PESHWA ACHARYA

MARKETING CHIEF RELIANCE RETAIL

•Tesco UK core business (Extras, Superstores, Metro, Express)

•Tesco International

•Non Food (clothing)

•Retailing Services (Dot.com, Tesco Personal Finance, Telecoms)

Tesco has a 4 point strategy:

Core Purpose

To create value for customers to earn their lifetime loyalty

Our Values

No-one tries harder for customers

Treat people how we like to be treated

Every Little Helps is customer speak for our values and is a broad summation of Tesco at it’s best

The expression of our Values

An Every Little Helps Shopping Tripand

A Great Place To Work

Through

Which are

No one tries harder for customersTreat people how we like to be treated

The way we work and

The way we behave

Which means we deliver

is

Shopping Trip•The aisles are clear•I can get what I want•The prices are good•I don’t queue•The staff are greatNo one tries harder for customers

The way we work

•We deliver consistently everyday•We aim to get it right first time•We make our jobs easier to do•We know how vital our jobs are•We always save time and money

Better for customers, Simpler for staff and cheaper for Tesco

A Great Place To Work

•To be treated with respect•A manager who helps me•An interesting job•An Opportunity to get on

Treat people how we like to be treated

The way we behave

Living Service Expressions

What part does the Marketing Department play?

Drive tradethrough

Every Little Helps

The Tesco Marketing PhilosophyThe Tesco Marketing Philosophy

Understand customers better than anyone

Delivering the Every Little

Helps shopping trip

Drive trade through

Every Little Helps

Saying ‘Thank

you’

Marketing

Making Tesco

available

Insight Unit - the role of Customer Understanding

Anticipating customer needs

Championing the customer voice in the business

Guide and measure the business

Insight Unit - Who we are what what we do

Meet customer needs by matching store format to locationSite Research

Market Research

Insight Analysis

Strategic Insight

Customer Question Time

Monitor and track the health of the business, identify changing customer needs, understand current customer issues, and ensure our initiatives are right for customers

Guide business strategy through our insight on customers, property and our people.

Analyse how customers are behaving and how we are performing as a business.

Research customer lifestyles and the shopping experiences in our stores to ensure the business reflects customer needs.

Combined analytical experience = the full story = competitive advantageThe Power of Joined Up Thinking!

Insight Unit - Our Key Outputs

A small selection of Insight reports that illustrate the power of joined up thinking

World class insight is at the heart of the business

UK Business Expansion

Report

Customer Spotlight

Blue Books

Brand Review

Customer Question Times

People Spotlight and

PeopleReview

Express and Non Food Brand

Reviews

Switching Analysis

Sales Forecastsfor new stores

New spacedevelopment

strategy

Trade Reports

CompetitorAnalysis

Insight Unit

Understanding customers better than anyone is the basis of the Marketing Department.

There are 3 broad reasons why we seek to understand customers Anticipating customer needs Championing the customer voice in the business Guiding and measuring the business

The Insight Unit is made up of five key teams - Site Research, Market Research, Strategic Insight, Insight Analysis and Customer Question Times (CQT)

Joined up thinking across Insight enables us to understand the full story and gain competitive advantage

Our key outputs ensure world class insight is at the heart of the business

Stores MarketingCore Purpose

To preview & review all stores on the development programme, to ensure the best offer for the local customer is delivered in the individual stores

To flex the existing levers to tailor the store for the local customers & continue to develop new levers with the relevant owners

To work with local marketing to turn around under-performing stores & assist in the understanding of reasons for poor performance

To help the business to prioritise which elements of the functional Every Little Helps shopping trip needs to be addressed for customers

To bring customer understanding & shape cross functional projects which are focused on the agreed business priorities that will make the shopping trip easier for customers (or impact on it)

Stores MarketingKey Outputs

Stores Marketing Group review papers which ensure the customer is considered in the property planning process. The papers cover:-

Agreement to Food / Non Food Square Footage Solutions to key Customer issues highlighted from

quantitative (Oxford Research) & qualitative (CQT) research Agreement to include food counters & cafe – Deli, Fish, Meat,

Salad, Pizza, Chicken, Olives, Takeaway Agreement to include non food services – Photolab, Pharmacy,

Opticians, Jewellery Counter Agreement to include other Services – Car Park Controls, Bus

Service Agreement to include additional range requirements e.g. Ethnic

Local Marketing

Core Purpose

To launch new stores in all formats to achieve sales targets

To market our refitted and extended stores

To defend against competitor new stores / extensions / conversions that are forecast to impact sales at any of our stores

To turn round sales in under-performing stores and assist in the understanding of reasons for poor performance

To test trade driving tactics at a local level before they get implemented by the national team e.g trial of various petrol promotions

To champion trade initiatives and brand building across specific groups of stores: - e.g London advertising campaign in 2004

Local Marketing

Key OutputsHighly targeted marketing campaigns that are made local by use of customer insight, Clubcard data and local knowledge. Local will use the same tactics as national but on a micro level - these include: -

• Mailings to Clubcard / non -Clubcard customers

• Coupons at till

• Advertising - press, radio, outdoor, other media (e.g. adbikes, blimps)

• Petrol promotions / Clubcard points promotions

• PR and events (e.g. launch events, celebrity chef events, community sponsorship / donations)

• In store Clubcard sign up

• Store specific non-food offers

• POS to communicate store changes

• Leafleting campaigns

Local deliver over 350 bespoke marketing campaigns per year

Local Marketing - Key Takeouts

Local marketing plan and deliver campaigns for all store launches from new stores & extensions to impacts and underperformers

All campaigns are are highly targeted and relevant to the local population. They are built using a wide range of customer insight, Clubcard data and local knowledge

Local use the full tool box of national marketing tactics at a local level

Price Team - Core Purpose

The role of the Price Team is as follows: - Set strategy and direction for company on price Monitor and report against price policy Help to communicate our great price position to customers Deliver price insight to the business

The Price Team has several key activities: - Price Basket Internal hierarchies Comparatives Ad-hoc checks

Price: Key processes Price Basket

Weekly checks on over 20,000 lines against Asda, JS, Morrisons Reporting to Commercial and wider business Price Checker and Price Claims

Internal Hierarchies Ensuring bigger packs give better value, and Tesco own label is

cheaper than branded equivalent

Comparatives Shopping 100s of products to make in-store claims highlighting that

we (a) match Asda and (b) are cheaper than other competitors

Pricing have the accountability for maintaining our price position versus competitors and ensuring the business gets cheaper for customers

Promotions Team - Core Purpose

The role of the Promotions Team is to Set strategy and direction for company on promotions Monitor and report on Tesco promotions against promotion

policy Monitor and report on competitor promotional activity Respond to short term competitor activity as required

The promotions policy is driven by the Helping You Spend Less customer plan objectives Even fewer, even better promotions Neutralise Morrisons on feature space promotions

Promotions: Key processes

Internal tracking and reporting: Monitor Tesco promotional activity against agreed KPIs and key measures

Feature space conformance tracking: Track Tesco store conformance with communicated feature space plans

Competitor tracking and reporting: Monitor competitor promotional activity through store audits

Lidl half price: Track Lidl half price activity and mobilise business to respond

Seasonal event tracking: Event specific promotions reporting on major events eg Christmas and Easter

The promotions team are responsible for setting promotional strategy and tracking Tesco promotions relative to this

Promotional strategy is driven by the customer plan objectives Even fewer, even better promotions Neutralise Morrisons on feature space promotions

Trade Planning - Core Purpose

Trade Planning’s core purpose is to set the trading priorities for the business, which means, Right for Customers Simple for stores Delivers ‘like for like’ growth Supports the Every Little Helps Shopping trip

Trade planning does 3 interrelated things:

Manage the 52 wk Trade Plan

Review Trade Forecast Sales

Trade Planning: Key Processes TPG (Trade Planning Group) - periodic

WL5 directors from Marketing, Supply Chain, Retail and Commercial, facilitated by trade planning who meet every period to:

Review trade and learning's for the period just completed Agree the trade plan going forward and resolve any issues

TPO (Trade Planning Operations) - weekly Cross functional group (trade planning, retail, supply chain) and managers

of small events (less than £10m), e.g. Pancake Day, St Patrick’s Day, Ramadan

Brand Comms - weekly Plan the alignment of TV, Press, Tesco TV, Publishing, Price News and

Point of Sale

Non Food Trade Planning and Great Seasonal Events Manage Seasonal space (power aisle 1 and grocery seasonal aisle) Great Seasonal Event Managers manage the events > £10m, e.g. Mothers’

Day, Halloween

Feature Space Management - what is it? Feature Space and Seasonal Space is the most prominent space in the

store, with the highest customer footfall. Feature Space = Promotional ends and OFDs (Off Fixture

Displays). Usually promotions. Seasonal Space = Power aisle 1 and grocery seasonal aisle.

Usually seasonal ranges.

Feature Space: Core Purpose

Core purpose is to make best use of feature space, which means: Right for Customers

Seasonally relevant Supports Trade Plan activityA good mix of product types for customersFit promotion policy (e.g. minimum discount 20%)

Simple for storesSimple to put on sale and exitProducts fit space efficiently

Delivers ‘like for like’ growthEach end has a hurdle rate, depending on its location

and distribution Supports Every Little Helps Shopping trip

Especially “Aisles are clear” and “I can get what I want”

Advertising - Core Purpose

Primary Objectives To project our brand values through an emotional connection with

our customers.

To build brand trust and loyalty.

Secondary Objectives To communicate our strongest trade drivers and promotions to

encourage customers to come into our stores.

Advertising - Key Outputs

TV & Press Every Little Helps Brand Campaign The Every Little Helps campaign is used to make people like their Tesco

more The campaign revels in the small things that Tesco does e.g. bag

packing, 24 hour opening, low prices as evidence of our philosophy The advertising is a direct, down to earth conversation between Tesco

and the customer (instead of an advertising mechanic that sits apart from the brand)

Cherokee TV Campaign Bi annual TV campaign that supports the Cherokee range of clothing at

Tesco Gives Tesco clothing credibility versus the likes of Next and Gap ‘Design by Cherokee. Price by Tesco’ caption (strap line) emphasises

the strengths of the two brands

Advertising - Key Outputs continued

Trade Driving TV & Press Supports the key trade drivers highlighted by the trade plan The ads are simple straightforward visual of featured product and lets

the offer speak for itself, whilst being clearly branded as Tesco. Press is used to support offers when a quick turnaround is needed –

can be done in days versus weeks for TV

Supplier Funded Advertising Paid for by the supplier but we ensure that they are simple, honest,

transparent and are clearly branded Tesco & the media selected targets our relevant customers

Strict criteria ensure only the strongest prices and promotions are advertised

Every Little Helps TV Campaign

Cherokee Advertising (Autumn/ Winter 05)

Publishing - Core Purpose

The role of Publishing is to support and build a positive image of the company with customers.

We do this in Two principle ways;

Development of an emotional connection with our customers, showing them that we understand them and are on their side.

Communicating our product ranges and great prices

to- Drive our price image with price sensitive customers, Increase and drive footfall into non-food Generate awareness in upmarket customers that we have great

quality and range at market leading prices

Publishing - Key Outputs

Magazine Written to compete with new-stand publications 4m readers 3rd largest circulation magazine in the UK- bigger than

all the leading women’s glossies added together Average retention time 14 days, average reading time 42 minutes -

both highest in the industry compared to the average of 28 minutes for other publications. Although the magazine is not used as a hard marketing tool, research tells us that 50% of readers will buy a food item, 29% a non-food item and 27% a clothing item - if it is featured.

Price News - leafleting Protects existing customer base and encourages defection from

competitors Standard version influences price image covers mainly food and

household aimed at competitor conflict areas - 4m circulation Non-food version aims to drive footfall and price image - aimed at

extra store catchment areas - 4m circulation

Publishing - Key Outputs

Tesco TV Provides “Talking Tesco” content to the revenue generation

inspired In-store TV service. Every Little Helps information, recipes, hints, tips and product information.

Store Finder Map booklet showing all of the stores in the UK with accurate

directions how to find them - 1m circulation

Internet Price check - compares our prices with our leading competitors Today at Tesco what’s key in store this week Store locator services- Search for the right store for you, get

directions to your local store and see what ranges, services and opening hours it has.

Internet magazine proposition being developed

“Tesco send me aThank you”

“I spend my Vouchers”

5 Club Mailings

Statement CaT

“Tesco give me coupons for things I already buy or they think

I’d like to buy”

“I collect Clubcard points as I spend in Tesco”

Extended Brand - TPF, Telecoms, Non Food

Shopping in store or on dot.com

Points Partners

e.g. Powergen

CLUBCARDThe Virtuous Circle

Clubcard Statement

Deals x4In Store

Extended Brand Deals

Online for shopping and

deals

Trade Driving

Club Mailings

CLUBCARDWho we are what what we do

Direct Mail

Operations

Customer Management

Targeted mailing - touching over 12m customers, with over 8m variations

Introducing customers to Clubcard and helping them get the most from it

Permission based mailings - including specialist advice and relevant coupons

Timely, targeted offers to Clubcard customers

Making Clubcard more rewarding through the extended brand

Measuring and supporting Clubcard use in the business

Clubcard Statement

Managing Penetration

Retail Services

Coupon at Till

Welcome Pack

A new system which will offer better data and business processes to help the business to grow customer loyalty

Freetime Deals Service where customers can get x4 value from their Clubcard Vouchers

Slippage and Gone Aways

Strategic Mailings to boost trade

Timely mailing to retain customers with declining loyalty

Thank you/brand builders

Raising the profile of CC

CLUBCARD - Key Take Outs

Clubcard continues to have fantastic success in the UK Over 12 million customers currently receive a Clubcard Statement With approximately 8 million unique variations - each time Clubcard penetration is currently 73%

Saying ‘Thank you’ drives trade Most customers see points as more valuable than money Club mailings grow the breadth and depth of customer loyalty

Coupons are tightly targeted You buy a lot of sausages? You get a sausage coupon Coupons at till target a new set of customers every two weeks It acts as an incentive - but secondary to reward

Clubcard rewards customers across the entire Tesco brand From your groceries to broadband connection!

Customer Plan - Core Purpose

The Customer Plan is a group of year-long projects which must

Drive our ‘like for like’ sales

Deliver a step change in the Every Little Helps shopping trip

Need more than one function + dedicated resource to deliver them

They are the Number 1 priority for the business each year and feed into the Customer quadrant of the Corporate Steering Wheel Each project has board-level support

The Customer Plan embodies our philosophy that customers will tell us our direction for the year ahead

It supports our core purpose of creating value for customers to earn their lifetime loyalty

This keeps us ahead of the competition

Customer Plan - Key processes

Phase OneIdentify and agree key

customer opportunities

Phase TwoDevelop solutions to

key opportunities

Phase ThreeImplement Monitor

Review

BRAND REVIEW

Research/Report

February - September

Planning

October - February

Launch Customer Plan

March

Project brief WritingOctober - December

Project SolutionsDecember - February

Examples of projects:

•Fresh & Full Meat & Poultry

•Strengthening our appeal to ethnic customers

•Helping you live more healthily

Who we are

VacancyInsight & Site Research

Acting Director of Marketing - UKIan Crook (also Trade Planning, Advertising & Customer Plan)

Andrew MannClubcard & Services

Andy MilesStores & Non Food

Nicola HeaslipPrice, Promotions &

Publishing/POS

Clubcard Scheme, Mailings, Clubcard DealsService Initiatives

New Stores, Local Marketing, Store Marketing Express Marketing, Non Food Marketing

Price News (Tabs), Price Basket, Price/Promotions PlanningProcess Management,

Site Research, Customer & People Insight, Market Research, CQTs,Customer Plan Development

Andrew CookeMarketing Finance

Hayley BilantzPersonnel Manager,

MarketingPersonnel

Finance

Peshwa Acharya

Peshwa.acharya@gmail.com

9867641038