IMC Plan
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alisha9214 June 2015

IMC Plan

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IMC Plan of Tesco
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CCT 5593

An IMC Plan for Tesco PLC 1

!

CCT 5593 !

Integrated Marketing Communications Assignment

! An Integrated Marketing Communication plan for

Tesco PLC !

by Alisa Shabanova

� ! ! October, 2014 !

An IMC Plan for Tesco PLC 2 !! Table of Contents ! 1 Background of Tesco…………………………………………………………………………………………………….3 1.1 Brief history of Tesco…………………………………………………………………………………………………3 1.2 Current situation of the company………………………………………………………………………….…3 1.2.1 Unsatisfied sonsumers ……………………………………………………………………………………3 1.2.2 Conclusion after customers’ reviews………………………………………………………………4 2 SWOT analysis………………………………………………………………………………………………………………..7 3 Strategy objectives and strategies……………………………………………………………………………….7 4 Strategy of Tesco………………………………………………………………………………………………………….. 7 5 Unique selling proposition…………………………………………………………………………………………….8 6 IMC budget………………………………………………………………………………………………………………….……8 7 The integrated marketing communications programme……………………………………….……9 7.1 Target audience……………………………………………………………………………………………………….…9 7.2 Advertising………………………………………………………………………………………………………………… 9 7.3 Direct marketing ……………………………………………………………………………………………………..9 7.4 Public relations……………………………………………………………………………………………………..……9 7.5 Sales promotion…………………………………………………………………………………………………………10 7.6 Interactive………………………………………………………………………………………………………………… 10 7.7 Personal selling………………………………………………………………………………………………………….10 ! 8 Implementation timetable……………………………………………………………………………………………10 9 Measuring Effectiveness……………………………………………………………………………………………….11 ! 10 Bibliography…………………………………………………………………………………………………………………12 !!!!!!!!!!!!!!!!!!!!!

An IMC Plan for Tesco PLC !3

!!!! «We are a team of over 500,000 people in 12 markets dedicated to providing the most compelling offer to our customers» (retrieved from Tesco official website, October, 2014). !

This sentence is fundamental, showing the evidence-based result of Tesco brand achievements from the 1924. Opening the first store in 1929, and further increasing to 100 stores in 1939 all over the United Kingdom, was the start of continuous success. Since the 1990s Tesco has increasingly added such segments as the clothing, furniture, electronic, toys, financial services, telecoms, internet services, petrol and software. Ultimately, in the 2011, Tesco became the largest retailer in Britain and the second biggest retailer in the world. «Tesco is facing the biggest crisis in its history after new chief executive Dave Lewis, who was hired from Unilever, found a black hole in the company’s profits. As well as the accounting scandal, Tesco is battling fierce competition in the UK from the discounters Aldi and Lidl» (adapted from: The Telegraph, 23rd October, 2014)

The paragraph from the Telegraph report and Tesco official website are both dated from October,2014 . But the part of the article brings us back to the reality of unpredictable and inevitable situations in the global market. Including also appearing of bad publicity. The company was named «Tescopoly», unveiled the information such as providing customers with horse meat in burgers . The financial embroilment and darkening of Tesco reputation lead to consumer’s particular reaction, mostly negative. !

From the position of the client, we can name these providing facts as external. The message that he/she receives from the environment. In this case, information about Tesco goes through the mass media and global wireless. So it is the choice of the customer to believe it or not. However, in the last years, customers are being defected during their experience with Tesco. Consequently, their internal relationships with the brand were damaged. And finally, what can highlight more the Tesco's recent problems than its customers. !

The number of unsatisfied customers in the Tesco’s products and service is increasing. It is clearly illustrated at Trustpilot website, one of the most popular online review platform. These are frequent reviews about Tesco during the last three months : ! 1. I have had issues with my tesco mobile for 4 weeks i have tried contacting them through phone, online chat and email but no responce. its disgusting. even connectivity to thier customer service number cut me off 4 times. do not use tesco mobile network it is rubbish. ! 2. Pathetic service Tesco - This is not the only time we have had major issues with Tesco home delivery including 9 hours late a few months back and goods delivered in the boot of a car - a really hot day - my frozen goods were soggy when they arrived! I am going back to Sainsbury's for home delivery as they do what they promise...to deliver the goods I ordered and on time!

An IMC Plan for Tesco PLC !4

! 3. I used to shop at Tesco regularly but about 3 years ago started to notice a deterioration in quality of food and general shopping experience with staff who are more happy to chat and gossip with ! their colleagues than serve the customers. Avoid at all costs - I would rather go without now than shop at this awful supermarket. ! 4. I only shop at Tesco if I have no other option and I am starving. Over the past few years I found stuff out of date (like yoghurts which last ages), open packages and ice creams obviously defrosted and frozen again. Staff are often clueless and more often than not smell like they don't wash. I don't find them cheaper than my local Waitrose and the quality of goods, sfaff and atmosphere is light years ahead. !

The last reviews were from the customers that accepted Tesco for an extended period. Attending the concrete place to shop, becomes a habit for a regular customer. Though, it can be harmful, but a person measures its values and, as a result, join the competitor ( such as Aldi, Lidl and Waitrose). To avoid changing priorities of our customers and to retrieve them to Tesco, the following integrated marketing communications (IMC) plan is provided for the year of 2015, starting from the Situation analysis.

! A situation analysis

! Strengths !

The brand. Integrated marketing communications implies the process of analyzing the consumer’s perceptions and activities. All products and services have attributes of the brand. Consequently, they create the values, perceived by consumers in terms of functions of these products and services. The inevitable stage in the buying behavior is forming the attitude in the consumer’s mind according to the particular brand. It can grow to a brand loyalty but may be limited by weak relationship. The brand becomes the kind of intermediary between the product or service and the customer. !!

The name of Tesco is internationally recognized.It has the power. At the present time, it must be more associated with a classical Tesco. Initially, Tesco is a brand of England. Nearly every tourist, entering, for instance, London will identify these red letters and confide in its products and services. To come back to its roots means to have a constant view of Tesco that it was before: with a variety of choices for all nationalities and social classes. !! Market share. « If you want to be a supermarket superpower, you have to be everywhere» !

An IMC Plan for Tesco PLC !5

! And that's just what Tesco has set out to do. Tesco has an insatiable appetite for space, and is relentless in its pursuit of the best new sites. In other words, ’Smart move’ of Tesco began in 2005 ,and this year has the quantity of 6,784 stores worldwide. Despite a fall in market share, Tesco is still the most popular supermarket, possesses in total 28, 6 % of market share in the UK. !

! Online market place. From the year of 2006, customers have an opportunity to do Tesco

online shopping. From the website, individuals can choose a needless section: groceries, Tesco direct, entertainment and books, clothing ; create and manage the Club card or The Tesco bank current account. Tesco does not always break down figures for its online operation, making it difficult to gauge the success of its online non-food arm, which was launched in 2012 in a bid to take on Amazon. It has worked hard to attract big name retailers and the deal with House of Fraser is the biggest so far. Most of the sellers on Tesco Direct are smaller, more niche brands but there are some bigger names and Tesco is clearly gunning for more. The supermarket is going through a difficult time, but it will undeniably still be attractive for many fashion and general merchandise retailers – its size and scale ensures that. Particular market place allows targeting China, taking the first place in the world with 219,8 million buyers. In contrast, the UK has 34, 8 million online shoppers.!

Financial power. Notwithstanding of reported massive profit warning after the accounting scandal, Tesco’s group profit before tax is 2.3 billion pounds. The figure is considerably higher than the competitors’. Excluding the impact of payments, share options, expenses and royalties paid to Walmart, Asda said its underlying operating profit rose by 5% to 718.6 million pounds. !

International presence . One of Tesco’s highest profile international operation is Fresh & Easy, its US start-up which now operates 164 stores in the western United States. Having invested substantial resources into launching and building the business, Tesco is eager to realise a return on its investment. Over half of Tesco’s international revenues are generated in Asia, with the retailer’s presence concentrated in the most dynamic South and East Asian economies. China is one of Tesco’s most exciting prospects. Tesco already operates over 100 stores in the country. India is Tesco’s newest market where it is committed to rolling out cash and carry outlets, working in partnership with Tata Group’s retail arm, Trent. It also has a franchise agreement with Trent to help support the growth of its Star Bazaar hypermarket operation. Though development options in India are limited by government regulations prohibiting the operation of foreign-owned multi-brand retailers, the launch will provide Tesco with valuable insight into the Indian grocery market and provides a platform for retail development in the event of restrictions being lifted. One market where prospects are distinctly more challenging is Japan, where Tesco operates over 140 convenience stores in a profitable format. Central Europe is the main focus of Tesco’s international

An IMC Plan for Tesco PLC !6

! activity and Poland, its largest market in the region. A dotcom launch is also in the offing in the Czech Republic with the service set to debut in Prague in the next few months. As in Poland, Tesco is actively pursuing a multi-format strategy; its presence in the convenience market was greatly strengthened in January 2011 when it announced the acquisition of 128 Zabka and Koruna outlets.

! !

Perhaps Tesco’s greatest opportunity for long term growth in Europe lies in Turkey, where it has been steadily increasing its estate of Kipa hypermarkets. ! Weaknesses !

Higher price than new emerging competitions. Tesco used to be a supermarket for «everybody with everything». Current situation points out at higher involvement of upper than the lower classes. The last one are more interested to choose compromising on quality because of the price. Accordingly, individuals from a lower class choose the cost-effectiveness strategy of Lidl or Asda. Waitrose supermarket chains represent people with higher income range that purchase quality of products over their price. The direct derivation is defining Waitrose stores more species compared to many other supermarkets, and this space comes at an extra price for consumers. On the official Waitrose website the managing director announced : « Our prices on branded grocery products are now identical to Tesco’s». !

Customer Service. According to the shopper’s reviews, the customer service went out of control. Negligence in providing customer service can be recently detected either in local stores or throughout ignoring direct calls, emails from the clients. !

Lack of experience diversification. On the 3d of October, 2014, Tesco unveiled hudl2, its second generation tablet. The considerably low price of £ 129 and concerning to the cardholders, it will be able with a lower price of £ 65.That is not a guarantee of success. Taking into account forceful competitors as Apple Macintosh and Samsung tablets, it is impossible to position hudl2 like a separate brand. Innovations could be useless or destructive for Tesco. Returning to its roots means responding to use a conservative way in the dialogue with the customer. To put the customer on the first place means to follow their requirements, which are listed in the reviews. ! Opportunities !

Global online market place implies improvement in delivery service and global technology trends.

An IMC Plan for Tesco PLC !7

! Development of personalised services - investing more in research and customers’ data ,

allows to take under control the situation with defected customers and to attract new consumers. ! Threats !

New competition. The growing geographic spread of the discounter competitors, such as Lidl and Aldi. Tesco’s dominance on the South East of England is clearly under threat. !

Economic Recession. Buyer behaviour has direct involutions on marketing activities in a wide range of buying factors. For example, a long-term global financial and economic crisis has had certain complexities on consumer buyer behaviour in the UK, reducing the levels of consumer spending. !

Decrease of the popularity of out-of-town stores. Shoppers interest to home delivery services is increasing. They prefer local convenience stores and discount offers from Aldi and Lidl. The trends have made the drop of sales at Tesco’s big out-of-town supermarkets. Its market share had declined from 30,1% to 28,8% in the previous year.

! !

Strategic objectives and strategies !

Corporate level strategies. Tesco is striving for growth within the company. A company seeking for growth has three ways of realization through horizontal, diversification and vertical integration. Referring to Tesco, the horizontal growth is prominent. The main aims are to peruse new and defected customers, new products and new geographic location. !

Business level strategies. To develop and maintain a competitive advantage for the goods and services that has been produced by Tesco !

Department strategies. To regulate the operative areas of Tesco, such as finance, marketing, research and development, human resources. Providing the customers with goods and services should be on time within an efficient and effective way. !

The strategy of Tesco ! 1. To retrieve the trust and loyalty of customers !

An IMC Plan for Tesco PLC !8

! 2. To concentrate more on local issues, where Tesco is still on the first place ! 3. To understand customer needs better : to improve online shopping and customer service in the supermarkets and stores. !

! Unique Selling Proposition

! 1. Customer Oriented Tesco. ! 2. Convenient Tesco. To improve the accessibility in customer service via mobile phone, internet and to manage the direct service. ! 3. Trustworthy Tesco. To make defected customers believe in the rehab of Tesco. By providing a clear and opened business. ! 4. Qualitative Tesco. To work above mistakes, that were shown in the costumer’s reviews. ! 5. Valuable for money Tesco. The brand from its deep roots was both for «rich and poor». !

IMC Budget !

Tesco worldwide budget in 2014 was £ 120, 000 . In 2015 it can be double decline in the situation of targeting mostly the UK ( £ 60, 000). The bar-chart depicts the percentage of spendings at each promotional mix element in IMC. ! ! !

55

10

10

25

25

Advertising Direct Marketing Public Relations Sales Promotion Interactive Marketing Personal Selling

An IMC Plan for Tesco PLC !9

! Integrated Marketing Communications Programme

! Creating a long-term relationships with the target audience is the key to successful IMC.

Being a big company, Tesco has comprehensive and broad target audience in 2015: upper, middle, lower classes; defected customers; green consumers. This year , primary target audience is defected customers, which attitudes were changed related to Tesco. Essentially, it means targeting customers from the UK, where the roots are. If Tesco solves these particular problems «at home», it prevents or even will not allow them to appear in Tesco worldwide market. !

Advertising. Tesco should spend 25% of its budget on traditional adverts on TV and radio. For instance, the idea of and advert, where Tesco agrees with its faults, and waiting forward to see its customers. Also announcing special gatherings before or after celebration days; meetings to discover new products; special meetings for loyalty card holders. TV adverts will catch more customers’ attention with attracting celebrities to the process. British celebrities, which are credible and associating with the UK, but are known all over the world. For example, Kolin Firth. !

Direct Marketing. Tesco has to use deeper its database, constructed on the basis of loyalty cards, producing special invitations for individual consumers in their stores in the evening time for the purpose of testing products with characteristics corresponding to the profile with preferences of confirming customer. Currently, it is technically possible to improve the database in which consumers are reaching, in terms of their personal social and economic preferences, their buying activity and their activity in relation to a particular brand. The process of retrieving defected customers implies to learn them more than before.

! Public Relations. To plan systematically and distribute information about the rebirth of

Tesco, to manage its brand and the nature in society. Press releases to announce changes in Tesco are necessary for the next year. !

Sales Promotion. 21 years have passed from the starting of Tesco socially significant marketing campaign with elements of sales promotion. The program was called «Computers for schools». For every £ 10 spent in their stores, Tesco provided its customers with vouchers, which they can send to any school. Therefore, schools exchanged received money for computer equipment. To collect a higher sum, students’ parents occasionally used club trading. Principals, teachers purchased this scheme. In 2014, the successful in past times marketing scheme began to decay. It needs refreshment by providing new terms and interactiveness. Such programmes as «Computers for schools» are influential , because it identifies the level of corporate social responsibility of the company.

An IMC Plan for Tesco PLC !10

! Interactive. Tesco mobile applications must be productive and not sophisticated. Customer

service line should be approachable at any time. Personal selling. The direct contact between buyer and seller. If the feedback is

unfavorable , as depicted in the reviews from the online social platform, the sales person has a chance to modify the message. The customer service must be controlled with frequent checks of directory , including video reports. And Tesco school of stuff should redevelop their rules, put strict borders of appearance and behavior of the staff. Also to increase the average amount of surcharging during the work experience.

! !

Implementation Timetable ! !

! Tesco will use its promotional mix during public holidays and «preparing for

school» month. ! ! !

! ! ! !

An IMC Plan for Tesco PLC !11

! Measuring effectiveness

! !

! ! ! ! ! ! ! ! !

! ! Tesco IMC Programme 2015 allows to understand deeper the attitudes of its customer with the help of pre-testing and post-testing activities. To put priority on direct marketing is a perspective to know the customers better than in the past time. Tesco has to broaden its database with particular details and to put attitudes of defected consumers, also the rest clients in the future, under control and do not let them go to competitors.

! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

An IMC Plan for Tesco PLC !12

! ! ! !

References ! Liptrot , H. (2005, June 3). Supermarket superpowe. BBC News.Money Programme. Retrieved !

from http://news.bbc.co.uk/2/hi/business/4605115.stm ! Straus R , S. (2014, April 22).Tesco fights back: Prices cut on basics to win over customers lost to

Aldi and Lidl. This is money. Retrieved from ! http://www.thisismoney.co.uk/money/news/article-2610219/Tesco-cuts-prices-basics-win-

customers-lost-Aldi-Lidl.html !

Winterman,D. (2013, September 9). Supermarket superpower. BBC News !

Magazine . Retrieved from http://www.bbc.com/news/magazine-23988795 ! ! Tesco raises the bar internationally - IGD. (n.d.).

Retrieved from http://www.igd.com/our-expertise/Retail/retail-outlook/4617/Tesco-raises- the-bar-internationally/ !

! Ruddick, G. (2014, October 23). The answer to Tesco's problems lies in the past and with Sir

Terry Leahy. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/epic/ tsco/11183732/The-answer-to-Tescos-problems-lies-in-the-past-and-with-Sir-Terry-Leahy.html !

Tesco reviews | Customer reviews of Tesco | www.tesco.com ... (n.d.). Retrieved from https:// www.trustpilot.com/review/www.tesco.com?page=2 !

Butler, S. (2014, October 10). Asda outperforms supermarket rivals with 5% profit boost last year . The Guardian. Retrieved from http://www.theguardian.com/business/2014/oct/10/asda- supermarket-5-percent-profit

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An IMC Plan for Tesco PLC !13

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