Recommendations Of Tesco : Tesco Essay

1118 Words Jun 6th, 2016 null Page
Recommendations of Tesco to increase ROCE

A recommendation to Tesco would be to deepen and strengthen consumer penetration . This consists of enhancing Tesco’s relationship with its customers so that they spend more time in Tesco stores, thereby spending a greater amount of money on Tesco products. The manner in which Tesco could do this, as mentioned previously, is through revitalising its loyalty programme. The loyalty programme not only allows customers to claim lower prices and better deals, it also allows Tesco to widen its customer base and collect information on the pattern of customer expenditure. Information of this regard would allow Tesco’s management to adapt to customer trends and allocate resources and capital in accordance with changing customer preferences thereby increasing efficiency and profitability of the company.

Tesco may also opt to use the method of product penetration to increase profitability. A continuous spending pattern of one customer at one supermarket can be attributed to brand loyalty and indicates trust. Tesco could implement cross-selling and up-selling to increase the variety of goods sold as well as provides customers with a variety of choice. Cross-selling means that Tesco would sell complementary products to the ones already being sold, and up-selling on the other hand means selling of an upgraded or enhanced version of a certain product. Such mechanisms allow for an increase in customer loyalty due to the variety of goods being…

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