specialized applications to a web based strategy for massive customization both in web site presentation, e-Mail communication and promotional banner and pop-up advertisements. It is an evolution that is enabled by web-technology that will allow the creation of micro-segments, precision targeting and full view of the customer across all the contact points across an enterprise. Many companies are interested in their customers purchase habits and preferences and are developing detailed databases to track purchase activities then, there are customer loyalty programs in...
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