Market Segmentation of Tesco
Tesco PLC is the most well-known supermarket chain in the United Kingdom. It has amassed such widespread public acclaim that its outlets have expanded outside the United Kingdom’s borders to include twelve more nations in Europe and Asia! Tesco began as a run-down collection of market stalls founded by Jack Cohen. With the support of one man’s dream and ardour to see those dreams realized, it has evolved into one of the world’s major grocery chains. We’ll take a look at Tesco’s market segmentation today.
Now, let’s look at Tesco’s target audience.
But the commercial first!
In this commercial, we can see a woman who seems to be one of Tesco’s regular customers. She walks around with a card in her hand, which is a very ‘beautiful and magical way’ that lowers any product’s price.
The background story of the commercial is one of Tesco’s recent campaigns; #ClubCardPrices.
Tesco Bank has launched an integrated campaign to promote its Clubcard Pay+ innovation, it’s first in seven years.
Clubcard Pay+ allows customers to pay, save, and earn Clubcard points inside and outside Tesco.
Bartle Bogle Hegarty, a long-time creative agency, designed the commercial to increase sign-ups. Real-life scenarios inspired it, emphasizing the value that Tesco Bank’s retail and finance skills can provide to customers.
A consumer purchasing a railway ticket and receiving a bonus head of broccoli, and a family bowling with a watermelon to the tune of Cilla Black’s Surprise Surprise, are among the scenarios.
Tesco is launching the campaign as it works to expand its Clubcard user base. Now underpins a significant push into retail media and the promise of helping sponsors better understand Tesco customers’ shopping habits, target adverts, and influence future product launches.
And so, the next question that we would like to answer is who is the ‘ideal type’ customer for Tesco. The result is quite fascinating – Tesco enjoys working with any customers, but they love Sharers?
‘Who are the Sharers? Are they sharing something with others?’ – you may ask. Here is some essential information to keep in mind if you want to identify them!
Attitudes, Values, and Lifestyle:
A sharer is someone who wishes to enjoy all aspects of life fully—these people like taking risks and are open to various challenges. Sharers have a positive attitude about their daily tasks and routines. They take care of their family, friends, and parents.
Even when they go shopping regularly, they are pleased. They don’t get carried away with optimism and positive energy, though; sharers are aware of their financial limitations and are usually smart with money. When something catches their attention at the grocery store, they lose control and buy it (this happens to many of us).
They like shopping as well as cooking. Sharers always ensure that the meal is good and that everyone in the family has enough to eat. They are always ready to pay more for high-quality organic and environmentally friendly things solely to safeguard their parents’ and loved ones’ health.
They, on the other hand, take care of themselves! They are self-conscious about their looks and health. Sharers strive to dress elegantly, exercise for good health, and maintain or lose weight.
Sharers enjoy spending much time for leisure and activities in and around their homes. They prefer to lose themselves in a cleaning project, either inside or outside their houses, and they enjoy tending to their plants. They also like mending a variety of curiosities.
They like reading magazines and watching movies as well. It makes no difference to them what genre they’re in. They want a wide range of films, including action, thrillers, romance, family, and animated movies.
Other interesting facts about the Sharers include:
They don’t take vacations or such short trips very often. They don’t go out of the country very often.
Sharers are brand aficionados with extensive knowledge of the business.
Despite their low living conditions, people choose to purchase premium goods whenever possible since they value the quality of their products. For them, quality, rather than quantity, is far more critical.
They are curious about what is going on in the lives of celebrities. Sharers like to learn about society rather than politics or economics.
They seldom pay attention to local, national, or international news; television serves as a doorway to a more thrilling side of life. Sharers watch much tv but rarely listen to the radio.
They can compensate for the limitations of their everyday life by watching cultural event transmissions — theatre, ballet, and opera performances.
Following that, we’ll look at Tesco’s Positioning Plan.
Tesco’s business strategy focuses on growth through new store acquisitions, retail services, and consumer requirements adaptation.
The primary goal of the Tesco business strategy is to satisfy customers not just in the United Kingdom but all around the world. The idea that Tesco came up with can make the products less expensive for the company.
Moreover, it will become another source of motivation for people to become a part of the vast ‘Tesco family’. Despite the impact of the global downturn, the company’s record-breaking sales are usually more than £1 billion each week, which was greater than the predicted yearly earnings of over £3.4 billion for the 53 weeks ending February 28, 2010.
‘Every Little Helps’ now appears on practically every Tesco product, from TV commercials to in-store coathanger recycling receptacles, re-usable Bag for Life carrying bags, and even till receipts.
Despite his admiration for the line as a piece of poetry, Asbury claims that its meaning is contradictory. He describes the sentence as “a perfect example of linguistic deception.” “‘Little’ should be the last word that comes to mind when thinking about Tesco. Consider them a global behemoth smashing everything in their way. Instead, they implant that term in your mind, complete with all of its folky beauty. I’m afraid I have to disagree with it, but I like it much.”
Tesco has based its business plan on four primary elements. The first step in analyzing the Tesco business model is to get more feedback and insights into what consumers desire so that you can better understand their demands. Tesco will be able to sell and distribute its products and services to its consumers.
Tesco’s business model is adaptable since the corporation is eager to alter or enhance its four components to meet the many customers who buy; this process also improves and simplifies their shopping experience.
Finally, let’s look at Tesco’s marketing strategy.
Product:
Tesco sells a wide variety of goods, including food, apparel, gadgets, and financial services. This ever-expanding product line caters to all of its customers’ needs, and as a result, it has also grown into the web marketing field! Aside from the 40,000 or so product lines that its retail storefronts display, it provides food delivery and free music downloads.
Tesco also offers a wide range of options within each category, including brand, regional produce, kind, international cuisine in food, and other opportunities that don’t leave the customer’s wants.
Price:
Tesco tries to keep its pricing as low as possible without sacrificing product quality or going out of business. It employs various strategies, including economies of scale, to pass on any cost savings to its consumers and keep them pleased.
Tesco’s low-cost strategy has endeared it to customers over the years, allowing it to transcend all expectations and become the biggest supermarket chain in the United Kingdom, displacing established names such as Sainsbury’s.
Place:
The company’s headquarters are in Chestnut, Hertfordshire. Tesco is all around the globe. They have shops everywhere and almost in all countries. It distributes its products and services through two main channels: online and offline.
Tesco Express, Tesco Extra, Tesco Metro, Tesco Compact, Tesco Homeplus, and Tesco Superstore are the six types of stores in its offline forum. According to Tesco’s research, not all customers are comfortable with large stores like Tesco Extras, nor is it possible to open so many of them. As a result, Tesco uses smaller stores for better and faster access. Tesco Direct is the company’s online forum, which any customer can find at www.tesco.com.
Promotions:
Tesco’s main selling point is its affordable prices. This is what distinguishes it from other supermarkets. And it employs this strategy to improve its brand image. Its main goal has always been to strengthen its brand image by cutting expenses and sticking to its promises while increasing profits. It does so via airing commercials on television, offering promotional discounts, sponsoring philanthropic events, and employing point-of-sale methods, among other things.
Tesco’s advertising always emphasizes one thing: its low prices. It also delivers a variety of attractive incentives to its clients throughout the year. Any client wandering the aisles of this grocery shop may quickly come across offers such as ‘buy one, get one free,’ or ‘half-price.’
As previously indicated, Tesco also employs the Clubcard program to provide consumers with additional discounts. Tesco can use this service to understand its consumers’ demand patterns better and, as a result, better understand its market. Hence, it enables them to segment their market and build relevant tactics.
Tesco has also gained more devoted customers due to its easy accessibility and availability. Its internet offerings have been well received and have garnered positive feedback. Both the offline and online forums have straightforward payment options. Its stores offer both self-service and pay-at-the-counter alternatives. Online purchases are often less expensive than those made in person.
Moreover, it may not work out as well for the stores as they had hoped, as customers may have fewer options online than offline, resulting in a significant drop in revenue. It’s also tough to persuade people to buy additional items if they can’t see them displayed appealingly in front of them.
Many business scientists have analyzed the business strategies that Tesco uses daily. We also discover some basic facts about the firm and the Brand Archetype they represent, Sharers. We constructed a mental image of potential clients based on that. We found a lot about Tesco’s marketing mix and how it influences its marketing strategy. Consequently, we can confidently assert that Tesco is deserving of its current renown.
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