Marketing Essentials: A Comprehensive Analysis of Tesco's Marketing Strategies

This report delves into the fundamental concepts of marketing, including the marketing mix and marketing plan, using Tesco as a case study. It examines the key roles and responsibilities of the marketing function within Tesco, highlighting its interrelation with other functional units. The report further compares Tesco's marketing mix (7Ps) with that of Sainsbury, another prominent UK supermarket chain, to understand how these elements contribute to achieving overall business objectives. Finally, it develops and evaluates a basic marketing plan for Tesco, outlining strategies, tactics, and measures for achieving specific marketing goals.

Marketing Essentials
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Table of Contents
Introduction......................................................................................................................................3
LO 1: Explain the role of marketing and how it interrelates with other functional unit of an
organisation:....................................................................................................................................4
Using examples from your chosen organisation, explain the key roles and responsibility of the
marketing function how roles and responsibilities of marketing relates to the wider
organisational context..................................................................................................................4
LO 2: Compare ways in which the organisation use elements of marketing mix (7P’s) to achieve
overall business objectives..............................................................................................................9
Using your chosen organisation and another organisation, compare how organisation use the
various elements of 7P’s marketing mix in the marketing planning process to achieve business
objective.......................................................................................................................................9
LO 3: Develop and evaluate a basic marketing plan.....................................................................15
Using your chosen organisation, produce and evaluate a basic marketing plan to meet
marketing goals and objective. The marketing plan should include all elements of the 7Ps
marketing mix, with an action plan and measures for marketing and evaluating the progress
and meeting of your chosen organisation’s goals and objectives..............................................15
Conclusion.....................................................................................................................................22
Reference.......................................................................................................................................23

Introduction
The report speaks about the important terms of the marketing such as marketing mix and
marketing plan. Along with this, the report also explains the roles and responsibilities of the
marketing functions and also how the marketing relates with the other functional units of an
organisation. Marketing is a term which is used by all the organisations as this ensures the
success for the company. It identifies the customers and their taste and preferences into the
market so that the organisation could get the idea about what to produce. For the deeper
understanding of the marketing and its terms, the company Tesco is taken as an example where
the marketing mix would be explained and a marketing plan of Tesco would be created. Tesco is
a grocery supermarket in UK and it comes under the top five supermarket chain of UK.

LO 1: Explain the role of marketing and how it interrelates with other
functional unit of an organisation:
Using examples from your chosen organisation, explain the key roles and responsibility of
the marketing function how roles and responsibilities of marketing relates to the wider
organisational context
Marketing is a very important process of an organisation. This could be explained as the study
and the management of maintaining the relationship with the customers by delivering the
products and the services as per their needs (Goi, 2013). The marketing plays a very important
role into the organisation and helps in achieving the overall organisational goals.
Figure 1: Role of marketing in Tesco (Stone and Jacobs, 2010)
As shown in the diagram given above, the roles and responsibilities of the marketing could be
divided into two parts. These are:

1. Strategic marketing and
2. Marketing management
Earlier, only the marketing is used in the management context by the company Tesco but since
the competition in the industry increased from the side of Sainsbury and other supermarket
chains, the company started to follow the marketing in strategic context. The main roles of these
two are explained below:
Strategic marketing: The main roles of the marketing in the strategic context are:
 Analysing and information: As the competition into the market is increased then it is
very important for the organisation to gather the information about the customers,
competitors and the environment of the company so that this could be used in formulating
the strategies (Grönroos, 2015). The concept of marketing plays a very important role
here as the company suggest the various strategies and policies to Tesco that helps the
company in gathering the information from the market.
For example: the concept market research is a part of the marketing that helps the
company in gathering, formatting and analysing the information in a form that could be
used by Tesco for the future use.
 Formulation of corporate business and marketing strategic decisions: As described
in the above section that the information is gathered by the organisation to formulate the
strategies (Hoffman and Bateson, 2011). With the help of this information, the company
Tesco also can formulate the high level strategies that could help the company in
investing in new areas etc. Thus, it could be said that the marketing plays a role here

where it informs the company Tesco about the decisions that it could take in the
corporate world to enhance the business.
 Execution of marketing philosophy: There are the various philosophies are explained
by the scholars in the marketing that shows the path to the organisation about how the
success should be gained into the market. It is the responsibilities of the marketing
concept to conform the organisation Tesco towards these philosophies so that the
company could offer the better services to the customers and also gain the profit into the
market.
Marketing management: The main roles of the marketing in the context of managing the
functions of the organisation are explained below:
 Role of marketing in developing the product marketing plan: Marketing also helps in
developing the marketing plan for the products and services offered by the company. In
Tesco, the marketing managers of the company use the various concepts and the
strategies explained in marketing in setting the objectives for the company so that the
organisational goals of the company could be achieved (Hulbert and Toy, 2012). In the
developing the marketing plan, the marketing plays the important role in setting the
objectives, formulating the strategies, gathering the information etc.
 Role of marketing in execution of product marketing plan: The term marketing also
play a very important role in executing the marketing plan in the real market. The studies
show that a plan could not be developed perfect. The company has to make the changes
in the plan when it applies on the real market (due to highly volatile market or high
competition). In this way, the terms explained in the marketing help the managers of the

company in changing the decisions at the real place without losing the end result of the
plan.
How marketing interrelates with other functional unit of Tesco: the term marketing is not
related to the marketing department of Tesco only even it affects the other department of the
company too. In the other words, it could be said that this helps the other department in
continuing their functions too (Kumar, Aaker and Day, 2014). Here, the explanation of the how
the marketing relates with the other functional unit of Tesco is given:
Finance department: the marketing helps the finance department in the following ways:
 Arranging the budgets
 Saving the revenue or remove the wastage of money through explaining the strategies
that ensures the profit
 Preparing budgets for the company.
Human resource department: the marketing helps the HR department in the following ways:
 Explains the required skills
 Explains the competencies that must be in employees so that the competition in the
market could be reduced.
 Also explains the ways of recruiting etc.
Research and development department: The marketing helps the R&D department in the
following ways:
 Provides the information about the market, customers and competitors
 Helps in identifying the trends and techniques (McDaniel, Lamb and Hair, 2012).

Production department: the marketing helps the production department in the following ways:
 Anticipate the demand of the product and services
 Estimates the supply of the products and services into the market.

LO 2: Compare ways in which the organisation use elements of marketing
mix (7P’s) to achieve overall business objectives.
Using your chosen organisation and another organisation, compare how organisation use
the various elements of 7P’s marketing mix in the marketing planning process to achieve
business objective
The concept of marketing mix is very important for the organisation as this helps the company in
taking the various types of the decisions. Basically, marketing mix acts as a tool in the
organisations that explains the organisation about:
 What to produce (characteristics of products, benefits to the customers, packaging, shape
and design etc)
 At what price the products would be offered to the customers (Farese, Kimbrell and
Woloszyk, 2011)
 At which place the products would be available and
 What techniques would be used by the company to create the awareness of the product it
is offering to the customers?
The marketing mix is also known as 4P’s and product marketing mix. Rather than offering a
product, if a company offers the services to the customers then these four elements of the
marketing mix extended to 7 which is also known as 7P’s or service marketing mix. The
extended elements of marketing mix are: process, people and physical evidence.

Figure 2: Service marketing mix (Hopkins, 2012)
As Tesco offers the products and services to the customers in this way, the company uses the
7P’s instead of 4P’s. Here, the comparison of the 7P’s of Tesco would be done with Sainsbury
which belongs to same industry of UK. Sainsbury is second largest supermarket chain of UK.
These two companies offer the best products and services to the company. The comparison in the
service marketing mix of Tesco and Sainsbury is explained below:
1. Product:
The product element of the marketing mix refers the services and goods that the company offers
to the customers so that their needs could be fulfilled. Tesco offers the different ranges of the
products and services to the customers to satisfy their needs such as foods, clothing, financial
services etc (Dibb and Simkin, 2013). The products of Tesco are well designed and well
arranged in the supermarket and the customers of the company do not feel any type of
inconvenience in finding the products in the super market. The services offered by the company
are also well arranged. The different types of the product lines are offered by Tesco to the

customers that focus on their every possible need. The services like free download of music,
grocery delivery etc is also offered by Tesco to the customers.
The products and services that Sainsbury offers to the company are also good but the products
and services of the supermarket are not well arranged. Besides this, the company does not offer
the services like music downloads and financial services etc. Hence, it could be said that in the
product element Tesco dominates Sainsbury.
2. Price:
The price element of the marketing mix explains the amount that the customers pay to the
company to get the product or services (Cravens and Piercy, 2016). Tesco uses the penetration
pricing strategy where it keeps the price of the product low without compromising the quality of
the product and services. The pricing strategy of Tesco is the reason of why the company is
leading the markets of UK.
On the other hand, Sainsbury uses the price skimming strategy where the price of the product are
low at initial stages and when the customers base of the company is increased then the prices are
set high. In the today’s world, this pricing strategy does not seem good especially for the
supermarket chains when the competition is high. The customers are being smarter and they also
have the information about the substitute products and services. Hence, here too, it could be said
that the Tesco dominates Sainsbury.
3. Place:
The place element explains the efforts and the strategies that the company is using to make the
products available into the market. Tesco is headquartered in Chestnut, England and for the

purpose of delivering the services and products; the company has opened the stores at the various
locations of UK (Cohen, 2015). The two channels use by the company to make the product
available into the markets are online and offline. Under the offline, the company offers the
products through Tesco superstore, Tesco express, Tesco extra and Tesco compact. Under the
online strategy, the company has made a web portal where the customers could get a direct
contact to the company.
Sainsbury also offers the products and services to the customers through online and offline
channels. However, the online channel of Sainsbury is not as effective as Tesco. Through the
offline channel, Sainsbury only offers the products and services through its supermarket.
4. Promotion:
Promotion refers the strategies of the company that it uses to communicate a message of the
organisation to the customers about the offering of the organisation. Tesco works on the low
price and great quality model. Tesco also keeps it promise to the customers. The main strategies
that Tesco uses for the promotion are the advertising, sales promotion, online marketing and
public relations. Tesco also sponsors the charity events (Borden, 2014).
Sainsbury uses the advertising only in newspaper, sales promotion and direct marketing. The
promotional strategies of Sainsbury do not seem as effective as Tesco because the company does
not use online marketing in the age of technology. The online marketing helps the company in
reaching to the large volume of the customers than any other promotional strategy.
5. People:

The people element explains the employees and staff of the company. Tesco has the excellent
staff and employees which are responsible for the success of the company that it has achieved in
last decades (Bitner, 2011). Along with the customers, Tesco also keeps the employees happy by
providing them the services like privileged card, Save as you earn etc. that enhanced their loyalty
towards the company and they put their best in gaining the success for the company.
The employees of Sainsbury are also very talented and skilled. Sainsbury also provides the
benefits to the employees but not as much as Tesco.
6. Process:
The process element refers the ways and procedures that company use to accomplish the
particular task. Tesco focuses on include the process in the company that keeps the customers
happy. In this way, it uses speedy billing services, service delivery etc.
Sainsbury also uses the effective services delivery to the products and other services that make
the customers happy and saves their time.
7. Physical evidence:
The stores of Tesco are not big as the other supermarkets of UK. Tesco does not believe on
spending too much only on furbishing the stores. Instead of this, the company tries to keep the
stores neat and clean (Beaven and Scotti, 2010). In the stores of Tesco, the customers could
easily navigate towards the products and services they needs and often the customers buy more
things than what they need. The website of the company could be accessed well.
On the other hand, the stores of Sainsbury are more elaborated than Tesco and the arrangement
of the goods and services is not well. The stores of Sainsbury are also neat and clean and the

company also take care of the ambiance of the stores. Besides this, the employees of Sainsbury
are also well dressed like Tesco.

LO 3: Develop and evaluate a basic marketing plan
Using your chosen organisation, produce and evaluate a basic marketing plan to meet
marketing goals and objective. The marketing plan should include all elements of the 7Ps
marketing mix, with an action plan and measures for marketing and evaluating the
progress and meeting of your chosen organisation’s goals and objectives
Marketing Plan for Tesco
About marketing plan:
Marketing plan of a company could be short or long term plan which is designed to accomplish a
particular goal or objective. Using the concept of the marketing plan has been important for the
organisation as this brings the competitive success for the organisation and helps the company in
achieving the overall goals into the market. In the simple words it could be said that marketing
plan of the company is a tool or concept that make the company able to take the decisions on
promotion strategies, targeting and positioning. Here, the strategic marketing plan for the
company Tesco would be explained.
Mission of Tesco:
While developing the marketing plan, it is very important to study the mission statement of the
company so that the objective could get a path or direction. Tesco is the organisation that thinks
for the customers first and then the profit of the company. This is the reason of why it comes on
the first position in the supermarket industry of UK (Westwood, 2012). Around 1456 stores are

opened by Tesco in 14 countries and many more are about to open. The mission statement of
Tesco explains that the company wants to add value on the products and services that it is
offering to the customers so that their faithfulness could be increased towards the company and
the company could gain the profit in the terms of customers satisfaction.
Situation analysis (strategic marketing analysis):
After the study of the mission statement, the position of the company into the market and
favourable and unfavourable factors reside in the environment of Tesco also needs to identify.
Situation analysis includes the strategies that examine the environment of the company. Here the
situation analysis for Tesco is explained below:
 Environment analysis: the environment of Tesco could be divided in two parts:
- Micro environment: This includes the external environment that affects Tesco
directly. This includes:
Customers: These are the real player of the company and all the policies are designed
in keep of them in mind. The customers of Tesco are loyal and in this way, the
customer base of Tesco is very large (Stone and Jacobs, 2010).
Competitors: the competitors like Sainsbury, ASDA etc are involved that could put a
huge impact on the operations of Tesco.
Suppliers: The suppliers of Tesco are also loyal and the company is also offering
them a fair price so there is no chance to shortage of the product or services.
Media: Media is in the favour of Tesco as it maintains a good relationship with them.

- Macro environment: This includes the external environment that affects the
company indirectly. For the examination of this environment, PEST is used which is
given below:
Political factors: Here, the rules and regulations of the political parties are examined.
All the political parties are in the favour of Tesco as the company is offering the
outstanding services (Schoell, Guiltinan and Valvatne, 2013).
Economical factors: Here, the economical factors like employment rate etc are
examined. The employment rate of UK is high. In this way, Tesco could get the huge
numbers of the employees for the purpose of implementation of marketing plan.
Social factors: The social value, communities value etc are followed by the company
Tesco and the company also takes care that any type of the violation could not be
done by company.
Technological factors: Tesco use the products and the services with the latest
technology. Tesco also try to bring the advance in the processes like service delivery
etc.
 SWOT analysis: SWOT is an integrated external and internal analysis that helps the
company in identifying the strengths and weakness of the company. Along with this, the
opportunities and threats are also explained by this. SWOT of Tesco is given below:
Strengths Weaknesses
 Well built brand image
 Leader of the supermarket industry
of UK
 High customer loyalty
 Company is fail in city centre
market of UK
 Require marketing loom (Runyon,
2011).

 Skilled employees and staff
Opportunities Threats
 Increasing demand of the labelled
products
 Expanding markets
 Expanding the product line
 Competitors like Sainsbury, ASDA
etc.
 Small superstore
Objective:
To increase the market share and also to get a growth into the market, the company needs to set
the marketing objective. In this way, it would be good for the company to set the marketing
objectives that met the SMART pattern (i.e. Specific, measurable, achievable, realistic, time
bound). The marketing objective of the current marketing plan is to increase the ratio of
achieving sales up to 50% in the next 15 months. Tesco is big organisation and the current
marketing objective of the company is meeting the SMART pattern.
Marketing strategy:
Marketing strategies are the policies or decisions or actions of the organisation that it needs to
take to achieve the proposed marketing objectives. The three strategies for Tesco that could help
the company in achieving the marketing objective are explained below:
 Segmentation: Here, the population is divided as per the marketing objectives. for the
current marketing objective, Tesco could divide the population as per:
- Geographical segmentation: The customers of Tesco could be divided as per their
location.

- Physiographic segmentation: The customers of Tesco could be divided as per their
interest and lifestyles.
- Behavioural segmentation: The customers of Tesco could be divided as per their
usage of service of Tesco.
- Demographical segmentation: The customers of Tesco could be divided as per their
age, occupation, gender.
 Targeting: in order to achieve the current objective of increasing sales of Tesco, the
company needs to use the undifferentiating targeting strategy where all the segments of
the company would be targeted to increase the sale of company (Peter and Donnelly,
2011).
 Positioning: In order to achieve the current objective of increasing sales, Tesco needs to
set a position into the mind of the customers so that the brand could be recognised by
high numbers of the customers. In this way, the company needs to organise and sponsors
the charitable events so that a positive image could be created in the market.
Marketing mix and tactics:
As Tesco offers the services too then the company would use the service marketing mix. The
service marketing mix for the current objective of Tesco is explained below:
 Product: Tesco is offering grocery, clothing, free music download, financial services etc
to the customers. The customers of the company are happy with the services that it is
providing to them. Here, the company needs to enhance the quality of the products so that
the more customers could be attracted by the company.

 Price: Recently, the company is using penetration pricing policy. If the company wants to
increase the sale of the services then it needs to use the same pricing strategy as this
would attract the customers who are price sensitive.
 Place: the company is using online and offline methods to make the products available to
the customers. Here, the company needs to add some retailer in its channel where the
products which are produced by Tesco only would be offered to the customers.
 Promotion: In order to achieve the current marketing objective of increasing sale, the
company needs to use the sales promotional strategies where the discounts would be
provided to the customers (McCarthy and Perreault, 2014). Along with this, the
advertising, social media marketing and online marketing would be used by the company
so that the customers of the company could be aware of the products that company offers.
 Process: Tesco needs to improve the process to the next level as this would put a huge
impact into the mind of the customers. Tesco needs to maintain the service delivery
process (there should be lo distance limit) so that the customers, who do not order the
product and service of Tesco, could order the products and service at their door steps.
Billing process must be improved. The company could provide the services to the
customers where they could shop from the supermarket and pay the bills through online
and the details of their bills would be sent at their email id. By doing this, the customers
do not have to stand on queue when the crowd is high at the counter.
 People: The proper training and development program must be given to the employees so
that they could handle the huge crowd of customers at stores and also can answer their
queries.

 Physical evidence: The stores of Tesco must be neat and clean, the employees must be
well dressed so that they could put an impression into the mind of customers (Yelkur,
2010).
Budget:
Budget is set by the company as per the marketing requirement. The current marketing plan of
the company needs huge investment as for the current plan, the company may have hire the
employees so that the money is needed for the recruitment. Besides this, the advertising, sales
promotion, enhancing the processes could bring the lots of expenses for the company. Here,
Tesco could take the financial loan from the banks or may arrange the funds its own.
Implementation:
This is the last step of the marketing plan where all the steps of the marketing plan are
implemented by the company at the real place. Here, the company must be aware of the factor
that could affect the process of implementation.

Conclusion
The above analysis of the company Tesco shows that the company has a great brand identity and
recognition into the markets of UK. The main reason of this success of Tesco into the markets of
UK is that the company tries to know the customers first and then come to the conclusion to offer
the quality products at low price. By doing this, the company gained the competitive advantage
among the competitors like Sainsbury and ASDA. Although the company is offering the
products and service at low cost but still the company is able to make huge profit from the
market due to high customer base and loyalty. In the present competitive scenario, the company
Tesco has been able to get the success because of the product development strategies and
effective marketing plan.

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