Tesco Integrated Marketing Communications (IMC) Campaign Strategy and

Budgeted Media Plan

May 2019

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Executive Summary

The aim of this report is to present an upcoming two-month integrated marketing

communications campaign (IMC) strategy for Tesco. The overall objective of the campaign,

which is scheduled to last for two months beginning mid June 2019, is to portray Tesco as an

ideal shopping destination for summer holiday preparation. The objectives of this campaign

include: improving Tesco sales by £30m, promoting the Tesco brand image among consumers

and promoting brand loyalty. The marketing communications mix used by this campaign

includes: advertising, personal selling, sales promotion, public relations and direct marketing.

This report also outlines the budget allocated for the campaign which stands at £3m and how the

budget is distributed to finance the various elements which make up the marketing

communications mix outlined above. It briefly explores a company overview of Tesco, conducts

a situational analysis of the company to identify its key internal and external strengths,

weaknesses, opportunities and threats (SWOT). Other main aspects such as the marketing

communications strategy used in the campaign as well as scheduling, monitoring and control

plan strategies are covered in the report.

Key words: Tesco, Campaign, Integrated Marketing Communications and Strategy

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 Tables of Contents
Executive Summary.....................................................................................................................................2

i. Overview of Tesco...................................................................................................................................3

ii. Situational Analysis.................................................................................................................................4

-Strengths................................................................................................................................................4

-Weaknesses............................................................................................................................................5

-Opportunities..........................................................................................................................................5

-Threats...................................................................................................................................................6

iii. Marketing Communications Objectives.................................................................................................6

iv. Integrated Marketing Communications (IMC).......................................................................................6

a.) Advertising.........................................................................................................................................8

b.) Personal Selling..................................................................................................................................9

c.) Sales Promotion................................................................................................................................10

d.) Public Relations................................................................................................................................11

e.) Direct Marketing..............................................................................................................................11

v. Scheduling and Budgeting of Media Plan..............................................................................................13

vii. Scheduling, Monitoring and Evaluation..............................................................................................13

References.................................................................................................................................................14

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i. Overview of Tesco PLC

Tesco plc is a British multinational retailer whose headquarters is based in Welwyn Garden City,

Hertfordshire in England, United Kingdom (Leahy, 2012). It is the leading groceries and general

merchandise trader across the UK with a market share of around 28.4% and the third-largest

global retailer measured in terms of gross revenues (Evans & Mason, 2018). Tesco is also an

industry market leader in Hungary, Ireland and Thailand. The retailer’s shops spread across

seven countries in Europe and Asia. Tesco was founded by Jack Cohen in 1919 and back then, it

only comprised of a group of unbranded market stalls (Simms, 2007). The company began

diversifying in the 1960s by venturing into other sectors such as retailing of books, toys,

electronics, clothing, furniture, petrol, financial services, telecoms, software and internet services

(Ryle, 2013). By the 1990s, Tesco adopted a new strategy and repositioned itself from its former

low cost strategy, to a retailer which attracts customers from diverse socioeconomic backgrounds

by selling from low-cost items (Tesco Value) to high end items (Tesco Finest) (Simms, 2007;

Leahy, 2012). This new strategy successfully broadened its appeal across people from diverse

socio economic groups and this resulted in a fivefold growth in the number of Tesco’s retail

outlets from 500 shops in 1995 to 2,500 shops in 2010 (Evans & Mason, 2018).

The Brand name Tesco was only made public in 1924 and the first Tesco shop opened its doors

in 1931 in Burnt Oak, Barnet (Ryle, 2013). The brand experienced rapid growth and by 1939,

there were well over 100 Tesco shops nationwide (Evans & Mason, 2018). Tesco, which initially

began as a UK grocer, recorded global expansion in the 1990s and its operations have spread

across a total of 11 other countries across the globe (Rahman, 2016). Although it pulled out of

the American market in 2013, Tesco has continued to witness growth in other parts of the world.

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Tesco shares are currently valued at £242 as at mid-May 2019 (Financial Times, 2019). The

company currently has 460,000 employees and over the last financial year, Tesco PLC’s

revenues grew by 11.17% from £57.49 billion to £63.91 billion and the company's net income

also improved by 9.62% from £1.21 billion to £1.32 billion (Financial Times, 2019).

ii. Situational Analysis

The term situational analysis can be used to describe a collection of methods which management

uses to analyse an internal and external environmental situation in which an organisation

operates to better understand its capabilities, clientele, and the business environment at large

(Waring, 2016). This report makes use of a SWOT analyses to conduct a situational analyses of

Tesco by analysing the company’s strengths, weaknesses, opportunities and threats.

-Strengths

Tesco’s main key strength includes its current position as the UK’s largest grocery retailer

(Deslandes, 2014). The company is the leading grocery retailer and supermarket across the UK.

Its sales revenue and earnings are higher than those of other rival supermarket chains giving it

the opportunity to invest more on marketing and advertising research and promotion to

consolidate its position (Gomez-Mejia et al, 2008). According to the company’s 2018 annual

report, Tesco’s annual operating profits grew by 28% (Financial Times, 2019). Tesco has the

leading market share amongst the four leading supermarkets and dominates the grocery retail

market with about a third of the market share (Evans & Mason, 2019). Another strength the

company enjoys is that it is geographically diversified with a thriving global presence counting a

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total of about 6800 stores around the world. This gives the company the opportunity to growth

through acquisitions in new markets.

-Weaknesses

Tesco’s weaknesses include its failure in some foreign markets such as the US and Japan where

the company had to pull out from in 2013 (Rahman, 2016). Furthermore, Fraud Trial and

Accounting Scandal which hit the company in 2017 resulted in hefty fines because of false

accounting declaration and misleading profit reports (Evans & Mason, 2018). All these have had

a serious impact on the company’s corporate image amongst investors. The company’s low cost

strategy results in reduced profit margins.

-Opportunities

Tesco has a number of opportunities and of late, it has been expanding its business through new

initiatives such as Jacks’ business (Hill & Westbrook, 1997). It recently introduced Jacks, which

is a discount store that has recorded significant growth since its inception. This is an opportunity

to grow the Tesco business by successfully competing as a low-cost rival of Aldi and Lidl while

appealing to consumers of non low cost products (Financial Times, 2019). The development of

strategic alliances between other brands and Tesco can enable the retailer to improve revenues

and earnings by working in collaboration with retailers in other geographical markets (Osita et

al, 2014). Such an initiative will enable the company to broaden its products offer and hence

appeal to an even much broader customer base (Westhues et al, 2001). In areas where Tesco is

underperforming, the company can initiate joint ventures with local retail companies that are

performing well in those local markets and make use of their expertise.

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-Threats

Tesco’s faced legal threats in December 2017 for misleading consumers by using fake brand

names in its food marketing to sell its products. It used the name Woodside Farms to market its

food products (Mesly, 2017). Brexit also poses a threat for Tesco which will no longer benefit

from current EU membership privileges in its businesses across the EU (Rahman, 2016).

Furthermore, Tesco also faces competition from rival supermarket giants in most of its markets

such as Carrefour, ASDA and Aldi which is increasingly positioning itself as a future threat to

Tesco.

iii. Marketing Communications Objectives

a.) To improve Tesco sales revenue by £30m.

b.) To promote the Tesco brand image among consumers.

c.) To promote brand loyalty amongst Tesco customers.

d.) To integrate different marketing communications tools in an attempt to achieve the an

increase in sales revenue.

iv. Integrated Marketing Communications (IMC)

Integrated marketing communications (IMC) refers to a carefully planned strategy which

integrates the various elements of the marketing communications mix to achieve one or more

marketing objectives (Lucia et al, 2012). It is an approach used to achieve the specific objectives

of a marketing campaign via the use of a carefully planned and coordinated use of various

elements of the marketing communications mix (Vladimir et al, 2012). Integrated Marketing

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Communications ensures that all the various forms of communications and the messages which

they carry are linked together in a way that they contribute to achieve marketing campaign goals

(Canter et al, 2019 ; Belch, 2014). This entails integrating various marketing promotional tools

in such a way that they work in collaboration to towards attaining a specific and clearly defined

marketing goal.

The term marketing communications strategy refers to an entire range of activities which are

designed to enable businesses to market their products (Valos et al, 2016). They typically range

from paid marketing communications to public relations (PR) activities which are not paid for

but designed to improve the corporate image of business organisations by portraying them as

socially responsible entities. Such activities have a long term positive impact on sales and brand

(Hanlon, 2019). The Marketing Communications Mix refers to a customised mix of advertising,

sales promotion, personal selling, public relations and direct marketing which an organisation

uses to achieve its advertising and marketing objectives loyalty (Verhoef et al, 2015). In order to

achieve their goals, integrated marketing communications need to ensure that the brand,

customer (target market), marketing message and budget are properly aligned to achieve the

desired outcome of the IMC campaign (Luxton et al, 2015).

To put this in perspective, the marketing communications channel used has to align to the brand

perception (Dahlen et al, 2010). For example, Tesco which is a leader in affordable prices cannot

advertise its services on a luxury magazine because the brand perception does not align with

luxury consumers who love to read luxury magazines (Leahy, 2012). A more appropriate

marketing channel will include billboards especially those located in low income communities

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where majority of the people are price sensitive. The campaign will follow the old marketing rule

which calls on marketers to be where their customers are located (Lucia et al, 2012). Finally, the

budget must also align with a marketing channel which meets the objective of the marketing

campaign. For example, this campaign is a national one and hence will be unnecessarily

expensive to use global media such as the BBC and CNN as choice of TV channels. Instead,

national TV channels and other platforms that can deliver a national audience shall be used in the

course of this campaign considering its scope (Vladimir et al, 2012). Below are some of the tools

of the marketing communication mix that will be used in the campaign and the way they shall be

used.

a.) Advertising

The campaign will make use of advertising in portraying Tesco as an ideal retail outlet to

consider for summer holiday preparations. Tesco’s low price strategy has been recommended to

customers over the years and this has enabled the retailer to meet the needs of customers over the

years (Simms, 2007). Considering that this strategy has worked well over the years and propelled

Tesco to the top of the retail sector, this message shall be highlighted in the course of the

marketing campaign that will start in mid-June 2019 (Ryle, 2013). Whilst this campaign will

highlight the affordability of new arrivals ahead of summer across Tesco shops nationwide, it

will emphasise on the fact that the low prices are a result of cost effective measures which the

retailer has introduced across its own supply chain and those of its suppliers (Belch, 2014). This

strategy will reassure consumers of Tesco Value, which promotes low cost products, are not

concerned about the quality of items they buy from Tesco shops (Rahman, 2016). Advertising

will be conducted using both traditional media such as TV, radio, billboards, newspapers and

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online sources including Tesco websites and social media (Facebook, Twitter and Instagram).

This approach ensures that no segment of the generational gap is left behind (Zook & Smith,

2016 ; Valos et al, 2016). For example, while the older generation is more comfortable with

radio, TV and newspapers, the younger generation is more comfortable with online and social

media. Digital media has changed the way marketers reach out to consumers and hence Tesco

has to take advantage of this online boom (Evans & Mason, 2018). Fuchs (2018) writes that

Facebook alone for example has more than 1.7 billion active users who sign into their account at

least once a month, 321 million Twitter users and some 111 million Instagram users. The author

adds that there were at least 35 million active Facebook users across the UK in 2015 and this

demonstrates the potential of social media advertising which Tesco needs to take advantage of in

the upcoming two months marketing campaign (Hanlon, 2019).

b.) Personal Selling

Personal selling is a promotional tool which Tesco can use to conduct face to face marketing

(Gambetti & Schultz, 2015). This strategy includes recruiting sellers to market products to

consumers using their appearance, attitude and specialist product knowledge. This approach to

marketing is rather expensive and as such, most retailers do not use it. However, it is important

in business to business transactions which constitute an area which Tesco needs to consider

(Verhoef et al, 2015). At least 39.2 million overseas visitors come to the UK every year and in

2017, they spent £24.5 billion setting a record high in both the number of visits and amount

spend in the country (Office for National Statistics, 2018). Most of these visitors make the trip

during the summer vacation period and as such, the marketing campaign needs to target some of

these customers. One way through which this can be achieved is through personal selling to tour

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operators who bring in tourists to get them to shop in Tesco shops across the country (Luxton et

al, 2015). This can be achieved by selling Tesco to tour operators through personal selling to

persuade them to take their visitors to Tesco shops and accumulate Tesco points.

c.) Sales Promotion

The Tesco marketing campaign will also make use of sales promotions. Sales Promotion

constitute one of the most commonly used tools of the promotional mix and makes use of both

media and non-media based communications to improve consumer demand and stimulate sales

(Dahlen et al, 2010). It entails using different types of strategies to entice customers to buy

products and last for a period of time. This promotional campaign will run for two months

beginning from mid-June 2019 to mid-August and its objective is to improve Tesco sales by

30%. The sales promotion will include providing free samples of some of the products that

customers are more likely to be in need of during summer such as sun creams (Lucia et al, 2012).

Another sales promotion strategy includes the use of buy one take one strategy. In this strategy,

the campaign will lay emphasis on products that are already on buy one take one promotion and

communicate this promotion on various marketing communications channel to encourage

consumers to take advantage of such promotions which they may not be knowledgeable about

(Vladimir et al, 2012). This information shall be made available online and on billboards on key

locations across the major city centres and media. The entire marketing campaign shall be

market on traditional media using TV and radio commercials (Belch, 2014). Interactive sessions

shall be organised on the social media pages of Tesco to continuously engage the customers in

the marketing campaign so as to make them aware of the ongoing sales promotion opportunities

at Tesco retail outlets across the country (Valos et al, 2016).

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d.) Public Relations

Tesco will also use public relations activities to bring the notice of the population to the

marketing campaign (Luxton et al, 2015). For example, one of the ways through which this will

be achieved is by organising charity events to raise money for charitable courses and on the

sidelines of such events, the public will be informed about the marketing campaign and Tesco in

general (Dahlen et al, 2010). Public relations activities enable organisations to portray

themselves as morally responsible entities and in the process, they generate public appeal which

is later on transformed into brand loyalty (Gambetti & Schultz, 2015). When some customers

become aware of the charitable work businesses do or their commitment towards giving back to

their communities, they tend to patronise them and hence in the long term, this leads to an

improvement in sales (Verhoef et al, 2015). In this light therefore, considering the campaign will

run during the holiday period, Tesco will allocate budget to organise friendly charitable matches

and solicit the participation of some premier professional footballers who can afford to

participate in the games. Public relations events result in a positive coverage of Tesco and also

attract attention to its ongoing marketing campaign (Lucia et al, 2012).

e.) Direct Marketing

Direct marketing shall also be used during the marketing communications campaign. Although

saved for the last, direct marketing is a very important form of marketing communications

because it allows businesses to effectively communicate directly to their customers using various

types of media such as emails, online adverts, websites, cell phone text messaging, database

marketing, catalogue distribution, fliers, promotional letters, newspaper and magazine inserts and

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outdoor advertising (Vladimir et al, 2012). Marketing practitioners tend to prefer direct

marketing as direct response marketing and many marketers like it because its results be it

positive or negative can be directly measured (Belch, 2014). To put this in perspective, if an

organisations dispatches 100 mails to potential customers to sell a good or service, they can

measure the feedback they receive because if 15 of those who received the solicitation and make

a purchase by returning the forms, the marketer can safely tell that the marketing efforts recorded

a 15% success rate. It is advisable for Tesco to use this approach because it will ensure that is

measures the success or failure of its campaign (Valos et al, 2016). Furthermore, this direct

marketing though postal mails is cost effective and relatively easier for Tesco to tell because it

has the data of millions of customers making it relatively easier to reach out to so many

customers without spending too much except for printing mails and postage costs (Gambetti &

Schultz, 2015). Furthermore, its Tesco’s client database allows the company to tell the various

interests of its customers making it easier to easily tell the types of items various customers could

be potentially interested in (Evans & Mason, 2018).

This response rate is important because it is one of the quantifiable measures marketers use to

evaluate marketing campaigns (Verhoef et al, 2015). Even those who do not sign up for a service

or buy a product sometimes provide a clue on why they chose not to purchase or sign up and this

information can be used to ameliorate the quality of goods and services offered to some

customers (Luxton et al, 2015). Furthermore, some customers’ feedback allows marketers to

make further offers which eventually result in a purchase (Dahlen et al, 2010). All these

advantages make it necessary for Tesco to incorporate direct mail marketing in its integrated

marketing communications campaign.

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 v. Scheduling and Budgeting of Media Plan

Media Target Frequency Cost Duration Monitoring and

Channel Audience Evaluation
TV 18 – 70+ year Weekly £1 million 2 months Monthly
olds
Radio 45 – 70+ year Daily £ 500,000 2 month Weekly
olds
Newspaper 4+ 45 £300,000 2 months Weekly
Online 18 – 45 years Twice daily £200,000 2 months Daily
Social Media 18 – 55 years Twice daily £400,000 2 months Daily
Billboards 18 – 70+ years 1 £400,000 2 months Monthly
Direct Mail 18 – 70+ years 1 £200,000 3 weeks Bi weekly

vii. Scheduling, Monitoring and Evaluation

Scheduling, monitoring and evaluation of this integrated marketing communications campaign is

important because it will contribute to the improvement of performance and the achievement of

desired results (Leahy, 2012). This is because it controls the way tasks are conducted and

important factors such as whether tasks are completed on schedule and the extent to which each

tasks contributes to the achievement of the goals of the campaign which have been stated above.

In the case where the tasks or marketing campaigning activities lose sight of the objectives of

this campaign, monitoring will lead to corrective action to mitigate the situation.

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