The paper “ Tesco - Store Format and Design, Advertising, Customer Segmentation, and Retention Strategy, Challenges and Threats" is a meaningful example of a case study on marketing. Tesco Plc is an international food retailer with headquarters in the United Kingdom. It has more than 2316 supermarkets, superstores and convenience stores located in 14 countries across Europe, Asia and North America (Telegraph Media Group, 2011). It is the leading food retailer in the U. K. with 1,878 retail stores located throughout the country. The company is currently the third-largest retailer globally in terms of revenue earning after Walmart and Carrefour and according to Nwagbara (2011, p.
56), it is the second-largest in profit-making after Walmart. The Tesco group of companies operates five-store formats: Tesco Superstores, Tesco Extra, Tesco Metro, Tesco Express and One Stop. Tesco has expanded all of its grocery stores to include non-food items such as books, software, electronics, and music. It operates an e-commerce site with over 450,000 registered users in the UK One of the key drivers to the success of this global supermarket chain is that it has an efficient Customer Relationship Management (CRM) system that many people envy (Shajahan, 2006, p.
208). In order for it to best target its diverse customer base, Tesco divides the target market into various specific segments. Specifically, the target market for Tesco is divided into different groups of customers with distinct similar product or service requirements or needs. This paper provides a detailed analysis of the company in regard to its operations. The specific areas discussed in the paper are Tesco’ s store format, store design, advertising and promotion strategies, customer segmentation, customer retention strategy, and the current and future challenges and threats.
Finally, the paper proposes various changes Tesco needs to make in order to remain successful in the future. Store format Tesco executes its marketing strategies through various formats. Most of the formats for Tesco have been there for many years and innovations and adjustments are introduced through formula development. The firm currently operates five types of formats, four of which are branded Tesco. These are Tesco Extra, Tesco Superstores, Tesco Metro, Tesco Express and One Stop. Tesco Extras have a hypermarket format and are primarily located in Asia (Zentes et al, 2011, p.
181). These stores serve large and densely populated catchment areas such as city suburbs and offer both food and non-food items. Tesco Superstores mainly offer food but have a few non-food items, with sub-brands (Zentes et al, 2011, p. 181). This format has two sub-brands namely Tesco Supermarket and Tesco Compact. Tesco Supermarkets take the format of a standard supermarket. Tesco Compact, on the other hand, is smaller than a supermarket and mainly targets smaller communities. Tesco Superstores mainly provide traditional grocery items as well as banking, insurance, telecommunication products, flowers, books, movie rentals, and uniforms.
Recently, the firm has expanded all of its grocery stores to include non-food items such as electronics, books, software and music (Zentes et al, 2011, p. 181). Tesco Metro is a city center supermarket that targets walk-in customers (Zentes et al, 2011, p. 181). The products offered in Tesco Metro are designed to target the needs of the local community. Tesco Metro sells a range of everyday products catering to the increasing number of city dwellers and professional people looking to do important shopping near their workplace.
Tesco Express, on the other hand, takes a convenience store format. They focus mainly on the needs of the local residential neighborhood, selling fresh and convenience foods. Some are located on petrol forecourts and offer gasoline as well (Zentes et al, 2011, p. 181). One Stop is also a convenience store format resulting from Tesco acquisitions. One-Stop stores are similar to Tesco Express but smaller. Among the different formats, Tesco Express has been the most dynamic of all the brands in recent years with gigantic developments off the brand in 2000 (Krafft & Mantrala, 2010, p.