Tesco marketing isn’t making any waves
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Now that Christmas is no more than a tiny dot in the distant past, all that remains is for supermarkets to count the beans and weigh up their performance.
For Tesco, Christmas trading was “disappointing” and said to be its biggest underperformance in more than two decades.
Richard Perk, retail research director at Mintel, has dubbed Tesco’s underperformance as a “marketing failure” and called for the supermarket to drop its Clubcard loyalty scheme, the lynchpin of its marketing strategy.
There is some logic in this. At the start of the 2008/2009 recession, Tesco put all its marketing weight behind its Clubcard relaunch. Now, the Clubcard double points scheme has been revoked in favour of an aggressive price cutting push under the Big Price Drop banner.
This shift was too tactical and not enough to protect and garner love for the brand.
Mark Ritson warned in his column this week that “marketers should treat promotions like heroin” ie: there might be a short term high, but in the long run it only heads in on direction, and it’s not good.
His point is that heavy discounting leads to commoditisation and brands that cut prices do so at the expense of brand values and equity, which begins a vicious circle that can only hurt brands in the long run.
By throwing money at price cuts Tesco seems to have cast aside long-term brand building. Consumers are only hearing price messaging and so they care less about what Tesco actually stands for.
Anecdotally, it doesn’t seem like there is any love for Tesco as a brand, whereas Sainsbury’s, Morrisons and even Asda have a real emotional connection with consumers.
This plays out in the YouGov Brand Index measures. Last year, Tesco suffered the biggest all of the major four supermarkets in the Index, which measures how customers rate the brand in terms of impression, quality, value, reputation, satisfaction and whether they would recommend it.
Let’s not forget that even with the latest “disappointing” trading figures, Tesco is still the biggest supermarket in the UK and took £44.6bn through its tills last year.
But as they say, it’s not the size that counts, but the motion in the ocean and Tesco doesn’t seem to making any waves.
Readers' comments (6)
sky | Thu, 12 Jan 2012 4:11 pm
Its so easy to hate Tesco. Its like a discount wholesaler. The one in Knutsford is awful. Not just brand, but also shops ARE VERY COLD!
Recently I visited Turkey and had a chance to visit their stores over there under the name of Kipa. Same, cold, cheap, cheap, cheap...
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Emma C | Thu, 12 Jan 2012 5:10 pm
The problem with Tesco is that it is trying to cover to many areas (metaphorically and literally). It's not known for one thing. Waitrose is known for service and quality, Sainsbury's is seen as family orientated. Tesco - who knows!
With their low cost image, is it any wonder that it's branding is undesirable?
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Anonymous | Fri, 13 Jan 2012 12:49 pm
It's not just marketing... it's a fundamental lack of good service and good quality. Tesco customers are getting wise that the other supermarkets are offering good service and value.
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Anonymous | Fri, 13 Jan 2012 1:10 pm
I think it's easy to feel jaded about shopping at Tesco's at the moment. For every special offer you hear about, you also hear a story about how product sizes are being reduced, or prices are escalated just so they can be lowered for a promotion etc. The public are more intelligent than the supermarkets seem to give them credit for, and where other stores are willing to price-match on brands, why go to a supermarket where it feels like the customer is continually being manipulated or short-changed?
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Tim Orrell | Fri, 13 Jan 2012 1:52 pm
The 2.3% fall in like for like sales is certainly an indication of the continuing economic woes that we all face and will continue to face throughout 2012. The question is how much better could it have been if shoppers had not been beaten senseless with an omnipresent value message that offers the promise of massive value without the context to judge these unbelievable savings. Is £1 (down from £2.20) for a bottle for stain remover an unmissable purchase if you don’t know how to use it and cant work out if it goes in the drawer of your washing machine, on the garment or in a plastic widgety thing in the drum. People won’t buy what they don’t understand or cant picture being seamlessly integrated into their lives and their own routine.
In a wave of discounting the good old fashioned messages about use, benefits and advantages were all washed away leaving bargains harder to judge and people scratching their heads about the new shampoo that had already been discounted at its launch – cant be that new and great can it? Some brands and retailers are really getting it right though – M&S Dine in for 2 for £10 adds a solution to the discounting showing you what tea looks like tonight with no pondering and wraps this welcome solution up in a discount – brilliant.
All this discounting isn’t ideal for all concerned with the retailers, the brands and the whole supply chain feeling the squeeze and inhibiting growth. The brands also run the risk of de-valuing their products and the brand itself causing damage that goes beyond the current climate.
Retailers need to remember that like the corner shop of yesterday they need solve the problems face by the family, what will we at, how do I clean this and will this cheesecake go round if the kids bring someone home for tea. These solutions when combined with real discounts can then offer the value we all crave and maybe just maybe everyone wins.
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Gavin Chase aka the Social Media Headhunter | Fri, 13 Jan 2012 4:57 pm
Sounds like Tesco need to get to grips with social media for business and quickly understand how to monetise an investment in this area. Loyalty cards, discounts, traditional marketing techniques is not the modern way. Successful companies engage with their customers. Brand sell and tell marketing is dead.... Tesco, you need brand ambassadors.... you need to engage professionals who will help you understand social business!
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