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Questions for Secondary Research TESCO
Author: Yermek, Assiya, Abay, Shynggys, Talgat

Company Name
TESCO

Over 15 million members are registered in the TESCO Clubcard scheme (2010) in the world.
====Previosuly they used [|Green Shield Stamps] - a promotional tool that rewards customers for visits and spend, however it gained no customer information. ==== ====KEY change since the 1993 Green Shield Stamp to Tesco Clubcards- the ability to track individual customer behaviour using a magnetic stripe card. ==== ===="What scares me about this is that you know more about my customers after three months than I know after 30 years." Tesco's then-Chairman McLaurin said to Grand Harrison and Clive Humby. (1994) ==== ==== J Sainsbury rejected alike loyalty card scheme. But the effect of Tesco’s Clubcard had on Sainsbury's sales made J Sainsbury introduce Reward Card in 1996, 2 years after TESCO. ==== ====This loyalty card scheme allows for users to: collect points, get vouchers, and spend those vouchers (or boost them). This is what creates the illusion of profit for customers. ====

Question 1 Additional Contribution by Yermek
When the Tesco's Clubcard was first introduced to customers back in 1994, people were more driven towards it and that's what gathered it most of its market share. This loyalty card system was new back then and that is why it was so benefitial and brought many new loyal customers. They not only gained new market share but also managed to maintain it.

Question 2 by Assiya
What are the features of the scheme?

Customers collect points every time they shop online, in-store or fill at the pump with Tsco's partners. <span style="font-family: Arial,Helvetica,sans-serif;">Once they reach 150 points, tesco converts them into vouchers. <span style="font-family: Arial,Helvetica,sans-serif;">Customers exchange vouchers online and in store or fuel stations. <span style="font-family: Arial,Helvetica,sans-serif;">Because they have a clubcard, customers can manage accounts online to check points, print vouchers, recieve coupons.

<span style="color: #0000ff; font-family: Arial,Helvetica,sans-serif;">Additional contributions
Contributor: Yerkebulan

When shopping in TESCO clubcard holders get 1 point for every £1 they spend. These points are stored and built up and at least four times a year the holder receives a statement and vouchers to the value of points they have saved.

From the beginning of 2014 (the actual date varied between outlets), Tesco Clubcard holders can collect points from Esso fuel stations, at a rate of one point for each £5 spent. After collecting 150 points, they will convert them into vouchers and send them to you. You can spend your vouchers online, in-store and on fuel or exchange to get 4x more value with Clubcard boost

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 11px;">Marketing in Financial Services. (n.d.). Retrieved January 28, 2015, from []

Question 3 by Talgat
What are the benefits for the customer?


 * 1) Tesco skillfully translates product availability for customers
 * 2) Apply new technologies (In 2003, Tesco took the lead in introducing RFID technology)
 * 3)  Ease of Payment (Speed and Simplicity) Tesco adopts the concept of lean management which is pointed out by Toyota. The concept of lean management is to simplify the process, remove all unnecessary elements and avoid waste.
 * 4) ** Possibility of Receiving other Financial Services **
 * Services that take part in the Clubcard scheme:**
 * ==== Tesco stores ====
 * ==== Tesco.com ====
 * ==== TescoDiets.com ====
 * ==== TescoEntertainment.com ====
 * ==== Tesco Petrol stations ====
 * ==== Tesco Direct ====
 * ==== Tesco Bank ====
 * ==== Tesco Telecoms ====


 * Additional contribution by Abay**
 * <span style="color: #222222; font-family: arial,sans-serif; font-size: 24px;"> CASE STUDY: Tesco || media type="youtube" key="hv4eEifsE08" width="560" height="315" ||
 * === How to exchange your points for rewards | ===

Tesco Clubcard Rewards
|| ======media type="youtube" key="8syrWqxMtQw" width="560" height="315"====== || <span style="font-family: Arial,Helvetica,sans-serif;">To make the most out of your scheme you need to know how it can be manipulated. Each loyalty card will have its own way to earn extra points without spending extra money.

<span style="font-family: Arial,Helvetica,sans-serif;">See our separate guides on loyalty card schemes for the best way to take advantage of your points.


 * <span style="font-family: Arial,Helvetica,sans-serif;">Tesco Clubcard
 * <span style="font-family: Arial,Helvetica,sans-serif;">Nectar card
 * <span style="font-family: Arial,Helvetica,sans-serif;">Boots Advantage card
 * <span style="font-family: Arial,Helvetica,sans-serif;">Superdrug Beautycard

<span style="font-family: Arial,Helvetica,sans-serif;">Contributor: Askhat

<span style="font-family: Arial,Helvetica,sans-serif;">Read more: [|http://www.thisismoney.co.uk/money/bills/article-1679729/Loyalty-cards-Tesco-Clubcard-Nectar--Boots-Advantage.html#ixzz3QYGsFs5Y]

Contributor Daniyar Syzdykov:
media type="youtube" key="SUPnXHgfB4w" width="560" height="315"

Question 4 by Shynggys
How does the system work? For example: include diagrams and bulleted text on how the loyalty card system works in the company you are studying. Tesco loyalty card collect points while you are shopping in the Tesco and buying goods. After customer get 150 points, customer may convert those points to vouchers, which may be spend on shopping in Tesco or in the website. Contributor Alen

Question 5 by Shynggys
What are the drawbacks/issues with the system? You should include the current problems that the company face with this system e.g. losing market share with another company? For businesses implementing loyalty card system may become a concern because it needs money to be implemented and promoted. Implementation of new system and connecting it to the current system will need a lot of money to be spent. As new system it will need technical support, which will require money to develop system and improve it and test updated versions. Even after succesful implementing or while it will require training of the staff to use new system. Training of the staff will be done by professional technician, he will be paid for his work, so it is an additional money spent. Another concern may be risk of leaking consumers personal data. If personal data of the consumer will be published, supermarket may loss its customers, who consern about lossing/leaking of their personal data, thus supermarket may loss market share. Additionally consumer(s) may complain about leak of their persoanl data, which may result as case in court. In consequence supermarket will lose money by paying compensation to consumer

<span style="background-color: #ffffff; color: #443f3f; font-family: arial,helvetica,verdana,sans-serif; font-size: 14px;">Contributor: Anel Mamet

Question 6 by Yermek
Include any illustrations/pictures of the loyalty card/system. For example: what information is stored on the card?

agkjdsvgk c Figure 1 (The TESCO clubcard) ilkhsdkjfhdskjlfh Figure 2 ( Esso Fuel Card)

khjgjhgvbkubgjhbkjbbhjkjbhkjbkjbnbkj Figure 3 (Shows what is included on a Tesco clubcard system)

Question 7 by Abay
Explain the process on how the company collects the data and what benefits does it bring to the company as a stakeholder and the company as a whole? What analysis does Tesco conduct on the data it collects and for what purposes?

Tesco company developed Clubcard system which collects information about their customers through analysis of their purchases and personal data entered during the regestration into the system.
 * 1) Data collection starts from the very begining of the process - the registration of the customers into the Clubcard system. Customers enter their personal data, including date of birth, name, credit card number, etc. Even if customer did not enter the personal information, it can be obtained through the bank account, phone number, adress, email adress and credit card during purchases via credit cards.
 * 2) Further data collection process occurs during the purchases made by customers. Every item or product that was bought is recorded by the system and enetered into database.

Collected data goes to the analysis process to identify patterns and features, so that company recognises customers preferences. It may include regular amount of purchases and spendings, most frequant types of products purchased, interest area, etc.

The main benefit for the company is targeted marketing, which basically means that they will sell exactly those products that customer needs. Via this method they decrease amount of unsuccessful sellls and increase their income from regular and successful purchases. Targeted marketing is conducted by the Tesco data analytics. The analysis that Tesco does includes: Step 1: Problem Definition Step 2: Development of an Approach to the Problem Step 3: Research Design Formulation Step 4: Field Work or Data Collection Step 5: Data Preparation and Analysis Step 6: Report Preparation and Presentation

**Question 7 Additional Contribution by Yermek** Tesco is using the customer data to massively personalize their habits using their loyalty card system.

“We’re in a new era of retailing – the era of mass personalisation." (Clarke)

As a result their sales grew by 10%

Its mobile apps will now enable shoppers to find their nearest store and add their Clubcard points by scanning their mobile at checkout. By putting free wi-fi into more stores, mobile technology will be used to direct customers to products in store, and suggest products and offers.

Question 8 by Abay
Explain the benefits for the customer for having their data collected by the company.

Customers get better communication with the supermarkets and shops. What does it mean? Basically, it means that the data collected by the supermarket is used in the most convienient and benefitial way for the customer. It Helps customers save their time by offering those products that they need. Moreover, customers care about customers experience. So, getting timely and relevant offers abnd deals does add value, that's why so many customers liked suggesting books and advertisements that fit their taste.

Contribution: Contributor: Assiya Question 8: benefits for the customer of data collection
 * data analysis, testing, research, statistical and survey purposes increase effectiveness in the presentation of products for customers
 * allows tesco to do troubleshooting
 * personalises services for customer;
 * informed of the important changes to the Website and services
 * manage promotions, competitions, customer surveys and questionnaires. About Clubcard - Tesco.com. (n.d.).

Question 9 by Ermek
<span style="font-family: Arial,Helvetica,sans-serif;">What analysis does the company conduct on the data it collects and for what purposes? <span style="font-family: Arial,Helvetica,sans-serif;">"As they change, you change. If you are faster at solving their problems you're useful and relevant to them. That's the only way to long-term survival," (c) Terry Leahy (former CEO) On the customer data analysis (2011). <span style="font-family: Arial,Helvetica,sans-serif;">They hold on to the existing customers instead of trying to gather new ones from their competitors. Therefore, they are able to sustain their loyal customers and keep the survivability. <span style="font-family: Arial,Helvetica,sans-serif;">“Tesco was transformed into the market leader in the UK—with more than 30pc market share—by being able to respond to the demands of its customers.” (The Telegraph) <span style="font-family: Arial,Helvetica,sans-serif;">Big data analytics of Tesco is driven by analysing customers' "loyalty". What that means is that they had more insight on their customers' behavior being driven by low cost and that's what kept them with Tesco. They (as well as some other companies) have thought that this tactic would get them more customers, while in fact it proved to be false, which was found when the Tesco's domestic competitiveness was at its low when Leahy left.

Question 9 Contribution by Talgat
Tesco segmented the customers into appropriate groups. That resulted in two things. On the one hand Tesco could actually be more targeted in its mailings of vouchers and coupons (which worked: rate of redemption for coupons shot up from 3% to 70%), but it could also launch new product lines according to customer demands.

Having broken down customers into segments, Tesco increased its reach by launching the Clubcard Plus, which had an integrated debit card. This was later replaced by a credit card but nonetheless lured customers into spending more at Tesco. Using all this data Tesco started trying to convert the non-buyers. For example, finding that recent parents were spending their money elsewhere, they launched a Baby club and ended up capturing 24% of the baby market. As data from Clubcard subscribers became more insightful the variations on the standard Clubcard mailing rose from a mere 100 after the fifth mailing to over 145.000 in 1999.


 * Seeing that its analytics approach worked, Tesco started applying it to other fields also. One example is its optimized stock keeping system which forecasts sales by product for each store based on historical sales and weather data.** Through predictive analytics Tesco managed to save 100m pounds in stock that would have otherwise expired and thus wasted. In another instance Tesco found that its management of the fridge and store temperatures was sub-optimal and thus enabled significant savings in energy costs.



Additional questions
Contributor: Assiya
 * 1) What are any Policies concerning private Data Protection that TESCO has established?**

Privacy, Cookie Policy, Terms and Conditions: According to Data Protection Act 1998 the data controller is Tesco Plc of New Tesco House, Delamare Road, Cheshunt, Herts EN8 9SL.

They collect and process information about customers under Private Data Protection Act'98, : Information that customers give, information that they collect ( technical information and information about a visit). TESCO's Website uses cookies to distinguish customers from other visitors of the Website.


 * "We will never disclose your information to anyone outside the Tesco Group of companies, except:
 * where we have your consent;
 * if we are under a duty to disclose or share your personal data in order to comply with any legal obligation or in order to enforce or apply our [|Terms & Conditions];
 * to analytics and search engine providers that assist us in the improvement and optimisation of our Website;
 * to other companies who provide a service to us (eg our advertising partners and networks that require the data to select and serve relevant adverts to you and others); or
 * with any successors in title to our business." About Clubcard - Tesco.com. (n.d.).

Other Websites which are hyperlinked with TESCO that are outside TESCO control are not covered by this Privacy and Cookies Policy. "The operators of these sites may collect information from you that will be used by them in accordance with their policy, which may differ from ours." says TESCO.

Contributor: Yermek
 * 2) How was the TESCO gaining and maintaining market share?**

TESCO was gaining market share over the period of last 12 weeks since the 20th of January 2013, however, it has failed to modernise its grocery stores, with the only addition being the loyalty card systems. They lack the presence in the fast -growing parts of the grocery industry (internet and convenience stores).

4) What are the benefits of the loyalty cards for the TESCO comparing with other systems?
 * 3) How much does targeted advertising/marketing contribute to the sales and profits generated for the business?**

= =

http://www.tesco.com/clubcard/about/

Resources
> Good Video: Video interview with Edwina Dunn and Clive Humby, the founders of dunnhumby, and the brains behind Tesco's (UK based supermarket) hugely successful Clubcard loyalty scheme. <span style="display: block; height: 1px; left: 0px; overflow: hidden; position: absolute; top: 4034.5px; width: 1px;">
 * About Clubcard - Tesco.com. (n.d.). Retrieved January 19, 2015, from http://www.tesco.com/clubcard/about/
 * Coles, S. (2013, March 6). Tesco Clubcard cashback deal: What's the catch? . Retrieved January 19, 2015, from http://money.aol.co.uk/2013/03/06/new-tesco-clubcard-cashback-deal-whats-the-catch/
 * The Fuelcard People. (n.d.). Retrieved January 19, 2015, from http://www.thefuelcardpeople.co.uk/tesco-club-card-esso/#.VLxxbCusWAU
 * - Benefits For Customers using Loyalty card. (n.d.). Retrieved January 19, 2015, from http://www.loyaltycard.in/content/view/25/36/
 * “Analyze Data.” Boundless Marketing. Boundless, 14 Nov. 2014. Retrieved 28 Jan. 2015 from https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/consumer-marketing-4/marketing-research-process-34/analyze-data-179-7307/
 * http://www.mycustomer.com/feature/experience/edwina-dunn-and-clive-humby-how-we-revolutionised-customer-loyalty/165585