MEDIA ANALYSIS: BRAND SPEND ANALYSIS - Innovative Tesco is looking after the pennies but still tops the supermarket tree

Background Since its launch by Jack Cohen in 1924, Tesco has grown into Britain’s number one food retailer and, despite being outspent in advertising, has firmly ousted Sainsbury’s as Britain’s most successful supermarket in terms of market share and profit. Tesco operates 586 stores in the UK and 196 overseas.

Background Since its launch by Jack Cohen in 1924, Tesco has grown

into Britain’s number one food retailer and, despite being outspent in

advertising, has firmly ousted Sainsbury’s as Britain’s most successful

supermarket in terms of market share and profit. Tesco operates 586

stores in the UK and 196 overseas.



Given the mass-market and competitive nature of the UK grocery business,

Tesco’s ad strategy is to make the company distinctive from its

competitors.



It does this by communicating its traditional strengths of value and

quality, plus a strong focus on customer service, using the slogan,

’Every little helps.’ Tesco is currently running a TV campaign featuring

Dotty, a ridiculously annoying middle-aged woman, played by Prunella

Scales, who puts Tesco’s service and standards to the test.



Media mix: Tesco is the UK’s 26th biggest above-the-line advertiser,

with an annual spend to February 2000 of pounds 33.9 million. This is

considerably less than Sainsbury’s 1999 spend of pounds 49.2 million but

more than Asda’s pounds 24.9 million.



It uses local press to promote individual stores and price offers, and

outdoor ads to promote good value products.



TV advertising accounts for 47 per cent of total spend, followed by

national press (23 per cent), direct mail (18 per cent), regional press

(5 per cent), radio (5 per cent) and outdoor (2 per cent). Tesco states

that, in a typical year, it will run more than 2,000 press ads and

10,000 TV commercials. In a typical week, its television ads will have

34 million impacts on the 22 million people responsible for the main

grocery trip.



During 1997, Tesco achieved 924 million impacts on these shoppers and

1,974 million impacts on all adults.



Target audience: Tesco sees most people as potential shoppers and uses

mass media to boost awareness and response, choosing daily newspapers

with the widest readership and commercial breaks between or within the

most popular TV programmes. Television advertising usually appears in

short, intense bursts, as Tesco believes this is more effective than

’drip feeding’. Tesco segments the population into small categories such

as students, single parent families and young mothers.



Its direct marketing and Clubcard loyalty scheme is finely targeted with

a reputed 80,000-plus unique mailings sent out every 13 weeks. Tesco is

the UK’s 73rd biggest direct mail advertiser.



Agencies: Tesco uses Western International Media for its media planning

and buying, Lowe Lintas for its creative work, and Evans Hunt Scott for

its direct marketing.



Trends: Tesco is very innovative. It has launched a bank, operates one

of Britain’s most sophisticated loyalty schemes and invests in spin-offs

such as Tesco Net, Tesco Metro and Tesco Direct. Given that it has

overtaken Sainsbury’s - despite spending pounds 10 million less on

advertising last year than its rival - it looks unlikely Tesco will

suddenly boost its adspend.





Research by AC Nielsen MMS, telephone: 01344-627553

www.mediamonitoring.co.uk.