Marketing Management Report

This report analyzes Tesco, a multinational grocery retailer, using a comprehensive approach. It delves into the company's background, conducts a marketing audit using SWOT and PESTLE analyses, reviews Tesco's marketing mix, and proposes new marketing mix actions to address identified gaps. The report also examines the competitive landscape using Porter's Five Forces Model.

MARKETING MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background information. ...........................................................................................................3
Marketing audit. .........................................................................................................................4
Review of marketing mix..........................................................................................................10
New marketing mix actions. ....................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Marketing management is organisational disciple which is focus on the practical
application of the marketing orientation, methods and techniques. Marketing management is very
important and effective activities which are involve in different goods and services factors. It is
the analysis, planning, implementation and control of program to designed for effective changes
with target market for achieve goals and objectives of company. The present study is based on
“Tesco” which is multinational grocery retail sector. It has the 460000 numbers of employee
with 6808 shops at various location. The study lays emphasis on background information of
company and industry which is choose for this report. Report will outline by the overall market
attractiveness and potential growth of market with the help of marketing audit. It will review by
the marketing mix of Tesco with explanation of some product and services mix. It will covers by
the different brands of Tesco for different market target. It will also critique by new marketing
actions for achieve gaps in present marketing strategy and external environment.
MAIN BODY
Background information.
Retail refers to the process of offering products or services to the buyers. An organization
uses various types of channels for distribution of goods so that, firm can earn profit. Retail
industry refers to the industry of Retail companies in which all the firms are involved in selling
and distributing goods or services to ultimate customers. Retail industry includes shops,
groceries, departmental stores and supermarket chains etc.
Tesco Plc belongs to retail industry. The company was founded by Jack Cohen in year
1919. The headquarter of Tesco is located in England, United Kingdom. The founder of Tesco
has opened the first store of the company in London in year 1929(Chernev, 2018). The firm is at
third position in the world in terms of revenue. The key peoples working in Tesco are Dave
Lewis, John Allan etc. Tesco offers its products through Supermarkets, Convenience shops,
Hypermarkets etc. in various countries such as United Kingdom, Hungary, Poland etc. Tesco
group is controlling various subsidiaries such as Tesco Bank, Tesco Mobile, Tesco Stores Ltd
etc. The business of the organization is diversified in various areas such as clothing, software,
books, furniture, financial services, and services related with internet under its different
subsidiaries.

Tesco has acquired Brooker in year 2018, the company is a wholesaler of food items.
Brooker owns various brands such as Euro Shopper, Budgens etc. Tesco Bank which is one of
the subsidiary of Tesco Plc offers financial services in UK. It offers products such as insurance,
credit cards, saving accounts etc. Tesco also provides services of Telecom business such as
broadband and telephone business etc. in Ireland, United Kingdom etc. The company is also
having its operations at international level. It is offering products and services in more than 11
countries other than UK such as Ireland etc. The company is operating more than 6800 shops
across the whole world(Grewal, 2018). The firm also offers services through a website known as
Tesco.com.
The firm is very much committed towards CSR activities. The firm has develop different
types of social programs for approximately 4,50,000 peoples that are living in the community.
Tesco is the first retail organization of UK that has join the initiative for promoting sustainable
development of agriculture in year 2016. The firm has contributed to reduce the emission of
carbon di oxide from the stores by 39.5% in year 2015/16. Tesco is among few retail companies
which publishes the data related with food wastage from various operations of the company in
UK.
Marketing audit.
Marketing audit-
The term marketing audit refers to the process of conducting systematic analysis,
interpreting and evaluating the internal as well as external environment in which the business is
operating. So that, company can identify the opportunities and weakness(Camilleri, 2018). On
the basis of marketing audit, the firm will develop the plan for improving the performance of the
marketing activities of the company. There are various components of marketing audit. Such as
conducting audit of macro environment to determine the factors that are affecting the marketing
performance etc. Tesco will use various types of tools for conducting marketing audit these are
as follows-
SWOT analysis-
SWOT analysis is a tool that helps an organization to identify the strengths and
weaknesses of internal environment as well as opportunities and threats that are existing in
external environment which is outside the firm. SWOT analysis will play a major role in
marketing audit of Tesco.

Strengths- Strengths are the internal abilities of the firm that exists in internal environment and
it helps the firm to get competitive advantage over other companies that are operating in the in
industry. Tesco should consider these strengths while developing marketing campaigns for the
products or services. Strengths of Tesco are as follows-
 Tesco is operating in different geographic areas and operates approximately 6800 stores
in around 14 countries across America, Europe etc.
 The company is using advance technology in conducting its operations this will help
Tesco to develop effective marketing programs for targeting the customers.
 The company is having a wide range of products under different segments such as
telecom services, clothing, financial services, home-ware items etc.
Weaknesses- Weaknesses are the skills that are lacking in the people that are working in the
firm. Tesco should keep in mind these weaknesses for developing a good strategy for marketing
of the products or services. Weaknesses of Tesco are as follows-
 One of the major weakness of Tesco is that in year 2018, the price of shares of the rim
has decline by 9%(Phadermrod, Crowder, R.M. and Wills, 2019). Therefore, company
should develop strong marketing strategy so that, it can attract large number of buyers
and operating profit will also increase.
 Due to the low cost strategy of the firm, the profit margin of Tesco is declining.
 Tesco has experienced lack of market research in some countries. It has resulted in low
level of operational performance.
Opportunities- Opportunities exists in the external environment outside the organization.
Company should make efforts for grabbing these opportunities. So that it will help to improve
the growth and market share of the company. Opportunities of Tesco are as follows-
 Tesco is having an opportunity improve its services through online channels. Therefore
Tesco should develop marketing campaigns for selling the products or services through
online channels.
 Company should offer organic products in emerging countries such as Turkey, South
Korea etc.
 Tesco has an opportunity to enter in Joint Venture with other companies. This will help to
improve the performance of the stores of the firm which are underperforming.

Threats- Threats exists in the external environment outside the business. Threats can negatively
impact the performance of the firm. Threats of Tesco are as follows-
 Tesco is facing strong competition from other retail companies such as Aldi etc.
Therefore, company should invest funds on conducting market research so that it can
identify the changing needs and demands of targeted group of customers. On the basis of
this, firm will modify the product or services for effectively competing with competitors.
PESTLE analysis-
PESTLE analysis is a framework that helps the firm to evaluate the impact of macro-
environment factors on the operations of the company. It is another important tool that will help
the organization in conducting marketing audit. Tesco will conduct analysis of the following
factors to determine whether there is potential for market growth, current position of Tesco etc.
Political-
There are various political factors that can impact the performance of Tesco. For
example- In year 2016 the prices of food items has been increased due to the impact of Brexit on
firm's operations. The firm is operating in approximately 14 countries across Europe and Asia
due to which it has to follow the regulations of Government of the different countries.
As per the view of Phadermrod, Crowder, R.M. and Wills (2019) Other factors that may affect
the performance of the firm are political instability, rate of unemployment in the country, tax
rate etc. For example- Tesco has to pay import duty on goods that it imports from China. This
will impact the level of profitability of the company.
Economic-
There are various economic factors that can affect the level of profits as well as growth
rate of the organization. One of the important economic factor that may affect the operations of
Tesco is cost of labour. In year 2018, the Government of UK has increased the level of wage rate
by 4.4% that has increase the cost of operation of Tesco(Nandonde, 2019). There are various
other economic factors that can affect the performance of the company such as cost of borrowing
in UK. Firm should focus on pricing strategy as well as marketing strategy.
Social-
Consumer taste regarding the products of the company is changing. Nowadays,
consumers are preferring fast delivery of products. Therefore, Tesco should focus on improving
the online channels as well as home delivery of goods. The firm should also consider the

changing perceptions of customers regarding organic food items and it should develop marketing
strategy for attracting and influencing large number of buyers towards the products or services of
the company. Tesco should take measures for improving relationship with buyers so that, loyal
customers of the firm will not shift to the products of other firms such as Sainsbury etc.
Technological-
There are various technological factors that may affect the level of performance of the
firm in different ways. Company has already faced issues such as horse meat scandal etc. that has
impact the reputation and profitability level of the firm. Company should develop strong
marketing strategy for improving the level of sales and brand image of the organization. Tesco is
using RFID technology in various stores for providing the services to the customers. This will
help to improve the experience of customers as well as it will also result in improvement in sales
of the firm.
Legal-
The business should evaluate various factor of legal environment that may affect the
operations of Tesco. The firm should constantly monitor the changes that may affect the
profitability of the business. For example- Tesco has to perform its operations according to the
standards as provided by Food Retailing Commission. Government has introduced the sugar tax
on food and drinks so that, the content of sugar in drinks can be reduced by 20% till year 2020.
This may impact the production of food items of Tesco.
Environmental-
Consumers are becoming more and more aware regarding the impact of production and
distribution process on the environment. The customers are demanding the companies to adopt
the practises such as recycling the packaging material of food items etc. Tesco should make
efforts for developing and implementing these practises. Tesco is using renewable sources of
electricity in all the stores.
Porter Five Forces Model-

Porter five forces model was developed by Michael Porter in year 1979. The model helps
to evaluate various types of competitive forces that may impact the industry.
Tesco will use Porter Five Forces Model to understand the level of competition that is existing
in the industry. This will help the organization to understand whether the market is attractive or
not in respect of a particular product or service of the firm(Meyer, C. and Cohen, 2018). The
model includes forces such as-
Threat of new companies-
Threat of new companies to enter in Retail industry is low because to enter in this
industry new companies will have to make large amount of investment in production as well as
distribution of goods or services and also to position the brand image in the minds of customers.
Tesco should increase the capacity of producing products so that, it will get the benefits of
Figure 1 : Porter Five Forces Model
Source : (Porter Five Forces Analysis, 2017)

economies of scale. As a result it will be hard for new companies to enter in the industry. The
firm should make efforts for developing innovative products or services so that, customers can
easily differentiate between the products of Tesco and products of other companies.
Supplier's bargaining power-
In retail industry the number of suppliers that are supplying the raw material to the
companies are less as compared to the number of buyers. Due to less number of suppliers they
have lower ability to control the prices as a result supplier's bargaining power is also low.
According to Morgan, Feng, H. and Whitler (2018) Tesco should buy raw material from
different suppliers for offering products or services at various geographical locations. The
suppliers in retail industry are supplying less standardised material. Therefore, it is easy for
Tesco to change the supplier.
Buyer's bargaining power-
In retail industry there are less number of firm that are developing the products so the
customers have less number of companies to choose as a result, buyers have low bargaining
power because they will not have more power to control the prices of the products or services.
Tesco should make efforts for developing new products such as organic food items so that, it can
attract more and more buyers(Wu, Y.L. and Li, 2018). The products offered by the companies in
the industry are having differentiated features. Therefore, the buyers will not be able to find
alternative companies that are offering the
similar products.
Threat of products or services of other companies-
The number of substitutes of the products that are offered by Tesco are less in retail
industry. The substitute products of other firms are available at high prices with better quality
and Tesco is selling goods at low prices with adequate level of quality(Gerard, 2018). Therefore,
it is difficult for customers to switch to substitute products. Tesco should focus on providing high
quality of products to the buyers and it should modify the existing goods or services with the
help of market research so that, buyers will not shift towards the products of other competitors.
Competition among existing companies-
There are less number of firms that are offering products or services in retail industry but
these companies are very large in size. Therefore, the level of competition among existing firms
in the industry is low. The companies are offering differentiated products due to which it is very

difficult for the companies to acquire the buyers of other firms. As a result, the rivalry among
existing companies is low in the industry. As the level of competition in the industry is
increasing Tesco should focus on attracting new customers through pricing and marketing
strategies rather than focussing to attract the buyers of existing companies(Fahmi, Fathoni, A.
and Harini, 2019).
Review of marketing mix.
Marketing mix is the best and effective marketing tool which is help to analysis the
market and their needs and wants as per products and services of company. This tool is help to
discussion on marketing topic and strategies requirement. This includes the four elements like
product, place, price and promotion and additionally this covers the process, people and physical
evidence (Martínez-Ruiz And et.al., 2016). The Tesco has comprehensive range of product
which are clothes, technology, health and beauty, home electrical, home appliance, car
accessories and so on. Other hand, Tesco is provide the bank/financial services to their
customers which are includes mortgages, credit card, personal loans and savings. They are
provide the various service like home delivery services, different payment offers as per
requirement of customers and also has online shopping services to customers. With the help of
those services customers are highly attracted towards company and it has beneficial for Tesco
and its growth.
The marketing mix is help to set the actions which is help to develop and implementation
to promote the product and services to the target marketing and peoples. The marketing mix of
Tesco are as follows:
Product of Tesco
The Tesco is provide wide range of product to their customers at various stores. That are
includes food, clothes, stationary, cosmetics, financial service, home and garden products, toys,
clothing, jewellery, books and so on. Tesco is try to satisfied each and every needs of customers
in order to build trust and loyalty of customers(Chang, Wang, X. and Arnett, 2018).
Pricing strategy of Tesco
Tesco is follows cost leadership pricing strategy to sets price of product and services.
Tesco manager is provide lower price of product by maintaining quality of product and services.
Tesco is uses economics scale and best procurement channels for maintain lower price of

products and services (Stead and Hastings, 2018). With the help of this, suppliers are improve
and make supply chain by reducing prices.
Place/distribution channels of Tesco
Tesco is use two main types of distribution channels which are online and offline. The
online channels of Tesco is direct sales of product and services which is based on the official
websites like www.tesco.com. It is most important and effective online sales channels. The
offline stores like express, extra, metro and so on. Those are the online and offline distribution
channels of Tesco.
Promotional strategies of Tesco
The Tesco has strong brand image at market place that helps to promote all activities of
Tesco. The company is uses various promotional channels such as YouTube, newspapers, social
media, TV and so on. Other hand, Tesco can build customer and public relations which is the
best and effective promotional strategy. By this, company is able to promote their product and
services(Wensveen, 2018).
Processes of Tesco
The process of Tesco is follows and sets the various activities in order to achieve goals
and objective of company (Marketing mix of Tesco, 2017). Process is includes the various task,
for processing a customer in order. The company has offline, for customers to shop their product
and services.
Peoples of Tesco
Tesco is the one leading retail brand company which gives lots of employing to peoples.
The company has the various and large numbers of customers who are plays a very important
role in the company for success. Employees are important for company they are competent and
company is invest huge amount and time on employees training and development process.
Physical evidence
The physical evidence but not limited tangible presentation of company like furniture,
equipments, employees, reports etc. The company has effective logo which is the best physical
evidence of company. Other hand, it provides shopping beg to customers. This also give
effective impact on customer mind.
These are the marketing mix of Tesco which is help to analysis various elements of
company like product, place, price, promotional channels, process, peoples and physical

evidence. The Tesco has different brands and different target markets for positive growth in
market. The brands of Tesco such as finest, everyday values, Tesco loves baby, Tesco bank and
so on. All those brands are target to different sector and peoples(Blythe, J. and Martin, 2019).
 Tesco loves baby brand is target to Chilterns and share baby products as part of efforts to
improve performance in marketplace.
 Tesco everyday value is also the brand of company which relaunched everyday values in
range is welcome to the long overdue refresh supermarket basic needs (Melis and et.al.,
2015). They are highly target to all age groups of peoples.
 Tesco bank is brand of Tesco company which provide financial services to customers.
They are target to their existing customers and retailers who are regular shop with launch
online account.
Those are the sub brands of Tesco, they are target to different sector and peoples in marketplace.
New marketing mix actions.
Figure 2 : 7 P's of marketing-mix
Source : ( 7 P's of marketing mix ,2018)

To fill the gap between the current marketing strategy of the firm and the external
environment, Tesco will develop new marketing mix for grabbing the opportunities that are
existing in external environment.
Due to increase in the demand of consumers regarding organic food items, Tesco will develop
marketing mix for offering organic product so that, it can take the advantage of the opportunity
which is existing in the environment. This will help the firm to improve the level of sales as well
as profits(Martell, 2018).
Product-
Tesco is already offering a wide range of products such as cloths, food items, home appliances
etc. Due to increase in the awareness of consumers regarding health, the demand of organic food
items has increased. To get the advantage of this opportunity Tesco will offer organic juice under
its existing brand name. So that, it can gain competitive advantage over other competitors in the
industry. The product will contain all natural ingredients and herbs. The product will be available
in packs and bottle with different size. The packaging of the organic juice will be very attractive
so that, it can attract large number of customers. The product will give long lasting shopping
experience to existing as well as new customers.
Price-
Tesco will use different pricing strategy as compared to the existing products. Company has
adopted low cost pricing strategy in existing products but it has resulted in decline in profit
margin(Gutierrez-Gutierrez, Barrales-Molina, V. and Kaynak, 2018).
Therefore, Tesco will adopt skimming pricing strategy for offering organic juice to targeted set
of consumers. Tesco will launch the organic juice in the market at high price for maximising the
level of sales of the organic juice. After some time other companies if other companies in Retail
sector introduce the substitute product, in that case firm will lower the price of organic juice so
that, firm can attract large number of price sensitive customers towards the product.
Place-
Firstly, Tesco will launch the organic juice in UK then as the product will gain success, the firm
will offer the product in emerging countries such as South Korea etc. so that level of sales and
profit of Tesco will increase. Tesco will mainly focus on online channels as well as home service
for delivering the organic juice to the buyers. For example- company will develop new website

for delivering organic juice to the customers. Company will appoint sales persons for delivering
the product directly to the buyers.
Promotion-
Tesco will use different methods for promoting organic juice in the market. So that, sales of the
product will increase. The firm will sponsor events and marketing campaigns for creating
awareness of the product in the market. It will also use method of direct marketing, social media
platforms(Jefkins, 2018). Tesco will offer free samples of organic juice to first 100 customers so
that, they will be encourage to buy new product of the firm.
People-
Tesco will appoint new workforce for developing the product, designing the packaging of
organic juice, etc. The company will also recruit talented sales force for conducting marketing
and distribution activities related with organic juice. So that, sale of the product will increase.
Process-
Company will focus on process aspect to keep the buyers happy. The process aspect will include
fast service of billing , convenient shopping either offline or online. For achieving this, Tesco
will appoint skilled workforce that will focus on solving the grievances of the customers.
Physical evidence-
Company will make efforts for improving the attractiveness of the layout of the outlets, shops
where the organic juice will be available. Tesco will design new logo for the product to attract
large number of buyers to buy the product. Packaging of organic juice will be very attractive and
this will play an important role in influencing the customers to buy the product.

CONCLUSION
From the above study it had been concluded that the marketing management has
important for the company and it growth. Report has covered by background and brief of
company and industry. The retail industry has serves, their service to million customers on daily
basis. It has the largest operations in UK with the numbers of stores. Marketing audit helped to
analysis external and internal factors of company. Marketing mix of the company has effective
and valuable tool by which company able to analysis product, price, place, promotional strategy
of company towards growth. The company has various brands which target to different peoples.
With the helped of marketing audit company has found various gap, for that report had defended
by new marketing mix actions to achieve goals and objectives of company.

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