TESCO's Marketing Strategies and Expansion

In this report, we explore TESCO's marketing strategies and expansion plans to maintain its market position. We examine the company's use of data analysis and market research to inform its decisions. The report highlights the importance of adapting to changing circumstances and utilizing data-driven approaches to succeed in a competitive retailing market.

INTRODUCTION TO
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Marketing techniques are used to market products................................................................1
P 2 The limitations and constraints of marketing........................................................................5
TASK 2............................................................................................................................................6
P3 Describe how one of the selected organisations uses marketing research.............................6
P4. Describe how the organisation utilises data and information collected through marketing
research for marketing planning. ................................................................................................7
P5 Explain how and why groups of customers are targeted for selected products.....................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Online........................................................................................................................................10

INTRODUCTION
Marketing is a way to introduce your product to your targeted customers in any market.
Today's business world demands every business to adopt a workable marketing strategy so that
they could achieve competitive advantages over their rivals and could generate higher sales and
profits successfully. There are different ways adopted by all the companies to maximize their
reach in markets. This marketing strategy should be aggressive and effective. In this assignment
we are going to study the approaches adopted by the TESCO and Barclays to analyse the
different marketing strategies.
TASK 1
P1 Marketing techniques are used to market products
Marketing is the process of planning and executing the developing, pricing, promotion
and distribution of good and services to satisfy individuals needs and organisational goals. In
this context, analysis has determined that TESCO marketing strategy aims to regain the trust of
stakeholders to the brand. The company is focusing on “Every Little Helps” strap line to
strengthen its core traditional competitive advantage in the marketplace (Marketing theory,
2017). Barclays PLC is a major global financial service provider engaged in retail and
commercial banking, credit cards, investment banking, wealth management, and investment
management services provider operating in Europe. Corporate strategy provides a direction that
serves as the framework for carrying out all the organisation’s functions. It specifies the aims the
company will pursue and identifies the growth objective. In addition to this, growth strategies are
described which are used to market the products by TESCO and Barclays.
Ansoff's matrix
The Ansoff Matrix also known as the Ansoff product and market growth matrix is a marketing
planning tool which usually aids a business in determining its product and market growth.
This Matrix has four alternatives of marketing strategies; Market Penetration, product
development, market development and diversification.
Market penetration
TESCO perfected its long term growth strategy based on four key parts. The openings on
other locations are supported by their purpose of growth in the core UK, expansion of
international retail industry, strong non-food and food services & outstanding customer services,
TESCO uses competitive pricing strategies, advertising and the other sales promotions to sell
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existing products & services to existing markets (Wilson and et.al., 2012). The Barclays
considers to increase the market share of the student account holders and to re-evaluate the
student proposition to ensure it relevance to the target market. This is done by implementing the
market penetration and by product development and by capturing current account market share
from the other banks and financial institutions, those which have been weakened by the
economic crisis.
Market development
The intention of TESCO to expand beyond its current business environment is supported with
coming up with new product dimension, distribution channels, & other strategies with exclusive
purpose of attracting customers to build a new market (Masterson, and Pickton, 2010).
Product development
The risks of introducing new product or service in an existing market are countless. For
TESCO, their growth strategy on the expansion of non-food is an example. TESCO introduces
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Illustration 1: Ansoff's matrix
Source 1: (Masterson, and Pickton, 2010)

other services aside from food to their existing market. Like in market penetration, various
strategies (example: pricing, advertising, and sales promotions) are significantly considered.
Barclays keep on developing new cards as an example of product development and they also
believe that by doing this they can get rid of non-traditional financial institutions. The advantage
of this strategy is that as Barclays has huge network of branches in more than 50 countries so
broad based differentiation is done and maximum market share is captured.
Diversification
It is investing on new markets using new products/services. TESCO should understand
the presence of risks on this process. The use of intensive Research & Development (R&D)
efforts is necessary. Barclays diversified into the new business of cycle hire throughout Central
London, United Kingdom (Babin and Zikmund, 2015). It’s a main sponsor of different sports
including football, tennis, golf, individual sponsorships, and the cycling in London.
Barclays has achieved its growth by product development, market development and
diversification. It is the official partner of one of the biggest football leagues followed in the
world known as Barclays Premier League. It expands its business by market development by
investing in new countries with its banking operations and then by product development by
increasing its operations in those countries.
Survival strategies
 Advertising: TESCO marketing strategy makes an extensive use of print and media
advertising systematically as a tested channel to send marketing communicate message to
current and potential consumers (Mentzer and Gundlach, 2010).
 Review Costs and Pricing: Pricing is an important element of marketing, particularly
when the economy is tight. TESCO marketing can be impacted by both the cost of
producing goods and services, and by the willingness of consumers to pay a certain price
for a particular product or service (Morrison, 2013).
 Market Segmentation through Customer Needs : The best thing done at Barclays is the
segmentation of the customer needs and then acting as their needs demand. This
segmentation has helped the bank to identify the real needs of the customers, take pre-
emptive approach and serve them before even they ask for it.
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 Re-evaluate Positioning: The competitive landscape of changes on a regular basis, and
marketers of TESCO in survival mode need to ensure that they are positioned
competitively -- and effectively -- compared to their competitors.
Branding strategies
 Sales Promotion : Various forms of sales promotions play an integral role within
TESCO marketing strategy. The supermarket chain facilitates sales promotions in the
following formats:
 Clubcard. Customers collect 1 point for each GBP 1 spent in TESCO. Several times a
year customers receive statements and vouchers equal to the value of points they have
saved.
 Free gifts. The supermarket chain offers free gifts such as Buy-One-Get-One-Free
promotions frequently to boost the sales of specific range of products (Chaffey, Smith
and Smith, 2013).
 Sponsor Various Events: In marketing Barclays focus on full portfolio of services
worldwide providing easy investment opportunities. The Barclays uses the self provision,
utilizes it as an increasing trend.
Relationship marketing:
 Networking:Networking, online and off, can be a powerful relationship marketing
technique used by Barclays and TESCO. Think about the interests that you have as a
business, and then join groups that share your affinities (Dahlén, Lange and Smith, 2010).
This not only helps the organizations brand awareness, but also expands your potential
customer base.
 Listen to Customers: Even listening and responding to compliments can be beneficial.
People love knowing they’ve been heard. Even complaints can be a blessing in disguise.
People often just want someone to share their concerns with. By listening to these
concerns, TESCO and Barclays ensure that their customers feel valued (Thorson and
Moore, 2013). Plus, if you learn what people love and dislike about you, you can
leverage the feedback to improve your business.
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P 2 The limitations and constraints of marketing
There are laws which have been created to protect the customers. Analysis is done to understand
how each of them impact TESCO and Barclays in different ways.
This law means that the company selling the product or service, has the legal right to do so. If
you are selling goods by description, such as newspaper, or catalogue, the goods have to
correspond with the description. This also applies to selling goods by sample - the rest of the
goods have to have the same quality of the sample product. This applies to both TESCO and
Barclays (Babin and Zikmund, 2015). TESCO have to have the legal right to sell their products,
however they don't sell by description in newspaper as they show pictures and promote the
products instead of describing it, they also don't sell in catalogues. Barclays also have the legal
right to sell their products, and they do sell by catalogue, so their products have to correspond to
their description.
Consumer Protection From Unfair Trading
This law is to ensure traders act honestly and fairly towards their customers. This applies both to
TESCO and Barclays, as their customers are purchasing goods/services from them.
Consumer Credit
This law requires most businesses that lend money to customers or offer goods and services on
credit or engage on certain credit activities to be licensed by OFT (Charlesworth, 2014). Trading
without a licence in such cases is a criminal offence and can result in a fine and/or imprisonment.
This apply to TESCO as they don't offer credit for their products, however Barclays do offer
credit accounts / catalogues for their products.
Consumer Protection
This law is aimed at making sure that businesses act fairly towards their customers, this applies
to both TESCO and Barclays, and they sell products and services to customers. This will allow
customers to be protected, and businesses treat them fairly (Taylor, Bogdan and DeVault, 2015).
Distance Selling
A lot of people buy products and services online, through the mail and over the phone. These are
all examples of distance selling. Business that normally sell by distance means they have systems
in place for trading this way, such as letters and emails they send to customers they death with
from a distance. These businesses need to comply with the consumer protection ( Distance
Selling) regulations 2000. TESCO however do sell their products internationally online, and
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through the mail so they would have to comply with the regulations act.
TASK 2
P3 Describe how the organisations uses marketing research
Market Research is a term that is used to refer to a process of gathering or collecting
information about target audience or target market. The main role of the concept of market
research is to provide the TESCO with an in-depth view of the customers or consumers in order
to be able to satisfy their needs better (Flick, 2014).
Qualitative research. Qualitative research or qualitative market research is a kind of research
method used by TESCO which mainly takes into account the opinions and feelings of a customer
as far as a business’s products and services are concerned. This type of research tries to get
behind the customer’s mind to fathom what they see lacking or whether they truly like the
product or not. Some common examples of qualitative research work include doing face to face
interviews, being part of focus groups, etc.
Quantitative research.: It is a kind of market research done by TESCO that is based on hard
facts and statistical data rather than the feelings and opinions of the customers or consumers.
Some common examples of quantitative research include exit surveys, questionnaires, on-site
fieldwork and the shopping bag survey (Armstrong and et.al., 2014).
Primary Market Research: It is a kind of market research which is done by the TESCO itself
with the objective of gathering information that can be used to improve the products, services,
and functions. It is the most common type of market research method and is also the most
valuable type. It is a method that only answers specific questions and not irrelevant issues.
Secondary market research: It is a research technique that does not aim to gather information
from scratch but relies on already available information from multiple sources. TESCO takes
into account many sources for collection of information including government data, office data,
newspapers, magazines, the internet, etc.
 Internal sources:
Balance sheets – Previous balance sheets of the business can be referred by TESCO to in order
to find stats and figures that may prove useful for evaluation.
Sales figures – TESCO store their previous sales figures so that they can be analysed and used
for further research.
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 External sources:
Government sources – Several government sources can be used by TESCO to collect a lot of
useful information about multiple subjects (Shaw, 2012).
Competitor data – Often, TESCO use the information collected and filed by other business
organizations including that gathered by their competitors.
P4. Describe how the organisation utilises data and information collected through marketing
research for marketing planning.
For the purpose marketing planning TESCO has conducted a research and utilises the data
information collected. Market planning is concerned with the establishing objectives and goals,
allocating the resources that are needed to meet these and setting out a plan of action. It also
includes setting out ways of evaluating performance against market targets.
SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. It’s a useful way for a
business to examine the relationships between a business and its marketing environment.
 Strengths- This refers to the internal environment of the business, which provide the
business with a competitive edge. For example TESCO’s In store setup is highly
effective.
 Weaknesses- These are also internal aspects of an organisation. These are were a
business is not working as well in comparison to other businesses. For example in some
TESCO stores staff aren’t trained well on the till system.
 Opportunities- These focus on events and development external to an organisation. In
the case of TESCO it could include the new territories for a product or service. Or a new
segment of a market (Wilson and Gilligan, 2012).
 Threats- Threats are external to a business, which could damage performance overall. In
TESCO case a threat could come from a change in governmental policy, such as a rise in
tax. When a business has identified the main points they are made into the marketing
objectives.
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TASK 3
P5 Explain how and why groups of customers are targeted for selected products.
Market segmentation
The most effective and efficient combination of operational resources in targeted market
segments promises the greatest return on investment marketing. Large multinational retailers
such as TESCO use different strategies based on customer databases that keep on sending direct
marketing messages effectively and to reward their customers catalogued.
Geographic segmentation: The TESCO, apart from its base located in England, also operates in
13 international markets. A division of the market is based on the country running and great
attention is paid to the specific needs of each geographic segment (Belch and et.al., 2014).
Demographic Segmentation: Demographic variables associated with age, sex, family size and
stage of life, the generation of income, occupation, education, social class, etc.
Psycho graphic segmentation: TESCO acknowledged the genuine psychological needs of
consumers and chose to cover those for which consumers really care (Malhotra and Malhotra,
2012).
Behavioural Segmentation : Club card was the tool that enabled TESCO to build a remarkable
knowledge of the purchasing behaviour of consumers. This includes knowledge of where and
when customers shop, where they spend their time in the shop, the rate of utilization of products,
their commitment to certain brands and, respectively, the rejection in others.
CONCLUSION
In the above report, it has been concluded that in a rapidly changing business
environment with a high competitors' pressure TESCO have to adopt new expansion strategies or
diversified the existing in order to sustain its leading market position in an already established
retailing market. The company must constantly adapt to the fast changing circumstances. It has
been considered that there are several strategies which are used by the TESCO and Barclays to
increase its marketing and uses market research as a tool to collect the data and information. At
last, utilization of data is also considered analysing the business.
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REFERENCES
Books and Journals
Malhotra, N.K. and Malhotra, N.K., 2012. Basic marketing research: Integration of social
media. Boston: Pearson.
Wilson and et.al., 2012. Services marketing: Integrating customer focus across the firm.
McGraw Hill.
Masterson, R. and Pickton, D., 2010. Marketing: an introduction. Sage Publications.
Babin, B.J. and Zikmund, W.G., 2015. Exploring marketing research. Cengage Learning.
Mentzer, J.T. and Gundlach, G., 2010. Exploring the relationship between marketing and supply
chain management: introduction to the special issue. Journal of the Academy of Marketing
Science, 38(1), pp.1-4.
Morrison, A.M., 2013. Marketing and managing tourism destinations. Routledge.
Chaffey, D., Smith, P.R. and Smith, P.R., 2013. eMarketing eXcellence: Planning and
optimizing your digital marketing. Routledge.
Dahlén, M., Lange, F. and Smith, T., 2010. Marketing communications: A brand narrative
approach. John Wiley & Sons.
Thorson, E. and Moore, J. eds., 2013. Integrated communication: Synergy of persuasive voices.
Psychology Press.
Babin, B.J. and Zikmund, W.G., 2015. Essentials of marketing research. Nelson Education.
Charlesworth, A., 2014. An introduction to social media marketing. Routledge.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A
guidebook and resource. John Wiley & Sons.
Flick, U., 2014. An introduction to qualitative research. Sage.
Armstrong and et.al 2014. Principles of marketing. Pearson Australia.
Shaw, E.H., 2012. Marketing strategy: From the origin of the concept to the development of a
conceptual framework. Journal of Historical Research in Marketing. 4(1). pp.30-55.
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Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
Belch and et.al., 2014. Advertising: An integrated marketing communication perspective.
McGraw-Hill Education.
Online
Marketing theory, 2017. [Online]. Available through :<
http://businesscasestudies.co.uk/business-theory/marketing/marketing-techniques.html>
[Accessed on 14 August 2017]
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