Marketing Strategy of TESCO: STP, Marketing Mix, and Relationship Marketing

This report analyzes the marketing strategy of TESCO, a British retailer, focusing on STP (segmentation, targeting, positioning), marketing mix elements, and relationship marketing tactics. It explores how TESCO segments its market based on demographic, geographic, psychographic, and behavioral factors. It also discusses TESCO's positioning strategies and its use of the marketing mix elements. Additionally, the report highlights the importance of relationship marketing in TESCO's long-term business success and how it helps the company retain customers and navigate challenging situations. Overall, this report provides insights into TESCO's marketing strategy and its effectiveness in achieving its goals and objectives.

Marketing

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Analysing the STP strategy of organisation that including segmentation, targetting and
positioning...................................................................................................................................3
Elements of marketing mix.........................................................................................................5
Relationship marketing strategy with the current tactics............................................................7
Recommendations for organisation that use marketing strategy................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12
Books and Journals:..................................................................................................................12

INTRODUCTION
Marketing is the process that involves selling, promoting, distributing and researching. It
focus on mainly study of consumer behaviour and market environment that helps to increase the
sales and revenues (Čorak and Šnajder, 2016). It analyse the current market trend that help to
identify and analyse the taste and preferences of customers. This report covers the marketing
strategy that adopted by companies for target the market. Market strategy is used for target the
market, positioning and segmentation. In this context, TESCO is undertaken for the analysing of
market strategy adopted by the companies for accomplishment of their goals and objectives.
TESCO is the British retailer that produces groceries, books, clothing, food products, etc. This
report undertakes models and concepts that help to analyse the market situation such as
marketing mix, STP model. These concepts giving the ideas of practical applicability of concepts
and model in the market. This report also covers the recommendations that help to TESCO to
undertake suggestions for their benefits.
MAIN BODY
TASK 1
Analysing the STP strategy of organisation that including segmentation, targetting and
positioning.
There are many factors that influence the marketing management decisions that are
macro and micro factors. Macro factors include political, social, economical, technical,
environmental and legal that are external factors which beyond on control. Micro factors are
internal factors that can be control by the organisation by improvising the internal factors. All the
products and services that offered by the TESCO, doesn't necessary that all of them are attractive
at equal terms. So it is necessary for TESCO that they should focus on targeting and positioning
on market. For that reason TESCO follow STP strategy that gives the ideas to the organisation
for targeting, segmentation and positioning. It can be explained well in the given following
points:
Market Segmentation: Market segmentation is basically division of population according
to their needs and wants. It can be divided people into the groups according to their needs and
wants that give the basic ideas of products and services required in the market. It can be

classified on the basis of demographic, behavioural, geographic and psychographic (Dagdee and
Philip, 2019).
 Geographic: TESCO have stores in approximate 14 countries that cover both the sector
urban and rural.
 Demographic: TESCO divided groups on the basis of age, gender, education, income,
occupation, size of the family, etc. They cover all age group, both gender, lower and
middle level people, children and students, etc.
 Psycho-graphic: TESCO bifurcated their products and services after the analysis of
psychology of customers. They choose lifestyle and personality of customers, including
traditionalist lifestyle.
 Behavioural: TESCO analyse the needs and wants of the customers according to
occasions, attitude and status.
Positioning: It is the element that determines the position of TESCO products and
services in the market. It involves the element of marketing mix that helps to attract their
customers for targeting the market. TESCO use many types of positioning strategies because of
their wide range of products and services (Diamond, 2016). Detail of positioning strategies are
explained below:
 Functional positioning: TESCO used this positioning strategy through selling the
TESCO finest products and services. For effective application of functional strategy
TESCO focus on the functions that provided in their products and services. It can be done
through increasing in the equality of products and services that they render.
 Symbolic positioning: TESCO try to analysing the values and aims of customers that
helps to decide their taste and preferences. TESCO sell one of the important products that
cover very narrow segment but they adopt because of satisfying their values and
aspiration i.e. Fair Trade.
 Price positioning: It is already known by the customers that TESCO sell their products
at low prices, because they have the aim of minimum prices. So that they cover the larger
segment of population. Experiential positioning: It is the strategic process that determines the needs and wants
of customers which helps to create and develop the products for serving the experience.

TESCO can serve experience through providing the beauty and health products (Gomez
de la Fuente, 2016).
 Multi-segment positioning: It is the strategy that covers almost all population through
providing wide range of products and services. TESCO serves wide range of products
and services so that they satisfy the wants that helps to cover the large portion of
population.
Targeting: Targeting is the marketing techniques that include the decision of
organisation that which segment they target for selling their products and services. It is the
strategy that divides the large portion into smaller groups for targeting the market. It makes easy
for TESCO that they accomplish their goals and targets with the fulfilment of needs and wants of
customers. TESCO choose their targets on the basis of income groups so that they provide cheap
products to them and cover all people. Their main focus on middle income groups because they
provides services and goods at low prices.
From the above discussion, it is analysed that TESCO uses STP strategy for
accomplishing their goals and objectives through proper segmentation, positioning and targeting
in the market. It helps to identify their position in the market so that they can choose marketing
strategy according to them. With the help of targeting TESCO can target the market easily and
decide their goals and target accordingly (Haider and et. al., 2017).
Elements of marketing mix
Marketing Mix
Marketing mix means tools of marketing that are used by the company for achieve its
goals and objectives. Its tools is considering the different component that is used to boost or
upgrade a brand and its products. It contain everything that company can do to control demands
for its product (Singh, 2016). It offers proper guidelines for settle the product in the right place.
Marketing mix introduce four broad levels of the marketing that is : “ product, price, place and
promotion”.
TESCO Marketing Mix (4Ps) Strategy
Marketing mix of TESCO analysis the brand which define 4ps and introduce marketing
strategies such as product and service innovation, investment, service experience. These
strategies helps the company to grow and and achieve their goal and strategies used by TESCO :
Product:

TESCO provides wide range of goods and services to the customers so that they can
satisfy their needs and wants. Product is the key element of marketing mix, because every
organisation run only when they provide some goods and services to the customers. TESCO is
the organisation that serves a large number of products and services to the customers. They have
many products that give wide choices to the customers so that they can not shift to other brand.
Due to the similarity of products they can not raise their products prices that decrease the profit
margins of the company. So it is very necessary for TESCO that they make their products unique
that helps to attract the customers.
Prices:
TESCO's pricing strategy is become cost leadership, because it becomes the tool of
attraction or promotional tool that attract their customers. Pricing strategies of organisation can
be developed on the basis of business strategies. For example, Apple sell their mobile phones at
premium prices because their business strategy is to sell products at premium prices. So in the
similar case, TESCO make their pricing strategies (Shehu, 2018). Their business strategies is to
provide goods and services at a low prices so they make available their goods at low prices to the
customers. Their marketing depends on their message i.e. " Every little helps". They used
economies of scale, so that's why they provide goods and services at low prices.
Place:
When a company operate their business and make decision regarding the place then
firstly they are taking care of some things that is where they should sell their product, what is the
location , how is it far from the market , how to deliver the product in maximum time. The goal
of the TESCO is to get their products in front of customer that are more interested to buy them.
So TESCO also have different distribution strategies such as TESCO has more than 6900 store in
11 countries and the types of stores is Tesco Metro, Tesco Express, Tesco Extra, Tesco
Superstore .so every store have different range and different price according to the market.
Promotion :
Promotion includes many things such as advertising, public relations, some different
strategies. The main goals of promotion is to reveal the product to consumers and shows them
the benefits of the product that why they should buy this product and what are the extra feature
and quality of the product. So TESCO is multinational brand and very strong also so they relies
on low prices. TESCO also used some promotion activities that is hues of hoardings , television

ads charitable events as promotional channels. There are some more ways in the stores that is
discount on the product and buy one get one scheme. TESCO has one loyalty card that is “
TESCO club card” which allows them to target the customers and if somebody have club card
then they will get some discounts offers and points so they can redeem the points and get
discount TESCO also sells their products Online (Udayana, 2017).
Relationship marketing strategy with the current tactics
Relationship marketing is the tool that serve solution to customer relationship
management which have a main focus on customer loyalty. It is the very important component
that helps to TESCO retain their customers for long term period. It is the two way
communication process that involves the customer and company's interaction. It increases the
customer engagement that helps to grow TESCO business for longer period.
The objectives and goals of relationship marketing is to create and maintain the
customers' trust on the organisation so that they can run their business for long term.
Relationship marketing includes creation of strong relations, with inclusion of emotional
attachments with TESCO's products and services. It can be done through the proper analysing
the needs and wants of customers and then manufacture products and services according to their
taste. It really helps in building the trust of customers on their organisation because consumers
thought they how much organisation focus on their taste and preferences (Karsten 2019). It can
be done through communication that gives good feedback of customers. There are many ways
for building the relationship with customers through proper applicability of relationship
marketing strategy. It should be include:
 The relationship marketing strategy should be proper planned so that they can be handle
all the situations and upcoming unexpected circumstances.
 In the process of relationship marketing strategy, TESCO should be prioritize service of
customers that helps to feel motivate to the customers. If TESCO focus on customers
service and prioritize their needs and wants of customers then they can attract a large
number of customers in the organisation.
 It can be done through with the help of new technologies such as social media. It is one
of the prominent tool that can help for attracting the customers in their organisation.
TESCO should use social media that really helps to attract a large portion of population
(Kotler and et. al., 2018). It include Instagram, Facebook, Twitter, etc. They become

most important tool for attracting the consumers by generating stories which give
emotional attachment.
 Email marketing is one of the method or relationship marketing that give emails directly
to the potential clients or customers. With their pop ups and mails customer get to know
the offers and discount so that they are enable to purchase their goods and services.
It is analysed from the above discussion that relationship strategy is important for the
long term business. It should include all above things that make the strategy better to achieve
their targets and goals.
Relationship marketing strategy of TESCO is found to be effective because they always
try to satisfy the customers' need and wants. It is also founded that TESCO sell their products
and services to the customers by analysing the need and wants so that they satisfy (Levin, 2017).
TESCO provide new products and services that target all level of income groups with analysing
of growing needs and desires of customers. With the introduction of TESCO bank, it is analysed
that they target the new market with covering all the important sectors that give customers'
satisfaction. Relationship marketing has importance in TESCO's organisation that given under in
the following points:
 It is the strategy that helps to TESCO in a way, by improving the initiatives of direct
marketing.
 With the help of relationship management, it is found that TESCO attract a number new
customers in their organisation that helps to increase their sales.
 TESCO retained their customers through adoption of relationship marketing strategy
even in the current drastic situations.
 In the current scenario, due to COVID-19 all organisations suffer from hard situations,
because it directly affects the sales of the organisation. But with the help of customers
loyalty, it is founded that even in the hard situations TESCO try to cope with these
situations with the help of relationship marketing (Mandal and Joshi, 2017).
 TESCO has many competitors that give a tough competition to the TESCO such as Lidl
and Adli. Due to the similarity of products and services, TESCO face threat of
substitute. It can be remove from the proper use of relationship marketing strategy.
 In a survey of TESCO, they founded that customers need online shopping so TESCO
then take action and make their website for serving online shopping experience. This is

the part of relationship marketing strategy which gives opportunities to TESCO that
they understand the needs of customers. It builds the trust of customers and they always
purchase from the selected brand.
For applying effective relationship marketing, there are some important key elements that
should be consider in the process of relationship marketing. The key elements are mentioned in
the given points: Customer differentiation: It is the first important key element that should be consider in
relationship marketing. It defines that TESCO should make products differentiate with
others' so that customers get to know the uniqueness of products and services (Nguru,
Ombui and Iravo, 2016). Long term emphasis: It is the most basic thing that should be considered by the
organisation. If organisation builds customer loyalty then it is very obvious for the
organisation that they should have a long term plan for running the business. TESCO
already has a long term goal because they adopt expansion strategy from the past few
years. It shows that company already work on them. Continuing transactions: TESCO should focus on the continuing transaction maintain
by their customers that create the loyalty and trust. From the record of sales of TESCO, it
is founded that company already build their sales through CRM approach Two-way communication: It is very necessary for TESCO that they should do effective
relationship marketing that include the interaction between two persons. They focus on
two way communication so that they can achieve their target (Panjaitan, Hermanto and
Widyastuti, 2020).
 Retention Focus: In the relationship marketing strategy, TESCO should be focus on
retention of customers in their brand that helps to maintain and increase their sales.
Relationship marketing is the most effective tool use for building and maintaining
customer relationship management. It can be apply very effectively so that attain their goals and
targets effectively.
Recommendations for organisation that use marketing strategy.
Marketing strategy refers to the the long term approach that gives the competitive
advantage to the organisation by applying all tools and techniques nicely. It is the plan that
predetermined the activities which come under in the process of marketing for accomplishing

organisations goals and objectives. It is the strategy that used for selling, promoting and
distributing the goods and services by the organisation.
TESCO make their strategies properly so that they can attain their targets and goals
effectively. In the present situation, it is founded that TESCO used expansion strategy to expand
their business globally more. They have already use many marketing strategies for that but it is
the main strategy to grow their business widely. TESCO use low pricing strategy that helps to
attract the consumer in a large portion with providing products and services at low prices.
Marketing strategy is very essential for the long term growth of the business. It helps in
sustainable growth of business through applicable of marketing strategy. There are few
recommendations for TESCO that helps to apply marketing strategy well and achieve their target
market. Recommendations are given below in the following points:
 TESCO applies expansion strategy for expanding their business, but it is very necessary
for the organisation that they can not forget their local people or local market. Because
they are loyal customers who always purchase products and services of TESCO (Roy,
2018).
 TESCO can also use collaborative approach through understanding the needs and wants
of customers. They can interact with customers so that they improve their direct
marketing.
 TESCO should make marketing plan so that they allocate resources to the particular
marketing strategies. With the proper planning, TESCO can achieve the target market
goals that helps to accomplishing organisations objectives and goals.
 TESCO has mainly focus on middle income group that neglecting upper income group.
So TESCO should manufacture premium products and services so that they cover the
upper level customers to satisfy their needs and wants.
CONCLUSION
It is concluded from the above discussion that company should adopt marketing strategies
that helps to attain their organisational objectives. It covers the STP model that helps company to
segment the large portion into small groups, make targets and then try to position the product in
the market. This report also give brief of marketing mix of organisation so that they can identify
the needs and requirements of elements to balance their mix. Balanced mix increase the
productivity and profitability of the company so that they can achieve their target market. With

the help of relationship marketing, organisation build the customer loyalty and trust so that they
meet their long term goals. It is very necessary for companies that they make their marketing
strategies properly so that they satisfy the needs and wants of their target customers. It is also
concluded from the recommendations that if the company take an idea of any suggestions then
organisations can improve their strategies.

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