each and every customer.’ He predicted that each of the 524 stores would
become a marketing unit where staff would get to know their own cus-
tomers individually and also confirmed that ‘Micro-Marketing will be at
the forefront of our future strategy.’
Clubcard Magazine
By now, due to the database facilities that had been developed, segmenta-
tion of Clubcard members was also possible at the corporate level. In
March 1996 the store announced the planned launch of the first Clubcard
Magazine. Produced in five different versions to suit five different lifestyle
bands (students, younger adults without children, younger people with
families, older people with children and pensioners), each version of the
magazine was tailored to suit its audience. Students would read features
about overseas travel, parents would read about family issues and so on;
offers in the magazine were also designed to be appropriate to each group.
Each publication carried promotions, competitions and advertising from
many suppliers as well as information on new product launches on
branded and own-label goods. The magazine proved to be highly popular
with high redemption of money-off tokens, which Tesco attributed to their
value and relevance for each of their customers.
The launch of Clubcard Plus
By late spring, it was clear that Tesco had achieved dominance in the UK
food retailing industry. This was confirmed by the subsequent news that
Sainsbury had reported a dramatic fall in pre-tax profits of around £100
million, its first fall in 22 years, from £802 million to £712 million. This
profit shortfall was followed by an announcement that the company was
set to launch a national loyalty card in June of that year. The turnaround
was seen as an attempt to pacify furious shareholders and to redeem the
tarnished company image. Industry analysts felt that the move merely
reinforced the already-held notion in the City, that Sainsbury’s marketing
strategy was lacking in ideas.
Whilst not announcing a launch date (City rumours were predicting late
summer), Kevin McCarten, the newly appointed marketing director,
insisted that the ‘Reward Card’ would be better value than Tesco’s
Clubcard and that they would ‘be looking at things that our competitors
cannot copy; we don’t want to do anything they can replicate’. Brian Woolf,
an international customer loyalty consultant, predicted that Sainsbury
‘would go for the jugular and leap-frog Tesco, not just catch them up’.
The customer market domain: Managing relationships with buyers 89