Marketing Fundamentals: A Case Study of Tesco

This report explores marketing principles and external environment analysis of Tesco, a British multinational merchandise. It covers market orientation, marketing mix, and PESTLE analysis. The report provides insights into the company's strategies for studying its external environment.

Marketing
Fundamentals

Table of Contents
INTRDOUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Marketing is basically considered to be the exchange of relationship with the
management and people. The process of marketing basically focuses on the steps in order to
satisfy the consumers with the help of making innovative products and fulfilling the demands
which further helps in attracting the customers. In context to the Report, Tesco has been chosen
as the organisation. The company is a British based multinational merchandise founded in 1914
and headquartered in London, UK. The report involves the marketing principles and the analysis
of the external environment of the company and involves how the organisation carry out
effective strategies for the purpose to study its external environment.
MAIN BODY
Marketing is basically the process of designing and maintaining an environment which involves
various individuals. In context to marketing, the process is not only confined to service or goods
but it also involves various other factors that need to be taken into consideration. Marketing
basically involves the various activities that involves flow of goods and services from producer
to the end user(Acuña Barnuevo, F. M., 2020).
Market Orientation: In context to market orientation, it involves various key elements such as
culture of the organization, customer orientation, long term profit focus, competitor orientation
and inter functional coordination. In context to marketing approach of tesco, it involves various
benefits such as improved corporate image, high customer satisfaction, retention, loyalty, growth
in profitability and enhanced competitive advantage. In context to Tesco, the two main factors
which affects the purchasing power of customers involves cultural factors which has a major
impact on behaviour of consumer and that affects their personalities.
Marketing Mix: The concept of marketing mix basically involves 4ps that is promotion, product,
price and place. In context to Tesco, the entry of the organisation to the china market should
focus on adapting the culture of the consumer. It is very important for the organisation to keep in
mind the basic standards(Cubas Alcalde, A. V. and Moreno Mantilla, L., 2020).
1

Product: In context to Tesco, the managers should set off various product development strategies
for the purpose to take control of the organisation stores with the help of current products. In
context to Tesco, the organisation should consider re inventing its models for the purpose to
provide and ful fill the needs of the customers(Eichi, S., 2020).
Price: Price is basically the monetary value paid by the consumer for the purpose to buy a
product or avail a service. In context to Tesco, the organisation can acquire cost advantage with
the help of enhancing the efficiency of the process and it will help the company in sustaining
cost leadership.
Place: In order to develop success in the retail operations, it is very important for the company to
expand its stores in different localities and districts. It is important for the organisation to get
involved in the private and similar minded public sector groups such as chambers of commerce,
local community based associations and colleges. In context to this Tesco will be able to open up
sites in various other countries. With the help of targeting these areas, it will help the
organisation in order to gain favour from local government and gain of local luminaries through
providing employment opportunities to the locals.
Promotion: In context to Tesco, the organisation uses various channels and methods in order to
promote their products and services and expanding loyalty of their customer. The organization
uses various methods and sales promotional tools such as discounts, rewards, coupons for the
purpose to attract customers(de Matos, N. and et. al., 2020).
PESTLE ANALYSIS
Tesco, a multinational food retailing company, is headquartered in the UK and has stores
in 12 countries across the world. It is the second largest retailer after Wal-Mart in terms of size
and profits made and also holds the title for the second largest retailer according to their revenue.
Generally known for selling food and non food products, Tesco now provides loan, mobile
insurance, and hardware services etc.
2

POLITICAL FACTORS : Since the retailer company operates world wide, global political
factors effect the performance of Tesco. These includes, tax rates, act of legislation and of of
course, the financial stability of the country it operates in. Due to ongoing financial instability in
the world, many government encourage retailers to creates job for local people. As tesco play its
parts in creating jobs opportunities, it also in turn increase the demand for its products and
expand it's staff(Narang, A. S., Gumparthi, V. P. and Chakrabarti, S., 2020).
ECONOMIC FACTORS : These factors are the main point of concern of Tesco, as they are
most likely to purchase costs, demand, profits and prices. Therefore, the company should be
aware of any changes in policies, such as changes in taxation or any other factors which could
affect the availability of finance. It is important to mention that although the business is growing
internationally, the company is still depend on the UK market where it has a market share of
30%. With that said, internationalization and diversity have been two key strategies follow by the
company over the years, and a big reason for its success, furthermore, due decline in disposable
income levels and household incomes, Tesco, has focus on advertising its value brands rather
than the more luxurious items(Pazhouheshfar, P., Biabani, H. and Behboudi, M. R., 2021).
SOCIAL FACTORS: Due to variety of social changes, trends indicate that customers in the UK
have moved towards bulk shopping therefore Tesco has increased the number of non food items
offered for sale. The type of goods and services demanded by the customers is mostly influenced
by social conditioning. Because customers are becoming more aware of health issues, due to
which their choice towards food is changing regularly, Tesco is adapting to these changes by
adapting the demand for organic products.
TECHNOLOGY FACTORS : The advertisement is technology have brought various new
opportunities for Tesco. Two of the most noticeable is, firstly the development and introduction
of online shopping with facilities for home delivery. Second self service check out points have
provided convenience and ease for customers, which in turn have reduce man power and their
costs. Furthermore, Tesco has also invested a huge amount of energy efficiency projects to fulfill
its long term objective to reduce its carbon footprint(Shahriari, M. and et. al., 2020).
3

ENVIRONMENTAL FACTORS : With increase pressure on companies to address
environmental issues and to adopt ways of operations which what would benefit society, Tesco is
clearly committed to reduce its carbon footprint by 50% by 2020. Also, Tesco is minimizing the
waste produce in their stores by increasing moral sense in customers.
LEGISLATIVE FACTORS : Government policies and legislation also directly impact the
performance of Tesco. For example, the food retailing commission (FRC) in 2004 suggested a
code of practice should be introduced which would ban many current practices, such as changing
price without notice or demanding payment from suppliers. To facilities these policies, Tesco
provides its customers discounts on the fuel purchase, in line with the amount spent on there
grocery stores. Also, there are several promotion offer where price are lowered.
So, here is a PESTLE analysis for Tesco which will provide detailed information anout factors
that affect its business environment(Toscano Rafael, N. Y., 2020).
CONCLUSION
From the above marketing report, it can be concluded that in the present scenario, the
organisation is considered to be the number one retail organization in the UK. The company is
involved in expanding their business operations all over the world and involves various countries
such as Malaysia, China and India. In context to Tesco the organisation and it managers need to
have a deep understanding about the domestic marketing and international marketing as both are
considered to be a complex process. In addition to that in order to maintain the progress of
marketing and keeping focus on customer. The report helps in deeper understanding of the
external environment which involves political, social, economic, legal and technological factors.
In addition to that it involves the aim and objectives of the organisation and the main aim of the
organisation is to fulfil the needs and demands of customers and making profits in long run.
From the above analysis, it has been determined that the organisation is doing really good in the
retail market of UK and has a lot more scope when it comes to expanding their business all over
the world.
4

REFERENCES
Books and Journals
Acuña Barnuevo, F. M., 2020. Percepción del marketing mix de los clientes de un restaurante de
Lima en condiciones de Covid-19 en el año 2020.
Cubas Alcalde, A. V. and Moreno Mantilla, L., 2020. Marketing mix y proceso de decisión de
compra de los usuarios del operador Bitel de la ciudad de Trujillo, Año 2020.
Eichi, S., 2020. Penerapan Pemasaran Promotion Mix di Warung Makan Bude Ica (Doctoral
dissertation, Universitas Internasional Batam).
de Matos, N. and et. al., 2020. Marketing in the Public Sector—Benefits and Barriers: A
Bibliometric Study from 1931 to 2020. Social Sciences, 9(10). p.168.
Narang, A. S., Gumparthi, V. P. and Chakrabarti, S., 2020. Indraprastha Gas Limited:
Formulating and Implementing a Go-to-Market Strategy. South Asian Journal of
Management, 27(1).
Pazhouheshfar, P., Biabani, H. and Behboudi, M. R., 2021. An Interactive Model of Digital
Marketing in the Field of Online Service Startups based on Mobile Commerce in Modern
Sociology. Iranian journal of educational sociology, 4(3). pp.0-0.
Shahriari, M. and et. al., 2020. The meta-analysis of neuro-marketing studies: Past, present and
future. Neuroethics, 13(3). pp.261-273.
Toscano Rafael, N. Y., 2020. Marketing mix y posicionamiento de la marca Reynaldo Los
Olivos, Lima, 2020.
Sousa, A., and et. al., 2020. The Perception of Employee Effect and Brand in Industry and
Services: An Internal Marketing Approach. In Digital Marketing Strategies and Models for
Competitive Business (pp. 116-130). IGI Global.
Riccomini, F. E. and et. al., 2021. Innovation in educational marketing: a study applied to
Brazilian private higher education institutions. Journal of Marketing for Higher Education. pp.1-
21.
5

6