At the beginning of the 1990s, Tesco faced a number of difficult market condiȬ
tions. Population growth was low and so was food market growth; the suȬ
permarket segment in the United Kingdom was already well developed and
relatively saturated; getting planning permission for large greenfield sites
was becoming increasingly difficult; there were three strong competitors
(Sainsbury’s, Asda and Safeway) in the national market; Tesco was the no. 2 in
the market with a share of 16.7 %; traditional supermarkets were challenged
by the arrival of new formats such as hard discounters like Aldi (see case
study Aldi in Chapter 5) (Coriolis 2004, p. 3). In order to tackle these difficulȬ
ties, Tesco decided to implement an entirely customerȬfocused CRM initiative
based on the customer loyalty card Tesco Clubcard. In a saturated market like
the United Kingdom, the goal of the initiative was not only to gain new
customers in order to increase market share, but also to enhance existing
customers’ loyalty in order to secure a greater share of their total shopping
basket.
At the beginning of the 1990s, Tesco faced a number of difficult market condiȬ
tions. Population growth was low and so was food market growth; the suȬ
permarket segment in the United Kingdom was already well developed and
relatively saturated; getting planning permission for large greenfield sites
was becoming increasingly difficult; there were three strong competitors
(Sainsbury’s, Asda and Safeway) in the national market; Tesco was the no. 2 in
the market with a share of 16.7 %; traditional supermarkets were challenged
by the arrival of new formats such as hard discounters like Aldi (see case
study Aldi in Chapter 5) (Coriolis 2004, p. 3). In order to tackle these difficulȬ
ties, Tesco decided to implement an entirely customerȬfocused CRM initiative
based on the customer loyalty card Tesco Clubcard. In a saturated market like
the United Kingdom, the goal of the initiative was not only to gain new
customers in order to increase market share, but also to enhance existing
customers’ loyalty in order to secure a greater share of their total shopping
basket.
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