tar is not a compression technique. Originally designed for tape archive, tar is now used for grouping files together and move them. A typical example would be grouping all files related to a package for delivery.
gzip uses a compression algorithm which can be exploited to save space. Option -9 in gzip provides maximum compression.
The usual method of delivering packages is tar all files and then gzip the tar file. Hence your package will look like my_package.tar.gz
We then need to apply gunzip and then tar extraction on this package at the receiving end to see the files in the package.