Tesco, one of the principal British retail distribution chains, is one of the most outstanding examples of carrying out a successful segmentation strategy. In this way, the company was able to rectify past mistakes, in which its concern with improving relations with providers and partners had made them forget the customer. Since 1947, when the first British business based on the American concept “self- service” opened, the company had focused on optimizing its relationship with partners and providers, improving its logistic processes at the cost of leaving the customer behind. Over time, this strategy cost the organization dearly, and its image among consumers was that of a low-price, low-quality company with poor customer service.

At the beginning of the 1990’s, the company took a new direction at the hands of its then Marketing director and current CEO, Terry Leahy. Leahy proposed generating a complete change in the Tesco culture in order to lift the company up. The firm set three immediate goals. First, fight for differentiation from its competition. In order to do that, it was absolutely necessary to stop imitating the strategy of Sainsbury’s, its main rival. Secondly, it was necessary to place the customer at the center of any decision made from that moment on.

Finally, and related to the previous point, a new sales offer would be designed, based on consumer preferences.

This policy of focusing on the customer ingratiated the company again to its clientele, who regained its lost faith thanks to the information provided by the consumers themselves, which allowed Tesco to let them identify themselves in order to facilitate their self-segmentation, using diverse loyalization and communication techniques. Among these techniques, the well-known Club Card stands out. More than 20 million Tesco customers have it, and thanks to this card, the distribution giant has accumulated and analyzed extremely valuable data about its customers’ behavior.

Currently, Tesco has one of the most in-depth, complex segmentation models in the world, thanks to sophisticated Data Mining models that allow it to discern patterns and correlations that are impossible to detect in any other way. The company has created more than 5,000 need segments, based on complex algorithms and alarms for analyzing its customers, according to which it organizes all its communication and marketing strategies. For example, it has numerous versions of its brochures and promotional magazines, which it distributes to one segment or another based on their distinct characteristics. Currently, Tesco is capable of designing more than 300,000 profiles, alarms, and algorithms that allow it to base its strategies more on an events marketing than on the typical campaign marketing. Today, this company is associated with quality, and it maintains a policy of competitive prices, which has allowed it to successfully face other powerful international distribution groups that have entered the Anglo-Saxon market, and to consolidate itself as the absolute leader in knowledge and the intelligent segmentation of markets.