In-Depth Marketing Strategy of Tesco – Case Study with SWOT Analysis

This is how Tesco manages to maintain its position as a market leader with affordable products while ensuring accessibility and quality. This is also visible in their marketing strategy, let’s take a deeper look at that.

Marketing Strategy of Tesco

Tesco’s marketing strategy accurately targets its ideal consumers with the help of its well-positioned brand image. Marketing strategy of Tesco is formulated based on the following:

Customer Segmentation: Based on the diverse needs and preferences of their customers, Tesco can put customers into different segments. Different marketing messages can be crafted to meet the needs of those segments.

Loyalty Program: Tesco’s Clubcard loyalty program is the most popular in the UK by offering personalized discounts, rewards, and special offers to encourage repeat purchases from customers. This program has 19 million members, which generates a revenue of billion pounds for Tesco each year.

Marketing through Multiple Channels: Tesco uses a combination of traditional and digital marketing channels such as TV, radio, emails, social media, etc., as well as in-store promotions to reach a wider customer base.

Value for Money: Tesco has always positioned an image in the minds of its customers for offering good value for money. This is reflected in the form of providing high-quality products at affordable prices.

Private Label Brands: Tesco has a range of private-label brands that sell a variety of products at a price that is lower than other national brands. These private-label brands are preferred by customers who want a good deal for the products purchased.

CSR activities: Tesco is involved in various corporate social responsibility (CSR) activities that focus on sustainability, community engagement, and charitable work. Highlighting these initiatives taken by the company will help to establish a positive brand image in the minds of the customers. Customers will appreciate the efforts taken and the company will receive a positive word of mouth.

Digital Marketing Strategy of Tesco

Campaign Name: Prices that take your back

What was the campaign about?

This campaign is one of the best examples of a successful marketing campaign that was launched in 2019 to celebrate Tesco’s hundredth anniversary as well as compete with retailers that offer discounts like Lidl and Aldi.

Which medium was used in the campaign?

Tesco used social media to engage with its audience and made alterations to its offers based on the response received. For instance, the price of Freddo chocolate was reduced to 10p, and a competition to find out the best snacks from Skips and Frazzles. Customers were able to resonate with it which led to an increase in engagement.

What was the outcome of the campaign?

The campaign was a huge success and Tesco made a sale of around half a million in one week and had 4,55,000 people participating in the snack competition. Tesco witnessed its highest-ever ROI along with a positive customer perception of Tesco’s value of money across all metrics.

Campaign Name  – Alia’s ‘worth the wait’ Samosas campaign 

What was the campaign About?

Tesco used a variety of media to launch Alia’s “worth and wait” campaign with the motive to reach a wider audience and connect with the audience at an emotional level. The release of the capaign was perfectly timed with the Muslim holiday of Eid al-Fitr, that received a strong support by a strong public relations campaign.
Which medium was used in the campaign?

Television

A 30-second Ad was aired on television that featured a young Muslim woman named Alia who is making somasas for her family.

The commercial was able to successfully portray the information of joy, warmth, and nostalgia by showing Alia’s family sitting around a table to relish samosas.

Digital

The campaign was launched and run on digital platforms, such as social media and Youtube that made use of videos, images and recipes related to samosas.

Source: Tesco

The video and images shared on social media, helped to generate a lot of buzz around by making use of interactive elements, such as a quiz that included questions recipe related to samosas. This helped to improve engagement with the viewers, making them feel a part of the campaign.

Top Competitors

Sainsbury’s: It is one of the main competitors of Tesco in UK known for its extensive network of supermarkets and general merchandise stores.

Asda: The company offering a diverse range of products and services, including groceries and clothing is one of the major competitors of Tesco.

Waitrose: The company known for providing high-quality products and an amazing shopping experience, competes with Tesco in the premium grocery market.

Ocado: This is an online grocery retail store. It competes with Tesco on online shopping and delivery services.

Iceland: This company is well known for offering frozen food that competes with Tesco in the frozen food segment.

Failed Campaigns

Tesco TV 2004

This in-store TV network launched Tesco in 2004. This network showed a combination of editorial and advertising content but did not recieve a good response from the audience.

Many people complained about the editorial content being irrelevant and annoying, which did not cater to the shopping needs of the customer. Hence, as a result of this response Tesco TV was discontinued in 2009

Tesco’s Clubcard Plus

This was a program launched in 2017 offering a number of benefits to its members in the form of discounts on fuel and groceries. But this campaign was not well received by the customers.

Many people noticed that the campaign fees were high and the benefits didn’t seem to provide value for money. This resulted in the discontinuation of Tesco Clubcard Plus in 2019.

Tesco’s Christmas 2015 AD

This ad featured a group of children singing a song on how they would rather eat instead of going to school. This ad received a lot of criticism for being insensitive to parents and teachers, and so was eventually removed.

Tesco’s Online Services and eCommerce Strategy

Tesco has a sophisticated online strategy that enables seamless digital shopping. Tesco’s eCommerce strategy reflects the brand’s commitment to value and convenience. Website visits are just as efficient as in-person purchases. Tesco’s website, just like its stores, is easy to navigate.

Tesco’s online business has performed extremely well over the years. As a result, the company’s online sales increased by 15% in Ireland and South Korea. Tesco has also achieved double-digit growth in the UK grocery market. Since 2010, Tesco has consistently improved its online business to provide customers with a worthwhile online shopping experience.

Tesco has also launched Click and Collect services which enable its customers to procure their groceries online and collect them from any store operated by Tesco.
Tesco Direct also has an online platform that allows customers to procure electrical goods, clothing and general merchandise.

The Tesco app is also a major hit and a go-to for customers for direct purchases and payments. The app launched a stand-out feature in 2020 that created a lot of buzz. They introduced the option for customers to shop in-store by simply scanning the products as they shop, through the app. Once done, the customers can simply checkout via self-service or cashier counters. And make the payment through the mode of their choice. This proved to be extremely convenient and quick since people did not have to wait in queues to await their turn.

Along with the many strengths and advantages that we looked at, Tesco also has several weaknesses and threats. This is why we also conducted a SWOT analysis of the company.