Marketing Management of Tesco : Assignment

Marketing Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Background Information..................................................................................................................1
Marketing audit................................................................................................................................4
Marketing attractivenesses...............................................................................................................7
New marketing mix .........................................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing management is the process of managing all the activities of the business. This
can be defined as the process of management of marketing activities which helps to achieve the
business goals and objectives. It contains planning, organizing, evaluating and implementation
and control of different marketing activities (Behziun, Abdolazimi and Sahranavard,2016). Here
marketing management of Tesco will be discussed in the report. It is the British multinational
groceries and general merchandise retailer there headquarter in Welwyn Garden city,
Hertfordshire, England, United Kingdom. Firm provide the variety of products supermarket,
hypermarket, superstore etc. The report will describe the overview of the company and retail
industry. Furthermore, report will describe the marketing audit and overall marketing
attractiveness also describe whether there are helps to growth for the business. Moreover, study
is lay emphasise the 7 ps of Tesco. Moreover, report will describe the Marketing attractivenesses
of the Tesco. Moreover, report will examine the new marketing mix actions to achieve gaps
between the company’s present marketing strategy and external environment.
Background Information
Retail sector is an industry which focuses on selling services and goods to customers with
the help of various channels in order to earn profit (Johnson and et.al., 2018). Organizations
within this industry identify customers demand and as per their needs and requirements sell
products or services to their customers. Company chosen in this retailing sector is Tesco. Tesco
is a public limited multinational company. Their main headquarter is in England UK, founded in
1919; 100 years ago. It is a company with more than 550,000 employees working globally with
them. According to their revenue it is the 9th largest retail organization in UK. They have more
than 6500 stores globally and serve countries like UK, India, Malaysia, Thailand, Ireland,
Hungary, Poland and Czech Republic and 10 other countries in Europe. It was founded by Jack
Cohen who had started market stalls group. It has diversified themselves in areas like retailing of
cloths, toys, book, petrol, electronics, financial services, software, furnitures and other telecom
and internet services.
Tesco's mainly focuses on Hypermarket, supermarket, convenience shops and
superstores. Since 1990 they have increased their customer based and have also grown from a
high volume low cost retailers to low cost high quality retailers. Their main subsidiaries are
Tesco Bank, Booker Group, Telecoms and Tesco support. Tesco are one of the biggest

food wholesaler Booker. They run their own financial services through their Bank which was
started with a joint venture of The Royal Bank of Scotland. Tesco Banks main products are
loans, cards, savings account, insurance, loans etc. They also operate in Mobile business as well.
With the help of O2 as a joint venture that operates under virtual mobile network operator they
launched their first mobile. This helped to increase their customer base by almost 2.4 million all
over United Kingdom. They mainly operated in broadband and home telephone business. In
2007 they also acquired a small Information technology company which helped them to launch
technical support of Tesco. Other than this they mainly focus on home wear, bakery, food market
etc.
Main competitors of Tesco are Sainsbury, ASDA-Walmart, Morrison's. These three are
Tesco's main competitors and not only this all of these four companies are known as Big four
footprints in United Kingdom. According to a survey ASDA and Sainsbury's market share
together is more than 28 percent. Other than these companies Aldi, Waitrose and Lidl market
share is also increasing continuously but as compared to Tesco and its other three main
competitors Aldi, Waitrose and Lidl are no threat to Tesco. They are continuously gaining
competitive advantage and as a result their market share is also increasing continuously. Their
profitability, net revenue is also increasing constantly. As compared to all its competitors their
market share is the highest among all of them. Due to their quality and low price they have
gained a competitive advantage and as a result they acquired a market share of 30%.
Marketing mix of Tesco
Marketing mix
Marketing mix is the tool that the many firms uses this tool in their business to achieve
the objective of the company and also this tool helps to firm for pursuing the goal of the firm.
Thus, the marketing mix includes the seven broad levels of marketing directions, like product,
price, place, promotion, people, physical evidence, process.
Product
Tesco provides a difefrent type of product to their customer such as food, costume,
stationary, electronics, beauty products, financial services etc. they also operate a home
shopping service and Petrol stations. Therefore, Tesco provides a different product line, Provide
the best quality product and satisfy the needs of consumers. The firm sales the high branded
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products that is the reason customer attract towards the product. Tesco have own costumes
brands such as Everyday Value, Tesco Lotus, Tesco Value, and F&F Clothing.
Price
Firm expand the different line of product they launch the newly product in the market by
the help of different pricing strategy. Tesco uses the penetration pricing strategy in their
business. This strategy is described that firm launch their product on minimum price to attract the
customer. They initially offer their product in the market with low price for a new product. This
is the best strategy Tesco uses to attract the customer towards the product and also helps to
increase the demand of the product they provide the best prices without any compromise with
quality. Tesco also maintain the good relationship with the suppliers to reduce the prices of raw
materials so it helps to adopting the best strategy for expand the future growth of the business.
Place
Tesco provides their product in all over the world, Tesco has 6,809 stores in the
worldwide. They use the different distribution channels such as direct and indirect distribution
channels also they use the online and offline channels. In direct distribution channels they
directly provide the product to the customer by using the online channels (Shiraz, and Ramezani,
2016). In indirect distribution channels it describes that Tesco sale their product to supplier
retaliates, and wholesaler etc. Tesco Homeplus and Tesco Superstore, Tesco Express, Tesco
Extra, Tesco Metro, Tesco Compact is the stores of the Tesco.
Promotion
Tesco has a variety of product they expand their business in international market so they
use the different promotional activities to enhance the demand of the product. Tesco uses the
television, newspaper, and other advertising platforms to increase the demand of product also
they use the different tag lines on the product to take the message to their customer. Therefore,
Tesco also uses the different advertising techniques to increase the demand of the product like
sales promotion. For example, Tesco gives many opportunities to the customer like, Buy one get
one free scheme and discount scheme. This strategy helps to increase the demand of the product
and customer are attracted this type of promotional activities
People
Tesco have a huge number of employees almost 460,000 employees work in Tesco.
Tesco is largest firm and they want the high number of employees to satisfying the customer.
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Employees is the key resources of every organization. So Tesco is provides the different benefits
to the employees such as medical, insurance retirement befits etc. so this is the best way of
encouraging the employees when employees get the benefit they enhance their performance and
provide the high profitability to the Tesco.
Process
Process means company use the different strategies in their business to achieve the goal
of the company. They use the best manufacturing process in the business which helps to reduce
the waste as well as help to reduce the cost. Business process means Tesco use the best and
standardized process to complete the task for example, Tesco’s offline stores, there has a unique
machines that customers purchase the product by using the different machines. Customer also
uses the self-service to make settelemnt by using machines.
Physical evidence
Tesco use the different strategies for making the best environment they organize the
different companioning programme to provide the knowledge among the customer that how to
improve the environment. Therefore, Tesco has an classic logo, and makes masterful use of
colours it describes the Eco friendly motive. Moreover, Tesco have also own online website
which is also the best and easy to use.
Marketing audit
Marketing audit refers to outlook of plan, objectives, strategies and goals that are
implemented in Tesco plc. Audit will be done on the basis of Marketing strategy, Marketing
organization, Macro- environment and Marketing productivity of the company.
Macro-Environment Audit - This audit includes the factors which are outside the control of the
business and influence its marketing performance. Thus, the Macro-Environment audit is
performed with the helps of Pestle Analysis.
PESTLE Analysis of Tesco
It is the technique that helps to analyse for unpredictable environment of Tesco plc. This
will help to evaluate the factors that will help to assess the macro environment factors which
impact the firm and its performance.
Political Factors - Tesco plc operates is business at global level. There is influence of trade and
taxation polices of various couturiers on Tesco plc. There is government intervention in export
and import business. There is financial instability in the various countries. Thus, governments are
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encouraging retailers to create more jobs in order to reduce unemployment from the countries.
Thus, it can be said that the influence of political factors is moderate for Tesco plc.
Economic Factors - It is matter of more concern for Tesco plc as economic factors such as price
fluctuations and inflation rate in country's economy affect the business of company in negative
term. Price of food products are rising, as a result (Gillespie and Riddle, 2015). The company is
facing price war from its competitors such ass Sainsbury, Morrisons and Aldi.
Social Factors - There is influence of social factor on Tesco plc, such as changing consumers,
preferences and choices affects the business of the company. The company produce products in
accordance with the customers taste and choice. As if now customers are more conscious about
their health and in UK people are more suffering from obesity so the company is now producing
healthy food products. The company needs top do deep marketing research to analysis the
current marketing trend of the customers.
Technological Factors - The technological advancement has brought a new opportunity for
Tesco plc. The company is using technologies like Omichannel customer experience and supply
chain management system to increase their productivity. Increasing use of social media create a
platform for the company in order to do advertisement of its product. This leads company to
increase its market share and profitability.
Environmental Factors - There is growing pressure on Tesco plc to consider the issues of
environment and use the ways that would benefit the society. The company has set the target to
reduce the Carbon Emission by 50% till the year 2020 (Gretzel, 2018.). The company is also
acting as the helping hand to save the natural resources, they are undergoing the processes of
waste management in order to minimise the wastage in their production cycle.
Legal Factors - The legal factors such as Trade and tariff laws, Employees Health and safety act
1974, National minimum Wages Act 1998 and Environment laws are influencing the business
environment of Tesco plc. The Company is running the business on the basis of these laws they
are ensuring that firm didn't disobey the laws.
Marketing Strategy Audit - It checks the feasibility of the business mission, vision and
marketing objectives of Tesco plc. Marketing strategy of Tesco is purely based on attracting the
customer retention towards their product. They are identifying different ways through which they
can retain customers they are using pricing strategy in which they are using discounting offers
and are giving various flat price offers to their customers. Tesco they provide the retail services
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in the market so they also want to identify that which type of pricing strategy is suitable for the
customer which means customer are likes the pricing of product and they attract towards the
product or not. They are giving club membership to their loyal customers in order to increase
their customer satisfaction.
They are doing advertisement of their products through telecasting the advertisement of
their products on television and they are printing advertisment in newspaper and magazines to
increase their brand awareness in the mind of people (Blythe and Martin, 2019). They are doing
various promotional activities such as they are running various campaigns to increase their brand
value in the market (Gretzel, 2018). The Company is launching various discounting schemes on
timely basis to attract large number of customers such as they are giving discounting offers
occasionally and festive seasons such as on Christmas eve in order to increase their sales. They
are putting hoardings and banners in order to attract large number of people. There marketing
strategy also includes the diversification. They are engaged in continuous research and
development of their products in order to bring innovative products for their customers.
Marketing Organization Audit - It evaluates the performance of the staff at different levels.
The Tesco has hierarchy organization structure. In which they have various functional
departments like Production, Finance, Marketing, Sales and human resource. There various
functional departments are integrated with one another (Campbell, Martin and Fabos, 2018). The
Production department do manufacturing of the products of Tesco plc on the basis of marketing
information which the marketing department has gathered such as current trends of the
customers and choices and preferences of them. They serve shoppers a little better every day.
Being a champaign of the customers they put customers first.
The Sales department is interlinked with human resource function. The selling of Tesco
plc products is impossible without enough manpower and labour. The finance function is also
interlinked with the marketing function, for conducting advertisement of products the company
needs huge amount of finance.
Marketing productivity Audit - This Audit evaluate the performance of activities such as
through determining it's profitably and cost effectiveness. The company has increased its
productivity it can clearly be seen in its past performance. The Company has grown
tremendously. It can clearly be seen in its sales reports but it is not grown as it was expected.
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At the time plan was made it was evaluated that company will increase its production
capacity by the margin of 25 % but they are able to increase only 20% which means there is gap
of 5% which they are lacking behind and fails to achieve the rest one (Baker and Saren, eds.,
2016). It is evaluated that Company has earlier trapped in the fake accounting scandal in which
they show fake financial reports to their shareholders, this puts negative impact on company's
image. It is evaluated that company has generated total sales of 48.4 billion of revenue. The
company has in total 6,9012 shops around the world. 944 million of group operating profits
before exceptional items.
Marketing attractivenesses
Marketing attractivenesses is the methodology which identify the different factor to
determine whether a market might be a profitable for investment or not. In other words it
describes that there are different opportunity in the market which expand the growth of the
business (Behziun, Abdolazimi and Sahranavard,2016). Firm using this method in their business
to asses the probability of the product which means they asses the profitability of the product that
the product is provided the expected profit or not. Tesco uses this method to identify the more
attractive market and its assessed the market for identify the profit potential.
There are different factors which identify the market such as Market size and growth rate.
These are two basic factors of marketing attractivenesses (Karaağaoğlu and Çiçek,2019). The
market size of Tesco is described the growth opportunity because Tesco is the largest retail
company which provides the variety of product to the customer and also Tesco have huge
customer base. Therefore, Tesco have more opportunities to expand the sell of product. When
the market size of Tesco is increase that means the market share is also incurs so other
shareholders are interested to invest in the business of Tesco it is also leads the growth of the
firm. The growth of the firm is increase the revenue of the firm Revenue is explained as a
volume and margin, so margin is one of the key factor which describe the profitability of the
firm.
New marketing mix
There has been several gaps in the existing marketing mix elements of Tesco. These
recommendations in the seven marketing mix elements will assist organisation in eliminating the
gaps in the external and global business environment and its existing practices. They
recommendations for Tesco are as follows:
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Product:
As discussed above the organisation is producing wide range of services. However, this
can be considered as one of the limitation of Tesco which prevent it from making its unique
identity. Since the organisation provides a diverse range of products it may become difficult for
the customers to distinguish products of Tesco from other popular brand (Pogorelova and et.al.,
2016). Thus, for improving this aspect it is recommended that organisation must focus on
improving and providing options for more customised products. This approach will help
company to improve new product range in the brand name of Tesco which distinguish
organisation from other service providers. New product segment and innovations in the products
can help organisation to achieve this objective.
Price:
From the long term the cost leadership and low prices have helped organisation to retain
its success. However, this strategy has not helped organisation to establish its excellence over
global market. Contrary to this in the era of online retailers and digital marketing consumers are
having lots of choices at the low prices (Stead and Hastings, 2018). Thus, company can go for
premium price strategies for some of its selected and innovative products. The premium prices
especially in the new target markets can be helpful for the organisation to enhance its
profitability as well as brand value. The adoption of premium pricing will definitely attract the
highly potential customers and Tesco will be able to improve its existing brand value. However,
for implementing this strategy organisation must focus greatly on the quality and innovations in
its products.
Place:
The current strategy and the distribution strategy of used by the organisation can be
considered as effective. The organisation provides its both internal and external distribution
channel through physical stores as well as online platforms (Pavlou and Stewart, 2015). For
making the distribution channel more effective Tesco must focus on improving its existing
infrastructures. The company can also improve online services and distribution channel through
building new mobile application. The mobile based application allow consumers to access the
services at any instant of the time. Further, to explore the scope of the distribution channel
organisation can also bring significant changes. For instance the store layout and service delivery
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patter can be made more innovative (Festa and et.al., 2016). Further the company can also open
its store for 24 hours and all days of week so that Tesco can excel in its services.
Promotion:
The organisation is using vast range of promotional and advertising strategies such as
discount coupons, customer loyalty benefits, television and newspaper marketing. However,
since in the era of digitalisation these strategies can address limited number of customers it is
recommended that company must focus on social media and digital marketing. The increased
presence of organisation on social media and information technology devices will enhance the
interaction of the company with its service users (Jindal and et.al., 2018). To make its
advertisements more effective Tesco can also use cultural and global consideration. For example
when organisation will develop television advertisements in relation with the culture of the target
audience then it will gain the attention of more customers and better promotion will be executed.
Process:
The online services of the Tesco are effective. When consumers place any order then,
their products are delivered to their destination. However, in the offline stores customers have to
wait for the long duration for the billing and product picking. Many times this type of processes
makes customers dissatisfied as they have to wait for the long. In long term the process is not
considered as good (Jackson and Ahuja, 2016). Thus, organisation is required to improve this
processing. For this purpose Tesco can use self service machines so that consumers can also
process their orders at their own.
People:
The human resources of the organisation are very effective and company pays complete
focus on employee retention and training. However, in long term this cannot prove to be
satisfactory or sufficient enough (Fahmi, Fathoni and Harini, 2019). Since most of the
organisational operations are gradually shifting towards online business in response to digital
technology it is required that company must now focus on expanding the number of technical
skilled employees. With the objective of enhancing the business at global level company must
also choose to develop international human resource practices so that it provide its services
effectively at global level as well.
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Physical evidence:
The existing physical appearance of the organisation is influencing however the
organisation must improve its physical appearance from the global perspective. For instance the
organisation can develop a unique tag line which can characterise the brand name of the
organisation (Kukanja, Gomezelj Omerzel and Kodrič, 2017). The furniture and layouts of the
stores is impressive and allows the consumers to easily locate or search any of the product.
However, to make the design and physical appearance more impactful the organisation can use
the standard layout for its physical stores or the unique interior themes on various special
occasions such as festive seasons. For the continuous performance improvement of its employees
the organisation must also incorporate various models of motivation and the performance
evaluation of its employees (Sinapuelas, Wang and Bohlmann, 2015). There must be an open
effective channel of communication between network so that employees can easily communicate
with the management and their retention and work efficiency can be improved within
organisation.
The adaptation of these recommendations will help Tesco to retain its position in this
competitive market and to successfully develop itself as the leading giant. Through above
recommendation organisation will also be able to assess the possible threats to its success which
can affect its global performance.
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CONCLUSION
The report has been drawn from the above project report it describes the brief information
about the company and retail industry. Furthermore, report has been described the marketing
audit and overall marketing attractiveness also describe whether there are helps to growth for the
business. Moreover, study has been examined the 7 ps of Tesco. At the last report has been
examined the new marketing mix actions to achieve gaps between the tesco present marketing
strategy and external environment. Moreover, report has been described the Marketing
attractivenesses.
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REFERENCES
Books and Journals
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