It is the ability to satisfy customers that

marks the difference between the successful

and the unsuccessful organisation. That is
why some childrens nurseries have a
huge demand for places, while others
have falling roles. It is why some
supermarkets have people crowding the
aisles whereas others are practically
empty. This ability to satisfy customers
boils down to successful marketing.
The Chartered Institute of Marketing uses
the following definition of marketing:
Marketing is the management
process responsible for identifying,
anticipating and satisfying
consumer requirements profitably.
There are a number of key components in
this definition:
Identifying - involves asking and
finding out the answers to questions
such as: How do we find out what the
consumers requirements are? and
How do we keep in touch with their
thoughts, feelings and perceptions
about our goods or service?
Anticipating - is essential because
consumer requirements change all the
time. For example, as consumers living
standards increase, they may seek a
greater variety of foods e.g. the
replacement of standard fare for
exotic recipe dishes. Anticipation
involves looking at the future as well
as at the present. What will be The
Next Best Thing that people will
require tomorrow?
Satisfying - involves meeting the
requirements of consumers. Consumers
seek particular benefits. They want the
right goods, at the right price, at the
right time and in the right place.
Profitability - because successful
organisations need to be able to build
for the future. An organisation that fails
to make a profit will have nothing to
plough back. Without the resources
to put into ongoing marketing activities,
it will not be able to identify, anticipate
or satisfy consumer requirements.
This case study therefore focuses on
how Tesco has identified and anticipated
changes in lifestyles in this country and
how these impact on new requirements for
healthy eating. It shows how Tesco has
developed a highly successful Healthy
Eating brand, which has enabled the
company to satisfy its customers and
generate profits.
Healthy Eating
at Tesco
The Tesco Healthy Eating Initiative was
launched in 1985. The aim was to
provide customers with information on
health and nutrition and also a range of
foods made specially for a healthier diet.
As Britains leading food retailer, Tesco
is in a unique position to communicate
with customers and receive feedback on
current attitudes and needs. Where better
to provide people with information about
the food that they eat than where they do
their shopping.
How was the
need identified?
The decision of Tesco to get involved
in Healthy Eating was brought about by
two things:
1. The extensive media coverage of
reports into diet and eating patterns in
the UK in the early 1980s. These
reports established a link between poor
diet and ill health and set out that:
If people are to change their diet then
they must be informed of the need for
change and of how the change may be
implemented and be given the necessary
enabling information.
2. Tesco had been aware of a steady
increase in the number of enquiries it
had been getting from customers about
the nutritional values of its products
and also requests from people
wishing to make changes to their diet.
These two triggers led to the
commissioning by Tesco of a Gallup Poll,
to try and ascertain exactly what people
were concerned about and what
information they would like. Gallup is a
major UK independent market research
group. Gallup carried out research on
behalf of Tesco in 1984 and 1987. It was
based on street interviews to a representative
nation wide sample of housewives. The
sorts of questions asked were:
Q.1. How concerned are you about
eating healthily?
Very concerned.
Fairly concerned.
Not very concerned.
Not at all concerned.
Dont know.
Q.2. Which three aspects of your
health concerns you most from
the list below?
General fitness.
Being overweight.
Blood pressure.
Heart disease.
Cancer.
Examples of the results that were extracted
from the market research were that:

Concern with eating healthily is high

(4 in 5 consumers are very or fairly
concerned) and this tends to be
highest amongst 25-54 year olds and
the higher social grades.

In March 1987, respondents appeared

more concerned with general health
issues than with specific illnesses.

An increasing number of consumers

were looking at information given on
product labels.

More information was required about

product additives.
Making an appropriate
response - meeting
customer needs
The Gallup Poll convinced Tesco that
it needed to focus its attention on four
main areas:
1. Providing Nutrition information on the
labels of all its own brand products.
2. Reviewing the use of additives in the
own brand range with a viewto removing
any that could be shown unnecessary.
3. 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.
4. 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. Per haps mos t
i mpor t ant l y, 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.
Ten Years On -
Continuous Improvement!
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
fromthe 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 customers
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.
Results of the research
Some of the results of the research were
that consumers feel that a balanced diet
includes:
1. Inherently healthy ingredients and
products. These include natural
ingredients that are seen to be healthy,
basic, traditional foods which are
considered natural and wholesome,
such as: fresh fruit and vegetables
wholemeal bread pasta, rice, pulses,
potatoes white meat fish water
fresh fruit juice cereals frozen
vegetables organic fresh foods milk.

Healthy Eating

TESCO
How a major Tesco brand has grown
through recognition of lifestyle changes
2. Products which have been made
healthy. These are products which
consumers feel sufficiently positive to
categorise as being healthy because
sufficient change has been made to
both the product and its image, such as:
low fat spread yogurt cheeses
semi-skimmed milk healthy prepared
ready meals and meal centres trimmed
meat and poultry.
3. Products which had been made healthier.
These are products which in their
standard formappear unhealthy, but have
been made healthier through changes
to recipe and preparation methods. These
products would still not be perceived as
inherently healthy, but can contribute to
an improvement in the diet, such as:
lowfat versions of sausages mayonnaise
crisps chips ice cream, etc.
In the third category it is sometimes possible
to move the product towards healthy eating
by the inclusion of a positive proposition,
such as: low fat burgers made with extra
lean mince.
In seeking information about healthy
eating, consumers feel that sources are
often contradictory. However, they feel that
the most reliable sources of information
include doctors, dieticians, nutritionists, The
Health Education Authority, The Heart
Foundation and Government sources. Of
the retailers, Tesco and Sainsbury were
universally the most highly regarded in the
provision of healthy foods.
Consumers requirements of retailers are
that they should provide a range of
choices, to the expected standards
dictated by the authoritative sources and
changing consumer perceptions. Such
choice enables the achievement of an
individual households own concept of a
Balanced Diet without pressure.
Consumers felt that the role of
communicating information and providing
an appropriate product portfolio must be
achieved without being perceived to over
claim or jump on the healthy eating
bandwagon. In this context, the fact that the
Tesco Healthy Eating brand was almost
10 years old, generated an extremely
positive reaction fromrespondents. It added
credibility in terms of the reasons behind the
original development of the brand.
Relaunching the
Initiative in 1995
The Healthy Eating Initiative was
therefore relaunched in June 1995, having
achieved the following:
A quality range of products with the
breadth and depth to satisfy consumer
requirements, which are offered as a
choice within similar product ranges.
Healthy Eating products are not all
merchandised together. Instead they
appear as part of a parent range offer.
A range of products which meet
required criteria and which are clearly
understood by consumers.
A consistent pricing structure. Wherever
possible, healthy eating products are kept
at the same price as standard products
unless there is a real cost implication,
e.g. skinless chicken is more expensive
than chicken with the skin on, but healthy
eating yogurts are the same price as
standard ones.
A pack desi gn whi ch cl ear l y
communicates food values and product
benefits, as well as being easily
identifiable.
A merchandising policy which helps the
customer to find the products and
maximise sales. The Healthy products
are usually merchandised next to the
standard version or next to the brand
leader if there is one in the healthy sector,
e.g. Healthy Eating ready meals are
next to Lean Cuisine and Weight
Watchers meals. Sometimes they are
put on an end for a special promotion.
The brand was redesigned to give a much
stronger on pack presence whilst still
retaining the Man.
The criteria for meeting Healthy Eating
requirements were also made stricter, but
the scope of the Brand increased by
stretching brand imagery for healthier
products e.g. reduced fat rather than
half fat.
The strength
of the brand today
At the start of this case we said that
successful marketing involved identifying
and anticipating consumer requirements,
in order to satisfy these requirements and
to make a profit. In each of these areas the
Tesco Healthy Eating brand has been a
success. This case study has highlighted
ways in which Tesco have gone about
identifying, anticipating, and satisfying, as
well as delighting customers with their
product range.
Healthy Eating sales turnover in 1995/96
was 300 million on the 235 lines which
currently make up the range.
Tesco were the first retailer to
nutritionally label all their own-label
range of foods. They are now giving
consumers the Calories and Fat per
serving separately, to make it much easier
to choose lower fat foods.
Tesco has made sure that there is a wide
variety of products available, which, by
their very nature, are low in fats or high in
fibre. Products such as fruit and vegetables,
rice, pasta, fish, pulses and bread. These are
now labelled with a small healthy eating
logo which highlights one of the reasons
they are healthy.
Tesco has led the way in healthy eating
through developing healthy versions of
other foods - it is these products which
have the large healthy eating symbol on
their packs. These foods are made to very
strict criteria, which limits, in particular,
their fat content, but Tesco also control
the amount of sugars and sodium the
product can contain.
Healthy Eating products can be divided
into two groups:
1. The first group is of foods which provide
most of the fat in our diet, such as
spreads, cheeses and meat products. The
Healthy Eating versions have half the
fat and saturates of a similar food, with
the sugars and sodiumlimited.
2. The second group includes other foods
which, although not so important in
providing fat in the diet, can still be made
to healthier recipes. These are set out in
clear guidelines. If there is a similar
product, the Healthy Eating version
should have half the fat, otherwise it will
have less than 10%fat.
Satisfying consumer
requirements
In seeking to delight its customers, Tesco
have recognised that there are many
different groups of Healthy Eaters with
different needs and wants. They have
therefore, wherever possible, responded to a
segmented market by providing for the
needs of a variety of types of healthy
consumers from sports enthusiasts, to
fashion conscious models, while at the same
time serving the needs of pregnant women,
diabetics and individuals with food
allergies. For example, for diabetics, the
nutrition information panels on all Tesco
products show consumers where the fats
and sugars are in foods in order to help them
find high-fibre and low calorie products.
Wines and beers have alcohol units on them
to help consumers have a moderate intake.
Healthy Eating products are all reduced in
fat, sugar and salt where appropriate.
The Tesco Healthy Eating line therefore
provides us with an excellent business case
study in market consciousness and
responding to consumer requirements as
revealed through the antenna of market
research. Tesco have identified major
changes in lifestyles in the UK buying
public and come up with a range of tailored
Healthy Eating products specially
designed to meet individual requirements.
TESCO
Whilst every effort has been made to ensure accuracy of information, neither the publisher
nor the clients can be held responsible for errors of omission or commission.
1
The following chart shows the
results of surveys carried out on
behalf of Tesco in 1984, 1987 and
1991. Carry out your own survey of a
representative group of housewives to
produce your own up-to-date figures.
Use a graphics package to present your
findings in charts and tables. Describe
and explain your results.
2
Design a questionnaire including
eight questions to find out what
customers expect/want from the
Healthy Eating brand. Try out your
questionnaire on a sample of Tesco
customers. Present your results in a
report format using illustrations
based on computer graphics packages.
3
Visit a Tesco store to identify
the Healthy Eating products that
are on offer. How are these products
displayed. Comment on their location.
What improvements would you make
to the merchandising of the Healthy
Eating range?
4
Examine The Man. How effective
do you think this symbol is in
presenting the Healthy Eating concept.
Can you produce an alternative design
that would be equally as effective?
5
What do you see as being the main
ingredients of a balanced diet? Why
do you think there are different
perspectives on what constitutes a
balanced diet?
6
The Healthy Eating range is
designed to meet the needs of a
number of segments of the total
market. What specific segments can
you identify within the current
total market. Can you identify any
further gaps within this total market
that would be worth plugging?
7
Explain why, in relaunching its
Healthy Eating Initiative, Tesco
has chosen to go for a consistent
pricing structure, rather than charging
premium prices for these products?
8
Why do you think that Tesco
relaunched its Healthy Eating
Initiative in 1995? Why should this be
seen as part of a process of continuous
improvement?
9
The case study provides an
exemplary lists of products which fit
into the categories:
i. Those with inherently healthy
ingredients and products.
ii. Products which have been made
healthy.
iii. Products which have been made
healthier.
Explain the distinctions between
these three categories. What extra
products would you put into each of
these categories?
10
What lessons can other
business organisations learn
from the marketing focus that Tesco
has employed?
TASKS & ACTIVITIES
1984 1987 1991 Today
Very concerned 19 25 39 ?
Fairly concerned 54 54 49 ?
Not very concerned 16 15 7 ?
Not at all concerned 11 6 5 ?
How concerned are you about eating healthily? % of housewives