TABLE OF CONTENT EXECUTIVE SUMMARY.............................................................................................................2 INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Background of industry and Market Positioning.........................................................................3 Market Audit................................................................................................................................6 New marketing mix actions........................................................................................................8 CONCLUSION.............................................................................................................................12 REFERENCES..............................................................................................................................13
EXECUTIVE SUMMARY Marketing is the activity which plays significant role in raising performance of the company. It always tries to improve efficiency level of firm by generating more demand. Positioning is important factor for organization. To stay competitive in the market place it is important for organization to keep its positioning good. To achieve better positioning organization, use various practiceslikeproductattributesandbenefits,productpricing,productquality,product application / use and competitors. The position of organization is analysed on the base of position of competitor in the market. This study describes unique selling point of Tesco and also highlights its strength and weakness of Tesco. It also conducts external audit in order to identify positon of the firm in external market. 1
INTRODUCTION Marketing management is a process that is used by organization to perform focused practical application of marketing concepts, techniques and methods that are applied within the organization to improve the performance of company in the market place. Marketing is one of most important function of organization which is used to improve the reputation and selling of company product in the marketplace(Deepak and Jeyakumar, 2019). This report is providing brief information of marketing management practices that are used in Tesco PLC (Public Limited Company). Tesco PLC is a multinational grocery and retail store. It was established by Mr Jack Cohen in 1919 in Hackney, London, United Kingdom. Tesco PLC is operating on 6800 locations around world. This study will provide brief information of marketing management and its background in retail sector industry. For Tesco PLC, the role of marketing management will be provided to analyse its current positioning in the current market scenario. This study is explaining unique selling proposition for Tesco. Internal and external marketing audit will be explained for organization to find overall market attractiveness and potential growth in market. The latest marketing mix action will be explained to find gap between present marketing strategy and external environment for Tesco to stay effective in the market place. MAIN BODY Background of industry and Market Positioning Industry Background Retail industry is the end step in the product chain in which the product is sold to end consumer. This industry is different from the wholesale industry because in retail sector the goodsandservicesaredirectlyprovidedtotheendusers.Retailindustryconsistsof departmental stores, discount stores, category killers, E-tailers, speciality stores, grocery stores and convenience stores. There is major contribution of retail sector in the economy of country. It is one of the oldest form of industry that is present in market. Retail sector is continuously developing in current market scenario(Chernev, 2018). In the last two decades, this industry has faced major changes. These particular changes are part of evolution of retail sector industry. Technological and management changes are most common for retail sector industry. Changes that are currently occurred in this sector are most important for development and growth of market and industry. Few years ago the retail sector was limited to the physical stores but with the application internet it is growing as online market. Now a big part of revenue generated by 2
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retail sector companies comes from the online market. Organizations are using the latest trends of marketing management to improve their performance in the market. Retail industry works on the market trends and these trends are constantly changing with the time. Changing trends are leading the growth in retail sector. Companies like Tesco PLC are working with innovations and continuous changes to meet their goals in global market. Retail sector organizations are using the technology like RFID, Information System, consumer resource management and artificial intelligence to develop better result in output with expansions. Online business or use of internet for business is considered as the future of retail sector. Currently this is concept is used by most of the organization, and they are generating huge profit from it. Use of technology like Artificial intelligence and Automation is changing the face of retail sector by allowing the customers to perform smart shopping, and it is also helping the companies like Tesco to perform consumer analysis to decide their marketing strategy to improve profit in operations. Tescois the organization which is more creative and innovative in business. It is the leading firm in retail sector, it has branches across the world. Firm aims to work better for the satisfying consumers. It has 6800 shops globally. 63911 million revenues were generated by Tesco last year.(Kerin and Hartley, 2015). This practical implementation has made Tesco PLC as one of the largest retail sector organization in United Kingdom. For market positioning of Tesco, it is important to stay update with the needs and demands of consumer. Positioning Market positioning can be explained as ability to influence the perception of consumers to allow an organization to achieve competitive advantage in the marketplace. It is all about creating better brand image for organization in market place to improve customer reviews and attract them to buy products from company store. Tesco has strong brand image in UK and other markets.It has become popular and valuable brand across the world. Market share in the year 2017 was raised by 27.2%. It has raised its sales by 2.2% as compared to last year. Whereas Sainsbury which is biggest competitor of Tesco raised only 1.2% sales and its market share was 15.1%. Hence Tesco has strong positon in the market and it focuses more on its consumers which help business competition in the market successfully. There are different marketing management policies are used by various organizations to improve their positioning in the market place. This is important for organization to stay aware of market condition, consumer 3
demand and performance of competitor to effectively perform business(Wierenga and Van der Lans, 2017). For retail sector organization the positioning is one of most important factor because there are many competitors in market. There are different types of positioning that can be classified as- customer needs, customer perceptions, brand recognition, pricing, quality and customer service and convenience. Tesco PLC keeps the data and behaviour analysis of its customers to know their demands in better way. By this data they focus on the products of customer interest to keep them retail for longer time. Also the market researches are performed regularly to stay aware of customer needs. This helps them to provide relevant product to consumers(Quelch, 2017). Customer Perception- In this policy, organization try to influence the mind set of customers to create better brand image. With a good image in the customer’s mind organization can highly influence them to buy product from their store. Tesco PLC is using the Corporate Social Responsibility to full fill their social responsibility to create positive image for Tesco brand. Pricing-This is the most common strategy that is used by all retail sector organization. In this strategy organization provide better quality product at lower price to attract more consumers. It implements penetration pricing strategy. This is strategy of Tesco PLC to provide low cost product to consumer as compared to the competitors. Through this strategy, it is easy for Tesco to increase the number of customer visits in store. Quality- This is one of the best strategy to retain customers for longer time. By provide better quality product to consumer organization can provide better satisfaction to customers. By this company in improve their brand image and reputation in target market. Tesco PLC is providing the premium quality products to its customer. High quality product can improve consumer satisfaction and it can help the organization to encourage the customers to buy goods from the Tesco Stores. Convenience- In this strategy, organization try to provide better and quick services to improve experience to customer. Better billing and purchasing process develop by companies to make people comfortable in store. Tesco is using digital and RFID technology to provide better experience to consumers. This is how by providing better buying experience Tesco ensures it positioning in market. 4
This is how different positioning strategies are used by Tesco PLC to improve and secure its position in local and global market. Unique Selling Proposition Unique selling proposition is defined as the unique concept or characteristic which makes the product or service of organisation unique or different from that of others so that its value is enhanced. It is a marketing concept that is used by different companies to influence the customers to switch their current brand. These are the key services or products of organization that make them different for the other companies. Companies use various methods to look different form other companies. For example, Tesco use slogan “Every Little Helps”. This is one of the way to influence their customers(Heding, Knudtzen and Bjerre, 2015). The slogan demonstrate that organisation is committed to its social responsibility which is also one of the important aspect of its promotional events (Rowley, 2017). Also Tesco provides large range of products to consumers. There are many services provided by Tesco PLC which are better and Cheaper from the other competitors in the market. Slogans like something for everyone also attracts people towards the company store. Tesco follows the low cost market penetration policy to reach to customer of various category. This is how Tesco use variety of marketing and business policies to improve it positions in the market place. Tesco is the third largest provision store in world so it can be considered as one of the best known organization for people. In terms of pricing organisationisgettingtoughcompetitionfromWalmart,Aldi,Tescoandotherlocal supermarkets in UK. Cheap pricing policy help the organization to address vaster range of people. Market Audit Tesco is one of the largest retailer among the world and the third one in United Kingdom. It has its expansion all over the different countries which consists of 16 in Asia, six in European country with the addition of its in North America. As to understand the all over of the market attractiveness along with the identification of the potential market, proper environmental analysis is required to be done. It consists of the format for the analysis of the environmental effecting Macro analysis (PEST) Socio Cultural factor-This is considered as most essential factor which impact on the firm to great extent. Changes in lifestyle change the buying behaviour of consumers. In such 5
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condition firm has face difficulty in attracting buyers and managing its operations.If people want healthy product and entity fails to provide them same products, then people will be negative which will influence them and they can turn towards other firm. Economic factor-Tesco has survived in the great depression in year 2008 along with the increasing profit for 3 billion in the next year 2009. Moreover, due to increase level of unemployment, the demand of the goods and service has been slowed. On the other hand, it turns out to be had increasing traffic for money in the area to have the new stores set up. The company is trying to make up the profit from all direction in different countries and pay all sort of taxes. Technological factor-the company is trying to implement various new technology in the company to make the business and selling of goods and services easier. There are various customer points that are been convenient to customers, such as the home delivery, online shipping, club cards bas many of the technological upgraded devices. The company is using technological advancement such as the radio frequency identification and electronic shelf labelling as to make the company more technologically advance. Political factor-There are many of the EU regulation along with respond to the changes with legal framework, employment regulation and other respective laws of countries. The company have the implementation of various tariff of UK government turns out to the largest private sector. Micro Analysis Customers-the company has large variation in its customer rating between different ages and the social classes. The company has to importantly understand the strategy to gain customer loyalty. The company used to set up different locations as to provide convenience to the customers as to provide the different level of customers to have the rest to their competitors and the supermarkets. The company is also trying to provide the best service at home to customer. There is being the increased years by rear of the increased profit accordion. Suppliers-there are many locals and international suppliers available in many countries which also help in having the growth of small suppliers to grow. The company is more concerned about the reputation in market as to have the cheap products. Tesco has the power as to push down the prices as to pays to its suppliers. 6
Distributors-Distributors refer to the company help in selling and distributing the large variety of good to final buyers. The company is the retailer who sells directly the goods to company s it didn't deal with local and regional distributors. Competitors- the major competitors of the company Tesco are Asda, Sainsbury and safe- way as these supermarkets used to provide the similar products to public with wide variety of range but the Tesco wants to keep the customers, loyal by different ways. SWOT analysis The company has following strength, weakness, opportunities and threats. Strength The company has the strong brand image which turns out to be had the brand equity of company for period. It is the market leader in retail market. This turns out to be the positive aspects for company. The company have the less risk in the product diversity along with loyal customer as Tesco is having the operation level across various fields which is stretched in different parts of world. Weakness The failure of lead centre city market has been turned out to be major weakness for the company. The company also faces to have the lack in company marketing approach. The company is facing the issue of the high debt of customer on various loyalty and debit cards of customer. Opportunities. The company have the increase chances in which there is demand of private product will increase. The customers of UK are major demanding for the private label products that has been turned as the opportunity in company. Due to company has the diversified appeal towards the product have the many explores areas which can be having the acceptability of company growth. Globalisation gives opportunity to the Tesco and it can growth well in the market. Technological advancement helps the firm in improving operations which supports in building strong relations with consumers and offering them products as per their requirement. Threats- Changes in legal regulations create threat for business. The company have the threat regarding the failure in international level. The losing of upper social class customers as the new competitor are appraising in the markets. 7
New marketing mix actions With the online retailing the organisations such as Tesco have been undergoing through significantoperationalandmanagementchanges.Inordertoexcelthroughoutstanding performance, it is required that on the basis of above situational analysis Tesco must incorporate significant changes in its marketing strategies. The organisation must upgrade its marketing mix actions in following pattern so that it can withstand the ongoing changes in the retail industry and globalisation trends. Marketing mix actions recommended for Tesco: Product: The organisation is dealing in wide range of products and services. The retail giant provide product such as clothing, stationary, food, financial services as well as electronics. With the increasing demand, organisations aim at providing products with innovative packaging and features so that a wide range of customers can be served. Apart from the product range of other brands like retailer the organisation also has its separate product line such as Tesco value, Everyday value and Tesco Lotus. Existingproduct range of the Tesco isattractiveand satisfactory enough to meet the needs of variety of consumers. However, in order to meet the market competition and global changes Tesco must also ensure that it emphasis more on customized products as per the market segment in which it is providing its services. The product and service customization as per the choice of target customers can help organisation to enhance their sales (Abril and Rodriguez-Cánovas, 2016). Apart from the physical stores, the organisation is also having option for online retailing at which customers can get electronic products, household, home appliances, health and beauty as well as sports and leisure products. For keeping the product innovation and preference of the target customer’s products strategy must be addressed and improved. Price: Tesco experience competition from big brands such as Aldi, Sainsbury and Morrisons in terms of pricing and product quality. The pricing has been one of the most significant element of marketing mix which helps organisation to sustain good brand value in the market. Tesco has been using cost leadership strategy for the long terms so that along with the effective product quality organisation is able to deliver goods at least possible price. Thecost leadership strategy 8
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for pricing is one of the main reason which attract people to purchase the products. However, with the major technological changes in the online retailing company is facing huge challenges in offering low price services (Bahadir, Bharadwaj and Srivastava, 2015). In order to reduce the prices, the organisation must emphasis on improving its supply chain as well as to manage its otheroperationalexpenses.TheexistingprogramnamedBrandGuaranteeassurethat organisation serves the product at the least possible price than all other available service providers.For retaining the competitive advantage these recommended pricing challenges are mandatory as they help in keeping dominance in the market. Place: The distribution strategy of Tesco can be assumed to be very wide and effective. For instance, for the customers who desire to visit physical stores the company has huge range and number of stores. Tesco superstores provides services for non-food products and groceries while Tesco metro stores are available for the city and town centres. For premium and high priced products, the organisation has Tesco express which aims at providing services to highly potential customers who can afford high price as well. In order to meet the needs of routine shopping so that all types of products are available under one roof. However, company must redesign this strategy because majority of the customers now expect more efficient services through online platforms. Tesco must try to assure that along with these physical stores online services are also more feasible and approachable. Company must expand its distribution network for online services so that quick home delivery is possible for all distant routes. Through filling of this gap service quality will be improved to great extent in terms of product delivery and quality. Promotion: The low pricing strategies and superior product quality makes it possible for Tesco to have strong brand image. However, the organisation also uses effective promotional strategies to promote its services so that its brand can be improved. Along with the charitable themes company also uses television ads, theme based advertisements, customer loyalty card programs. However, there is need to make a major transformation in the promotional strategies of the organisation. In response to the global market there is need that company must have its major focus on social media and digital marketing. Along with the search engine optimisation and website promotions Tesco must encourage social media campaigns so that most of the audience can be approached. The use of social media will allow company to have more regular interaction 9
with the people and to promote their achievements (Dadzie and et.al., 2017). Organisation must also bring innovations in its customer loyalty programs so that it can improve its customer retention for the long term. The bridging of promotional gaps is necessary for keeping the Tesco brand popular and active among audience which is necessary for the growth of company. People: ThesuccessofthephysicalstoresofTescoisrepresentedby theemployeesof organisation. Thus, it is highly recommended that service provider must value its employees (Abril and Rodriguez-Cánovas, 2016). The organisation has organisational culture and work environment bounded with all legal and ethical considerations. Tesco also emphasis on the diversity so that staff members are also able to understand the diversified needs of various customers. However, with the increasing competition and global interference it is required that company must change and improve its recruitment and people management strategies (Haider and et.al., 2019). The recruitment and selection strategies of the organisation must also take global communication and technical skills so that Tesco is able to serve quality services in both online and offline media. Through bridging this gap organisation can enhance the product and service quality and long term customer loyalty can be achieved.Since employees of Tesco represents organisation globally it is also recommended that employees must be provided with high standard training framework and motivation to assure the desired quality standards. Process: The operational and management processes followed by Tesco are aimed at achieving market objectives and sales targets. The task oriented processes are the key reason which assure that all consumers are provided with on time and quality services. The existing processes are not much focused on the concept of sustainability thus necessary improvements are required in the accessibility, production capacities and service features. The integration of the sustainability with the process will not only reduce the operational expenses but will also help company to fulfil its corporate social responsibility. All the staff members of Tesco assure that their tasks are accomplished as per the company policy and quality standards so that there are no possibilities of functional defects and errors. The processing gaps are vital for assuring the expansion of Tesco business successfully into new global market which consist of huge success opportunities. Physical evidence: 10
The most valuable and effective physical evidence of organisation is its trustworthy brand image among its target customers. The logo, labels, design of physical stores of Tesco, colour and equipment are some of the evidences which make Tesco brand recognisable among its customers. In this digital world of online retailing it is very tough task for the organisations to manage and assure their physical evidence. However, organisation is successfully achieving this task by means of its great number of physical stores. The organisation is having its stores in nearly all major towns, cities and areas. Thus it is very convenient for the customers to approach and communicate with the service providers (Fan, Lau and Zhao, 2015). In the virtual world also the organisation marks its presence through a well maintained websites and social media presence.Tesco is active on various social platforms so that its target audience can easily approach it whenever they have any requirement. The proposed marketing mix actions are considered to be satisfactory enough which can help organisation to sustain competitive advantage. These gap between physical evidences can assist organisation in developing new customer and market segments which is beneficial for long term profitability. However, in long term Tesco may need to bring necessary changes to its marketing strategies. For instance, the existing promotional strategies may not go well with the stores outside UK. Within UK the current emphasis of the retail service provider is on festival based promotional activities (Išoraitė, 2016). However, the Christmas oriented offers may not go well in the Asian countries and organisation may require to modify its strategies as per the local market. Similarly, sustainability is another major trend driving operational cost and marketing strategy of retail service providers. Thus the modified marketing mix strategies must also incorporate this trend into consideration. CONCLUSION It can be concluded from the above report that it is essential for the organisation to improve their market positioning so that customer experience can be improved. In order to sustain the competitive position in the market it is required that organisations must have higher unique selling proposition in accordance with the latest industry trends. The organisations must also seek the growth opportunities and the potential market where they can grow. For this purpose, the internal and external audit must be performed essentially. It has been evaluated from the discussion in the report that through the regular audit companies are able to assess own capabilities as well as various market challenges which can prohibit the organisational growth. 11
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For the long term success, it is also essential to assure that marketing strategies followed by the company are in accordance with the latest marketing trends and customer needs. The marketing mix elements must be improved in a way such that these strategies can fill the gap between external market requirements and the organisational goals. It can also be concluded from the study that organisations must respond to the latest trends of industry so that satisfactory and high quality services can be provided to the customers. 12
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