1. Tesco’s Sustainable and ethical practices in marketing and CSR
Tesco is a UK-based international grocery and general merchandising retail chain. In the recent past, Tesco has undertaken an array of marketing activities to benefit its marketing strategies and corporate social responsibility. The company has invested in a range of own-label products, in-depth market research with customers, established such in-store facilities as bakeries and meat counters and baby change roofs, as launched first-class training program to enable its staff to offer service to customers the best way possible. This focus on customer-centric culture has been signified by the positive impacts of the Tesco Club Card and Tesco Direct.
Tesco Club Card
Use of customer loyalty programs has become increasingly pronounced in many industries, the retail sector being no exception. Retailers are increasingly adopting customer club cards to encourage customer loyalty by providing value to them. This tapping into customer loyalty for mutual benefit is a basic technique of relationship marketing which also involves other variables of trust, commitment, satisfaction, and value (Palmer 2005, p.125). Compared to its major competitors, Tesco has the most successful customer loyalty program known as Tesco Club Card. This has given Tesco competitive advantage as the competition has only succeeded in creating false loyalty. Whilst other companies have designed good loyalty programs, they have failed to create value to their brands in the eye of the consumer leading to customer dissatisfaction.
The Tesco Club card scheme, launched in 1995, has direct benefits to card-holding customers who receive a point for £1 spent at Tesco stores or at Tesco’s website, as well as double points on special offers by the supermarket. The points are stored and accumulated and the card holder is awarded with vouchers for the value of points they have built up at four times a year (Gummesson 2008, p.55). These vouches can then be used for shopping in store or on Club card Deals where their value is quadrupled. In addition, Club Card holders qualify for free access to a number of Club card clubs by Tesco such as healthy food, baby and toddler, food and Christmas clubs. Tesco card-holding customers also benefit from the convenience of purchasing air miles using their club card points following Tesco’s partnership with Virgin Atlantic.
The Tesco Club card system also benefits customers by rewarding “green points” to them when they contribute to environment sustainability measures through bringing their own carrier bags during shopping. This is part of Tesco’s 10-point Community Plan intended to increase “greenness” at all Tesco stores and improve the chain’s positing within the community (Charlesworth 2009, p.85). The plan also entails Tesco’s efforts to introduce thicker and degradable bags. Through this plan, Tesco customers are able to adopt environmentally friendly behavior and significantly contribute to sustainability.
Similarly, Tesco itself substantially benefits from the Tesco Club Card scheme. The benefits afforded to the customers allows Tesco to understand consumer behavior and micro-segment them in terms of lifestyle habits. Data obtained from this enables Tesco to target the customers with more personalized promotions along with other marketing programmes. Tesco is able to gather detailed data about individual customers’ buying habits while at the same time maintaining feedback channels by which the stores communicate directly with their customers and build loyalty. The wealth of information obtained from the Tesco Club Card system, which is constantly updated and refreshed, has significantly contributed to the supermarket chain’s knowledge of its customer base, increased sales and commitment from customers. In addition, Tesco enjoys such operational benefits as refined stock selection, display as well as staffing levels.
Tesco Company has also revolutionized its use of personalized club card data through online marketing strategy. Considerable changes have been made to the company’s website, Tesco.com. Club card has been turned digital, where data about individual consumer habits are correlated with other sources of data such as mobile phone data, social networking data, payment methods to enable delivery of even more personalized offers to customers. As such, value offers flash up to its most price-sensitive customers whilst finest products are the core of personalized messages to the more “upmarket” club card holders.
Home Delivery Service
Tesco.com, previously known as Tesco Direct, has attracted a huge loyal customer base as a result of the company’s excellent home grocery delivery service. It was initially targeted at time-precious consumers needing to buy Tesco products online. This was done with the understanding that only a particular subset of the customers wanted to buy online. As such, Tesco adopted a user-friendly operating system together to produce a flexible home delivery system carefully tailored to meet the needs and expectations of the target market (Hart 2003, p.206). Tesco,com has grown to become a strong business model complimented by Tesco’s Club card loyalty programme, and helped the leading supermarket chain with identifying, segmenting and incentivizing the most potential customer for less than $250 a head (Humby et al. 2008,, p.221).
The home delivery service strives to recreate as much as possible the experience of shopping at a local Tesco store. The home delivery model is a product of Tesco’s determination to know its customer more than rival supermarkets and other internet retailers. It has benefitted Tesco’s reputation of listening to customers and responding to their wishes accordingly (Chaffey & Smith 2008, p.98). Tesco has at least 3,200-strong fleet of light commercials that facilitate about 500,000 deliveries per week. The supermarket chain’s home delivery vehicles are in operation seven days a week for a maximum 16 hours daily, resulting in substantial positive effect on their customer service levels. Using a powerful satellite navigational system, Tesco drivers follow most efficient delivery routes that enable them to meet delivery schedules at all times. This is helped by the fact that the company has a team of high skilled pickers who take care of online orders.
2. Marketing Relationships Between Organization And Its Stakeholders
Bibliography:
Chaffey D. & Smith P.R. 2008. E-Marketing excellence. 3rd Ed. Butterworth Heineman.
Charlesworth A. 2009. Internet Marketing – A practical Approach. 1st Ed. Butterworth Heineman.
Gummesson E. 2008. Total Relationship Marketing. 3rd Ed. ButterworthHeineman.
HART, S. J. (2003). Marketing changes. London, Thomson.
HUMBY, C., HUNT, T., & PHILLIPS, T. (2008). Scoring Points How Tesco Continues to Win Customer Loyalty. London, Kogan Page.
Palmer A. 2005. Principles of Services Marketing. 4th Ed. McGraw Hill.
