Tesco Retail Marketing


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This is a short and simple presentation which encapsulates the Customer and Marketing Philosophy of TESCO , and can be possibly used in lot of Reatil context ...

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Tesco Retail Marketing

  1. 2. PESHWA ACHARYA <ul><li>MARKETING CHIEF </li></ul><ul><li>RELIANCE RETAIL </li></ul>
  2. 3. <ul><li>Tesco UK core business (Extras, Superstores, Metro, Express) </li></ul><ul><li>Tesco International </li></ul><ul><li>Non Food (clothing) </li></ul><ul><li>Retailing Services (Dot.com, Tesco Personal Finance, Telecoms) </li></ul>Tesco has a 4 point strategy:
  3. 4. Core Purpose <ul><li>To create value for customers to earn their lifetime loyalty </li></ul>Our Values <ul><li>No-one tries harder for customers </li></ul><ul><li>Treat people how we like to be treated </li></ul>
  4. 5. Every Little Helps is customer speak for our values and is a broad summation of Tesco at it’s best The expression of our Values An Every Little Helps Shopping Trip and A Great Place To Work Through Which are No one tries harder for customers Treat people how we like to be treated The way we work and The way we behave Which means we deliver is Shopping Trip <ul><li>The aisles are clear </li></ul><ul><li>I can get what I want </li></ul><ul><li>The prices are good </li></ul><ul><li>I don’t queue </li></ul><ul><li>The staff are great No one tries harder </li></ul><ul><li>for customers </li></ul>A Great Place To Work <ul><li>To be treated with respect </li></ul><ul><li>A manager who helps me </li></ul><ul><li>An interesting job </li></ul><ul><li>An Opportunity to get on Treat people how we like to be treated </li></ul>The way we behave Living Service Expressions What part does the Marketing Department play? The way we work <ul><li>We deliver consistently everyday </li></ul><ul><li>We aim to get it right first time </li></ul><ul><li>We make our jobs easier to do </li></ul><ul><li>We know how vital our jobs are </li></ul><ul><li>We always save time and money Better for customers, Simpler for staff and cheaper for Tesco </li></ul>
  5. 6. Drive trade through Every Little Helps The Tesco Marketing Philosophy Understand customers better than anyone Delivering the Every Little Helps shopping trip Drive trade through Every Little Helps Saying ‘Thank you’ Marketing Making Tesco available
  6. 7. Insight Unit - the role of Customer Understanding Anticipating customer needs Championing the customer voice in the business Guide and measure the business
  7. 8. Insight Unit - Who we are what what we do <ul><li>Meet customer needs by matching store format to location </li></ul>Site Research Market Research Insight Analysis Strategic Insight Customer Question Time <ul><li>Monitor and track the health of the business, identify changing customer needs, understand current customer issues, and ensure our initiatives are right for customers </li></ul><ul><li>Guide business strategy through our insight on customers, property and our people. </li></ul><ul><li>Analyse how customers are behaving and how we are performing as a business. </li></ul><ul><li>Research customer lifestyles and the shopping experiences in our stores to ensure the business reflects customer needs. </li></ul>Combined analytical experience = the full story = competitive advantage The Power of Joined Up Thinking!
  8. 9. Insight Unit - Our Key Outputs <ul><li>A small selection of Insight reports that illustrate the power of joined up thinking </li></ul><ul><li>World class insight is at the heart of the business </li></ul>UK Business Expansion Report Customer Spotlight Blue Books Brand Review Customer Question Times People Spotlight and People Review Express and Non Food Brand Reviews Switching Analysis Sales Forecasts for new stores New space development strategy Trade Reports Competitor Analysis
  9. 10. Insight Unit <ul><li>Understanding customers better than anyone is the basis of the Marketing Department. </li></ul><ul><li>There are 3 broad reasons why we seek to understand customers </li></ul><ul><ul><li>Anticipating customer needs </li></ul></ul><ul><ul><li>Championing the customer voice in the business </li></ul></ul><ul><ul><li>Guiding and measuring the business </li></ul></ul><ul><li>The Insight Unit is made up of five key teams - Site Research, Market Research, Strategic Insight, Insight Analysis and Customer Question Times (CQT) </li></ul><ul><li>Joined up thinking across Insight enables us to understand the full story and gain competitive advantage </li></ul><ul><li>Our key outputs ensure world class insight is at the heart of the business </li></ul>
  10. 11. Stores Marketing Core Purpose <ul><li>To preview & review all stores on the development programme, to ensure the best offer for the local customer is delivered in the individual stores </li></ul><ul><li>To flex the existing levers to tailor the store for the local customers & continue to develop new levers with the relevant owners </li></ul><ul><li>To work with local marketing to turn around under-performing stores & assist in the understanding of reasons for poor performance </li></ul><ul><li>To help the business to prioritise which elements of the functional Every Little Helps shopping trip needs to be addressed for customers </li></ul><ul><li>To bring customer understanding & shape cross functional projects which are focused on the agreed business priorities that will make the shopping trip easier for customers (or impact on it) </li></ul>
  11. 12. Stores Marketing Key Outputs <ul><li>Stores Marketing Group review papers which ensure the customer is considered in the property planning process. The papers cover:- </li></ul><ul><li>Agreement to Food / Non Food Square Footage </li></ul><ul><li>Solutions to key Customer issues highlighted from quantitative (Oxford Research) & qualitative (CQT) research </li></ul><ul><li>Agreement to include food counters & cafe – Deli, Fish, Meat, Salad, Pizza, Chicken, Olives, Takeaway </li></ul><ul><li>Agreement to include non food services – Photolab, Pharmacy, Opticians, Jewellery Counter </li></ul><ul><li>Agreement to include other Services – Car Park Controls, Bus Service </li></ul><ul><li>Agreement to include additional range requirements e.g. Ethnic </li></ul>
  12. 13. <ul><li>Local Marketing </li></ul><ul><li>Core Purpose </li></ul><ul><li>To launch new stores in all formats to achieve sales targets </li></ul><ul><li>To market our refitted and extended stores </li></ul><ul><li>To defend against competitor new stores / extensions / conversions that are forecast to impact sales at any of our stores </li></ul><ul><li>To turn round sales in under-performing stores and assist in the understanding of reasons for poor performance </li></ul><ul><li>To test trade driving tactics at a local level before they get implemented by the national team e.g trial of various petrol promotions </li></ul><ul><li>To champion trade initiatives and brand building across specific groups of stores: - e.g London advertising campaign in 2004 </li></ul>
  13. 14. <ul><li>Local Marketing </li></ul><ul><li>Key Outputs </li></ul><ul><li>Highly targeted marketing campaigns that are made local by use of customer insight, Clubcard data and local knowledge. Local will use the same tactics as national but on a micro level - these include: - </li></ul><ul><li>Mailings to Clubcard / non -Clubcard customers </li></ul><ul><li>Coupons at till </li></ul><ul><li>Advertising - press, radio, outdoor, other media (e.g. adbikes, blimps) </li></ul><ul><li>Petrol promotions / Clubcard points promotions </li></ul><ul><li>PR and events (e.g. launch events, celebrity chef events, community sponsorship / donations) </li></ul><ul><li>In store Clubcard sign up </li></ul><ul><li>Store specific non-food offers </li></ul><ul><li>POS to communicate store changes </li></ul><ul><li>Leafleting campaigns </li></ul><ul><li>Local deliver over 350 bespoke marketing campaigns per year </li></ul>
  14. 15. <ul><li>Local Marketing - Key Takeouts </li></ul><ul><li>Local marketing plan and deliver campaigns for all store launches from new stores & extensions to impacts and underperformers </li></ul><ul><li>All campaigns are are highly targeted and relevant to the local population. They are built using a wide range of customer insight, Clubcard data and local knowledge </li></ul><ul><li>Local use the full tool box of national marketing tactics at a local level </li></ul>
  15. 16. Price Team - Core Purpose <ul><li>The role of the Price Team is as follows: - </li></ul><ul><ul><li>Set strategy and direction for company on price </li></ul></ul><ul><ul><li>Monitor and report against price policy </li></ul></ul><ul><ul><li>Help to communicate our great price position to customers </li></ul></ul><ul><ul><li>Deliver price insight to the business </li></ul></ul><ul><li>The Price Team has several key activities: - </li></ul><ul><ul><li>Price Basket </li></ul></ul><ul><ul><li>Internal hierarchies </li></ul></ul><ul><ul><li>Comparatives </li></ul></ul><ul><ul><li>Ad-hoc checks </li></ul></ul>
  16. 17. Price: Key processes <ul><li>Price Basket </li></ul><ul><ul><li>Weekly checks on over 20,000 lines against Asda, JS, Morrisons </li></ul></ul><ul><ul><li>Reporting to Commercial and wider business </li></ul></ul><ul><ul><li>Price Checker and Price Claims </li></ul></ul><ul><li>Internal Hierarchies </li></ul><ul><ul><li>Ensuring bigger packs give better value, and Tesco own label is cheaper than branded equivalent </li></ul></ul><ul><li>Comparatives </li></ul><ul><ul><li>Shopping 100s of products to make in-store claims highlighting that we (a) match Asda and (b) are cheaper than other competitors </li></ul></ul><ul><li>Pricing have the accountability for maintaining our price position versus competitors and ensuring the business gets cheaper for customers </li></ul>
  17. 18. Promotions Team - Core Purpose <ul><li>The role of the Promotions Team is to </li></ul><ul><ul><li>Set strategy and direction for company on promotions </li></ul></ul><ul><ul><li>Monitor and report on Tesco promotions against promotion policy </li></ul></ul><ul><ul><li>Monitor and report on competitor promotional activity </li></ul></ul><ul><ul><li>Respond to short term competitor activity as required </li></ul></ul><ul><li>The promotions policy is driven by the Helping You Spend Less customer plan objectives </li></ul><ul><ul><li>Even fewer, even better promotions </li></ul></ul><ul><ul><li>Neutralise Morrisons on feature space promotions </li></ul></ul>
  18. 19. Promotions: Key processes <ul><li>Internal tracking and reporting : Monitor Tesco promotional activity against agreed KPIs and key measures </li></ul><ul><li>Feature space conformance tracking : Track Tesco store conformance with communicated feature space plans </li></ul><ul><li>Competitor tracking and reporting : Monitor competitor promotional activity through store audits </li></ul><ul><li>Lidl half price : Track Lidl half price activity and mobilise business to respond </li></ul><ul><li>Seasonal event tracking : Event specific promotions reporting on major events eg Christmas and Easter </li></ul><ul><li>The promotions team are responsible for setting promotional strategy and tracking Tesco promotions relative to this </li></ul><ul><li>Promotional strategy is driven by the customer plan objectives </li></ul><ul><ul><li>Even fewer, even better promotions </li></ul></ul><ul><ul><li>Neutralise Morrisons on feature space promotions </li></ul></ul>
  19. 20. Trade Planning - Core Purpose <ul><li>Trade Planning’s core purpose is to set the trading priorities for the business, which means, </li></ul><ul><ul><li>Right for Customers </li></ul></ul><ul><ul><li>Simple for stores </li></ul></ul><ul><ul><li>Delivers ‘like for like’ growth </li></ul></ul><ul><ul><li>Supports the Every Little Helps Shopping trip </li></ul></ul><ul><li>Trade planning does 3 interrelated things: </li></ul>Manage the 52 wk Trade Plan Review Trade Forecast Sales
  20. 21. Trade Planning: Key Processes <ul><li>TPG (Trade Planning Group) - periodic </li></ul><ul><ul><li>WL5 directors from Marketing, Supply Chain, Retail and Commercial, facilitated by trade planning who meet every period to: </li></ul></ul><ul><ul><ul><li>Review trade and learning's for the period just completed </li></ul></ul></ul><ul><ul><ul><li>Agree the trade plan going forward and resolve any issues </li></ul></ul></ul><ul><li>TPO (Trade Planning Operations) - weekly </li></ul><ul><ul><li>Cross functional group (trade planning, retail, supply chain) and managers of small events (less than £10m), e.g. Pancake Day, St Patrick’s Day, Ramadan </li></ul></ul><ul><li>Brand Comms - weekly </li></ul><ul><ul><li>Plan the alignment of TV, Press, Tesco TV, Publishing, Price News and Point of Sale </li></ul></ul><ul><li>Non Food Trade Planning and Great Seasonal Events </li></ul><ul><ul><li>Manage Seasonal space (power aisle 1 and grocery seasonal aisle) </li></ul></ul><ul><ul><li>Great Seasonal Event Managers manage the events > £10m, e.g. Mothers’ Day, Halloween </li></ul></ul>
  21. 22. Feature Space Management - what is it? <ul><li>Feature Space and Seasonal Space is the most prominent space in the store, with the highest customer footfall. </li></ul><ul><ul><li>Feature Space = Promotional ends and OFDs (Off Fixture Displays). Usually promotions. </li></ul></ul><ul><ul><li>Seasonal Space = Power aisle 1 and grocery seasonal aisle. Usually seasonal ranges. </li></ul></ul>
  22. 23. Feature Space: Core Purpose <ul><li>Core purpose is to make best use of feature space, which means: </li></ul><ul><ul><li>Right for Customers </li></ul></ul><ul><ul><ul><li>Seasonally relevant </li></ul></ul></ul><ul><ul><ul><li>Supports Trade Plan activity </li></ul></ul></ul><ul><ul><ul><li>A good mix of product types for customers </li></ul></ul></ul><ul><ul><ul><li>Fit promotion policy (e.g. minimum discount 20%) </li></ul></ul></ul><ul><ul><li>Simple for stores </li></ul></ul><ul><ul><ul><li>Simple to put on sale and exit </li></ul></ul></ul><ul><ul><ul><li>Products fit space efficiently </li></ul></ul></ul><ul><ul><li>Delivers ‘like for like’ growth </li></ul></ul><ul><ul><ul><li>Each end has a hurdle rate, depending on its location and distribution </li></ul></ul></ul><ul><ul><li>Supports Every Little Helps Shopping trip </li></ul></ul><ul><ul><ul><li>Especially “Aisles are clear” and “I can get what I want” </li></ul></ul></ul>
  23. 24. Advertising - Core Purpose <ul><li>Primary Objectives </li></ul><ul><li>To project our brand values through an emotional connection with our customers. </li></ul><ul><li>To build brand trust and loyalty. </li></ul><ul><li>Secondary Objectives </li></ul><ul><li>To communicate our strongest trade drivers and promotions to encourage customers to come into our stores. </li></ul>
  24. 25. Advertising - Key Outputs <ul><li>TV & Press Every Little Helps Brand Campaign </li></ul><ul><ul><li>The Every Little Helps campaign is used to make people like their Tesco more </li></ul></ul><ul><ul><li>The campaign revels in the small things that Tesco does e.g. bag packing, 24 hour opening, low prices as evidence of our philosophy </li></ul></ul><ul><ul><li>The advertising is a direct, down to earth conversation between Tesco and the customer (instead of an advertising mechanic that sits apart from the brand) </li></ul></ul><ul><li>Cherokee TV Campaign </li></ul><ul><ul><li>Bi annual TV campaign that supports the Cherokee range of clothing at Tesco </li></ul></ul><ul><ul><li>Gives Tesco clothing credibility versus the likes of Next and Gap </li></ul></ul><ul><ul><li>‘ Design by Cherokee. Price by Tesco’ caption (strap line) emphasises the strengths of the two brands </li></ul></ul>
  25. 26. Advertising - Key Outputs continued <ul><li>Trade Driving TV & Press </li></ul><ul><ul><li>Supports the key trade drivers highlighted by the trade plan </li></ul></ul><ul><ul><li>The ads are simple straightforward visual of featured product and lets the offer speak for itself, whilst being clearly branded as Tesco. </li></ul></ul><ul><ul><li>Press is used to support offers when a quick turnaround is needed – can be done in days versus weeks for TV </li></ul></ul><ul><li>Supplier Funded Advertising </li></ul><ul><ul><li>Paid for by the supplier but we ensure that they are simple, honest, transparent and are clearly branded Tesco & the media selected targets our relevant customers </li></ul></ul><ul><ul><li>Strict criteria ensure only the strongest prices and promotions are advertised </li></ul></ul>
  26. 27. Every Little Helps TV Campaign
  27. 28. Cherokee Advertising (Autumn/ Winter 05)
  28. 29. Publishing - Core Purpose <ul><li>The role of Publishing is to support and build a positive image of the company with customers. </li></ul><ul><li>We do this in Two principle ways; </li></ul><ul><ul><li>Development of an emotional connection with our customers, showing them that we understand them and are on their side. </li></ul></ul><ul><ul><li>Communicating our product ranges and great prices </li></ul></ul><ul><ul><li>to- </li></ul></ul><ul><ul><ul><li>Drive our price image with price sensitive customers, </li></ul></ul></ul><ul><ul><ul><li>Increase and drive footfall into non-food </li></ul></ul></ul><ul><ul><ul><li>Generate awareness in upmarket customers that we have great quality and range at market leading prices </li></ul></ul></ul>
  29. 30. Publishing - Key Outputs <ul><li>Magazine </li></ul><ul><ul><ul><li>Written to compete with new-stand publications </li></ul></ul></ul><ul><ul><ul><li>4m readers 3rd largest circulation magazine in the UK- bigger than all the leading women’s glossies added together </li></ul></ul></ul><ul><ul><ul><li>Average retention time 14 days, average reading time 42 minutes - both highest in the industry compared to the average of 28 minutes for other publications. Although the magazine is not used as a hard marketing tool, research tells us that 50% of readers will buy a food item, 29% a non-food item and 27% a clothing item - if it is featured. </li></ul></ul></ul><ul><li>Price News - leafleting </li></ul><ul><ul><li>Protects existing customer base and encourages defection from competitors </li></ul></ul><ul><ul><li>Standard version influences price image covers mainly food and household aimed at competitor conflict areas - 4m circulation </li></ul></ul><ul><ul><li>Non-food version aims to drive footfall and price image - aimed at extra store catchment areas - 4m circulation </li></ul></ul>
  30. 31. Publishing - Key Outputs <ul><li>Tesco TV </li></ul><ul><ul><li>Provides “Talking Tesco” content to the revenue generation inspired In-store TV service. Every Little Helps information, recipes, hints, tips and product information. </li></ul></ul><ul><li>Store Finder </li></ul><ul><ul><li>Map booklet showing all of the stores in the UK with accurate directions how to find them - 1m circulation </li></ul></ul><ul><li>Internet </li></ul><ul><ul><li>Price check - compares our prices with our leading competitors </li></ul></ul><ul><ul><li>Today at Tesco what’s key in store this week </li></ul></ul><ul><ul><li>Store locator services- Search for the right store for you, get directions to your local store and see what ranges, services and opening hours it has. </li></ul></ul><ul><ul><li>Internet magazine proposition being developed </li></ul></ul>
  31. 32. “ Tesco send me a Thank you” “ I spend my Vouchers” 5 Club Mailings Statement CaT “ Tesco give me coupons for things I already buy or they think I’d like to buy” “ I collect Clubcard points as I spend in Tesco” Extended Brand - TPF, Telecoms, Non Food Shopping in store or on dot.com Points Partners e.g. Powergen CLUBCARD The Virtuous Circle Clubcard Statement Deals x4 In Store Extended Brand Deals Online for shopping and deals
  32. 33. Trade Driving Club Mailings CLUBCARD Who we are what what we do Direct Mail Operations Customer Management Targeted mailing - touching over 12m customers, with over 8m variations Introducing customers to Clubcard and helping them get the most from it Permission based mailings - including specialist advice and relevant coupons Timely, targeted offers to Clubcard customers Making Clubcard more rewarding through the extended brand Measuring and supporting Clubcard use in the business Clubcard Statement Managing Penetration Retail Services Coupon at Till Welcome Pack A new system which will offer better data and business processes to help the business to grow customer loyalty Freetime Deals Service where customers can get x4 value from their Clubcard Vouchers Slippage and Gone Aways Strategic Mailings to boost trade Timely mailing to retain customers with declining loyalty Thank you/brand builders Raising the profile of CC
  33. 34. CLUBCARD - Key Take Outs <ul><li>Clubcard continues to have fantastic success in the UK </li></ul><ul><ul><li>Over 12 million customers currently receive a Clubcard Statement </li></ul></ul><ul><ul><li>With approximately 8 million unique variations - each time </li></ul></ul><ul><ul><li>Clubcard penetration is currently 73% </li></ul></ul><ul><li>Saying ‘Thank you’ drives trade </li></ul><ul><ul><li>Most customers see points as more valuable than money </li></ul></ul><ul><ul><li>Club mailings grow the breadth and depth of customer loyalty </li></ul></ul><ul><li>Coupons are tightly targeted </li></ul><ul><ul><li>You buy a lot of sausages? You get a sausage coupon </li></ul></ul><ul><ul><li>Coupons at till target a new set of customers every two weeks </li></ul></ul><ul><ul><li>It acts as an incentive - but secondary to reward </li></ul></ul><ul><li>Clubcard rewards customers across the entire Tesco brand </li></ul><ul><ul><li>From your groceries to broadband connection! </li></ul></ul>
  34. 35. Customer Plan - Core Purpose <ul><li>The Customer Plan is a group of year-long projects which must </li></ul><ul><ul><li>Drive our ‘like for like’ sales </li></ul></ul><ul><ul><li>Deliver a step change in the Every Little Helps shopping trip </li></ul></ul><ul><ul><li>Need more than one function + dedicated resource to deliver them </li></ul></ul><ul><li>They are the Number 1 priority for the business each year and feed into the Customer quadrant of the Corporate Steering Wheel </li></ul><ul><ul><li>Each project has board-level support </li></ul></ul><ul><li>The Customer Plan embodies our philosophy that customers will tell us our direction for the year ahead </li></ul><ul><li>It supports our core purpose of creating value for customers to earn their lifetime loyalty </li></ul><ul><li>This keeps us ahead of the competition </li></ul>
  35. 36. Customer Plan - Key processes Phase One Identify and agree key customer opportunities Phase Two Develop solutions to key opportunities Phase Three Implement Monitor Review BRAND REVIEW Research/Report February - September Planning October - February Launch Customer Plan March Project brief Writing October - December Project Solutions December - February <ul><li>Examples of projects: </li></ul><ul><li>Fresh & Full Meat & Poultry </li></ul><ul><li>Strengthening our appeal to ethnic customers </li></ul><ul><li>Helping you live more healthily </li></ul>
  36. 37. Who we are Vacancy Insight & Site Research Acting Director of Marketing - UK Ian Crook (also Trade Planning, Advertising & Customer Plan) Andrew Mann Clubcard & Services Andy Miles Stores & Non Food Nicola Heaslip Price, Promotions & Publishing/POS Clubcard Scheme, Mailings, Clubcard Deals Service Initiatives New Stores, Local Marketing, Store Marketing Express Marketing, Non Food Marketing Price News (Tabs), Price Basket, Price/Promotions Planning Process Management, Site Research, Customer & People Insight, Market Research, CQTs, Customer Plan Development Andrew Cooke Marketing Finance Hayley Bilantz Personnel Manager, Marketing Personnel Finance
  37. 38. Peshwa Acharya [email_address] 9867641038