Marketing Essentials: A Comprehensive Guide to Tesco's Marketing Strategies

This comprehensive guide delves into the core principles of marketing, examining Tesco's successful marketing strategies. Explore the key roles and responsibilities of the marketing function, the application of the marketing mix, and the development of a basic marketing plan for Tesco supermarket. Gain insights into the current and future trends in marketing, including relationship marketing and digital marketing, and understand how Tesco leverages these trends to achieve its business objectives. This assignment also analyzes the internal and external environment of Tesco, including SWOT and PEST analysis, and examines the company's segmentation, targeting, and positioning (STP) strategies. Finally, the guide explores the importance and value of marketing plans, as well as the evaluation and monitoring techniques employed by Tesco to ensure the effectiveness of its marketing efforts.

MARKETING ESSENTIALS

Table of Contents
Introduction.....................................................................................................................................3
Task 1...............................................................................................................................................4
P1 EXPLAIN THE KEY ROLES AND RESPONSIBILITIES OF THE MARKETING FUNCTION..............4
P2 ROLES AND RESPONSIBILITIES OF MARKETING RELATE TO THE WIDER ORGANISATIONAL
CONTEXT SUCH AS SALES AND WAREHOUSE DEPARTMENTS....................................................6
Task 2...............................................................................................................................................9
P3 WAYS IN WHICH DIFFERENT ORGANISATIONS (TESCO’S AND MARKS & SPENCER) APPLY
THE MARKETING MIX TO THE MARKETING PLANNING PROCESS TO ACHIEVE BUSINESS
OBJECTIVES..................................................................................................................................9
Task 3.............................................................................................................................................12
P4: BASIC MARKETING PLAN FOR TESCO SUPERMARKET.........................................................12
CONCLUSION.................................................................................................................................19
REFERENCES...................................................................................................................................20

Introduction
Marketing is the process of managing various activities of the firm to achieve a specific goal. It
includes analysis, planning and organising the functions of a company to satisfy the needs of
the customers. Marketing management requires coordination among product, price, place and
promotion and planning the functions of the company so that proper implementation of this
marketing mix can be ensured (Kotler, 2015).
The present assignment explains the current trends in the marketing processes and how Tesco
applies these marketing methodologies in the company functions to achieve profitability in the
business and satisfy the needs of the customers. The assignment also discusses various
marketing mix like Product, price, place, promotion, process and physical evidence. The report
also covers the marketing plan followed by Tesco which included the analysis of mission and
goals of the company, external and internal environment, segmenting, targeting and
positioning (Armstrong, et al. 2015).
Tesco has also developed a monitoring plan for the marketing strategies in which the market
share, cost-profitability and sales figures analysis is done and strategies are made based on
these inputs.

Task 1
P1 EXPLAIN THE KEY ROLES AND RESPONSIBILITIES OF THE MARKETING
FUNCTION
Marketing is a function of an organization through which an organization can increase the sales
and make the customer aware of the qualities and specification of a product. A good marketing
strategy helps Tesco to gain a competitive edge against the rivals and claim its marketplace.
With right marketing mixes the company can retain its existing customer base as well as attract
new customers in the business (Baker, 2014).
CURRENT AND FUTURE TRENDS IN MARKETING
With emerging new technologies and changes in the lifestyles several new trends of marketing
have been evolved which are discussed below:
Relationship marketing
The relationship marketing is a new concept in the marketing which focuses on making long-
term relationships with the customer which is in contrast with the traditional marketing
methods in which the primary focus was on selling the product. This relationship benefits the
company in long-term as making good relationships with the customer develops the feeling of
brand loyalty in the customers and it results in a continuous increase in the sales ( Christopher,
et al. 2013).
The relationship marketing also includes handling the queries and complaints of the customers
in a responsive way and providing servicing and replacement facilities. Handling the customer
queries also helps the organization to improve its systems and provide even better services to
the customers.
Digital Marketing

In last few years there is a great increase in the number of people using laptops and
smartphones in their leisure time. Increased online presence of the people makes necessary for
the companies to advertise their products on these mediums. In digital marketing, the search
engine like Google also plays a key role and the optimization of the websites is done to bring
the company name in the top of the search results (Chaffey, et al.2013).
Figure 1: Digital Marketing
[Source: https://mktgessentials.com/inbound-marketing-solutions/what-is-a-content-audit/]

AN OVERVIEW OF TESCO
Tesco is a global grocery and merchandising retailer having headquarters in the UK. The
company has worldwide operations with over 2000 stores in various countries. The company is
operating in all the major economies of Europe, Asia and North America. The mission of the
company is to provide an excellent value to the customers and gain the trust and loyalty of the
customer for a lifetime.
KEY ROLES OF MARKETING AT TESCO
The marketing department at Tesco manages all the function of the marketing in a professional
way so that it may help in increasing the sales and overall profitability. Following are the key
roles of the marketing department at Tesco.
 Identifying the target market based on the customer preference, current market trends,
demographics etc.
 Managing the brand image of the company in a way which reflects the mission and
vision of the goal of the company.
 Identifying the competitive environment and studying the strategies of the competitors,
and based on these results design the strategies of the company.
 To develop right promotion materials for the products of the company and increasing
the brand awareness of Tesco in various markets.
 Handling the online activities related to marking, such as promoting the brand on social
media platforms, designing ads and banners, managing the web content.
 Conducting surveys and customer feedback so that the company can plan its strategy
based on the reviews from the end users.

P2 ROLES AND RESPONSIBILITIES OF MARKETING RELATE TO THE WIDER
ORGANISATIONAL CONTEXT SUCH AS SALES AND WAREHOUSE
DEPARTMENTS
THE FOUR P’s OF MARKETING
These four marketing mix product, price, place and promotion must be balanced properly to
position a product in the market.
Product
The product can be a tangible item or intangible like services. The marketing department must
carefully analyse the unique aspects of the product before deciding a market plan. The product
mix includes the entire range of products that the company offers. A wider variety of products
offers the customers the facility of getting all the required products at a single place (Tapp and
Spotswood, 2013.).
Price
After understanding the product offering the pricing decisions can be taken. The pricing must
be done after analysing the price offered by the competitors any wrong decision regarding the
pricing can seriously impact the profit margin and the brand position of the company. Strategies
like dynamic prices may be used which includes offering discounts at special occasions like
festivals.
Place
The right placement strategy will help the company to decide the right channel for the product
delivery. The geographic area of the place where the selling is to be done must be analysed to
target the right set of customers. The location of the store must at the prime locations of the
city to provide convenience to the customers.
Promotion

The promotion activities include the advertising, offers and discount strategies and public
relations. The promotion activities ensure that the proper communication of the product is
done to the end user. The promotion of a product increases the brand awareness of the
company and results in an increase in the sales.
AN OVERVIEW OF MARKETING PROCESSES AT TESCO
The marketing process is carried out at Tesco to increase the brand awareness of the company.
The following steps are included in the marketing processes.
Analysis
The analysis process requires grasping the need of the customer and preparing the right
product according to the requirement of the customers. This process requires a research into
the customer choices and making the final product which satisfies the need of the customer.
Strategic planning
The planning process is based on the current marketplace of the company and the position of
the competitors in the business. This also includes analyzing the internal strengths and the
weakness of the company and the external factors like economic situations, legislation and the
recent technological advancements in the manufacturing of the products (Hill, et al.2014).
Marketing mix
The marketing mix includes the four factors product, price place and promotion. Based on these
four factors the marketing department plans the right strategy which can increase the overall
profit of the company. The product specifications have to be decided based on the customer
preferences.
ROLE OF MARKETING IN B2B AND B2C TRANSACTIONS

There is a difference when a company sells its product to another company (B2B), and when a
company sells its product to a customer (B2C). When dealing with the business selling it
requires logic, while the customer buys with emotions (Swani, et al. 2014).
To deal with these two types of buyers the marketing department has to make the right
strategy for product development and promotion. In the B2B transactions the main focus is on
the product specifications and in B2C transactions the main focus is on the benefits provided by
the product.
Figure 2: TESCO
[Source: https://www.thedrinksbusiness.com/2017/03/tesco-to-ups-focus-on-no-low-
alcohol-wine/]

Task 2
P3 WAYS IN WHICH DIFFERENT ORGANISATIONS (TESCO’S AND MARKS &
SPENCER) APPLY THE MARKETING MIX TO THE MARKETING PLANNING
PROCESS TO ACHIEVE BUSINESS OBJECTIVES
Tesco and Marks & Spencer both the companies are major retail companies in the UK and
operate on a global level. The factors of marketing mix such as product, price and place have a
great importance in the policy-making of the company. The marketing department analyses
these elements of marketing mix and decides a plan to apply the principles of the marketing
mix in the planning of the company so that the long-term business goals of the company can be
achieved (Yasanallah and Bidram, 2012).
Marketing
Mix
TESCO MARKS AND SPENCERS
Product Tesco has a wide range of products at its
stores all over the world to cater the need of
the customers from various segments of the
market. The product range of Tesco includes
Food products, beverages and bakery
products. Home appliances and electrical
products, sports and leisure products.
The product range of marks and spencer
includes fashion and beauty products,
apparels including women’s and kid’s
wear. Bags and accessories for women
including handbags, jewellery sunglasses
etc. The company also offers home
furniture and lighting accessories.
Price Tesco has a policy of providing goods at
lowest prices. The company has developed
strong supply chain management systems to
maintain the low prices of its products. The
company follows the strategy of competitive
For all its product portfolios Marks and
Spencer follow the dynamic pricing
strategy, during off-seasons the company
offers bigger discounts in the purchases
which attract the new potential

pricing and have started a programme ‘Brand
Guarantee’ in which the company gives the
guarantee of lowest prices in the market
(Londhe, 2014).
customers and also helps the company
clearing its old stock. In addition to this,
the customers also get the products in
lower price ranges.
Place Tesco has located its stores at prime
locations and ensures that the stores can be
accessed easily at the public places. The
company has around 7000 stores in 11
countries and serves at all the big commercial
cities of the world. The company has stores
called ‘Tesco Express’ to serve at the smaller
locations.
Marks and Spencer have its operations in
around 50 countries and is extending its
operations in other countries also like
Turkey, France and Hungry. The company
gives facilities like online purchasing and
home delivery. The products can also be
purchased in local currency while doing
online transactions.
Promotion The company puts an adequate focus on the
promotional activities at its various stores.
Discount offer hoardings and digital display
boards are placed at major locations of the
city. The company also uses routine
promotional offers like ‘buy one get one’ to
target the potential customers. The company
has also started special discount cards called
‘Tesco Club card’
Along with traditional methods like
newspaper and TV ads, hoardings and
banners, the company has started
marketing its product online with the
help of social networking sites and
YouTube ads. The company also does
promotions through its website and users
can get latest fashion trends and tips on
this website.
People Tesco has around 480,000 employees
working in its stores all over the world. The
company follows a strong recruitment and
selection process to choose its employees
and designs adequate training and placement
programmes for its employees. The
employees are trained to be supportive to
the customers.
The company has started rewards and
bonus programmes for motivating and
retaining its employees. The company
also ensures the safety of the employees
at the workplace and also provides health
insurance and pension facilities for its
employees (Satit, et al.2012).

Process Tesco management always ensures that
customers are satisfied by the company
processes in its stores. The company provides
quick billing services to avoid the long ques.
The company is also providing its wide
product range online and dedicated apps are
developed for facilitating online purchase of
the products. The special staffs have been
appointed to handle customer grievances.
All marks and Spencer stores are properly
organised and have separate sections for
clothing, furniture and fashion
accessories. The company follows an easy
return policy and the alterations in the
clothes are provided free of cost. The
company also ensures adequate parking
space for the vehicles of the customers.
Physical
evidence
All the Tesco stores are properly cleaned and
managed. The products are categorized
carefully according to their use so that
customers can navigate easily around the
stores and can locate the required product in
minimum time. The website of Tesco is
designed in such a manner so that customers
can find the required product easily through
various sections (Khan, 2014).
The physical evidence is the environment
in which the services are delivered and
the customer interaction is done. The
Marks and Spencer stores are located
mainly in the suburban areas and the
company maintains the ambience of the
store according to the location.

Task 3
P4: BASIC MARKETING PLAN FOR TESCO SUPERMARKET
A marketing plan is a document which provides an outline of company’s marketing strategies
for a specific time period. This plan includes analysing the current market position of the
company, the position of its competitors and the unique selling point of the company. A
marketing plan needs constant evaluation and monitoring to change the business strategies
according to the changing market trends (Westwood, 2016).
EXECUTIVE SUMMARY
The first step in making a marketing plan is to produce an executive summary. The basic
purpose of making an executive summary at Tesco is to make a business plan in a summarized
way so that all the key points of a document can be taken into consideration concisely. The
executive summary contains an overview of the company, mission and vision of the company,
target market, competitive advantage, marketing plan and future goals. This information is
provided in a concise way to attract reader’s attention and convince them of debts and other
financial assistance.
COMPANY OVERVIEW
Tesco is the leading supermarket chain in the US. The company is running its operations in 11
countries and has strength of 480,000 employees. The company deals in food and bakery
products, lifestyle and leisure products and general grocery. The unique selling proposition of
the company is its brand recognition as one of the largest retail chain company globally. The
strongest competitors of Tesco are Wal-Mart, Carrefour and Debenhams. These companies are
giving tough competition to Tesco by launching new product and technologies in the retail
sector.
INTERNAL AND EXTERNAL ENVIRONMENT

The internal and external environment of a company includes the internal strength and
weaknesses of a company with respect to its competitors and the factors which affect the
company externally as political and economic situations (McDaniel and Gates, 2013). For
analysing the internal and external environment of Tesco, tools like SWOT analysis and PEST
analysis are used which are discussed below.
STRENGTHS
 A strong brand value in the market
 Strong focus on research and
development of new products
WEAKNESSES
 Existing employee need training for
excellent customer services
 Limited presence in the emerging BRICS
economies
OPPORTUNITIES
 The tremendous growth in the retail
sector worldwide
 Opportunities to expand the business in
the Asian market
THREATS
 Competitors like Wal-Mart and
Debenhams expanding and diversifying
their product line
 Low disposable income and rising food
prices around the world
The External environment study is of prime importance as the political situations in many
countries where Tesco has its operations are not stable and it has a strong impact on the
operations and profitability of the company. The legal factors are also very important as
implementing the legislation regarding environmental sustainability requires a large amount of
capital and changes in operations.
POLITICAL FACTORS
 The changes in the political environment
due to BREXIT
ECONOMIC FACTORS
 Financial uncertainty due to 2008
recession

 The company’s expansion plans in China
and opening three new shopping malls
 Changes in the foreign exchange rate due
to the European Union legislation.
SOCIAL FACTORS
 increased concern of customer for
quality and safety of products
 Decreasing inclination towards home
meal preparation due to Increase in the
number of working women (Vaňa and
Černá, 2012.)
TECHNOLOGICAL FACTORS
 New technologies in the online retail
segment
 Installation of new billing systems to
ensure fast billing process
ENVIRONMENTAL FACTORS
 Environmental sustainability and
reducing the carbon footprint
 Installation of energy efficient systems
across the various store of Tesco
LEGAL FACTORS
 The legislation regarding the minimum
wage of employees
 Legislations regarding monopoly control
in the UK
SEGMENTING, TARGETING AND POSITIONING (STP)
The marketing plan basically involves three steps the segmentation of the market based on
different factors like demographics and region of a particular area and deciding a target market
based on these inputs. The next step is making the implementation of these strategies and
positioning the company to gain maximum profits. These three steps are explained below:

Figure 3: The STP Process
[Source: http://surfexcelmarketing.blogspot.in/2014/09/segmenting-targeting-and-
positioning.html]
Segmenting
The segmentation of the market is done on the basis of social class, income or region. This
segmentation is very useful for Tesco as it has its operations in different countries of the world
the segmenting helps the company decide its target market and the strategies which needs to
be followed to serve a particular market in a region. The segmentation process involves
segmenting a broad market into small segments and identifying the inclination of the
customers towards a similar category of product (Mullin, et al.2014).
Targeting
After segmenting the market the next step is to decide the target market. The targeting helps
the company direct its resources in a particular segment and take advantage of the business
opportunities available in a particular region. The company can also plan to launch low-cost
products to cater the needs of low-income groups or luxury products for the high-income
groups. This strategy helps the company capture diverse markets and increases the overall
profit margins of the company.

Positioning
The positioning process involves the detailed planning regarding the product supply chain and
marketing related tasks in the selected region. A perfect strategic planning is required for
proper positioning of the resources with respect to a particular region. Positioning helps the
company make a perception of the company’s product in the psyche of the customer.
MARKETING TACTICS
To establish a strong market position the marketing team need to develop strategic plan and
tactics so that the company can maintain its competitive advantage over its competitors. The
marketing tactics also include the advertising plans to increase the brand recognition in
different markets (Terpstra, et al. 2012).
BUDGET
Making a budget for your market plan is required to forecast the total cost to be incurred on
the purchasing, transporting and advertising. Budget making can be time taking and may
involve a lot of calculations but a proactive approach in the budget planning helps the company
direct its resources in the right direction.
IMPORTANCE AND VALUE OF MARKETING PLANS
Making a detailed marketing plan helps the company decide its target market and allocate the
resources according to the requirement of a particular market. Marketing plans also include
studying the market strength of the rival companies which help the company plan the
strategies keeping in mind the strength and weakness of the competitors. The market plans
also involve the segmentation of the market according to the region demographics or ethnicity.
This segmentation is useful in deciding the particular market where the company has to expand
its operations or provide better services (McDonald, et al. 2016).

EVALUATION AND MONITORING OF MARKETING PLANS
After making an effective marketing plan and implementing it across all the branches the steps
should be taken to keep the marketing plan up to date. This requires monitoring and analysing
the results and make changes in the marketing plan according to the changing market
situations. Following marketing control techniques are employed by Tesco.
Sales analysis
In this step, the total sales of the company in a financial year are calculated. Based on these
results the company can decide the future strategies which may include cutting cost or
increasing the budget in advertising. The sales analysis gives a broad picture of the company’s
market position in comparison with the competitors.
Market-share analysis
The market share analysis is done with respect to the other major players in the retail sector as
Wal-Mart. This helps the company target the areas in which company is losing its market and
the steps to be taken to regain the market share.
Efficiency ratios analysis
The efficiency ratio is used to analyse the current ratio of assets and liability of the company. An
increase in liabilities of the company is not good for its financial health and steps should be
taken to maintain this ratio up to manageable levels.
Cost-profitability analysis
The cost profitability analysis considers the total cost of production versus the total profitability
of the company. By analysing the total profit gained and the cost involved the company can
make a better marketing plan to take the benefit of available opportunities in the market
(Hassan, 2012).

CONCLUSION
A marketing plan is prepared by the Tesco management considering the target market and the
need of the customers. A proper marketing plan is a key to maintain the competitive edge over
the rival companies. In current assignment, an analysis is done over different tools used by
Tesco to make an effective marketing plan. These tools include making a detailed analysis of the
different marketing mixes like the product, price, place and promotion. The next step is the
segmentation of the market on the basis of customer preferences and allotting the budget for
all the marketing activities. Based on these inputs the company makes a strategy to take benefit
from the available opportunities in the market.

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