Part 1: Introduction:
TESCO PLC is one of the largest retail-based companies in the world. TESCO PLC operates in over 12 different countries with a combined workforce of more than 500,000. Headquartered in Cheshunt, the UK the company was founded in 1919 by Jack Cohen. This makes TESCO PLC enter the list of a handful of companies that have survived more than 100 years in the business. The business motto of TESCO PLC is “pile it high and sell it cheap”. This motto is still reflected in the pricing policy of the company; making it very popular among the middle and upper-middle-class people who are the primary consumers of the company. TESCO PLC boasts of a massive product line; it sells groceries, fashionable and electronic products, and many more. It has also entered the segment of the financial service and telecom industry. TESCO PLC is also known for its habit of including cutting-edge technology to do business. It is one of the handfuls of companies to implement the idea of “smart shopping” into mainstream life. In the UK alone, TESCO PLC operates more than 3000 outlets. TESCO PLC also owns an E-commerce business; this had allowed the company to gain some degree of mobility during the lockdown phase occurring in the UK due to the coronavirus. In this assignment, the service of “shop as you go” launched by TESCO PLC has been discussed. This assignment highlights the segment of consumers that were targeted by this service. Initially, this service was launched by TESCO PLC to attract more millennial customers who are very fond of using the latest technology while doing business; however, the service then was stretched to attract a regular segment of customers. This assignment highlights digital platforms undertaken by TESCO PLC to promote this service far and wide in the UK. The approach of communication strategy to promote the service has been discussed as well. Moreover, the communication strategy of TESCO PLC to overcome the negative reputation company had to face due to the accusation of different scandals committed by the company has been discussed as well. Furthermore, different CSR projects undertaken by TESCO PLC and the ethical violations committed by TESCO PLC have been highlighted as well.
Part 2: Effectiveness of digital marketing of Tesco PLC:
Segmentation and Targeting:
Covid-19 had created unspeakable levels of difficulties for the retail business in the UK. Moreover, the retail industry in the UK was undergoing massive changes in working methodologies due to rapid advancements in technology. Tesco PLC introduced the service of smart shopping in its outlets by launching “Scan as you go”. During the pandemic norm of social distancing was imposed; Tesco PLC had to conduct business by abiding by this norm. “Scan as you go” was one of the most ambitious projects of Tesco PLC; the primary aim of Tesco PLC was to attract young customers to its outlets as they are more tech-savvy compared to the older generation. However, this service is not exclusive to the millennial generation; regular customers too can be benefited from this service. “Scan as you go” addressed the younger generation as they have much lower patience compared to the older generation and lowering the average waiting time can be lowered. This service was initiated in 2016 and Tesco PLC initially decided to cover at least 20 of its outlet with this service. This service was broadcasted on national news to promote it and many experts deemed it to be the first digital platform for its promotion. Rivals of the company such as Sainsbury had already introduced a similar service however Tesco PLC claimed that the service will be broader in its outlet. “Scan as you go” will directly benefit 600,000 customers visiting the outlets of Tesco PLC weekly (Bowden, 2022). The idea of self-checkout was innovative; however, initially, there were several issues with the service. Many of the customers complained about the price issue which was higher compared to traditional services provided by the retail outlets. For the customers not used to handling such technology, self-checkout service was quite annoying (Hamacher, 2017).
The digital communication strategy of Tesco PLC is rather simple yet quite compact. In its digital communication, Tesco PLC does not promote the latest discounts; rather it offers solutions for the existing problems retail consumers face daily. The majority of its digital marketing campaigns do not promote cliché lines such as “buy one get one free”; rather Tesco PLC focuses on the marketing stories of real people. Digital communication of Tesco PLC has been created after the owners of the company started to visualize the problems from the consumer perspective. One of its digital marketing campaigns was made under the banner of “Tesco Food Love Stories”. In this marketing campaign, Tesco PLC highlighted how a small family is preparing for celebrating their special occasions and how Tesco PLC is participating to help the family. In 2013, 75% of the UK retail market was controlled by ALDI and LIDL; Tesco PLC was falling drastically as the company could not effort to offer the discount margin provided by these two retail giants. Tesco PLC retaliated by making improvements in the digital marketing campaigns; Tesco PLC focused on the lifestyle of their customers, ignoring the price factor. This digital marketing campaign showed how Tesco PLC was becoming a significant part of its consumers and showed its tactics allowing the company to solve their issues. The digital marketing campaign of Tesco PLC was highly consumer-oriented; focusing on strengthening the bond between the customers and the company. It was this approach that allowed Tesco PLC in launching the service of “shop as you go” very smoothly (Bourn, 2017).
“Shop as you go” was a perfect service launched by Tesco PLC to address all the segments of customers handled by the company. Tesco PLC targets mostly middle and upper-middle-class people as its primary consumers. Hence, the financial condition is a major category of segmentation followed by Tesco PLC. Middle and upper-middle-class people are highly conscious about their spending and expect to get a good return on their spending; they also love to bargain. Hence, Tesco PLC offers attractive discounts mostly in its online business. Another important segment is age and behavior; Tesco PLC is slowly changing its business methodologies to attract young customers; the introduction of E-Commerce services and smart outlets are thus important for Tesco PLC (Shastri, 2022).
The segmentation and targeting strategies of Tesco PLC are highly robust. Three factors are responsible for adding the robust factor to a much higher level; firstly Tesco PLC does not use a cliché and boring targeting and segmentation strategy; it is filled with humor and can connect with its audiences. The humor factor allowed Tesco PLC in covering up the horsemeat scandal that had lowered the trust factor of the company among the consumers. The segmentation and targeting strategy adopted by Tesco PLC never fails to inform its consumers regarding the arrival of the new product line. Tesco PLC had a much better response regarding the national trend of consuming organic foods; it also promoted the advantages of consuming organic foods and listed the possible reasons that make Tesco PLC a better choice to purchase these products (How Tesco turned its marketing strategy around | Smart Insights, 2020).
Positioning and Branding:
Tesco PLC is not known for providing any premium products; it offers regular household items, groceries, and fashion products at a wholesale price. It targets mostly the middle and upper-middle-class people who are not much fond of using premium products; their only goal is to gain maximum gain in return for their expenses. Tesco PLC aims to connect with a maximum number of customers. It has made a very strong presence on social media sites and offers good discounts in its online business. Since 2014, Tesco PLC has been very active on its official social media pages and accounts. Tesco PLC aims to create brand chatter through its promotional and branding campaigns. Tesco PLC is using more social media to reach out to its customers and have a better engagement as well. Tesco PLC has made some radical changes in its communication policies after incorporating social media as its primary marketing tool (Butler and Wood, 2014).
It has been more than a decade since many UK retail giants have plunged into an online war to promote their products and improve their brand identity. Earlier it was limited by small-sized retailers doing local business. Since 2012, retail companies such as Tesco PLC have dramatically changed their business strategies after the internet becomes a common household name and usage of social media become part of everyday life (Butler, 2012). The promotional strategy used by Tesco PLC was both push and pull. Tesco PLC could lose a majority of market share in the UK after ALDI and LIDLE offered amazing discounts to its customers. Tesco PLC was struggling with a declined reputation after the scandal of horsemeat went viral in the country in 2013. Hence, Tesco PLC had to change its promotional tactics; it had to earn the trust and respect of its customers. Hence, the promotional tactics were designed for “pulling in the targeted customers. Tesco PLC did not mention the discount rates in its advertising campaigns; the company was more focused on highlighting ways how the company can become a family member of its consumers. These promotional campaigns rejected cliché and boring promotions; they add humor to the advertisements, making them highly attractive to the audiences. Tesco PLC also adds a pushing mechanism in its promotional tactics; Tesco PLC wished to penetrate deeper into the sub-urban parts of the UK. It created a product portfolio matching the financial conditions and the requirements of the people residing in the sub-urban parts of the country. For these targeted audiences, a pushing mechanism was required. Tesco PLC is perceived as one of the best retail-based organizations in the UK. The company is highly customer-oriented; this is proved in the promotional campaigns undertaken by the company. Being a customer-centric company has allowed Tesco PLC to aim for rapid expansion even after so many barriers it faced since 2014 (Shaping the Tesco brand, 2019).
Communication Strategy:
The communication strategy used by Tesco PLC was very simple, yet highly innovative. Tesco PLC uses television as its primary mode to communicate with its audiences. However, the company also utilizes different social media platforms such as Twitter, YouTube, etc. to promote its business. Unlike its rivals the communication strategies used by Tesco PLC is not about highlighting the discount coupons; rather the message through the digital communication modes to create a perception about ways that make Tesco PLC a part of its consumers. The communication strategy used in different digital platforms used by Tesco PLC is vastly different compared to its rivals. Tesco PLC has added humor to the communication; this has allowed the message reach to more customers. The message was simple and quite straightforward; Tesco PLC wants to be perceived as a retail-based organization that goes beyond simple trading. Many of the digital advertisements highlighted how Tesco PLC was working tirelessly to become a part of the daily lives of their consumers; the relationship between the consumers and Tesco PLC goes far beyond online and offline trading. This message made the consumers give rethink their preferences. The advertisement strategy of Tesco PLC was so successful that the company fetched more than 800% of its profit. Moreover, digital platforms used by the company allowed Tesco PLC in polishing its image after it was tarnished by the events of the horsemeat scandal. Tesco PLC earned more than £1 billion that year. This figure shows that Tesco PLC was highly successful with its communication strategies and made the most use of the available digital platforms (Glenday, 2018).
The horsemeat scandal of Tesco PLC forced the company to witness its share prices go down by 1%. Tesco PLC suffered a massive loss and it was estimated that the company lost around £300 million in revenue. However, the worse hit was yet to come; the consumer base of the company shrunk drastically as they stated that they did not find the company to be reliable. Furthermore, retail-based companies such as ALDI, LIDLE, etc. had conquered a significant share of the market. Tesco PLC found immense difficulties to convince regarding the quality of its products to its customers. In Ireland, Food and Safety Authorities published a report stating the majority of the food items sold by Tesco PLC were safe to consume. However, similar products were sold by ALDI and LIDLE; making the competition more complex for Tesco PLC (Fletcher, 2013). Tesco PLC had to come up with a new communication strategy that can make the consumers rely on the company once again; hence the narrative of the communication strategy was focused on crisis management. This crisis could only be reduced when the communication strategy was focused on a specific cause/purpose. Tesco PLC attempted in creating an image about its business that was highly consumer related. The service of “shop as you go” was attempted by several other retail giants such as Sainsbury; hence a simple introduction of this service would not have been effective at the moment. Tesco PLC decided to highlight the causes that eventually lead the company to introduce this service. On their digital platforms, Tesco PLC highlighted that they wanted to keep up with the pace of decision-making of its millennial customers which is quite fast. Moreover, several of its advertisements posted on the social media platforms highlighted the future aims of Tesco PLC; this earned the respect of the consumers all over the country; allowing Tesco PLC to bounce back.
Messages that are emotional work best for bonding purposes; this also works for business communications (Barton, 2020). A big part of the narrative of the communication strategy used by Tesco PLC covered this aspect. This was the quickest way to retrieve the lost faith of the targeted consumers. Tesco PLC intentionally made the communication highly emotional for this purpose. The digital platforms used by Tesco PLC maintained caution regarding the aspects such as body language, tone and vibes, and also words. The communication aimed to invoke maximum emotion among the audience. It comes easier for the organizations to do business with the clients once they are emotionally attached to them. After passing a certain stage, this emotional message can be transformed into a functional message; making the business more vibrant. The communication strategy was purposefully made linear in the initial stages. A linear communication strategy was chosen specifically to directly pass the message and the contents of the communication without being interrupted. Tesco PLC was directly communicating with its audiences via different digital platforms. However, once the emotional stage was created the communication was transformed into interactive; making it more functional. Interactive communication was required for Tesco PLC as the company was willing to communicate with its consumers on a ground level.
Part 3: CSR and Ethical issues of Tesco PLC:
CSR activities are undertaken by TESCO PLC:
TESCO PLC undergoes three main types of CSR activities that have been explained below:
- Diversity programs: This CSR project undertaken by the higher authorities of TESCO PLC focuses on individual development. TESCO PLC understands the importance of owning a workplace that promotes diversity and inclusiveness. The leadership of TESCO PLC follows the principle of leading by example. Several training programs are initiated so that inclusiveness can be promoted; TESCO PLC understands the issues employees belonging to a minority community might go through in the workplace; TESCO PLC is working tirelessly to remove the ethnic barriers and make and improve the degree of mutual respect among the employees. TESCO PLC had launched the “#this is ME” online campaign at the workplace. Employees were asked to contribute plans and strategies that can be added to the existing leadership model that can be used to improve the social talent within the company. The process of information collection was kept confidential. New policies have been undertaken and have been backed up by accumulating enough resources. At the workplace, internal communications have been upgraded; allowing the employees to reach directly to their supervisors and discuss their issues. TESCO PLC has included the policy of listening, learning, and acting in internal communication (Diversity & Inclusion, 2022).
- Better distribution of food products: TESCO PLC has vowed to lower the problem of poverty across the globe. Moreover, the company has made a significant increment in accumulating more healthy food items in its outlets. TESCO PLC made the best response when the UK was flooded with the trend of organic food. By 2025, TESCO PLC aims to hit the 65% mark of accumulation of healthy food products. TESCO PLC is aiming to include more vegan and plant-based meat products by 300% within 2025. TESCO PLC aims at distributing plant-based meat in regions where poverty is at its peak. These targets fall under the category of “little help plan” undergone by TESCO PLC. TESCO PLC will focus mostly on reformulating products; the company is aiming to remove a significant portion of calories mostly sugar, salt, and fat from the edible items; however, the company demands the taste factor will not drop. Since 2018, more than 50 billion calories have already been removed. TESCO PLC also plans to initiate activities that will lower the barrier between the consumers that was restraining them to lead a healthier lifestyle (Tesco makes ambitious new commitments to support healthy, sustainable diets, 2021).
- Green power projects: Rapid changes in the environment due to irresponsible behavior of the corporation have caused severe changes in the environment. Rapid consumption of fossil fuels is leading to a future with no reserve; hence Tesco PLC has stepped up with its different projects that will ensure power generation by harnessing eco-friendly ways. The company aims to install more wind farms and solar farms by 2020. The company aims at creating more than 400 jobs in the renewable industry of the UK. Tesco PLC is also aiming for a massive reduction in carbon footprint. Tesco PLC has set up the aim to generate electricity from 100% renewable sources by the end of 2030. The company has set up an aim to save more than 90,000 tonnes of CO2 every year (Tesco announces major green power projects in the UK, 2019).
Importance to invest in CSR Projects for Tesco PLC:
Tesco PLC projects are known to have a positive influence on employee satisfaction. It was the main cause that pushed Tesco PLC to adopt the program of inclusiveness in the workplace. Policies undertaken to benefit the employees states a lot about the mindset of an organization. Tesco PLC employs a very diverse workforce; it requires including activities in the workplace policies that would promote diversity and a safe place for the employees coming from a minority culture. Moreover, when employees of Tesco PLC work for the community, they become the flag bearer for the company; indirectly promoting the company. Hence, this will vastly improve the image of Tesco PLC in the public. A few years back the company was accused of violating several ethical norms (explained in the next section); active participation in difficult CSR projects will allow Tesco PLC to improve perception regarding the business among its consumers, thus the company will attract more business. Handling difficult social and environmental causes requires creativity; thinking unorthodoxly allows providing quick solutions even for problems that have existed for a long time. Hence, Tesco PLC will have a better chance to foster creativity in the workplace (Russell, 2020)
Ethical violations are done by TESCO PLC:
On several occasions, TESCO PLC has been accused to breach ethical norms. A few years back the company was accused of deploying payments to their suppliers. TESCO PLC was going through some patches of financial patches; payments were delayed to cope with this phase. Christine Tacon, the Grocery Code Adjudicator stated that this was one of the most serious ethical violations. TESCO PLC admitted its flaws and for a long time, the company was under strict investigation by SFO. It all started in 2014; more than £200 million were found to be “blackholed”. After an initial investigation, details of emails and other internal reports were found, clearly highlighting the statements given by the higher authorities of TESCO PLC not to clear the dues of the suppliers. TESCO PLC suffered some serious consequences after this allegation (BBC NEWS, 2016).
Unfortunately, this was not the only serious ethical violation committed by TESCO PLC; the scandal of horsemeat shook the entire nation when it surfaced. The horsemeat scandal was considered one of the biggest food frauds committed in the 21st century. The impact was severe enough as many European countries had to withdraw millions of burgers and beef products from the market for a long time. It was a very shocking crime committed by TESCO PLC. A nasty syndicate was slowly exposed that committed gruesome crimes against animals and tales of an illegal meat brokerage cartel were exposed that was active in many parts of Europe. This syndicate controlled a major section of the meat industry that was active in the entire continent. Unfortunately, the complexities that existed in the supply chain, made it almost impossible for the actual masterminds to be exposed and punished. However, many investigators stated that the scandal committed by TESCO PLC was merely an accident. The factory that was given the charge to supply TESCO PLC with beef burgers used ingredients from over 40 suppliers. Unfortunately, this particular factor supplied almost 30% of the total beef burger to TESCO PLC (Lawrence, 2013).
Recommendations to see faster results in the undertaken CSR projects:
TESCO PLC needs to improve its rate of response to difficult situations. For example, laws regarding land acquisitions have become more complex in the UK; this can impact the project of solar and wind farms adversely. TESCO PLC needs to hire a team of efficient lawyers; this will improve the time of responses to this issue. TESCO PLC needs to divide responsibilities equally according to the qualification and specialties of the teams handling the CSR projects of the company. This will make the team more agile (DeRobertis-Theye, 2021).
Part 4: Conclusion:
TESCO PLC is one of the oldest and largest retail-based companies in the world; TESCO PLC is known for being one of the most consumer-oriented companies in the UK. TESCO PLC operates not only in the retail industry; it has expanded itself to do business in the financial service and telecom industry. The popularity of TESCO PLC among its audiences is quite high, even if the level of competition in the UK retail industry is growing exponentially. TESCO PLC traditionally provides a vast product line and maintains a very consumer-friendly pricing policy. TESCO PLC is also known to have some of the most sophisticated technical arsenals in the UK retail industry. “Shop as you go” was one of the most innovative services ever produced by the company; it was aimed to attract a new generation of buyers who are comfortable with modern technologies. TESCO PLC made very innovative use of the existing digital platforms to promote this service; this allowed the company to maintain a decent degree of competitive advantage over companies such as Sainsbury as it also initiated a very similar service. The communication strategy used by TESCO PLC was very different; it did not promote the offers and discounts done by other retail giants such as ALDI; rather it showed the approaches undertaken by TESCO PLC to become a part of the families of its consumers; humor was the main factor that made the connection with the audiences much stronger. Communication strategies undertaken by TESCO PLC were to build up a strong emotional connection with its audiences as the company was trying to revoke its reputation which had taken a sharp decline after the horsemeat scandal. TESCO PLC initially made the communication linear however as it progressed TESCO PLC made the communication more interactive. TESCO PLC was haunted by a series of ethical violations; however, its participation in different CSR projects and successfully executing them made the company overcome the adversaries it faced after these violations.
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