Discuss tesco's promotional and place strategy - Essay Example

TESCO is the world’s third largest retailer headquartered in the UK (United Kingdom) and is a geographically diversified conglomerate that sells everything from books to petrol to music and financial services. This gives the company the ability to spread its risk as well as achieve economies of scale owing to its size. Promotion Strategy TESCO’s promotion strategy is based on the slogan, “Every Little Helps”, which translates into ads depicting shots of cars (when advertising petrol) and displaying price tags next to the product with the slogan “Tesco Value”.

The purpose of the promotional strategy is to convince customers about the value proposition that the company is offering and to persuade them to buy goods and services from TESCO which are discounted as compared to other retailers. Further, TESCO makes use of insights that it has gleaned from its years of operations to target specific customer groups and segments as evidenced by the use of specific mailers to club card and non-club card customers. The overall thrust behind TESCO’s promotional strategy is to win over customers with discounts and goods and services that are high in quality of make and service.

The promotion strategy is driven by the motto of “Making You Spend Less” and is aimed at price conscious customers who might want better discounts and at the same time do not want to compromise on quality. It can be said that TESCO has succeeded to a large extent in weaning over customers from other retailers due to this promotional strategy (Irish Times, 2011). Place Strategy TESCO concentrates on reaching out to customers at the point of sale and hence the place strategy is built around the concept of situational advertising.

The channels that TESCO targets are the stores that it has and the store specific advertising that it does is indicative of the emphasis it lays on micro-marketing or marketing to individual customers. Though the mass marketing campaigns are indeed rolled out by TESCO in all print, visual and electronic media, the company’s emphasis on POS or point of sale points to roll out targeted offers to the customers makes the place strategy heavily dependent on the specific locations where the sale happens.

The place strategy of TESCO is heavily influenced by the fact that customers shopping at retailers are prone to impulsive buying decisions and hence the strategy of rolling out special offers at the sale points is intended to target such customers. This is the overall thrust of the place strategy and considering the fact that TESCO is in direct competition with other retailers who follow similar or better strategies, the company can ramp up on its place strategy to a significant extent if it wants to retain its position in the rankings of retailers (Deloitte, 2010).

TESCO’s aim of reaching the number one position is what drives its overall marketing strategy. Considering the fact that the ongoing global economic crisis has squeezed margins for many retailers, TESCO’s promotion and place strategy is meant to win over more customers for the retailer and in the process help the company tide over the current gloomy market conditions. References Deloitte (2010) Global Powers of Retailing, [online] Available at: http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/news-research/Press%20releases/Global%20Powers%20of%20Retailing/Global_Powers_of_Retailing_2010_report.

pdf [Accessed: 30th Oct 2011]. Irish Times (2011) Every little helps Tesco improve its bottom line, [online] Available at: http://www.irishtimes.com/newspaper/finance/2011/0401/1224293541885.html [Accessed: 30th Oct 2011].