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EDEXCEL BUSINESS STUDIES CASE STUDY JUNE 2009 - UNIT 1 (Tesco plc 2007) watch

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    Heya! Bug B thnx for crrcting ma answer ........LOL!!
    buh the point is dat i cnt get any more limitations for tesco product diversification........... i had one more point in my mind buh i wasnt sure about including it , the falling demand of some products wre due to the loss made by royal bank of scotland which is joint venture with tesco??? like it affected the company's reputation? would that b crrct?
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    (Original post by Nes)
    hmmm herez my answer...da questin was sucha pain in da ***

    Analyse the benefits of using loyalty card scheme as a promotional technique to Tesco Plc.

    Promotion is one of the four elements in the marketing mix , that promotes, that is inform and/ persuades customers to purchase the products and services provided by the business. Promotional techniques are the ways in which they are achieved.

    Tesco Plc uses loyalty card scheme along with many other community initiatives in order to promote it’s products. Using this card, customers will be able to benefit from reduced costs while shopping at Tesco.

    Tesco Plc as a retailer, targets a very large proportion of the market, and there fore, while choosing their promotional techniques, they must ensure it is able to reach its target market. Using loyalty card scheme will be of benefit to Tesco, as it will attract a lot of customers towards its store in the hope of shopping at lower prices. Besides, in order to be able to get hold of a “loyalty card”, the customers will have to prove their “loyalty” to Tesco plc by shopping at their stores as often as possible, in the process; Tesco will be able to benefit from increased sales and profit. Also, once the customers get their loyalty cards, they will tend to return to Tesco more often for their groceries shopping as they will then be able to purchase products with cheaper price than if they purchased the same products from other retail stores. However, customers may not like the fact that they will have to prove their loyalty by shopping more often firstly, to be able to get a loyalty card, and next, to shop even more to gain enough points to get the discounts. Also, this method of promotion is quite risky when we consider the fact that tesco will have to provide a large number of customers at a discounted rate for indefinite period of time, and there fore, the promotional technique is very expensive as well.

    In conclusion it can be said that, using loyalty scheme cards is a very smart move taken by Tesco, as besides being used as a promotional tool, it can also be used as a market research technique if the firm keeps track of the frequent purchases made by their loyal customers along with their likes and dislikes. However, as this techniques is likely to incur a lot of costs, but then again, Tesco’s already high returns will probably be enough for it to fund for such investments.
    Hey NES, ur answer is really to the point and full fills all the the level.......
    You could mention more about "Price conscious customers" they will be easily targeted.

    For the loyalty card do they need to make purchases to some extent from tesco or they get it directly without any purchase???
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    (Original post by Z for all)
    Heya! Bug B thnx for crrcting ma answer ........LOL!!
    buh the point is dat i cnt get any more limitations for tesco product diversification........... i had one more point in my mind buh i wasnt sure about including it , the falling demand of some products wre due to the loss made by royal bank of scotland which is joint venture with tesco??? like it affected the company's reputation? would that b crrct?
    It would require a lot of resources of tesco plc.
    Moving into new markets maynot as successful as in food. e.g. moving in tele-com may not provide as much revenue as in food because there ar already many competitors and they are specialised in that industry.
    You could mention product diversificiation itself is a risky decision, wrong decision may lead to losses.

    About the Scotland joint venture losses I am not sure although it is mentioned in the toolkit(I think so) but not in the casestudy so can't say anything abt dat.
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    Hey Nes I got this from wikipedia:

    When shopping at Tesco or using Tesco services (such as services from Tesco Finance), Clubcard holders receive one point for every £1 (€1 in Ireland) they spend, holders can also get double points on special offers and receive one point for every carrier bag they reuse (UK only) as part of Tesco's green initiative. These points are stored and built up and four times a year the holder receives a statement and vouchers to the value of points they have saved (1p/1c per point). Vouchers can be spent instore on shopping or used on Clubcard Deals where they are worth four times the value. These can be used to obtain discounted day trips and magazines.

    Clubcard holders are also entitled to free access to the clubcard clubs which include: wine club, baby and toddler club, healthy living club and food club. There is also a facility to save vouchers to be sent near Christmas, similar to a Christmas savings scheme.
    No where does it say that customers get discounts for shopping at Tesco, they are just rewarded for it. But they do get exclusive deals.

    And don't worry, if such a question comes, it won't be for promotional purposes only, we will be able to right about it being a market research tool. Their card scheme is what gave them an edge. Tesco somewhat pioneered retailing because they tried things which others didn't and wasn't aware of, like this card scheme.

    Btw, what do you guys think about product diversifiction increasing internal competition. Diversification can be a different brand of product right?

    @Z for all: I don't think a loss made by RBS will affect Tesco, but negative pulicity might. And Tesco bought out RBS' stake in the Tesco Personal Finance project, so RBS is no more. You can't write this though, just thought I'd update you on the situation.

    Edit: One last thing, customers don't need to shop regularly for a card, they can just apply for it. http://www.tesco.com/clubcard/clubcard_n/howtojoin.asp
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    (Original post by aayman_farzand)
    Hey Nes I got this from wikipedia:



    No where does it say that customers get discounts for shopping at Tesco, they are just rewarded for it. But they do get exclusive deals.

    And don't worry, if such a question comes, it won't be for promotional purposes only, we will be able to right about it being a market research tool. Their card scheme is what gave them an edge. Tesco somewhat pioneered retailing because they tried things which others didn't and wasn't aware of, like this card scheme.

    Btw, what do you guys think about product diversifiction increasing internal competition. Diversification can be a different brand of product right?

    @Z for all: I don't think a loss made by RBS will affect Tesco, but negative pulicity might. And Tesco bought out RBS' stake in the Tesco Personal Finance project, so RBS is no more. You can't write this though, just thought I'd update you on the situation.

    Edit: One last thing, customers don't need to shop regularly for a card, they can just apply for it. http://www.tesco.com/clubcard/clubcard_n/howtojoin.asp
    hy there aayman...i would like to deferr to the point where u sid that its not mentioned that they provide discount..its kinda worldwide known fact that this kind of club cards are there to give discount to the customers...otherwise they wouldnt exist....these days many of the big supermarkets have it...even in our country...for example..Nondon...
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    I know, but these aren't the same. Customers don't directly get a discount on their purchases in Tesco, so I'm pretty sure it's not right to say they do.

    I had a coffee world discount card, and used to get 10% discount everytime I visited the place, but in Tesco its like Agora's card scheme, you collect points based on your purchases then redeem them later. These act as a reward rather than a discount.
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    (Original post by aayman_farzand)
    I know, but these aren't the same. Customers don't directly get a discount on their purchases in Tesco, so I'm pretty sure it's not right to say they do.

    I had a coffee world discount card, and used to get 10% discount everytime I visited the place, but in Tesco its like Agora's card scheme, you collect points based on your purchases then redeem them later. These act as a reward rather than a discount.

    yeah..i wrote that in my answer...the customers may not like the fact that they will have to purchase to the limit to get hold of a card and then further purchase more to be able to get discount...
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    (Original post by Nes)
    yeah..i wrote that in my answer...the customers may not like the fact that they will have to purchase to the limit to get hold of a card and then further purchase more to be able to get discount...
    No they don't have to purchase to a limit to get a card. They can just apply for it directly by taking a form in-store.

    I'm not calling it a discount card because customers don't get the discounted price until they build up and redeem points. For a discount card, you usually don't need to collect anything, just an initial fee or maybe a yearly fee will suffice, and you get it everytime you use their service.

    I didn't mention this before,

    Official Site:
    Once you have collected 150 Clubcard Points, you will start receiving Clubcard Vouchers in your quarterly Clubcard Statement.
    Part of a Clubcard Review:

    You can simply 'cash in' your points for Tesco Vouchers, you can get £1 off your shopping per 100 points acquired so I could get £7 off my next shop. I can see this being a great option for someone that spends a lot on food and is definitely a loyal Tesco customer!

    http://www.dooyoo.co.uk/credit-card/...bcard/1220286/

    That can be your point, customers having to build up on points and then cashing them in to receive vouchers for any form of discounts, instead of being able to use them to receive discounts directly, and maybe even poor in-store points value (1 point = 1 pence).

    Plus they also encourage you to spend more by sending you exclusive deals (confirmed from another review).


    Edit: All this time I thought you called the Clubcard a discount card in your answer. God I need to pay more attention when reading answers....
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    (Original post by aayman_farzand)
    No they don't have to purchase to a limit to get a card. They can just apply for it directly by taking a form in-store.

    I'm not calling it a discount card because customers don't get the discounted price until they build up and redeem points. For a discount card, you usually don't need to collect anything, just an initial fee or maybe a yearly fee will suffice, and you get it everytime you use their service.

    I didn't mention this before,

    Official Site:


    Part of a Clubcard Review:




    That can be your point, customers having to build up on points and then cashing them in to receive vouchers for any form of discounts, instead of being able to use them to receive discounts directly, and maybe even poor in-store points value (1 point = 1 pence).

    Plus they also encourage you to spend more by sending you exclusive deals (confirmed from another review).


    Edit: All this time I thought you called the Clubcard a discount card in your answer. God I need to pay more attention when reading answers....


    yes exactly my point..it is not a discount card but using this yiu can get discount..and points...yiou get points on the basis of your PURCHASEEEEEESSSSSSSSSS!!!!!!!!!
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    yes yes I know I know....my bad. At least I was right on one case, no need to prove loyalty.
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    hey does anyone have any notes or quests for unit 3??
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    can anyone help me with some unit 3 quests?? im sitiin for the paper and i dont have nuff quests to practice with!! paper is soon and i feel like im nt well prepared!! please help
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    heyloe ppl...okay aayman...The Answer Man.... help me out wid the usefulness of working capital for tesco....dunno wat to write as we done hav n e thing to do wid working capita...
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    Evaluate the importance of a strong WC and as a financial performance indicator of Tesco.

    Working capital measures how much in liquid assets a company has available to build its business and is calculated using the following formula, Current Assets – Current Liabilities.
    Since Tesco has stores scattered throughout the nation, a strong WC in respective stores will allow them to gain business opportunities. A strong WC will ensure short term survival of the business. However, WC can be misleading if a large portion of it is in the form of Debtors and Stock instead of other liquid assets such as Cash/Bank.

    WC will be misleading in these cases as a lack of sales will build up stocks, and credit sales will increase debtors, thus also increasing chances of bad debts. The business will not be receiving cash in any of these situations, and as such will face liquidity problems if this persists.

    However, if WC is well balanced or is more concentrated upon cash/bank, Tesco will be able to engage in further market research, expansion, new projects, R&D and participate in more corporate responsibility programs. These will eventually bring in long term benefits such as economies of scale and reduced cost per unit.

    A strong WC is always beneficial as it reflects good operations and opens doors for new opportunities. It acts as a major key to survival, and can possibly save Tesco from bankruptcy, however it is can easily mislead, and alone is not sufficient to measure the financial performance of Tesco. Hence, other analysis tools such as the Quick Assets and Gearing ratios must be utilized to fully evaluate Tesco’s performance.
    Most of the points are taken from the mark scheme of past papers.

    And here's a point which I forgot to include in the answer. It needs some work, but you'll know what I'm trying to say.

    A strong WC is not always a positive sign as it also indicates that cash is tied up in the business, and if cash makes up majority of WC, it could also mean that Tesco does not enough stock to meet future demand.
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    hey guys any one sitting for unit 4 .....even if no could any pls help me out with one question..........i have posted the link in the unit 4 forum but no one replying.............:PPP....... .

    http://www.thestudentroom.co.uk/show...4#post18688420

    please go to the link, read the question and help me out. Thankssssss :P




    i also have some unit 3 questions will post em here :P
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    hey if anyone could give me any notes or anything useful for unit 3 tesco plc that would be good. if so could you email me [email protected]. cheers
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    Tesco plc has a long-term strategy for growth, based on four key parts: growth in the core UK market; to expand by growing internationally; to be as strong in non-food as in food; and to follow customers into new retailing services.

    What i Think is the above four key parts are totally based upon Ansoff Matrix
    growth in the core UK market = "Market Penetration"
    to expand by growing internationally = "Market Development"
    to be as strong in non-food as in food = "Product Development"
    and to follow customers into new retailing services = "Diversification"

    what do u guys say about this.. i think we will get a question from Ansoff Matrix.

    it could be like.
    Describe how tesco uses Ansoff Matrix to devise its Marketing Strategies?
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    Guyx..............wht abt internal competition..........
    how it effects Tesco line of product and its revenue???

    just need some points for and against it...............thnx
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    @ shoaib: i agree wd u , i dnt knw y buh i do have a feeling dat such question might be dre?
    the points to mentioned r some what correct jst need to ellaborate dem!
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    (Original post by Z for all)
    Guyx..............wht abt internal competition..........
    how it effects Tesco line of product and its revenue???

    I don't think it has enough points to justify its own question, but you can include it with an answer such as widening product portfolio. Include general points such as struggle with shelf space, advertising budget, preventing bulk purchase of goods so increase in cost per unit etc. These are the ones I can think of atm, what about you?
 
 
 
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