Why brand should be central to the new Tesco strategy

You can’t be all things to all men, so the saying goes.  And the evidence is now apparent to troubled supermarket giant Tesco.  Having posted the sixth biggest corporate loss in history last month, the supermarket that has for too long tried too hard to appeal to anyone and everyone, and is now having to take stock and figure out how to win back market share.

Certainly, Tesco’s bosses will have a lot of navel-gazing to do over forthcoming months.  But one thing is certain – brand strategy will have a large role to play, evidenced by the hiring of a new Brand Director within days of the loss announcement.  We wish her well; her journey will not be easy.

To build a new brand is a major challenge, but to change perceptions about an existing brand, well, that’s like the Everest of marketing challenges.

Hindsight is a wonderful thing, but it’s now clear to see the fundamental flaws lay in Tesco’s market positioning.

In the past few years, Tesco has tried to steer the middle ground, offering ‘value’ products alongside mainstream and its ‘finest’ range.  They’ve made no secret of the fact they wanted their supermarket to sell everything which everyone wanted to buy at a the price they were willing to pay.

With the might of Tesco’s buying and supplying power, it wasn’t a laughable goal.  It was perhaps one of the bravest goals that Tesco could set.

However aspirational Tesco was in its marketing strategy, the result, was a watered-down brand which, over time, people found hard to relate to.  Formerly loyal customers weren’t sure what the Tesco brand meant to them – was it saving them money every day?   Was is the cheapest, the best quality, the biggest range, the most pleasant buying experience?

There was just too much going on. So customers were allowed to be seduced by the low prices of Aldi and Lidl, and the ‘expensive and proud of it’ positioning of Waitrose and Sainsbury’s.  Tesco waved goodbye to  market domination, and said a reluctant ‘hello’ to too few customers spending too little, along with a raft of corporate reputation disasters from which it is still struggling to recover.

Tesco’s issue serves to demonstrate why market positioning is so important to a brand. Their demise has shown it isn’t ever possible to appeal to everyone all of the time, even in the FMCG market where one Braeburn apple is very much like another.

Defining the customer is the first rule in every marketing handbook ever written; it’s the first exercise we undertake whenever we take a new brief and it’s imperative to creating marketing messages which prompt a response.

What the most successful brands do is appeal to a particular segment of their target market.  This doesn’t mean they don’t appeal to non-target customers, it’s just that non-targets are considered ‘bonus customers’.

Well-defined customers can often be described in terms of the type of work they do, the lifestyle they lead (and the lifestyle they aspire to), the other brands they like and their priorities.  It can be viewed as the ultimate exercise in stereotyping, or the ultimate exercise in marketing and merchandising.

When the target customer is crystal clear, it’s easier for brands to make decisions about what their customers want, what they don’t want, what sort of shopping experience they’d like to have.

And these small, isolated decisions build a business which knows its customer, is able to serve them better than the competition and doesn’t fall into the same marketing quagmire that now surrounds Tesco.

It will certainly be interesting to see the new brand strategy unfold in forthcoming weeks and months.  Anyone who remembers the Tesco of the 1980s will know this isn’t the first time the company has had to turn around its image and its fortune.  The question is, can Tesco regain the trust of its customers, and get shoppers back through the door once more?

About the author:
Jon Walker is M.D. of Ultimate Creative Communications. Jon has an extensive knowledge of all digital marketing disciplines and a passion and deep understanding of more traditional forms of marketing and over-arching Brand Strategy.

Written by Jon Walker April of 2015