Marketing Strategy Analysis

This assignment delves into the marketing strategies employed by Tesco. It examines various aspects including target market segmentation, product positioning, and the overall effectiveness of Tesco's approach. The analysis utilizes a range of academic sources and publicly available information from Tesco itself to provide a comprehensive understanding of their marketing strategy.

MARKETING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Explaining marketing process in context of TESCO............................................................1
1.2: Evaluating the cost and benefits of marketing orientation...................................................2
TASK 2............................................................................................................................................3
2.1: Showing various macro and micro environmental factors which influence marketing
decision........................................................................................................................................3
2.2: Proposing a suitable segmenting criteria in the context of TESCO.....................................5
2.3: Choosing a targeting strategy in the context of TESCO.......................................................5
2.4: Demonstrating how buyer behavior affects marketing activities of TESCO in different
buying situations..........................................................................................................................6
2.5: Proposing a new positioning strategy in the context of TESCO..........................................7
TASK 3............................................................................................................................................7
3.1: Explaining how to develop a new product to attain competitive advantage........................7
3.2: Explaining how distribution is arranged to provide customer convenience in context of
TESCO.........................................................................................................................................8
3.3: Explaining how the prices are to be set by TESCO to reflect its marketing objectives and
conditions.....................................................................................................................................8
3.4: Illustrating that how the TESCO can integrate its promotional activities to achieve its
marketing objectives....................................................................................................................9
3.5: Analysing additional elements of extended marketing mix.................................................9
TASK 4..........................................................................................................................................10
4.1: Planning a marketing mixes for two different marketing segments...................................10
4.2: Illustrating difference between B2B and B2C....................................................................11
4.3: Showing the difference between international and domestic marking activities...............11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing principles is that organisational plan which combines all goals into one
comprehensive order. In order to give birth to a good marketing strategy, one is required to go
through research and right product mix. It helps in achieving goals and objectives of the firm as-
well-as help in sustaining competitive advantage over the competitors in the market. TESCO is a
public limited retailing company founded 97 years ago in the London UK. It distributes wide
range of products in worldwide through its supermarkets, hypermarkets and superstores etc.
Ample of employees are working in the TESCO. Also, it is the 3rd largest retailing company that
has expanded its services in around 12+ countries of the world. From the last 5 years, there has
been a continuous decease in the overall sales of the TESCO which had lead to profits at £62.284
billion by the previous year 2015 (About TESCO, 2016). Further, the report will include
explanation on the elements of marketing process as-well-as evaluate cost and benefits of market
orientation in the context of TESCO. After that, it proposes targeting and a positioning strategy
in the report that will help in penetration of product into new markets. Furthermore, the report
will include a brief explanation on how prices are to be set to reflect the organisational objective
and marketing conditions. At last, a plan will be prepared in the report which will show
marketing mixes for two different segments of consumer markets.
There has been continuous decline in the financial statistics of TESCO. Revenue of the
firm has shown fall by 1000 million dollar from previous year 2015. While looking for the group
revenue, there has been a decline in the profits of the firm and had reached to 54,433 from
63,916 by this year (Five year record, 2016).
TASK 1
1.1: Explaining marketing process in context of TESCO
Managing marketing efforts- In this, TESCO is required to analyse, plan, control and
implement a plan that will help in increasing sales and profits of the firm. In this, the company is
required to analyse its marketing environment in order to determine various marketing threats
and opportunities (Schlegelmilch, 2016). After that, it is required to make a detailed plan for its
each business unit, brand and product. Implementation is a process in which the plan is finally
turned into marketing actions to achieve predetermined objectives. Control is the last step that

involves looking working of basic strategies as per the defined direction and their matching with
the opportunities.
Preparing marketing mix- For selecting correct marketing mix strategy for TESCO,
following conditions are required to be completed before. Those are: right Product, right price,
right place and most suitable one is promotion which is required to be decided while selecting
suitable marketing mix strategy for the retail firm.
Selecting the target market- After the selection of marketing mix, the company is
required to go for market segmentation (Blank, 2013). While segmenting market, two things that
TESCO should consider are attractiveness of segments and fit balance between firm’s objective
and its resources, capabilities etc. This will further help the retail organisation in bringing up its
sales and revenue.
Analysing Marketing Opportunities- In this, TESCO is required to analyse various
opportunities and threats that might occur to it in the future. Opportunities will help the firm in
overcoming its losses in last five years.
1.2: Evaluating the cost and benefits of marketing orientation
Market orientation is a process that helps the organisation in analysing needs and wants
of their customers by conducting research.
Benefits
It helps TESCO in attaining higher customer satisfaction and loyalty. Also, it helps in
increasing the market share and sales of the retail firm. It also leads to profitable growth of the
firm. Market orientation assists TESCO in enhancing competitive advantage over its rivals in the
market and also helps in improving the corporate image of TESCO.
Cost
Market orientation leads to increase in the expectation of customers towards the company
(Jones and Morgan, 2014). Also, proper development needs and staff training is required to be
given for this approach by the TESCO which leads to extra cost.
Recommendation
TESCO should go with both customer as-well-as competitor orientations. Customer
orientation will help the firm in regular collection of information related to customer’s need.

Also, it helps in focusing on corporative objectives and policies with increase responsiveness to
consumers. The chosen retail organisation can also go for competitor orientation strategy. This
will help it in keeping regular watch on the competitor’s activity (Payne and Frow, 2013). This
will help in setting a benchmark for competitors etc.
TASK 2
2.1: Showing various macro and micro environmental factors which influence
marketing decision
MICRO ENVIRONMENTAL FACTORS
Competitors Competitors are generally firms that operate in the same market. To
remain successful in the market, TESCO is required to adopt better and
satisfactory products for its customers than its rivals in the markets
(Chaffey and Smith, 2012). TESCO has various rivals in the markets and
some of them are Sainsbury, ASDA, Morrison's, Aldi, Lidl, Waitrose etc.
Customers Customers are the ultimate users and king of the market. Their
perceptions, decisions etc leads firm towards growth and sometimes may
even take the sales down.
Employees Employees are the back bone of the firms such as TESCO that helps in
selling and producing the products of the firm. It is important for the
chosen retail to recruit well qualified and motivated employees for the
organization to attain the success (Christopher and Peck, 2012).
Suppliers It is one of the important micro environmental factors that actually lead
the company towards its customer value delivery system.
PESTLE

MACRO ENVIRONMENTAL
FACTORS
IMPACT OF TESCO
Political Factors:
Increase in living wages Changes in political factors lead to place a huge impact on
the functioning of the TESCO. For example; in case of
increase in living wages, positive impact on the sales of
the company is observed with the increase in purchasing
power of customers (Czinkota and Ronkainen, 2012)..
Economical factors:
Recession
Changes in economic factor also lead to have positive as-
well-as negative impact on the TESCO. For example; In
the time of recession, TESCO revenues and sales may get
affected because of which it has to fire some of it
employees.
Social factors
Life style
Changes in lifestyle and preferences of customers also
place impact on TESCO. It is because, they have to to cop
up with the changes taking place in the society otherwise
there will be decrease in its demand (Malik, 2015).
Technological factors:
E-commerce
Now-a-days, companies are moving towards e commerce
websites from where they can directly assess the
customers without any supply chain. This helps in saving
cost as-well-as provide convenience to its customers.
2.2: Proposing a suitable segmenting criteria in the context of TESCO
There are various segmenting criteria that can be used by TESCO to penetrate its new
biscuits and snack bars in the markets. They are as follows:
Psychographic segmentation In this segmenting criterion, TESCO is required to
identify and analyse the needs and requirements of
customers. For analysing, it should make segments on the
basis of lifestyles, status, personality etc (Schmidt, Spann

and Zeithammer, 2014).
Geographical segmentation In this, the chosen retail firm can segment on the basis of
state, nations, country etc.
Demographic segmentation Here, segmentation is done by considering the age,
income, education, family size etc factors.
The chosen retail firm can go for demographic segmentation in order to penetrate its new
product that is biscuits and snacks among different markets. More specifically, TESCO can
categorise individuals on the basis of age. Different segments can be from 10-20 years, 20-30
year, 30-40 and 40 and more (Gerlemann and et.al., 2014). Accordingly, the segments for which
the company is required to make plans and strategies to achieve attention of all markets within
the determined time limit need to be made.
2.3: Choosing a targeting strategy in the context of TESCO
There are different types of targeting strategies that the TESCO can use to increase its
sale in the market (Types of Target Marketing, 2016). That will further help it in increasing its
scale instead of decreasing in coming years. The targeting strategies are:
Differentiated Marketing Over here, the chosen firm will have to make different
marketing mixes for different market segments.
Undifferentiated marketing In this strategy, TESCO will have to look forward to all
sectors with single marketing mix strategies (Borland and
Lindgreen, 2013).
Concentrated Targeting In this strategy, the firm will have to focus on single
segments with single market target.
In order to reach its product, TESCO will have to focus on each segment. Every segment
has its own characteristics and features. To fulfil and consider them, firm will make different
marketing mix strategy for each segment. This will help it in reaching every segment and
increase its sales and revenue of TESCO. For this, the firm will have to go for differentiated
marketing strategy.

2.4: Demonstrating how buyer behavior affects marketing activities of TESCO in different
buying situations
There are various types of buying situations in which customers or buyer behaves
differently. They are:
 Modified Rebuy- It is a situation in which an individual purchases product that it had
already purchase before but there are some modifications such as changes in the suppliers
etc. In other words, buyer wants some modification in the product whether in terms of
specifications, prices, suppliers etc.
 Straight Rebuy- Under this buying situation, buyer purchases product on a routine basis
from a approve supplier. In this, suppliers make continuous efforts for maintaining
products quality and reordering systems (Madhavaram, Granot and Badrinarayanan,
2014).
 New task- It is the buying situation in which buyer purchase the product for the first
time. The greater the cost or risk, the larger the number of decision participants and the
greater their information gathering and therefore the longer the time to decision
completion.
2.5: Proposing a new positioning strategy in the context of TESCO
There are various positioning strategies that can be used by TESCO to improve its sales
and revenue. Such as:
 Brand Positioning Strategy- It is a strategy in which firm adds differentiated values to
product from the competitors in the markets. This helps the company in attaining
successful position in the markets with uniqueness of the products. For creating such
brand image, firm goes through adding a new curve to the company as-well-as it leads to
effective communication.
 Product Positioning Strategy- In this, the company tries to position its product in the
hearts of customers (Product positioning strategy in marketing management, 2009). By
making attempts to create image of product, brand as-well-as also express positioning
relative to the rivals in the markets.

TESCO can go for brand positioning strategy, to penetrate its biscuit and snack products
in different segments of the market. In this, it can mention quality, value feature driven,
relational as-well-as inspirational positioning that increase the identification of product in the
eyes of customers. It can also go from warm, fuzzy, rivalry based positioning etc. to increase the
sales and revenue of the firm (Li, Song and Collins, 2014).
TASK 3
3.1: Explaining how to develop a new product to attain competitive advantage
To achieve competitive advantage, the companies such as TESCO are required to
research for the customer’s needs and wants. If it will produce goods as per the requirements of
its customers, demand of the product will automatically get increase. This will lead to increase in
the revenue of the firm that went down from past 5 years as per the statistics of TESCO. Also,
TESCO can go for attractive packaging to attract customers. Effective communication may also
help in increasing the recognition of products (Laroche, 2014). For that, the company will have
to appoint effective marketers who can market its product into the hearts of the customers. This
will definitely leads to increase in the demand and sales of the TESCO products. It can also go
for effective positioning and branding of products to achieve competitive advantage over the
competitors in markets.
3.2: Explaining how distribution is arranged to provide customer convenience in context of
TESCO
In order to provide convenience to customers, TESCO can display its new biscuits and
snacks in front of its various supermarkets, hypermarkets etc. It will help the customers in
recognising its new product. Along with this, the chosen retail firm can go for various other
arrangement strategies to make favourable options for its consumers. It can open up various
supermarkets across its segmented markets that are accessible to every segments people. Also,
TESCO can go for its own e-commerce website (Pagani and Otto, 2013). Here, it can display its
new biscuits and snacks with various flavours along with other ranges of products and their
features and prices.

TESCO can also provide more comfort to its consumer by giving home delivery services.
In that case, consumers are only required to go through the website and search for the required
product. After selecting product, they are required to order it through online means and the
employees of chose retail organisation can deliver things at homes of the customers too.
3.3: Explaining how the prices are to be set by TESCO to reflect its marketing objectives and
conditions
In order to attain the ultimate objective of the organisation, they go for price cutting etc
methods as well. Objectives and market conditions of TESCO is to increase its revenue that has
been continuously declines from the past 5 years. Fort this, it can go for cutting down price
strategy. In this, the company will have to cut its price slightly down for its products from its
competitors that are Sainsbury, Aldi etc. This will further help it in attaining and retaining the
customers over its competitors in the markets. For cutting down its prices, the company will have
to make changes in the production units (Phillips and Hallman, 2013). This is to make changes in
the prices of the products. It can prevent purchasing of product from expensive suppliers etc. It
can also go with the e-commerce trading those leads to less cost and generate more revenues.
3.4: Illustrating that how the TESCO can integrate its promotional activities to achieve its
marketing objectives
Promotion often leads to increase in sales of products. For this, TESCO will have to go
through various promotional activities that will result in the increase of sales of new biscuits and
snacks. For this, TESCO can do television advertisements, radio, newspapers etc. It can go with
such printing media advertisements to increase sales of its products. Along with this, it can also
promote its product on online social media platforms such as twitter, Facebook etc (Oly Ndubisi,
2012). Along with this, the company can also go for aerial advertisements through air balloons,
huge banners etc. It can also promote its product by sponsoring in the events such as sports
event, or any other king of event such as cookery show, dance realities etc. This will help the
TESCO in increasing its sales and profits.

3.5: Analysing additional elements of extended marketing mix
Following are the additional elements of marketing mix which also can be adopted by
TESCO to achieve its marketing objectives. They are:
 People- They are the backbone of the company because they are the people who directly
interact with the customers. People can also be termed as employees of the company.
TESCO’s sales graph depends on the marketing skills of its employees. Hence, proper
training and development skills are required to be provided by the company to its new
employees (Eggers, Hansen and Davis, 2012).
 Physical layouts- Physical layout refers to the design of the stores, supermarkets etc.
There designs should be such which can attracts customers. Along with the designing,
cleanliness and hygienic factors are also required to be considered by the company.
Because these days customers give preference to the cleanliness and hygiene.
 Process- TESCO should follow a procedure for handling customer’s complainants etc. It
also includes the procedure of identifying the customer’s needs and wants.
TASK 4
4.1: Planning a marketing mixes for two different marketing segments
ELEMENTS OF
MARKETING
AGE GROUP (10-20) AGE GROUP FROM
(30-40)
Product TESCO is required to consider
children at the age of 10-20 years
while producing products.
Similarly, it has to consider
requirements of 30-40 years of
age people while preparing
biscuits and snacks for them.

Place It can place new products for
distribution in front of stores
beside to some toys etc. So that it
can be easily recognisable by the
children (Morgan, 2012).
Similarly, new products are to
be displayed in front row of
the TESCO stores and
supermarkets to approach 30-
40 years of age group people.
Price Price in case of children does not
matter. Because they are small
children and whatever they want to
buy their parents had to take it for
them in any case.
Over here, price has a direct
connection with the demand of
the products. If the prices are
low then, demand definitely
increases otherwise its goes
vice versa.
Promotion TESCO provide harm free toy for
children along with the biscuit and
snacks to attract them towards the
product.
Here, the chosen company can
go for promoting its product
through printing, aerial as-
well-as social media sources
(Wilken and et.al., 2015).
4.2: Illustrating difference between B2B and B2C
Following are the differences between business to business and business to consumers
market.
 B2B is a small and a focused target market on the other hand; B2C is a large target
market.
 B2B consist of features, functions, education whereas B2C involves benefits, symbols
and appeals.
 Buyer’s nature in B2B market is rational whereas in case of B2C, nature of buyers is
emotional.
 B2C is involved in the multiple of media consumption whereas B2B goes for only
selective media (Rundh, 2013).

 B2B is long term process as it involves multiple steps whereas in case of B2C, it is short
term process as it involves only single step.
 B2B leads in creating and supporting demand but B2C drives demand.
 B2B emphasise more on technical development then customer research whereas, B2C
goes for extensive feedbacks of the customers as-well-as for customer research.
4.3: Showing the difference between international and domestic marking activities
Following are differences between international and domestic marketing activities:
 International marketing deals with different aspects whereas, domestic market deals in
same currency that is domestic currency.
 Market capacity in international market is larger as compared to the capacity of domestic
markets. This is because of the limited population in domestic markets.
 Another difference between both international as-well-as domestic markets is language
and cultural barriers (Liu, 2013). Domestic market deals with the one culture and
language whereas international market has various communication challenges occurs due
to cultural and language barriers.
 While expansion of business at international level companies have to make changes in
the environment and management practices as per the requirements. But, in case of
domestic business no such changes are required to be made.
 While business expanded at an international level, the firm has to face restriction in the
trade practices, license etc. but in case of domestic trade; such issue arises to the limited
extent.
CONCLUSION
This report was based on the scenario where there is a continuous decrease in the sales of
the company from past 5 years. New marketing and promotional strategies are being made in the
report to increase the sales of the TESCO. Various elements of marketing process are studied in
the report regarding managing marketing activities, preparing marketing mixes etc. There also
been identified various micro and macro environment factors that are competitors, suppliers,
technological, political etc. Further, the report also concluded the extended elements of

marketing mix which were physical layouts, process and people. At last, plan has been made in
the report which depicts elements of marketing mix into two different age group segments that
were from 10-20 and 30-40.

REFERENCES
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