Description
This is presentation highlighting evolution, strategies adopted, success factors and vulnerabilities of Tesco.
1
AGENDA
Introductio n - TESCO
Evolution of TESCO
Success Factors
Vulnerabilities & Recommendations
2
AN OVERVIEW
Britain based global merchandising retailer. grocery and general
Fourth largest retailer in the world measured by revenues Second largest retailer in the world profits. measured by
TESCO
Stores present in 14 countries across Asia, Europe and North America.
Initially it specialized in food and drinks. Diversified into areas such as clothing, electronics, financial services, telecom, home, health, car and dental insurance.
3
BRANDS
4
TESCO STORE FORMATS
5
EVOLUTION OF TESCO
1995:- Launched TESCO Clubcard Frequent Shopper program 1989:-Improved shopping experience and highlight the improvements with an image campaign 1990-92:- 114 separate initiatives to improve the quality of its stores.
2000:- TESCO moves to “big box“ retailing.
1983:-Began stores
upgrading
its
6
SUCCESS FACTORS
Branding & Reputation:
• Promotion of an “Every Penny Counts” environment • Brand is associated with good quality trustworthy goods
Diversification:
• Providing shopping convenience by selling general merchandise and non-food products under one roof. • Average Margin • Non Food Products - 9% • Food Products - 5%
7
HIGHLY SUCCESSFUL LOYALTY PROGRAMME
Tool- Clubcard Frequent Shopper Program using a highly efficient database management and tracking system.
Discounts & special offers tailored to individual shoppers.
Powerful data gathering tool- understand the shopping pattern & preferences.
Customer- 40 dimensions like price, size, brand, ecofriendliness, convenience. Tracking Purchases uncovered price elasticity and set promotional schedules - $ 500 million saved. Data used- nature of merchandising for each store, range of products, store location.
8
DATABASE MARKETING - ADVANTAGES
Identifying prospects
By enabling custom made shopping targets and discount offers
Deepening customer loyalty
Reactivate Customer Purchase
9
VULNERABILITIES: DATABASE MARKETING
1. Difficulty of getting employees to be customer oriented and use the available information.
2. Changing of customer attitude towards privacy and security.
3. Escalating costs of maintaining and mining data.
Possible Solution • Give training and incentives to employees • Conveying to the customers the advantages of sharing their data and promising them not to sell it to 3rd parties • Dealing with multiple vendors
10
VULNERABILITIES: CONCENTRATION IN DEVELOPED MARKETS
TESCO earns a major portion of its revenues from the developed markets of Europe and USA (more 75% revenue from UK alone) where economic slowdown and credit crisis have changes the spending rate and affected growth.
Possible Solution 1. To come-up with smaller pocket-friendly packages of SKUs. 2. To cut the cost on frivolities and pass on the benefits to customers. 3. Launch more “Value stores”. 4. Aggressive launch in new geographies- African and Asian countries.
11
VULNERABILITIES: PRODUCT RECALLS
12
VULNERABILITIES: PRODUCT RECALLS
• Glass pieces found in Stella Artois Beer bottle packs and defects in several other products like toys and baby dresses forced Tesco to recall these products. • This led to a severe dent in their brand image and resulted in a lower market share and Tesco must take corrective measures and ensure that such a blunder doesn’t occur in future.
Possible Solution • Along with apologies to affected customers, we would replace their defective items and give them free gifts to earn back our goodwill. • We would sue for damages, those suppliers that provided defective items. We would also ensure that we collaborate with only reliable suppliers.
13
VULNERABILITIES: COMPETITION
• Well established retailers in new areas and new entrants in TESCO’s territories can have a negative effect on TESCO’s market share. • Eg. opening of Wal-Mart's new chain of market side small groceries are meant to pose a direct challenge to TESCO’s Fresh & Easy stores in South West US.
Possible Solution Customer retention by schemes like : • free home deliveries, • increase in loyalty discounts • ad-campaigns projecting our leadership in e-grocery.
14
THANK YOU
Abhir Bhomavat ? Aditya Kaul ? Bharat Paldiwal ? Shreya Bannerjee
?
10927855 10927859 10927861 10927201
15
doc_628841244.pptx
This is presentation highlighting evolution, strategies adopted, success factors and vulnerabilities of Tesco.
1
AGENDA
Introductio n - TESCO
Evolution of TESCO
Success Factors
Vulnerabilities & Recommendations
2
AN OVERVIEW
Britain based global merchandising retailer. grocery and general
Fourth largest retailer in the world measured by revenues Second largest retailer in the world profits. measured by
TESCO
Stores present in 14 countries across Asia, Europe and North America.
Initially it specialized in food and drinks. Diversified into areas such as clothing, electronics, financial services, telecom, home, health, car and dental insurance.
3
BRANDS
4
TESCO STORE FORMATS
5
EVOLUTION OF TESCO
1995:- Launched TESCO Clubcard Frequent Shopper program 1989:-Improved shopping experience and highlight the improvements with an image campaign 1990-92:- 114 separate initiatives to improve the quality of its stores.
2000:- TESCO moves to “big box“ retailing.
1983:-Began stores
upgrading
its
6
SUCCESS FACTORS
Branding & Reputation:
• Promotion of an “Every Penny Counts” environment • Brand is associated with good quality trustworthy goods
Diversification:
• Providing shopping convenience by selling general merchandise and non-food products under one roof. • Average Margin • Non Food Products - 9% • Food Products - 5%
7
HIGHLY SUCCESSFUL LOYALTY PROGRAMME
Tool- Clubcard Frequent Shopper Program using a highly efficient database management and tracking system.
Discounts & special offers tailored to individual shoppers.
Powerful data gathering tool- understand the shopping pattern & preferences.
Customer- 40 dimensions like price, size, brand, ecofriendliness, convenience. Tracking Purchases uncovered price elasticity and set promotional schedules - $ 500 million saved. Data used- nature of merchandising for each store, range of products, store location.
8
DATABASE MARKETING - ADVANTAGES
Identifying prospects
By enabling custom made shopping targets and discount offers
Deepening customer loyalty
Reactivate Customer Purchase
9
VULNERABILITIES: DATABASE MARKETING
1. Difficulty of getting employees to be customer oriented and use the available information.
2. Changing of customer attitude towards privacy and security.
3. Escalating costs of maintaining and mining data.
Possible Solution • Give training and incentives to employees • Conveying to the customers the advantages of sharing their data and promising them not to sell it to 3rd parties • Dealing with multiple vendors
10
VULNERABILITIES: CONCENTRATION IN DEVELOPED MARKETS
TESCO earns a major portion of its revenues from the developed markets of Europe and USA (more 75% revenue from UK alone) where economic slowdown and credit crisis have changes the spending rate and affected growth.
Possible Solution 1. To come-up with smaller pocket-friendly packages of SKUs. 2. To cut the cost on frivolities and pass on the benefits to customers. 3. Launch more “Value stores”. 4. Aggressive launch in new geographies- African and Asian countries.
11
VULNERABILITIES: PRODUCT RECALLS
12
VULNERABILITIES: PRODUCT RECALLS
• Glass pieces found in Stella Artois Beer bottle packs and defects in several other products like toys and baby dresses forced Tesco to recall these products. • This led to a severe dent in their brand image and resulted in a lower market share and Tesco must take corrective measures and ensure that such a blunder doesn’t occur in future.
Possible Solution • Along with apologies to affected customers, we would replace their defective items and give them free gifts to earn back our goodwill. • We would sue for damages, those suppliers that provided defective items. We would also ensure that we collaborate with only reliable suppliers.
13
VULNERABILITIES: COMPETITION
• Well established retailers in new areas and new entrants in TESCO’s territories can have a negative effect on TESCO’s market share. • Eg. opening of Wal-Mart's new chain of market side small groceries are meant to pose a direct challenge to TESCO’s Fresh & Easy stores in South West US.
Possible Solution Customer retention by schemes like : • free home deliveries, • increase in loyalty discounts • ad-campaigns projecting our leadership in e-grocery.
14
THANK YOU
Abhir Bhomavat ? Aditya Kaul ? Bharat Paldiwal ? Shreya Bannerjee
?
10927855 10927859 10927861 10927201
15
doc_628841244.pptx