Global Marketing Models and Strategies of Tesco Plc

This report summarizes global marketing models for international market, comparison of international markets and evaluation of Tesco in context selected markets that are USA Market and European Market.

Global Marketing
Report

Contents
Contents...........................................................................................................................................2
EXECUTIVE SUMMARY.............................................................................................................3
TASK...............................................................................................................................................3
Background of company:.............................................................................................................3
Global Marketing Models:...........................................................................................................3
Analyse the method of market entry used by company:..............................................................5
Review potential marketing strategies of Tesco Plc:...................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
This report summarizes global marketing models for international market, comparison of
international markets and evaluation of Tesco in context selected markets that are USA Market
and European Market. Further this report provides comprehensive analyse of method related to
market entry applied by Tesco to enter into one of the selected markets and evaluation whether
such entry method was best option.
TASK
Background of company:
Tesco Plc is an UK global supermarket and consumer goods retailer headquartered in
Welwyn Garden City, Hertfordshire, England, United Kingdom Corporation is world's third
largest retailer supermarket in terms of aggregate revenue as well as world's 9th largest in terms
of sales. This is market leader in foodstuffs in UK (which has a market-shares of about 28.4
percent), Thailand, Ireland, Hungary as well as it has outlets in Asia and European nations.
Tesco was established as store booths in year 1919 by founder Jack Cohen. Since Cohen had
acquired a T-shipment, the title Tesco first emerged in year 1924. E. Stockwell including his
initials were paired by his first 2 letters of names, and in Burnt Oak, Barnet, the very first Tesco
stores began in year 1931. By year 1939 he had around 100 Tesco stores throughout the world.
Global Marketing Models:
Global marketing requires the scheduling, processing, positioning and advertising in world of the
goods or services of an organization. Global marketing is about much more than merely selling
multinational products and services. This is the conceptualization mechanism and the
corresponding global transmission of final good or service (De Mooij, 2018). The corporation is
aimed at achieving global marketing. Here are several global marketing models in context of
Tesco Plc, as follows:
Tesco has established long-term strategy of growth focused on four main components. In
the central UK, the vast supermarket worldwide, solid non-food service plus excellent customer
care, Tesco utilizes competitive market techniques, advertising, as well as other sites are driven
by their goal at expanding their operations.
Market Development:

Tesco's plan to grow beyond its present business environment encourages the creation of
new product-item dimensions, sales platforms and other approaches to draw consumers and
develop new market. With respect to Tesco, United Kingdom, manufacturers are primarily
British citizens since they know the requirements of UK market. This is one innovative approach
that Tesco has built for its current products and services Asian growing market.
Product Development:
There are various threats to the launch in such an established market of new products or
services. Their marketing strategy towards non-food advancement is an instance for Tesco. This
company provides its existing market with additional services, including food. Different
strategies (e.g. price, advertisement and publicity) are viewed in the same way as with market
penetration (Alon, Jaffe, Prange and Vianelli, 2016).
Diversification:
Diversification invests in new products-items in USA market. Tesco must understand that
this method poses risks. It is important to use intense research and innovation efforts.
BCG Matrix:
To order to allocate resources and define areas of company such as profitableness and market
positioning, the Boston Consulting Group model aims to.
 In a highly competitive market, the cash cows are strong and to have lower growth. Of
instance, Tesco's primary source of revenue has been its fresh meat-product, which is
most requested in the United Kingdom. Although its meat suppliers weakened their
corporate image, this issue was solved and consumer trust restored. In view of several
other meat traders competing on a massive scale, the industry is running at a matured
level, making it one of group's cash-flows due to high profits generated through meat
sold. Including meat, their healthy fruits and veggies are also counted in the classification
of cash cow, since there is higher demand for them and the potential to generate high
incomes (Cannon and Yaprak, 2014).
 Stars are items that generate business success and function on markets which are marked
by potential for growth. They generally need more money than cash-cows, but if the
sector matures, they will expand to cash cows.
 Dogs include low market shares and lower market growth, so investments are needed in
order to sustain business, but this can also lead to poor results. Tesco Mobile seems to

have an unpredictable future and does not deliver desired results because the mobile
phone industry offers high rivalry and limited growth potential.
 The question marks contain items that are less competitive and produce less sales.
As market grows, the coming years of such items is questionable and can thus be a good
source of turnover. They are likely towards becoming stars or dogs, but before drawing
investment choices they needed to be carefully examined.
Analyse the method of market entry used by company:
In recent decades most corporations worldwide have developed their operations. The key
causes for expansion are that the market at each market is in line with competitiveness.
Companies will be looking for fresh opportunities and possibilities to expand their business.
Once company enter into new market overseas, certain challenges like another culture or specific
consumer buying behavior. Following is discussion on methods of entry used by Tesco Plc, as
follows:
Foreign market servicing method: When a corporation chooses to enlarge to a region, it must
confront specific types of methods for the global market servicing as well as to choose best one
for the nation. The method of entrance often has an enormous effect on whether or not expansion
succeeded. Export markets, global licensing, global francophone licensing, specific modes of
entrance and foreign direct investment (FDI) are the most common approaches used by
businesses outside UK (Kolk, 2014). FDIs are divided into parts: “Acquisition Strategy”,
“Greenfield Strategy” and “Joint Ventures”.
As Tesco extended its organization throughout the USA in year 2007, greenfield method
was utilized in the creation of the urban retail model New & Simple. There are benefits and
drawbacks of greenfield approach. It begins from ground up when a company utilizes this
strategy. This leases or purchases land because of its business. Such method has the benefits of
allowing the corporation to select a location in the nation that suits the business better. In
addition, the company starts entirely new and therefore does not engage in operating debt or
outdated equipment which might take place with the takeover and joint venture method. The
drawbacks could not be "immaterial exposure to regional retail experience, not only in the layout
and product spectrum, but also for the vulnerable zone of stores" (Kreutzer, 2013).
Greenfield Strategy in the US food retail industry: If a business wishes to reach new market,
various framework models can be used to explore the right expansion method. The OLI model,

founded by John H. Dunning, has been chosen for this portion. O is the proprietary advantage; L
is the advantage of the location whereas I the internalization. Well into the U.s, Tesco Plc had to
have a company ownership benefit over the last few years, US consumers ' consumer habits has
shifted to a greater awareness of wellness. Tesco decided to establish small convenience outlets
focused on fresh fruits and veggies and cooked dishes. In addition, US citizens no longer need to
drive lengthy distances to even get their food. They prefer smaller shops in the area, that was the
reason Tesco was launched into US market. Company Tesco had competitive benefit, although,
the expansion couldn't be used as the only route to reach the US internationally. When it enters
the US, food would also be rotten. Moreover, Tesco knew the growing consumers ' consuming
and purchasing patterns. Before Tesco's entering North American marketplace through Fresh &
Easy there was no idea for any large retailers across the us including Tesco. Wal-Mart opened
the same style of' urban' convenient shops after Fresh & Easy was created. So, when they
reached the USA with greenfield approach, Tesco plc had such a benefit in its location.
Rather than joint venture through North American corporation or purchasing a business, Tesco
chose to adopt the greenfield method. This had once done a joint-venture in France that was
unsuccessful and Tesco decided to withdraw. However, licensing and franchising approaches to
reach a market if there is a geographic advantage do not match a store like Tesco. This
supermarket chain normally uses the acquisition method that for multiple acquisitions, such as
Hungary, Poland and Czech Republic, have proven extremely effective. Tesco was
using Greenfield technique for entering into US market (Potgieter, Adamovic and Mearns,
2012). Two of their biggest manufacturers in UK have decided to move to United States with
company Tesco branded "Wild Rocket Foods" as well as "2 Sisters Foods." The very first shop
launched in Nov. year 2007 near Hemet, California. Company Tesco set up 168 shops in
California, Nevada and Arizona by end of September, year 2010. Tesco had benefits of
internalization business in US and can utilize FDI for entering the market. Fresh and Easy does
not, however, do as well as Tesco would have liked. Furthermore, recession of year 2008 struck
the United States. Tesco hoped that it would build a powerful US brand that would be able to
endure the downturn. In any situation, in year 2010 Tesco had to shut down 13 it's own Fresh &
Easy shop due to recession and the' slow-than-expected reaction to its creative small shop
configuration.' In fact, Tesco did not benefit from its North American operations for five years.
Through fiscal years 2012/13, it is projected to benefit. The business wants to start up to nearly

400 outlets, so two shops must be opened each week. In United States, Tesco have not been
completely successful to date. Perhaps with a takeover by an established business it could have
entered market as it had been before. When Tesco had bought a company, this would have
"immedicable exposure to regional retail knowledge not only in shop design and variety, but also
throughout vital shop area". Tesco plc could have been competitive in the US by selecting the
acquisition method (Rao-Nicholson and Khan, 2017).
Review potential marketing strategies of Tesco Plc:
Marketing strategy of company Tesco currently seeks to restore the confidence of brand's
stakeholders. In order to enhance their core conventional market benefit, the corporation
concentrates on "Every Little Helps." The supermarket chains are employed to convey this
messaging to consumers by certain components of marketing communications mix like print and
online ads, product promotions, activities and interactions and public affairs. The
Tesco's marketing strategy systemically uses printing and media advertisements as a verified
channel to deliver marketing to the consumer. While Tesco's marketing spending plan in
year 2015 has fallen as portion of its huge cost-saving measures opposed to prior years, print and
media publicity efficiency have expanded. This is accomplished by applying the differentiation
of marketing. Occasionally Tesco Plc printing and advertising coverage provides valuable food
or house-styling tips. For instance, the corporation "published currently reactive print advertising
on a subject called" bake or fake "across Great Bake Off (Al‐Khatib, Al‐Habib, Bogari and
Salamah, 2016).
CONCLUSION
From above report it has been articulated that it's not always convenient to develop a
company in a global market. When a corporation doesn't examine adequate society, clients or
rivals, the expansion of its market will easily fail. Organization must determine the best entrance
method for the nation in which it wishes to enter. Company Tesco Plc has not succeeded in the
move to the U.S. market overall. Rather than the Greenfield method, Tesco Plc would have
chosen acquisition method. It might not have crashed by now through doing this.

REFERENCES
Books and Journals:
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Alon, I., Jaffe, E., Prange, C. and Vianelli, D., 2016. Global marketing: contemporary theory,
practice, and cases. Routledge.
Cannon, H.M. and Yaprak, A., 2014, March. Cosmopolitan-based cross national segmentation in
global marketing simulations. In Developments in Business Simulation and Experiential
Learning: Proceedings of the Annual ABSEL conference (Vol. 28).
Kolk, A., 2014. Linking subsistence activities to global marketing systems: The role of
institutions. Journal of Macromarketing. 34(2). pp. 186-198.
Kreutzer, R., 2013. Global Marketing—Konzeption eines länderübergreifenden Marketing:
Erfolgsbedingungen, Analysekonzepte, Gestaltungs-und Implementierungsansätze.
Springer-Verlag.
Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing
strategies in emerging market cross-border acquisitions. International Marketing
Review. 34(1). pp. 138-158.
Potgieter, A., Adamovic, D. and Mearns, M., 2012. Knowledge sharing through social media:
Investigating trends and technologies in a global marketing and advertising research
company. South African Journal of Information Management. 14(1). pp.1-7.
Al‐Khatib, J.A., Al‐Habib, M.I., Bogari, N. and Salamah, N., 2016. The ethical profile of global
marketing negotiators. Business Ethics: A European Review, 25(2). pp.172-186.