Customer Relationship Management at Tesco *

Abstract:

The case describes the customer relationship management (CRM) initiatives undertaken by Tesco, the number one retailing company in the United Kingdom (UK), since the mid-1990s. The company's growth and its numerous customer service efforts are discussed. The case then studies the loyalty card scheme launched by the company in 1995. It examines how the data generated through this scheme was used to modify the company's marketing strategies and explores the role played by the scheme in making Tesco the market leader. The case also takes a look at the various other ways in which Tesco tried to offer its customers the best possible service. Finally, the company's future prospects are commented on in light of changing market dynamics, the company's new strategic game plan, and criticism of loyalty card schemes.

Issues: » Examine how the information gathered through CRM tools can be used to modify marketing strategies and the benefits that can be reaped through them.

Questions for Discussion:

1. Examine the customer service efforts undertaken by Tesco prior to the loyalty card scheme's launch. Why do you think the company felt the need to launch Clubcards?
2. Analyze Tesco's Clubcard scheme in depth and comment on the various customer segmentation models the company developed after studying the data gathered.
3. How did Tesco use the information collected to modify its marketing strategies? What sort of benefits was the company able to derive as a result of such modifications?
4. What measures did Tesco adopt to support the CRM initiatives on the operational and strategic front? Is it enough for a company to implement loyalty card schemes (and CRM tools in general) in isolation? Why?
5. With Tesco moving away from its core business of grocery retailing and focusing on globalization, what do you think the future has in store for the company? What do you think the company should do to retain its growth pace and leadership status?

Key words:
Customer relationship management, CRM, Tesco, retailing company, United Kingdom, UK, mid-1990, customer service efforts, loyalty card scheme, 1995, data generated, scheme, marketing strategies, possible service, changing market dynamics, game plan, loyalty card, schemes

*Note : This case is a simplified version of a longer case study, and is intended for learners for whom English is a foreign language. The longer version of this case study (MKTG070) is available at: http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG070.htm