Tesco's Marketing Strategies and Mix

This assignment delves into Tesco's comprehensive marketing strategies. It examines their approach to market segmentation, targeting, and positioning. Furthermore, it analyzes the application of the four Ps of the marketing mix – product, price, place, and promotion – in the context of Tesco's operations. The provided text offers insights into various aspects of Tesco's marketing strategy, drawing upon academic sources and real-world examples.

Marketing Management

Table of Contents
INTRODUCTION.......................................................................................................................1
TASKS.............................................................................................................................................1
Target market and market segmentation of TESCO...................................................................1
Consumer Behaviour of TESCO' s Customers...........................................................................3
Marketing Objectives..................................................................................................................4
Marketing Mix............................................................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Marketing management can be defined as the discipline of the organisation, whose major
focus is on practical implementation of the marketing methods, orientation and techniques inside
organisation or enterprise and also on the administration of the firm's marketing activities and
resources. The application, review and proper track of company's resources which are used for
marketing comes under the marketing management (Sharma and Iyer, 2012). This report is based
on the topic of marketing management on the case study of TESCO. It is the largest retail chain
operating in UK. This report will be helpful in covering necessary topics that are necessary in
order to handle marketing challenges which are created by external and internal environment.
Market segmentation, consumer behaviour, marketing objectives and action plans related to
marketing mix will be analysed in this report. This report will present various ways in which
company makes it management regarding marketing activities which are done for different
services and products.
TASKS
Target market and market segmentation of TESCO
Marketing principles of TESCO includes market analysis, determination of the products
which company is offering, what type of customers will get benefit from it and considerations in
relation with seasons, fashion, size and appropriateness (Ngo and O'Cass, 2012). Organisation
makes decision that there will environment friendly products which will be exported all over the
Europe and there will be different range for local customers. Before making any decisions
regarding market strategy, a proper market research will be done so as to check pricing,
customer's attitude and their purchasing habit.
There are different micro and macro environmental factors which are affecting TESCO 's
marketing management decisions directly or indirectly. Services and products which are offered
by company may not attract every customer equally, as there is difference in wants and needs of
the people. Therefore businesses got engage in practices like targeting and market segmentation
(Trainor and et.al., 2011).
Market segmentation is based on concepts that product which is there in market is not
homogeneous to its wants and needs. In market segmentation, population is divided into different
groups as per their wants and needs and then services and products are developed according to
1

the needs and requirements of the groups. Segmentation is classified into demographic,
geographic, behavioural and psycho-graphic bases. Targeting and segmentation can be
implemented in TESCO as well as in its products. Market segmentation of the company can be
defined as follows: Geographic Segmentation: The TESCO makes its operations in various areas and
markets. A market division is on the basis of country running and proper attention is
being paid to the particular need of every geographic segment. A further subdivision is
made among local markets and cities of each country to accept its promotional packages
and products to local conditions. Demographic Segmentation: Demographic variables are in association with sex, family
size, age, life stages, occupation, education, social class, income etc. TESCO creates
product finest products for buyers who are having more disposable income, it also focus
on low income consumers with greater price sensitivity (Shou and et.al., 2011). Psycho-graphic Segmentation: This segment represents the lifestyle of the consumers
who are using products. Company make acknowledgement of consumer's psychological
needs and focus on things for which consumer care. Various lifestyles magazines are
created by company which targets on different tastes and personalities (BBC History,
Harper's Bazaar etc.).
 Behavioural Segmentation: This segment helps TESCO to analyse the buying behaviour
of the consumers. It includes knowledge regarding when and where customers shop, rate
of product utilization, commitment regarding various brands etc.
TESCO is making use of the mass marketing strategy for targeting its customers. Mass
marketing strategy is the type of strategy which is used to ignore differences of the market
segment and target entire market with one single offer, if majorly focus on common needs of the
consumer and fulfil them. They don't make differentiation in the types of customer it is serving,
they serve large amount of customers as they can. Common need of most of the customers is to
get the low price product, which gets fulfilled by the mentioned company (Tesco Marketing
Strategy. 2016).
TESCO make use of positioning strategies so as to attract desired customer segment.
These strategies functional positioning strategy which is in relation with increased quality and
range of functionalities of services and products. Products which are sold through functional
2

positioning are generally expensive in comparison company's basic products range. Symbolic
positioning strategy is carried out on the basis of aims, aspirations and value of customers.
Company make use of this strategy for fair trading of products. TESCO makes use of price
positioning strategies for its products which is produced by them only. Experimental positioning
strategy is used to target customers for beauty and health range products. Multi segment
positioning is used in order to target customers of different segment with diverse products.
Consumer Behaviour of TESCO' s Customers
Consumers are the kings for the business organisations. Without customers, no company
could make sales in the market and will not have any scope of developing and growing in the
industry. Businesses and businessmen have to give respect to the customers and they have to be
kept in top priority if TESCO have to survive and succeed in their business (Sharma and Iyer,
2012). Consumer behaviour can be defined as the behaviour of customers towards the company
as well as their products. Organisation usually conduct research and surveys in order to know
about the nature of the customers they have and their behaviour towards the company and the
brands they make available to the customers. Consumer behaviour is a subject to the needs of the
customers and their expectations from the product as in case of the level of satisfaction they
provide to the customers. Company collects data from various sources and involve the nature of
the consumer behaviour such as:
 TESCO studies the consumer behaviour from their past sales chart as to determine what
the customers are expecting from the company and the products produced by the
organisation. Sales forecasts are a major source of bringing in data that will help in
estimating the sales that are expected from a certain market that is specifically noted
within a time period. Past buyers are considered to be the major source of collecting the
data regarding the behaviour of the consumers to forecast the sales to be happened in the
future. There are two different types methods for performing the forecast of sales:
quantitative and qualitative (Salonen, 2011). Quantitative forecasts help in predicting the
sales of the products that are manufactured by the company on the basis of the results in
the past statistics from the history and the qualitative method depends in the expert
advises and opinions for the prediction of sales in the field.
 Conduction of research and surveys studies the behaviours of the consumers for the
purposes to realise the needs and requirements of the customers targeted by TESCO. It
3

help in knowing the expectations and to know how to respond to those needs and
expectations with the advertisements and other promotional activities. They also help in
identify various problems to the point without causing confusions of what changes are to
be made. Concept tests for new products and brand name recognition are other techniques
used in the research survey methods to know about the customers who require the product
and how can the product satisfy their needs. Organisation can even also conduct surveys
in persons, or through telephonic interviews, or via mails or other online
communicational sources (Ngo and O'Cass, 2012). The researches also help in
recognising the customers that TESCO have to target in order to gain the advantage of
making more sales and convert them to satisfied customers.
 Internet Research are also adapted by major companies including TESCO. It helps in
online conduction of researches and survey and support in the monitoring procedures of
customer behaviour on the basis web. The organisation gets a support from this in
determining the correct prices, attributes and the promotion related activities that are to be
performed for products that the organisation is going to release in the market. They also
suggests the company in revealing the market conditions in which the manufactures
products can be sold.
 Sensing of market is another process that can help in the development of TESCO and
help them making advantages of competition by the provision of understanding the the
behaviours of the customers deeply (Mason and Spring, 2011). Different resources are
utilized by the organisation in order to study the behaviour of the consumer in respect to
TESCO and their products. It also support in the process of compiling the data the
company collected from various sources into a database of information related to
marketing and management, and this is known as sensing market. The frame work is
provided by the database in the integration and presentation of the information for the
purpose of decision making.
Marketing Objectives
Marketing objectives can be defined as the goal's group which is set up by the company
while promoting its services and products to the desired customers which needs to be achieved in
given time. A marketing objective of the company may be related to particular product which
will include giving information regarding features of the product, increasing awareness about
4

product among target customers, and decreasing resistance of the consumer to buy a product
(Macdonald and et.al., 2011). Marketing is an essential part of an organisation with the help of
which company raise awareness regarding particular service or product. Once company make
establishments regarding strengths, weakness, opportunity and threats by doing marketing audit,
company can define various marketing objectives. General marketing objectives of the company
are related to increased sales, increased market share, launching of new services and products,
building brand awareness, targeting new customers, enhancing customer relationship, increasing
profit and improving internal internal communication.
Marketing objectives of the TESCO makes inclusion of profit maximisation in long and
short term perspectives and to increase the brand image value. Its marketing objectives are in
association with business strategies which includes various elements (Lee and Lam, 2012). Three
main marketing objectives of the company are:
 To grow retail services and operations in present markets
 To increase international presence with the help of online and offline channels.
 To focus on activities like corporate social responsibility.
These three objectives are the vital part of TESCO, which they needs to pursue for next 3
years. These objectives will be helpful for the long term growth of the company, so they should
be taken into consideration for the coming years. Company wants to grow its retail operations in
the market in which they are currently operating. This is the long term objective and will be
helpful for the company to attract many customers. Another main objective is to make presence
everywhere in the world through different channels. This objective will eventually increase the
profit and revenue of the company. Corporate social responsibilities is such kind of activity
which is in concern with company's self regulation with an integration with business model. This
objective assist the company to understand the importance of social responsibility for their
customers and organisation. Environmental factors are also considered under corporate social
responsibility which company should analyse in regards with their customers (Kohlbacher,
2011).
TESCO make use of different marketing tools for the promotion of goods and services
which they are offering for customers. These tools may include advertising, events, sales
promotions and public relations.
5

 Advertising: TESCO makes large use of media and print advertising in order to make
communication regarding marketing of new service or product. Media and print
advertising is one of the effective channel for promotion of goods. With the help of these
channels, promotion of product is done globally to all the customers around the world. Events: Various events are being done by the company for the marketing of goods and
services. Event marketing helps in describing development process of the product,
present, display and promote products and services. Events can be done through online
and offline channel. Sales Promotion: Different forms of sales promotion plays an important role in the
company's marketing strategy. Sales promotion techniques include discount on products,
rebate, refunds, lucky draws, usable benefits, samples etc. (Kim and Hyun, 2011).
 Public Relation: It is a tool which is used for building effective relations with customers
of the company by having favourable publicity, handling unfavourable rumours and by
building good image of the company. Public relation tool is used by TESCO for public
affair, press relation and development.
Marketing process of TESCO makes use of various things which includes analysis of the
internal as well as external environment, identification of the target market, deal with marketing
mix elements, set various marketing objectives and make proper control and revision of
marketing process. This process of marketing is very helpful for the company as it supports in
effective and efficient promotion of the goods and services with the help of different tools. This
process also helps in analysing the company's strength and weaknesses which will help company
in more effective marketing of the product and service (Green, Whitten and Inman, 2012).
Marketing Mix
Marketing mix is set of tools which are used by businesses to achieve the objectives of
marketing set by organisation for targeted market. Marketing mix is a common concept of the
marketing which consists of common elements i.e. Product, Price, Place and Promotion these
elements are also referred as 4p's of marketing mix. The elements in marketing mix where
extended by three elements which are process, people and physical evidence. The Marketing mix
plan to be used by TESCO Plc in the period of next three year is described as follows:-
6

 Product: This is a element of marketing mix which is referred to the goods or service
which is been provided by organisation within target market to customers (Gilmore,
2011). TESCO Plc is a grocery store which provides house hold product to the customers
at discounted rate. The business also provides its own branded and other branded product
to its customers. In next three years venture is planning to develop its own brand product
in order to increase number of customers for the products. For this organisation will
develop features and quality of existing products with development in packaging of the
product to attract new customers and supports in retaining existing customers. Price: The element is related to a cost which have been beard by the customers in order
to get the benefits from a product. It is a sacrifice in the monetary term which is done by
a customer to receive products. In recent time period TESCO Plc is already offering its
services at discounted rate to service users. Company have plan for next three years in
relation to the prices of product offered to customers. For future three year business have
developed effective pricing strategy which supports in increasing customers and earning
more profits out of products provided. Promotion: The promotion is referred to advertising of the products and services offered
by the organisation (Flint, Blocker and Boutin, 2011). Promotion helps business to create
the awareness among target customers about products and services offered by
organisation. TESCO plc have planned the significant promotion activity for its products
and services for next three years. The activity will help venture in generating demand for
product by creating awareness of product benefits and its uses. The promotion will
directly influence target customers to purchase the products offered by company. Place: The place is also referred to market which is been targeted by the business
organisation for providing its products and services. The channel of distribution is also
considered under this element which support business to provide convenience to
customers in receiving the products offered. TESCO Plc have made significant policies
for expansion of target market which will help business to increase its profitability by
covering large market segmentation easily. Business have future plans for providing free
home delivery of products to provide convenience to customers to acquire it (Ballantyne
and et.al., 2011).
7

 Physical evidence: It is a extended element of marketing mix is referred to service or
product which can be felt and experienced by the customers. It is also referred to the
proof of the products and services which has been used by customers. TESCO Plc have
future three plans for increasing the customers of the organisation by products which
helps in receiving the complete satisfaction level of by provided products. The business
provide proof bills and other valid documents as a proof for the products served to the
user. Process: The process is referred as the procedure through which the product get delivered
to the target customers. Thus help in making their client satisfied for as particular
commodity. The TESCO Plc have designed significant process design for next three
years which will help venture in delivering the product effectively to the customers.
 People: This element is referred to individuals who are involved in delivering the
products and services to final customers (Aremu and Saka, 2014). Organisation have
framed strategies in order to hire good personnels which will help organisation in
providing the products to target customers significantly in next three years.
CONCLUSION
From the above report it can be concluded that management of marketing is very
necessary for the company as it helps in the overall development and growth of the company.
Marketing management is carried out for the proper administration of the various activities
which are used in the process of marketing. It is analysed that TESCO make use of market
segmentation strategy and then concentrate on their target market. Behaviour of every consumer
is different which affects the marketing of the product. It is also determined that company make
major objectives which are related to marketing and pursue those objectives for the 3 years.
Those objectives are made for long term purpose which will aid in company's development.
Different marketing tools and marketing mix are also used by company for the product and
service marketing.
8

REFERENCES
Books and Journals
Aremu, M.A. and Saka, H.T., 2014. The impact of information technology on library
management: a marketing perspective. Arabian Journal of Business and Management
Review (Oman Chapter). 4.(4). p.1.
Ballantyne D. and et.al., 2011. Value propositions as communication practice: Taking a wider
view. Industrial Marketing Management. 40.(2).pp.202-210.
Flint, D.J., Blocker, C.P. and Boutin, P.J., 2011. Customer value anticipation, customer
satisfaction and loyalty: An empirical examination. Industrial Marketing Management.
40.(2). pp.219-230.
Gilmore, A., 2011. Entrepreneurial and SME marketing. Journal of Research in Marketing and
Entrepreneurship. 13.(2).pp.137-145.
Green, K.W., Whitten, D. and Inman, R.A., 2012. Aligning marketing strategies throughout the
supply chain to enhance performance. Industrial Marketing Management. 41.(6).
pp.1008-1018.
Kim, J.H. and Hyun, Y.J., 2011. A model to investigate the influence of marketing-mix efforts
and corporate image on brand equity in the IT software sector. Industrial marketing
management. 40.(3).pp.424-438.
Kohlbacher, F., 2011. Business implications of demographic change in Japan: Chances and
challenges for human resource and marketing management. In Imploding Populations in
Japan and Germany (pp. 267-294). Brill.
Lee, C.K.M. and Lam, J.S.L., 2012. Managing reverse logistics to enhance sustainability of
industrial marketing. Industrial Marketing Management. 41.(4). pp.589-598.
Macdonald E.K. and et.al., 2011. Assessing value-in-use: A conceptual framework and
exploratory study. Industrial Marketing Management. 40.(5). pp.671-682.
Mason, K. and Spring, M., 2011. The sites and practices of business models. Industrial
Marketing Management. 40.(6).pp.1032-1041.
Ngo, L.V. and O'Cass, A., 2012. Performance implications of market orientation, marketing
resources, and marketing capabilities. Journal of Marketing Management. 28.(1-2).
pp.173-187.
Salonen, A., 2011. Service transition strategies of industrial manufacturers. Industrial Marketing
Management. 40.(5). pp.683-690.
Sharma, A. and Iyer, G.R., 2012. Resource-constrained product development: Implications for
green marketing and green supply chains. Industrial Marketing Management. 41.(4).
pp.599-608.
Shou Z. and et.al., 2011. The many faces of trust and guanxi behavior: Evidence from marketing
channels in China. Industrial Marketing Management. 40.(4). pp.503-509.
Trainor K.J. and et.al., 2011. Integrating information technology and marketing: An examination
of the drivers and outcomes of e-Marketing capability. Industrial Marketing
Management. 40.(1). pp.162-174.
Online
Tesco Marketing Strategy. 2016. [Online]. Available
through:<http://research-methodology.net/tesco-marketing-strategy/>. [Accessed on 2nd
June 2017].
9

ANNEXURE
Sources:
http://research-methodology.net/tesco-segmentation-targeting-and-positioning-2/
http://research-methodology.net/tesco-marketing-strategy/
http://research-methodology.net/tesco-marketing-mix/
https://www.kbmanage.com/concept/marketing-management
10

11