Page 3: Meeting customer needs
The Gallup Poll convinced Tesco that it needed to focus its attention on four main areas:
- Providing Nutrition information on the labels of all its own brand products.
- Reviewing the use of additives in the own brand range with a view to removing any that could be shown unnecessary.
- Providing literature in the form of leaflets on healthy eating to help people understand the issues and give them enough information to make reasoned choices about the food they were buying.
- Providing products that people need to eat a healthy diet and in certain areas, providing healthier alternatives to standard products.
Tesco had nutrition information on all its own brand products by 1987 and was the first retailer to do so. Today this follows the European Union required format. Tesco established a 'Hit List' of additives to ensure that its products did not contain contentious additives such as Azo Dyes.
Leaflets have been produced on a wide range of subjects from facts about healthy eating to recipe cards incorporating the main healthy eating messages with fun easy recipes. Perhaps most importantly, Tesco developed a logo system to make it easy for customers to identify products which provide a 'Healthy Eating' choice.
The 'Healthy Eating' Brand
In order to anticipate change, organisations need to have an antenna which is highly sensitive to changes taking place in the buying population - for example, what is happening to the age structure of this population, how are tastes and preferences altering as lifestyles change, what is happening to incomes and buying patterns, and so on. Market research is therefore the antenna of the organisation.
The Tesco antenna enabled it to understand that consumers where seeking healthier lifestyles, were more concerned with personal fitness and therefore wanted to purchase those foods that would best provide them with these benefits. Using the results of their 1984 and 1987 research, Tesco went on to develop 'Healthy Eating' logos for 'naturally' healthy products such as fruit, vegetables, pasta and rice.
Tesco also decided to develop new foods with manufacturers, that were to be produced to different recipes, so that it could create a new sub-brand, the 'Healthy Eating' brand. Today this brand consists of over 200 products with a combined turnover of £250 million. Dairy products such as skimmed and semi-skimmed milks and half fat cheeses were the first products to be labelled. These already existed and just needed repackaging. Next, products such as half fat spreads and yogurts were moved over to the brand. Ready Meals lent themselves to having their recipes modified and so were the next to be developed.
Having established yourself as the market leader in a particular line, then there should be no room for resting on your laurels. In a competitive market place, rivals will continually copy your best ideas. The secret to success therefore lies in continuous improvement. In 1994, with the 10 year anniversary of its 'Healthy Eating Initiative' approaching, Tesco decided to carry out a major review. Consumer research was again used to assess what changes, if any were required.
The specific issues that the research sought to investigate were?
- To identify who the 'Healthy' customers are and who rejectors of 'Healthy' products are, including men, women and children. Were these customer profiles the same for the Tesco 'Healthy Eating' brand?
- To determine what customers expect/want from the 'Healthy Eating' brand?
- To determine whether the 'Healthy Eating' brand is appropriate for all these product areas or whether it might have been more sensible to position some of these products in a slightly different segment e.g. 'diet' or 'lite.'
- To find out what customer’s perceptions were of the 'Healthy Eating' brand and how it compared with competing brands.
- To find out whether consumers were willing to trade off taste for a healthier product.
- To see if customers would be prepared to pay more for a healthier alternative.
These were just some of the areas for investigation. The student can see that the research had moved up a gear in terms of sophistication, in the same way that consumers are increasingly making more sophisticated and educated choices about healthy eating. Today, healthy eating is not just one generic market segment. The segment needs to be further sub-divided and understood.