Tesco's Exemplary Management

Tuesday's Wall Street Journal also carried a piece describing the superb marketing management of Tesco, the British grocery chain. It's wonderful to read of such sensible, informed, data-driven marketing and operations management in a large-scale firm.

That Tesco's skill has given Wal-Mart fits adds luster to the firm.

What struck me about Tesco's fundamental success ( the article does not mention, and I do not, presently, know its total returns for the past several years) is that it is really not much more than consistent, classic marketing management. Things I was taught almost 20 years ago at Penn's business school, where I studied marketing.

Tesco has combined its membership card with very good data analytics. Together, they allow Tesco's very capable managers to do that of which marketers always dream- know specific customer behaviors, and link pricing and product tactics to them.

The article describes both customer-segment management, as well as physical store management, using their member data. By comparing across stores, and customer segments, the Tesco management team has been able to add store features, products, etc, to both increase other store sales, as well as store sales in problem areas.

They really seem to have taken segmentation analyses, product strategy, and channel strategy about as far as I think I've seen it go, successfully.

What was illuminating was to read quotes from the managers of one of their lesser-performing competitors, Asda, who failed to appreciate the value of Tesco's member data. They really did not "get it." How powerful the combination of demographics, purchase data, and location are.

Again, as in my previous post regarding Howard Stringer at Sony, it's a pleasure to witness fine management in such a large-scale firm. These two pieces demonstrate what I mean when I write about the mediocre 70% of management. Here are two firms who are clearly way above that tranche. They either manage what they have in a consistently disciplined, successful manner, like Tesco. Or, like Stringer, they keep and refocus their assets and strengths, while coldly assessing their weaknesses and move to remedy those.

It's such a pleasure, amidst articles on GM, Intel, and Microsoft, to read about really self-aware, capably-managed firms like Tesco and Sony.