Tesco's Marketing Strategy Analysis

This assignment delves into Tesco's effective marketing strategies, analyzing their application of the marketing mix model and SOSTAC model. It highlights Tesco's brand identity, diverse product range, focus on health and safety, and innovative approaches to attract customers globally. The analysis emphasizes how these strategies have contributed to Tesco's financial success, reputation, and leading position in the retail industry.

MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Explain SOSTAC marketing strategies.......................................................................................1
TASK 2............................................................................................................................................7
SOSTAC strategy in UK supermarket........................................................................................7
TASK 3............................................................................................................................................9
Marketing mix strategy in UK and in international market........................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing refers to activity taken by the company to promote the buying and selling of
the product or service. It is a very wide term which includes advertising, selling, strategies and
delivering of products and service to the ultimate customer. Tesco is one of the leading retailer in
the food and non food items and it has a significant internal and external environment as it deals
in the retail sector. The report will highlight the SOSTAC strategy followed by the Tesco
supermarket. (Brazil)
TASK 1
Explain SOSTAC marketing strategies.
SOSTAC is a marketing model developed by the PR Smith in 1990 to help in strategic marketing
planning and in business planning. It is rated in top three marketing models which is most
popular. SOSTAC stands for
S- Situational
O- Objectives
S- Strategies
T- Tactics
A- Actions
C- Control
1. Situational Analysis
It is a collection of method which is being used by the manager for the analysis of
internal and external environment of an organisation which impacts ability of an organisation so
that they can achieve its objectives (Fahy and Jobber, 2015). Situational analysis can be done
PESTLE analysis. Tesco is the worlds leading organisation in retail sector operating in 4331
retail stores in 14 countries. Tesco is having the largest market share in the UK as well as in the
international through its marketing techniques. TESCO has maintain there goodwill by providing
best services with the good quality to the customer. Tesco face problems due to fluctuation in
price rates which effects the margin profit of retailers (Hastings and Stead, 2017). Tesco has to
search more about marketing strategy and search for better substitutes to gain profit in this
competitive market. The retailing strategy of Tesco has failed to provide better results which tells
that Tesco has done weak marketing research. Consumer not able to purchase services due to

high range as retailer fails to maintain its inventory and selection as well. (Kotler and et.al.,
2017).By Joining with local companies which can support Tesco in marketing research and helps
to increase their sources of income. Economic changes which disturb market share and profit
ratio of the world which lead to reduction in sales . High prices of food which leads to reduction
in purchasing power of consumer.
PESTLE analysis of Brazil
Political factor
Political factors greatly influence in the performance of Tesco as it operates globally. It
covers Tax rates, legislation of the Brazil and the strength of the country where it operates. Due
to the financial instability of the world, many governments give support to the retailers to create
the job opportunities for the domestic public (Lovelock and Patterson, 2015). Tesco wants that
their organisation is having the great impact on job and the people living there. TESCO perform
well in achieving various awards for excellence in retailing and best services provider to the
customer. Its one of the largest profitable supermarket and has a tough competition with other
companies across the world. It has lots of property and assets which can provide a great
infrastructure and financial support to maintain country economy.
Economical Factor
This factor is the most concern factor of the Tesco as it leverages its cost, price and profit.
So the company has to aware of any changes in policies like change in the taxation policy of
Brazil or any other factor which effects the financial stability.
Sociological Factor
Consumer taste and trends are constantly changing by the time and people wants to
deliver their goods fast even on the same day and needs the return policy. People of Brazil
believes in one stop shopping and bulk shopping. Tesco rely on customers and understand their
issues regarding the service. Now the consumers are becoming more aware for the health so the
Tesco keeps the food organic as the demand is changing constantly.
Technological Factor
Innovation in technology brings the various new opportunities for Tesco. As due to the
advancement of technology Tesco introduce the online shopping and self service check points.

The retailers of Tesco mostly deal with country UK and Europe for the sales and services and has
paid less attention to expand market and to increase resources. Tesco has opportunity to increase
their online market by providing services according to customers choice which they receive
directly at home
Legal Factor
Government laws and legislations impacts the performance of the Tesco such as they
have to conduct their operation accordance with Food Retailing Commission or any other laws of
the country where it operates.
Environmental Factor
Tesco has the pressure from the government that they have to reduce its Carbon foot print
by 50% till 2020. Tesco are planning to come in South America but they are liable to respond the
issues and benefits to the company address to environmental issues.
2. OBJECTIVES
The objective of the Tesco is to open the Super market in South America with the motive
to sell, serve, increase the revenue and diversify the market. They want to give the better services
to the customers and provides them the additional services. Some of the objectives are
Objectives of Tesco
Global Presence
One of their objective to come in the south America is to make their presence globally by
20 % till 2020.
Increase in sales
To increase the sale by 20% till 2019. Tesco wants to maximise their sales and they can
increase their sales by expanding the stores. If the sales increase than it will lead to increase the
profit. They also use different strategies to attract the customers and retain them by offering deals
and cutting price.
3. Strategy
Company for expanding its market in brazil can make use of Ansoff matrix strategy it includes
the following:
Market penetration- This involves increasing market share within existing market segments.
This can be achieved by selling more products or services to established customers or by finding

new customers within existing markets. Here, the company seeks increased sales for its present
products in its present markets through more aggressive promotion and distribution. Company
can create market penetration through decreasing the prices of products in Brazil.
Market development- Company is going to develop its market in Brazil by reducing the price and
increasing the cost.
Product development- Tesco can also make use of this strategy by bringing new products in
market through product development strategy.
Diversification- Tesco can also diversify its products which can support them in increasing the
market in Brazil.
4. Tactics
Tesco is one of the leading firm in the retail sector and its aim is to increase the customer
loyalty. Tactics are the strategies which is being implemented by the organisation in the market.
Firm can use the 4p's strategies for penetrate the market.
Product
Tesco gives the diversity in products which includes food, clothing, grocery, electronics
and many other products. While coming in the South America (Brazil) they try to provides every
need of customers. They have the product from all great brands in all the product line.
Price
They will make use of differential pricing strategy. Tesco is the leader in the pricing
strategies as a result they offer the product in the low price as much as possible without any
compromise in the quality. Tesco want economies of scale and they work continue to supply
their products without any problem and also offer the products at lower cost.
Place
Tesco is having more than 6900 store in 11 countries like Tesco Metro, Tesco Express,
Tesco Extra etc. As they now open the supermarket in the Brazil, Tesco can open the physical
store in public place. The online company of the Tesco is called Tesco direct. Size of the city
decides that which category of store they want to open.
Promotion
Tesco has the strong brand value and it is known among people that they serve the
products at the lowest cost. As they are opening in the new market the promotional activity is the

centred in the theme. Promotion is done by Tesco through the hoardings, television ads, social
media marketing etc.
STP techniques are
Segmentation
It will segment on basis of geography that is they are going to expand in Brazil. It is
being divided in 2 parts that is geographic and demographic, segmentation is basically done by
dividing the population into groups as per their needs, wants or the section of the society.
Segmentation also decides the suitable area where the Tesco has to open their store.
Targeting
Tesco has to target the customers of South America (Brazil) that which class of people
they want to serve so that they can attract the majority and increase the revenue. They will target
people of middle aged.
Positioning
Positioning of the product includes dealing with people so that they can attract their target
customer. Tesco makes all the strategies in order to target all the possible consumers. Types of
positioning are symbolic positioning, price positioning, Experiential positioning and Multi-
segment positioning. They will make use of cost positioning strategy by lowering price and
increasing quality.
5. Actions
It is the planning of any organisation that how they have to execute the strategies made
by the organisation and to make the action measurable. This section covers what they need to
achieved in each of the tactics. Action refers to proper implementation of the strategies.
6. Controla
The final stage of SOSTAC is control. Controlling is the method to regulate the
organisation's strategies and activity. It also measure and monitors the performance based om the
objectives. Tactics which were planned and the controlling unit provides the series of
dashboards. For the effective implementation of store in Brazil, there Tesco can use decentralize
method as it saves the time and allows delegation of work. It motivates the lower level for work
hard.

Background of TESCO marketing
Tesco which was started in 1919 by Jack Cohen. The third largest British retailer and
headquarter is in England. Across Asia and Europe it has seven shops and the first shop of Tesco
opened in 1931 in Burnt Oak, Barnet. The first brand of Tesco appeared in 1924. And listed on
London stock exchange as well .In 1995,Tesco introduced a loyalty card, brands club card. After
that Company also have started to increase the rang of products such as house hold goods ,
clothing for sale under the brand name called the Delamare brand in 1960. Tesco lotus was also
become a joint venture of the Charoen Pokphand group in 2003.
Tesco is the first company which started selling of petrol in 1974 in united kingdom and
after several years later Tesco become a part of financial services and started work with The
Royal bank of Scotland. This tie up provides growth to the Tesco brand.
In 2003 with the help of joint venture with O2 network Tesco started mobile phone business and
then Tesco reached to the high profit growth and it had over 2.5 million UK mobile customer.
This company has large number of superstores and supermarket across the world where
they provide groceries to the customers and are mostly located in engaged city, residential areas,
small towns and villages. Tesco has made a commitment to fulfil the social responsibility in
2006 and contribute 1.87 of its pre tax profits as a charity to the local community organization.
TASK 2
SOSTAC strategy in UK supermarket
SOSTAC is a marketing planning model and was invented by Paul Smith. It focuses on
the six elements and helps in the planning system of the organization around the world and each
of these six elements plays an essential role in the marketing plan. Tesco uses these elements to
improve financial status, attract customers, business processes, learning and growth.
Situation
Tesco is known as the largest food retailers in the world, which is currently operating
with around 4331 retail stores in 14 countries around the globe. It has 960 express stores that sell
approximately 7000 items including food and non-food items. Tesco also has 170 metro and 450
super store and is the market leader of groceries in the UK. The company's share market is the
largest in the UK which is around 28.4% as well as international market such as Ireland,
Hungary and Thailand due to implications of strong marketing strategies (Chaffey and Ellis-
Chadwick, 2019). Tesco strengthened the value proposition and food quality at the highest level

helped them to increased profits, generated more cash and reduce the debts significantly. The
annual revenue of Tesco in the UK and the Northern Ireland accounted to approximately 45
billion British pounds. Tesco is able to target the customers with the variety of products and
network in different parts of the countries. They understood the importance of new marketing
strategies to attract more customers and overcome the competitive advantage over other retailers.
For every business, customers plays a crucial role for the survival and growth of the company.
Tesco is completely aware with the needs and demands of its customers and work accordingly to
meet the expectations in a better way. To fulfil these need company focuses on the development
of product and market strategies by conducting market research and survey to attract more
customers and identifying their behavioural needs. The strongest growth of Tesco has been
recorded in seven years which is boosted by its acquisition of the booker cash and carry group.
The CEO of the company Dave Lewis cut the prices on fresh food lines which helps in 300
million pounds of sales in UK. They set their growth plan by delivering food to clients more
quickly in some areas.
Tesco is operating in a strong competitive market, competing with three major retailers
i.e. Morrison, Sainsbury and Asda. Tesco has overcome its weaknesses and reducing the threats
from competition by implementing various strategies such as brand management, leadership,
diversification etc. and it has various growth opportunities of emerging market like China, Japan
etc. Tesco has also started working in non-food sector like insurance and other financial services,
merchandising trading etc.
Objective
Tesco has well structured system of values, strategies and policies which help them in
accomplishing the goals and objectives. The company is mainly focuses with its strategic
planning with every aspects of business i.e. customer satisfaction, employee performance,
financial position, operations and maintaining the consistent and standardized growth of the
business. Tesco's other objective is to recruit diverse staff which have diverse views, ideas, skills
and capabilities which will help in creating the innovative and creative path to achieve the
success (Strategic Marketing, 2019). It also aims on providing training and development
programs to enhance the personal and professional skills of employees.
Strategy and Tactics

Strategic marketing helps the organisation to consider every aspects of business such as
competition, future plan and opportunities etc. the valuable strategy helps in accessing the
current position of the company considering 4 P's of marketing i.e. product, pricing, place and
promotion. Strategic marketing provides benefits such as it guides management in decision-
making, understanding the market trends, customers and competitive behaviour. Tesco gains
operational effectiveness through the implementation of strategic marketing that means
employees are aware about their roles, functions and goals of the company.
Market Penetration: Tesco has increased market share with existing products and services and
become successful in penetrating within the existing market in the UK as well as other countries.
Product diversification: Tesco has various type of products and operating with good services
such as food, non-food items like insurance, petrol etc. and also adopting competitive pricing
strategy which is giving them advantage over rivals.
Market development: Tesco has created the network all over the world with it new and
diversified product which is helping them in making alliances, partnership and growing their
business globally.
Brand management: Tesco has created the strong brand identity with the help of their values
and ethics and providing quality products and services. It has managed its branding by using
innovative ideas to improve the customer shopping experience.
Actions and Control
Tesco used some actions to improve the performance management framework by
adopting Corporate Steering Wheel which was designed to outline the company's top strategic
priorities supported by key performance indicators and the main purpose is to take the
organization to success. This wheel was based on the fiver perspective such as financial,
customer, community, operations and people.
It is all controlled by CEO of the company, Dave Lewis which stated that this wheel is
the shared language and shared way of thinking and a common method for action. This wheel
was used to measure the performance over all the organization from leaders to the employees. It
is described as a round balanced scorecard or strategy map (De Mooij, 2018). The
implementation plan will be presented to reach the objectives showing which marketing elements
that will be executed when and this will be followed by a budget.

TASK 3
Marketing mix strategy in UK and in international market
Tesco's current market strategy is the effective strategic marketing which helped the
company to achieve the competitive advantage and to become one of the largest retailers in the
world. This market strategy helped the company to expand its network and building the brand
reputation. Tescos's customer-centered strategy is used to create values of products at the
reasonable rates and providing them unique and quality products and services in order to enhance
customer loyalty. This market strategy implemented in UK supermarket can also be applied in
marketplace of Brazil, South America.
The culture of Brazil has been principally influenced and formed by its European roots
due to the fact that it has both abundant natural resources and a well educated workforce. Private
consumption by consumers plays main role in economy growth and accounting for
approximately two-thirds of the GDP (Blythe and Martin, 2019). Brazilian people are good in
relationship both in professional and personal use. Brazil put a high value on appearance which
is an integral aspect of their culture. Argentinians accept power and hierarchy in society as Tesco
having the largest network and have hierarchical organisational structure. Tesco has supportive
and value-driven organizational culture which shows how staff behaves inside and outside the
company.
Product
Values to the customers of Brazil can be delivered in various ways such as financing
plans to purchase the product, quality, brand name etc. As the demand of groceries are high in
the Brazil, Tesco can fulfil the necessities of the customers by supply diverse range of product
with high quality and affordable rates. The consumer in Brazil gets more attracted towards the
brand name and Tesco is the biggest retailer who supplies the products according to the needs of
the consumers and try to interact with customers through market strategies and identify their
behavioural needs.
Place
Brazil has the strong economic growth rate of 8.3% with GDP $470.5 billion. The biggest
benefit Tesco can have in Brazil is that online retail sites have continued to grow and reached
74% of its total online audience (Culture and E-Business in Brazil – Infographic, 2019). The
market has adopted the digital marketing as internet usage and availability in Brazil grew 17.5%.

The online shopping for groceries are available in Brazil but not the online food services which
can give advantage to increase their sales in food sector and will help in productivity of
company.
Promotion
To attract the Argentinian consumer, it is important to understand the search engine
optimization and focus on top search engines in Brazil like Google, Bing, Yahoo, Babylon. The
social media landscape in Brazil is one of the most important for online marketing as it promote
the brand through channels to the consumers. Tesco can have benefit in promoting their brand
because Brazil is the third most highly engaged social networking market worldwide with user
spending 9 hours. Brazil's 95% or more population is engaged on the social sites such as
Facebook (87.83%), Twitter (7.33%), Youtube (3.27%), Pinterest (0.64%), StumbleUpon
(0.42%).
Pricing
Tesco provide the high quality and wide range of products who have brand reputation all
over the world and understand the needs of consumers on their daily basis and serves the
products at the affordable range. This strategy can be helpful in Brazil as it has the population
around 42.19 million and people are health conscious and always buy products looking at the
quality and brand name. Numerous consumers buy products online so this will give opportunity
to expand its business in online marketing with reasonable rates on products which will create a
great attention on the social sites and more consumers will attract and increase the sales and
profit.
Recommendations
As Brazil's concerns increasing towards health and safety, Tesco can recognize its
customer's needs, preferences, expectations and lifestyle and design products and services
accordingly (Baker, 2016). Tesco is famous for promoting green, healthy and fresh items in its
stores. The company's success is all due to the implementation of branding and marketing
strategies. Tesco has gain powerful position by promoting retailing concept through viral
marketing, brand extension and culture sponsorship etc. It has applied new extension and
diversification strategy so it can sustain its global leading position in the retail industry. The
company is strives to innovate product so that they can attract every segment across the globe
like socio-demographics, geographics and psychographics.

CONCLUSION
The above analysis of Tesco's marketing strategy in respect with marketing mix model
and SOSTAC model showed that company had become successful in various markets because of
its brand identity as well as marketing strategies. SOSTAC model helped the Tesco to understand
these elements to improve financial status, attract customers, business processes, learning and
growth. It had gain the good image and reputation in the market because of its diverse product
range by providing the high quality and healthy products at the affordable rates. It also described
the various development strategies and technology which helped them top survive and grow in
the market.

REFERENCES
Books and journals
Baker, M.J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Blythe, J. and Martin, J., 2019. Essentials of marketing. Pearson UK.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Fahy, J. and Jobber, D., 2015. Foundations of marketing.
Hastings, G. and Stead, M., 2017. Social marketing. Taylor & Francis.
Kotler, P., and et.al., 2017. Marketing for hospitality and tourism.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Shaw, S., 2016. Airline marketing and management. Routledge.
Tuten, T.L. and Solomon, M.R., 2017. Social media marketing. Sage.
Source
Culture and E-Business in Brazil – Infographic. 2019. [online]. available through
<https://www.globalizationpartners.com/2014/05/01/culture-and-e-business-in-Brazil-
infographic/>
Strategic Marketing. 2019. [online]. available through
<https://www.globalassignmenthelp.com/samples/marketing/sample-strategic-marketing-of-
tesco>