Delivering Customer Value at Tesco Essay Example
Delivering Customer Value at Tesco Essay Example

Delivering Customer Value at Tesco Essay Example

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  • Pages: 5 (1127 words)
  • Published: June 7, 2017
  • Type: Case Study
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Tesco Plc is a British is a general merchandise retailer and a chain of multinational grocery stores based in the state of Chesnutt in United Kingdom. All across the world, Tesco is the third-largest retailer in terms of its revenues, and is followed by Carrefour and Wal-Mart; the company is also the second-largest with respect to its annual profits and is followed by Wal-Mart in ranking. Tesco own its stores in approximately 14 countries spread across Europe, Asia, and North America. It is also the market leader in grocery markets in Malaysia, United Kingdom having a market share of approximately 30%, Thailand and the Republic of Ireland (Tesco, 2012).

It was in 1919 that Jack Cohen had founded the company in the form of a group of market stalls. Later, the business saw a quick expansion and by the year 1939 Tesco was spread all over the co


untry in the form of 100 Tesco stores. Initially built as a UK-focused grocery retailer, The Company has been subject to increased geographical and segmental diversification since the 1990s. At present, Tesco operates in clothing, books, furniture, electronics, petrol and software; internet and telecoms services; financial services; music downloads; and DVD rental.

Delivering Customer Value Tesco is one of the leading companies that focus upon the customer service delivery and creating value for them. The company creates values for its customers in the following manner:

Marketing Mix Tesco has created it marketing mix or Ps (product, price, place, and promotion) in order to align these factors with the customers' needs and affordability. The entry into different markets all over the world by Tesco has been made by significant adaption to the

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consumers' culture in relevant markets. It has made certain changes in the service provision with respect to its four Ps which are completely in adherence to the standards inherent to the company.

A. Product Tesco sets off its strategies and tactics of the product development by taking control of the regional and global markets through marketing their current services and products. They do this by exporting their products in various regions and provinces and making use of all the available opportunities of enhancing the market share and market penetration of the company. Tesco also considers the revision and restoration of the older models of its products to in order to provide its customers across the world with all that they needs and want (Tesco PLC, 2012). Thus, Tesco develops its stores and brands according to the customers' needs and markets them strategically at the respective locations.

B. Price Tesco has been acquiring the cost advantages through increasing its process efficiencies, and growing its contacts with the large supplier of lower cost materials. Thus, it aims to provide value to its customers through the cost leadership by attaining competitive advantage.

C. Place In order to successfully develop the company's retail operations, Tesco has been making huge investments in the expansion of its stores in low-income localities and districts. Moreover, through acting in a socially responsible manner and getting involved in the community services, the company has also been able to open stores at locations that are economically disadvantaged. In this way, it has been able to gain the trust of local luminaries and has also achieved employees form the residential areas.

D. Promotion The promotion approach of Tesco entails a

strategic plan that is long-standing sand focuses upon producing customer value in order to grow the customer loyalty. The major point is that Tesco has been successful in adopting a marketing mix which creates and delivers value for its customers (Lysons, Farrington, 2006). Through a systematic and well thought out market research process, Tesco has been able to know the needs of its customer located in the target country. Moreover, the company has also extended good and long term relationship with suppliers and customer by guaranteeing a competitive provision of its services and product.

Delivering value to Customers Tesco delivers better and cheaper products to its customers by offering them more choices and variety. The company consistently makes price reductions in long-term all through its businesses. During the year 2012, Tesco had invested £56 million in the form of price cuts in Central Europe. Besides this, in the United Kingdom, The Company had offered to its customers the price cuts of £230 million in addition to the £67 million more that were declared in April

(Tesco Plc, 2012). It means that, to the customers, the average weekly shop at Tesco costs less than it did priory. Moreover, there are sets of policies, exacting standards, and guidelines that support the process of this price reduction and guarantee that the company's drive for value does not necessarily entail the reduction of labor or environmental standards, or quality, in its supply chain. The customers at Tesco are conscious regarding what their health more than before.

Thus, the company provides them the Healthy Living range, on the top of which, it extends its Value range to encompass vegetables, fruit, salads and many

more foods that take care of its customers' health. According to the calculations, Tesco's healthy daily diet in its Value range costs a mere amount of £1.40 to deliver value to its customers. Thus, the excellent services at Tesco Plc are a source of customer's satisfaction and fulfill the organizations' strategic intentions too. It is generally the ultimate the careful planning, design and delivery of a complete array of the interlinked business processes delivered at the company.

Tesco offers its customers online shopping and service availability through realizing the time savings and customer value creation by not having to drive to the store. They reduce the manual labor of selecting and picking up the groceries, waiting in a queue to make payments, driving back home and unloading the car. It also makes the customers avail and enjoy the chance to feel and touch the fresh product and make impulse purchases (Tesco, 2012). The team at Tesco has worked to rationalize the shopping scenario of the customers along with maintaining the attributes of the customer value by delivering the assortment and quality at their desired prices.

Along with offering more choice, lower prices, and better food, the Tesco stores also bring broader range of economic benefits for the local community. It does so directly by generating taxes and creating jobs, and indirectly through the attracting of more inward investment.

The Company is sensitive to both the concerns and the opportunities that are available at the time of investment and operates with the grain of planning social change and policies. The company embraces the town-centre stores and brings back life to the declining quality of living in the urban areas

instead of establishing edge-of-town stores which is accessible only by car. It also struggles to harmonize its various stakeholders' interests and adopt a sustainable approach.

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