Marketing Techniques of Tesco and Sainsbury

This assignment analyzes the marketing techniques employed by Tesco and Sainsbury, two major supermarket chains. It examines their distinct approaches to the four Ps of marketing (Product, Price, Place, Promotion) and considers the limitations and constraints they face in the competitive retail market. The report delves into target customer segmentation based on product and service offerings, highlighting how these companies leverage different marketing strategies to reach specific consumer groups. Moreover, it explores the process of developing new product marketing mixes within the context of both organizations.

INTRODUCTION TO
MARKETING

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Marketing techniques used by two organisation....................................................................1
P2 Limitations and constraints of marketing.............................................................................3
TASK 2............................................................................................................................................3
P3 Use of marketing research by Tesco......................................................................................3
P4 Marketing research for marketing planning...........................................................................4
TASK 3............................................................................................................................................5
P5 Groups of customers are targeted for selected products .......................................................5
TASK 4............................................................................................................................................6
P6 Marketing mix for new products and services.......................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Marketing is the management process through which goods and services move from
concept to the customer. This is one of the premier components of Business Management It
includes the coordination of four elements called the 4 P's of marketing that includes
identification, selection and development of a product; determination of its price; selection of a
distribution channel to reach the customer's place, and development and implementation of a
promotional strategy (Anda and Temmen, 2014). Tesco and Sainsbury are two companies who
are carrying out different marketing strategies to establish and to sustain in competitive market as
required in current scenario. It is basically about understanding of needs and desires of users and
then according to that products are served to them.
TASK 1
P1 Marketing techniques used by two organisation.
Sainsbury's is the second largest chain of sssupermarket in the United Kingdom. It started as a
retailer of fresh foods and later expanded into packaged groceries such as tea and sugar. Where
as Tesco is third largest store as measured by profit, it is very renowned organisation all around
the world its popularity is very high and also it has a successful growth rate in the competitive
market.
Tesco's Marketing techniques (Growth strategy)
Market penetration
Consumers sometimes have the tendency to run after brands more than the products. Tesco has
very well understood this psychology of the consumers. To the customers, Tesco is a brand.
 Tesco first came into the market with its own advertising website known as the Tesco
Property Market.
 They are promoting all its products and services through the website.
 In the year of 1995, Tesco crossed Sainsbury’s and became the largest retailer in the UK
market (Bhattacharya, 2010). The introduction of the Club card concept for gaining the loyalty of the customers and
retaining them, helped Tesco to penetrate deep in the retail market.
New products and services
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In order to grow and sustain in the market, a company should come up with new products and
services. Activities that Tesco did:
 Offer wide range of products and services like credit cards, mortgages, insurance
products, various investment and savings schemes, electronic goods and others.
 They are trying to improve the quality of those products. To expand business in other sectors also like mobile and tablets. They have tested success
in the Asian market regarding these products and earned huge profits (Hallahan,
Kauffman and Pullen, 2011).
Market development
 They bought stakes from the Associated British Foods retail chain consisting of Stewarts,
Quinnsworth and Crazy Prices.
 In June 2003, Tesco purchased C Two-Network in Japan. For development of the existing market, Tesco undergoes frequent changes.
Product diversification
 Tesco diversified its products from the food items to the non-food items. Initially Tesco
started as the leading grocery retail chain but diversified its business into garments, books
and rental, furniture, various financial services and internet related services. In the clothing department, Tesco introduced its own brands like ‘Cherokee’ and ‘F+F’.
Sainsbury's marketing techniques
 Branding- It is a method through which a company can be able to create an image of it in
the mind of customers. Company is doing branding of its products and services to its
target customers so that they can be able to sustain in market with support of its loyal
customers (Malhotra, 2012).
 Brand extension- This way is used by company to introduce a new product and service
with help of its existing services in market. The brand name are used by it with its new
products. Its existing items has already created a benchmark in market which is assisting
the firm to launch new products.
 Relationship marketing- It is an important aspect as it helps in maintaining long term
relationship with the customers of society. Several tools and techniques are used to carry
out this activity.
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P2 Limitations and constraints of marketing.
All business organisations are work to be success in the field of market and marketing. But there
are always has lots of limitation and constraints of marketing for a marketer.
This company may face limitation from the government, customers, EU, competitors and other
stakeholders (McKenzie-Mohr, 2013).
Goods act, 1979: This act conducted by the parliament of UK which regulates the commercial
law in respect of goods that are sold and bought. The act is made by the set of formation of the
contract. The contract of sale, capacity to buy and sell, and ascertainment of price, agreement to
sell at valuation, condition and warranty are the core element of this act.
The consumer protection from Unfair Trading Regulations act, 2008: Consumer protection act
is the regulation that is a general duty not to trade unfairly therefore being honest and fair to all
customers. Consumer protection act is mostly practices on price claims, product information,
competitors, and sales methods and as well as sales services. The legislation is providing the
rights of consumer to search, choose and selection of products.
Consumer credit act- This act is implicated upon all the firms and customers who are doing their
transactions on credit basis that means, products and services are availed on loans (Financial aid
to those customers who are in need of). For example bank and financial institutions these avail
their services to customers in credit basis.
Acceptable language- This aspect also has to be considered the most as because this assist in
knowing correct mode of language that has to be chosen by company to convey message and
information that are related to products and services of it.
TASK 2
P3 Use of marketing research by Tesco
Primary research
Primary research are those method through which an organisation' researchers get
directly into the market and interact with customers to collect relevant informations and data that
will assist company to sustain in market. Quantitative and qualitative methods are involved
where qualitative involves open ended questionnaires, observation methods, interview and focus
group. Whereas in quantitative techniques researchers are more focused upon numericals and
statistical aspects, it involves questionnaires and surveys (Mentzer and Gundlach, 2010).
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This sources will help knowing what actually customers are in need of and with this
company can be able to avail them what they need and this will satisfy every customers of the
company.
Secondary research
This is a methods of gathering information where companies collect data which has been
already get collected by some other researchers like, books, journals, magazines etc. it has
internal and external sources, internal are those informations that can be attained within the
company like retail data, stock analysis and balance sheets. Whereas in external sources includes
commercial data, government stats etc (Molesworth, Scullion and Nixon, 2010).
This approach will help in developing plans related to marketing and will lead in learning
about industry and market of several places where company wants to deal with its products and
services.
P4 Marketing research for marketing planning
The marketing use for marketing planning for Tesco company, with the help of marketing plan
by SWOT it can be analysed that in what way company will be able to implement and use
effectively all the informations that are gathered by marketing research.
Strengths
1. Wide Market Presence across Europe, South America, North America, North Africa and Asia
2. Multi Format Strategy-hypermarkets, supermarkets, hard discount stores and convenience
stores
3. High proportion of locally sourced products which helps to achieve operational efficiencies
4. Relatively large stores with broad non-food lines such as books, apparels, music, electronics,
furniture, petrol and software; financial services; telecoms and internet services etc.
5. Highly popular Private label brands that build its brand equity
Weakness
1. Recent controversies that led to negative media coverage and public image
2. Weak presence in other countries (Palmer, 2012).
3. Tesco's Finance profit levels were impacted through bad debt, credit card arrears and
household insurance claims.
Opportunities
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 Rebranding Champion stores through innovative digital media advertising and
promotions.
 Entry into emerging markets through acquisition of smaller chains and tie-ups.
Focus to boost non-food sales. Focus on Private label growth.
Threats
 Rising raw material costs from both food and non-food will impact profit margins
overall.
 Maintaining low-cost operations and low prices in economic recession scenario.
 Increased competition from other retail store formats and companies.
TASK 3
P5 Groups of customers are targeted for selected products
Different segmentation and targeting approaches are used by Tesco and Sainsbury to target their
customers. There are many products that are offered by both the companies and these are
effective to fulfil the demand of market.
 Grocery- It is the product that are most used at every home hence home makers of society
are targetted. On the basis of psycho graphic method and geographical segmentation
method customers of society are targetted most (Papasolomou and Melanthiou, 2012). Its
is because tastes and preferences changes as trends of market get fluctuate, hence it is
very essential for company to know their needs and wants regarding the products that will
be offered to them. Both Tesco and Sainsbury are dealing in same category of industry as
retail they both will be concerning more upon taste and choices of customers of this
segmented market.
 Baby products- These products are not used in frequent manner it is used by mother for
their new born kids. Hence customers are targetted on the basis of demographic
segmentation method. This is because it lies upon age factors as baby products are only
used by small child. It is very important for the firm both Sainsbury and Tesco to
understand who all are in need of it so that the customers can be targetted according to
that.
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Clothing- It is the sector which is been targetted by both cited companies on demographic
geographic and psycho-graphic basis as because services of companies are availed in many
places according to that geographical segmentations is to be considered most, their tastes and
preferences also get changes very frequently according to that customers can be targetted (Anda
and Temmen 2014).
TASK 4
P6 Marketing mix for new products and services
Product
Tesco provides a wide range of products that include food, clothing, electronics, financial
services etc. It provides a wide variety of choice ranging from brand, regional produce, type,
international cuisine in food and other choices that don’t leave the customer lacking when it
comes to choice.
Price
Tesco attempts to maintain as low prices as possible without reducing the quality of its products
or running itself in loss. In order to pass all cost advantages to its customers and keep them
happy, it uses a number of measures which includes the economies of scale it enjoys.
Place
Its stores are spread far and wide in the world. It employs two main channels of distribution for
its products and services – online and offline. Its offline forum has stores of six different kinds –
Tesco Express, Tesco Extra, Tesco Metro, Tesco Compact, Tesco Home plus and Tesco
Superstore (Bhattacharya, 2010).
Promotion
All of Tesco’s advertisements focus on one thing – its low prices. It also provides a lot of
attractive offers to its customers all year round. It is very easy for any customer roaming the
lanes of this grocery store to find offers like ‘buy one get one free’, ‘half price’ etc. It strives to
make its customers purchase more, all the while feeling like they’ve saved so much.
People- All those who are involved in transaction with the firm is said to be as people.
Manpower of the company are representatives of it they are the one who has direct connections
with customers, they most know about consumers choices and preferences, hence while
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producing a new product and services their opinion are very must to be considered by the
company.
Process- The methods and steps involved in providing services and products to the ultimate
customers and to make them satisfied is a tough task to be performed by the company
(Bhattacharya, 2010). Therefore it is very essential to opt the correct method to attain the
customer's satisfaction.
Physical evidence- As services as to be provided any physical element or tangible presence is
not there hence the experiences and process through which a customers has gone through are to
be considered in this aspects.
CONCLUSION
In this report different marketing techniques are used by two different organisation. Also
limitations and constraints of marketing are understood so that company can overcome them in
effective manner and can carry out its operation in appropriate manner. Targeted customers are
selected on the basis of different categories of products and services provided by Tesco and
Sainsbury. On its basis segmented markets are targetted so that customers can be able to attain
desired services. Companies new product's marketing mix developing methods are described.
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REFERENCES
Books and Journals
Anda, M. and Temmen, J., 2014. Smart metering for residential energy efficiency: The use of
community based social marketing for behavioural change and smart grid introduction.
Renewable Energy. 67. pp.119-127.
Bhattacharya, C.B. ed., 2010. Introduction to the special section on stakeholder marketing.
Journal of Public Policy & Marketing. 29(1). pp.1-3.
Hallahan, D.P., Kauffman, J.M. and Pullen, P.C., 2011. Exceptional learners: An introduction to
special education. Pearson Higher Ed.
Malhotra, N.K., 2012. Basic marketing research: Integration of social media. Boston: Pearson.
McKenzie-Mohr, D., 2013. Fostering sustainable behavior: An introduction to community-based
social marketing. New society publishers.
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.
Molesworth, M., Scullion, R. and Nixon, E. eds., 2010. The marketisation of higher education.
Routledge.
Palmer, A., 2012. Introduction to marketing: theory and practice. Oxford University Press.
Papasolomou, I. and Melanthiou, Y., 2012. Social media: Marketing public relations’ new best
friend. Journal of Promotion Management. 18(3). pp.319-328.
Peter, J.P. and Donnelly, J.H., 2011. Marketing management: knowledge and skills: text,
analysis, cases, plans. Plano: Business pub., INC.
Online
Tesco SWOT Analysis. 2016. [Online]. Available through:
<http://research-methodology.net/tesco-swot-analysis/>. [Accessed on 17th July 2017].
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