Strategic Targeting and Positioning for Tesco's Market Success

The assignment content discusses the strategy implemented by Tesco to enhance its market share and deliver best value to consumers. The company uses STP strategies (Segmentation, Targeting, and Positioning) to achieve customer satisfaction and organizational goals. It involves segmenting customers based on their needs, targeting specific groups through different methods such as television and newspapers, and positioning the brand image in the minds of consumers. Additionally, Tesco adopts social media networking to improve its brand image and interact with customers. The main objectives of Tesco's STP strategy are to increase and retain customer base, become market leader, and provide a range of products.

Marketing and
Markets
(TESCO)

EXECUTIVE SUMMARY
It can be evaluated from the study that business analyses regarding the marketing
environment in which it operates. Therefore, it is essential for firm to undertake different
marketing concepts so that competitive advantage can be gained by firm. Further, STP needs to
be effectively implied to Tesco that helps in determining its effectiveness in order to attain
desired goals. Also, SAFe model has been implemented in regard to Tesco so that better
decisions can be made in regard to suitability, feasibility and acceptability. Tesco undertakes
different marketing strategies which are different as compared to its competitors and also faces
certain problems and issues with its marketing tactics as they possess the pressure of their rivals
at the time of making business strategies. However, Tesco possess its own brand identity in
market but still it faces problems of marketing such as price issues, new rivals, buyer shopping
behaviour etc. Further, Tesco undertakes different diversified marketing strategy such as STP as
compared to its rivals because it possess unique brand image in market. Club card is the best
marketing tool adopted by Tesco that helps them to give unique identity to their loyal consumers
and satisfy their needs. Also, it can be stated that marketing concept is encouraged in
organization then it is referred as strategic marketing. Furthermore, concept of marketing
depends on internal and external environment which facilitate proper formation of strategies that
can be beneficial for accomplishment of company’s objectives. Further, there are different issues
that were found in the enterprise such as lack of training and hiring mistakes, providing
ineffective customer service, threat of new competitors available in market, fluctuations in prices
etc.
Further, it has been founded that Tesco is undertaking STP process and thus provide
competitive advantage for firm in order to gain market share and brand image. Moreover, in the
current study both internal and external analysis has been carried out in order to analyze the
market environment. However, it can be assessed that business is required to use STP strategies
in order to implement effectual tactics for future course of time and thus implement within firm
to attain objectives. Business can become market leader through segmenting its client base and
providing them suitable products in order to satisfy their needs. Also, business positions its
strategy through social media marketing and attracts youth. At the end, report also provides
recommendation in order to counter the STP issues such as firm should provide advertising on

social media so that they can effectively communicate with consumers, benchmark effectual
customer relationship management so that best strategies can be attained.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 MARKETING ANALYSIS..............................................................................................1
Key marketing issues affecting the organizations strategic position and their significance. .1
TASK 2 UNDERSTANDING STP.................................................................................................3
2.1 Concept of Segmentation, Targeting and Positioning and their challenges.....................3
2.2 Tesco’s Segmentation, Targeting and positioning approach to gain competitive advantage
................................................................................................................................................4
TASK 3 STRATEGIC RECOMMENDATIONS...........................................................................5
3.1 Tesco improving its current approach to Segmentation, Targeting and Positioning.......5
3.2 Recommendations............................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Organization's marketing environment................................................................................14

INTRODUCTION
The present report is based on strategic marketing and relationship among corporate
strategy and marketing strategy of Tesco (Baig and Akhtar, 2011). Along with this, it also
focuses on internal and external environment encircling organization that it greatly impacts the
firm and its operations. At last the report covers some marketing strategies with their application
and implementation within company (Ambler, Kokkinaki and Puntoni, 2004).
TASK 1 MARKETING ANALYSIS
Key marketing issues affecting the organizations strategic position and their significance
After analysing the different marketing environment in the Appendix it can be assessed
that Tesco adopts different marketing strategies in order to promote business.
 Competition- Business owns around 30% of the market share in the UK retail industry
and aims to gain more consumers from home country and then concentrate to the other
countries so that they can enhance the customer base. For this they are making huge
investment in market and carrying out business operations. Tesco faces competition from
different retailers such as Asda, Sainsbury's Aldi, Morrison, Lidl etc as they are offering
products at low prices in order to attract consumers and satisfying their needs (Allio,
2005). Further, Tesco introduces new strategy in market i.e pay less for quality products
as compared to rivals.
 Loyalty card- It is an effectual marketing strategy adopted by business to attract
consumers and enhance market share. Tesco was the first retailer to introduce loyalty
card scheme for its clients. Tesco club card is the most effective marketing tool to
influence consumers and increase loyal customers in the business (Baig and Akhtar,
2011). Main importance of introducing loyalty cards is that it helps in providing benefits
to consumers and improve the business performance by attracting wide range of target
consumers and satisfying their needs.
 Pricing- Tesco faces tough competition from Wal-Mart which is a big competitor and
thus sells similar products therefore, it is essential for Tesco to cut its cost and negotiate
with suppliers in order to grow the market share. Also, firm uses diversification strategy
in order to expand the business into overseas market such as Tesco bank, insurance and
telecom services (Amalesh, 2011).
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 Business faces issues from the new entrants in market such as Wal-Mart as it buys Asda
in UK that raises main issue for Tesco as it needs to redevelop its marketing tactics.
Further, business faces issues regarding marketing as it is necessary for firm to develop
its marketing campaign because of wide range of competitors present in market and using
different promotional technique to enhance customer base. Thus, Tesco faces marketing
issues.
 Tesco faces issues at the time of targeting the market segment in order to sell the products
and services (Curtis, 2007). For instance, business targets their customers as per their
wealth through its club card database as firm has distinguished its customers on the basis
or rich and poor as per their earlier spending. Thus, here firm faces issues at the time of
targeting specific market and ignoring the rest of the market. For instance, if any body
building tonic is marketed by the company to only the gym going persons and not others
than it affects the needs of other people who need protein diet. However, it is essential for
business to market its products and services to the target market and for that firm is
required to undertake effectual marketing strategy. Thus, it faces issues for Tesco to
attain desired goals.
TASK 2 UNDERSTANDING STP
2.1 Concept of Segmentation, Targeting and Positioning and their challenges
However, it is essential to understand segmentation, targeting and positioning in such
competitive market so that firm can measure competitiveness in the market especially at the time
when competition is very high.
 Segmentation- Market segmentation can be stated as the method of sub-dividing the
market into different homogeneous sub sections of customers. Thus, through developing
particular marketing mix it helps in selecting a specific target market. However, it is a
process that helps in dividing the market into different sub groups of consumers with
same requirements (Islam, 2003). While carrying out segmentation, business tries to
separate the particular group of people with particular requirement and firm believes that
they will respond quickly to the product. Main purpose of carrying out segmentation is to
assess the particular group of people where possibility of selling the product is high.
Segmentation can be divided into demographic, geographic, behavioural and
psychographic. For instance, if Nike launches a new product such as athletic design shoes
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its focus is on sports persons such as cricketers in order to attract them for newly launch
shoes and gain high market share. Furthermore, market segmentation in the retail clothing
business are often based upon the gender such as Zara deals in fashion industry and thus
geographic segmentation is very crucial for Zara as they target young women to sell
fashionable clothing to them (Clark, 2000).
 Targeting- It is the process in which firm select such market segment and then design the
products and services in order to personalized for each segment. However, targeting is
not the same as market segment allows firm to focus upon the specific market which is
more likely to purchase the specific product from firm. For instance, Nike company
produces best athletic shoes and make the products targeting for the sports person or
other consumers who are fitness freak such as routine joggers, gymers etc. to buy the
products because they need such shoes for running (Rhee and Mehra, 2006).
 Positioning- Within such strategy it states that the business aim to focus its image in the
minds of consumers. However, it helps firm to carry out the process and attract
consumers to buy the product because of the brand image, reputation of firm in market.
For instance, whenever any consumer thinks of buying smart phone it thinks of Apple
iPhone as company has created such a unique position in the minds of consumers and
provide suitable products to attract large market share. Further, effective positioning
strategy helps in considering the cost, quality, flexibility and services of the product
which are unique from its rivals (Walter, 2011).
 Key issues with STP- STP can be stated as crucial marketing tool that helps firm to attain
goals. On the other hand, understanding consumer behaviour requires deep vision as it
helps firm to sell their products in market. Further, STP has its own issues which vary
from firm to firm or it depends upon their strategies they made. For example, in
segmentation it is difficult to select the demographic consumers as Zara mainly
undertakes demographic segmentation as attracts young women to purchase the clothes
(Pride, 2010). However, it is difficult to undertake physiographic segmentation of
consumer because female choice differs from one region to another. Thus, such issue
raises problems for the company.
 Furthermore, at the time of targeting a specific market it means that firm is ignoring the
rest of the market. Thus, it states that the market which is not targeted will respond
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quickly as compared to the target market. As Nike just targeted the athletic people rather
than other people who are fitness freak but they could respond to it quickly because of the
promotional campaign or celebrity attraction. Thus, company losses the potential
consumers while targeting the specific consumers (Jaakkola, 2006).
 Another issue relates to positioning strategy which arises issues because it is the
consumer perception towards the company therefore, it is essential for firm to make a
strong brand image or logo and develop a new message that helps in changing the mind-
set of consumers. Hence, it is crucial for firm to come up develop effective feature of the
product which already exist in the market in order to gain the market share and enhance
consumer base (Salaimeh, 2008).
2.2 Tesco’s Segmentation, Targeting and positioning approach to gain competitive advantage
 Segmentation of Tesco- STP marketing strategies is the best as it helps Tesco to analyse
the consumer base and sell the products and services. For instance, in order to launch
unique product of Tesco, it uses effective STP strategy and attract consumers. Firm uses
geographic segmentation i.e. UK as a region, demographic segmentation such as age,
gender such as focusing upon students or older people. Furthermore, psychographic
segmentation such as lifestyle of people and assess shopping behaviour of consumers in
UK market (Walker and et. al., 2006). For instance, Tesco provides products and services
for every age group and thus satisfy their needs.
 Targeting of Tesco- Business targets its consumers as per the wealth, thus it takes help of
club card database system that helps firm to divide its consumer upon different categories
such as rich and poor. It helps Tesco to differentiate their clients upon its different
categories such as Tesco Everyday Value and Tesco Finest product that clients can buy as
per their wealth. However, with the help of club card, company can determine the
spending behaviour of its clients and now customize its website in order to target
potential consumers as club card provides data regarding the loyal customers only (What
is Marketing Strategy. 2013).
 Positioning of Tesco- Business positions its products with the help of marketing mix
strategy in order to attract consumers in an effective manner. Tesco uses price positioning
strategy to sell its product range and overcome rivals. Firm also adopts competitors
positioning strategy in order to target right people by providing right price as compared to
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rivals such as LIDL, Asda, Wal-Mart etc. (Mentis, 2013). Tesco positions itself in the
minds of consumers by delivering quality products at affordable prices. However, it
carries out price positioning strategy which helps in developing effective prices as
compared to Lidl and Aldi and thus helps Tesco to enhance consumer base. For instance,
consumer should adopt Tesco for carrying out their shopping because they are providing
quality products and services at affordable prices as compared to other rivals such as Aldi
and Lidl.
TASK 3 STRATEGIC RECOMMENDATIONS
3.1 Tesco improving its current approach to Segmentation, Targeting and Positioning
Following are the current STP strategies that Tesco uses in line but in order to enhance it
to get high market share and attract more consumers. STP options Tesco may consider certain
recommendations options such as-
 Segmentation options- Tesco is required to consider behavioural segmentation within
segmentation strategies such as how many loyal clients with positive behaviour purchases
company's products. While, another option is Tesco is required to develop their
segmentation through analyzing consumer shopping behaviour as it has direct connection
within marketing process (Baig and Akhtar, 2011).
 Targeting options- Business is required to adopt effective targeting strategies in order to
target students or old people as per their product line but on the same side firm are not
able to target their loyal consumers and thus losing the same. Second option is that Tesco
could develop targeting strategy in order to target the business people as per their demand
of products through both ways online as well as walking in the store (Ambler, Kokkinaki
and Puntoni, 2004).
 Positioning options- It states that position strategies impact upon the consumers as Tesco
uses experiential positioning or product based positioning as the position is all about
dealing individual product of marketing mix. For instance, as per the CEO of Tesco it is
essential for firm to develop strategies through considering the qualities and quantities of
product and develop the brand in market. Business develops its products by considering
the target market and enhances the good quality product available at low prices
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(Drummond, Ensor and Ashford, 2013). Business uses effective measure such as
delivering quality products at cheap prices and thus attracts consumers to enhance sales.
 Tesco segment its market based on demographics and income level. Thus, it helps them
to segment its market i.e. old people and provide them required products in order to
satisfy their needs (Drummond, Ensor and Ashford, 2013). Tesco attracts targeted
segment as per their demographic and income level. For instance, firm is required to
attract each and every age people so that required products can be provided.
3.2 Recommendations
For company like Tesco, its marketing STP objectives are:
 Segmentation recommendations- As Tesco is enlarging its business activities it is
essential for firm to capture both home market and international market in order to attain
success. For instance, firm is required to grow its branches in India, Bangladesh, Pakistan
as there is no big retailers. However, business faces issues in UK market but in order to
overcome this, firm is required to expand its operations in worldwide market as it is the
era of globalisation and each and every competitor is trying to move outside the country
to enhance consumer base. Moreover, business is facing issues in the UK market as there
are high competitors available in business such as Aldi and Lidl and thus attracts
consumers by providing best discounted products.
 Positioning recommendations- It is essential for Tesco to develop quality product and
provide it at best prices as compared to rivals in order to build brand image in market. For
instance, because of such marketing strategy people buy Tesco's products and enhance
sales and profitability (Doole and Lowe, 2008). Targeting recommendations- Business is required to target the geographical segment
consumers outside UK such as India, Bangladesh as these economies are developing and
attract other target segment such as students in order to enhance market share. Business
adopts advertising strategy as it helps them to attract customers and capture high market
share.
Further, firm can apply SAFe model so that results can be attained-
 Suitability- Expanding in region like India is suitable for company as the country
possesses second highest population in the world after China. This gives huge
opportunity to company in boosting its sales volume. From this, the company is able to
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enhance its market share along with profitability which will assist it to sustain for longer.
Expanding in region like India will act as a base for company in South Asia through
which it can enter into nearby economies for example Pakistan and Sri Lanka (Wilson,
2005).
 Feasibility- Considering the feasible aspects of expanding Tesco in India, there exist
certain issues. India, being a democratic country, has a policy of 51% in the multi brand
retail which act as a barrier for Tesco. Due to this, Tesco need to enter into joint venture
with local company of India in 51:49 ratio. From this, profit from this market will be
distributed that leads to low return on investment. This is one of the limitation from
Indian market which will not be fruitful for shareholders. However, fact cannot be denied
that there is huge market opportunity in India as company retail sector here is highly
unorganized. Also, there is no international player in retailer which can give huge growth
rate to the company. Therefore, it is feasible to expand the operation of Tesco in Indian
market.
 Acceptability- In addition to it, recommendation of opening store in India is highly
acceptable from shareholder point of view as well. Through this market entry move,
Tesco will be able to conquer higher market share and growth potential.
CONCLUSION
Strategic marketing plays an important role for organization by aligning objectives of
organization with marketing goals to systematically gain company’s goals. The leading retail
firm Tesco is trying to overcome its losses in all its subsidiaries by providing products to
customers that are beneficial to them and satisfy their requirements.
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REFERENCES
Books and Journals
Allio, M. K., 2005. A Short, Practical Guide to Implementing Strategy. Journal of Business
Strategy. 26. pp.12-21.
Amalesh, S., 2011. Take-off of online marketing: casting the next generation strategies. Business
Strategy Series. 12(4). pp.202 – 208.
Ambler, T., Kokkinaki, F. and Puntoni, S., 2004. Assessing Marketing Performance: Reasons for
Metrics Selection. Journal of Marketing Management. 20(4). Pp.475-498.
Baig, V. I. and Akhtar, J., 2011. Supply Chain Management: Value Configuration Analysis
Approach: A Case Study. The Journal of Business Perspective. 15(3). pp. 251-266.
Clark, B. H., 2000. Managerial perceptions of marketing performance: efficiency, adaptability,
effectiveness and satisfaction. Journal of Strategic Marketing. 8(1). pp. 3-25.
Curtis, T., 2007. Marketing in Practice 2007-2008. Routledge.
Doole, I. and Lowe, R., 2008. International Marketing Strategy: Analysis, Development and
Implementation. 5th ed. OH: Cengage Learning.
Drummond, G., Ensor, J. and Ashford, R., 2013. Strategic Marketing. 3rd ed. Routledge.
Hussain, H. A. and Al-Ajmi, J., 2012. Risk management practices of conventional and Islamic
banks in Bahrain. Journal of Risk Finance. 13 (3). pp. 215 – 239.
Islam, M. M., 2003.Development and performance of domestic and foreign banks in GCC
countries. Managerial Finance. 29 (2/3). pp. 42 – 72.
Mentis, P., 2013. Tesco PLC's entry mode in the Slovenian retail market. GRIN Verlag.
Pride, W. M., 2010. Foundations of Marketing. Cengage Learning.
Proctor, T., 2013. Strategic Marketing: An Introduction. Routledge.
Rhee, M. and Mehra, S., 2006. A strategic review of operations and marketing functions in retail
banks. International Journal of Service Industry Management. 17 (4). pp. 364 – 379.
Salaimeh, M., 2008. Marketing Concepts; Segmentation and the Product Development Process.
European Journal of Scientific Research. 23(3). pp. 454-457.
Walker, O. C. and et. al., 2006. Marketing Strategy– A Decision-Focused Approach. 5th ed.
McGraw-Hill.
Walter, W., 2011. Developing more effective social marketing strategies. Journal of Social
Marketing. 1(1). pp.17 – 31.
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Wilson, R. M., 2005. Strategic Marketing Management. Routledge.
Online
Jaakkola, M., 2006. Strategic Marketing and Its Effect on Business Performance: Moderating
Effect of Country-specific Factors. [pdf]. Available through:
<http://www.stratmark.fi/wp-content/uploads/2006/11/Thesis_Jaakkola_FINAL.pdf>.
[Accessed on 19th November 2015].
Value chain model. 2013. [Pdf]. Available through:
<http://www.diva-portal.org/smash/get/diva2:230804/FULLTEXT01.pdf>. [Accessed on
19th November 2015].
What is Marketing Strategy. 2013. [Online]. Available through: <
http://www.1000ventures.com/business_guide/marketing_strategy.html>. [Accessed on
19th November 2015].
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Appendices
SWOT
Strengths
 Tesco is the market leader in retail sector
and deal within food and non-food
products.
 Business also expands its services in
international market such as Malaysia,
Poland, Hungry etc.
 Tesco uses strong marketing tool such as
loyalty card that helps in enhancing market
share.
 Business launches its unique selling
strategy of online marketing and gain high
profits.
Weaknesses
 Business faces high pressure on price as
there are rivals available.
 Company invest huge amount in buying
stores and thus take loan from financial
institutions.
 Tesco mainly depends upon the UK market
and thus the profits are affected.
Opportunities
 Organization possesses the opportunity to
enhance its business in international market
through carrying out joint venture.
 Tesco plans to grow its product range in
health and skin care market.
Threats
 Tesco faces price war among its
competitors.
 Entering into new market would raise
problems for Tesco.
 Business adopts aggressive marketing
strategy and thus it may be a problem for
firm.
Value Chain Model
Value chain analysis is defined as the analysis which provides connection between
values added activities and its intrusion in supporting activities. In inbound logistics company
make use of its leading market position for bargaining low cost materials from its suppliers. For
maintenance of low cost leadership Operations Tesco make use of information technology
systems and through its digital programs (ERP solutions) and achieved a profitability of £550
million in year 2009. The offline and online position of Tesco is sustained by its outbound
10

logistic that include its unique stores formats that are strategically used to attract huge customer
segment. Information technology helped company to introduce loyalty programs like Tesco club
card that retains customers as well as enhance sales. The above dual strategy is necessary for
development of financial services and self-service kiosks (Drummond, Ensor and Ashford,
2013).
Internal analysis also includes performance analysis that is necessary for noting the
pathway or direction in which company is moving on. The functional analysis is necessary to
assess the current abilities of organization and suggest improvements which can be added into it.
Illustration 1: Value Chain model
(Source: Value chain model. 2013)
External Environmental Analysis
External analysis is important in order to know the external conditions of market that can
provide opportunities to organization as well as threats that can influence operations. This can
be completed by analysing macro and micro environment of company (Hussain and Al-Ajmi,
2012).
Porter’s five forces model
Porter’s five forces is undertaken to find effective sources from which competitive
advantage can be gained in recent time period. For competitive analysis of Tesco Porter’s Five
Forces can be undertaken- Bargaining Power of Customers (High)- The main issue is that there are varied
competitors available and thus consumers possess high bargaining power. Therefore, it is
essential for business to build high number of price promotions in order to attract
11

consumers towards firm. The main significance for Tesco is that they need to adopt
Squeezed margins so that they can decrease their profits and provide products at lower
prices in order to grab attention of consumers. Here, buyers switch to other products
when they find products suitable and standardized with competitors. Therefore, the
bargaining power of customers is high in retail market (Mentis, 2013). Threat to Substitute Product and Services (Low)- In the retail market threat from
substitute product is minimum for food items and medium to high for other products.
Tesco offers high quality products and at affordable cost which make the firm attractive
to customers (Islam, 2003). Threat to entry of new competitors (Low)- In case of food items the threat of new
competitors is low as if comparison is made on the basis of other products. The major
competitors of Tesco in retail industry are ASDA, Sainsbury and Morrison and together
they account for 80% of shopping overall in UK market. Therefore, in this situation new
competitors need innovative ideas to place itself in market. Bargaining Power of Suppliers (Low)- As suppliers are losing market with large
supermarkets which give an opportunity to companies like Tesco and ASDA to negotiate
in prices and gain advantages.
 Intensity of Rivalry (High)- In UK market the intensity of rivalry is high for food and
retail industry and thus Tesco has to face strong competition from ASDA and Sainsbury
in every term of price and promotional strategies (Pride, 2010).
PEST ANALYSIS Political- The political factors consists of political parties that rule the country and the
yearly change in these parties consequently affect the operations of organization both in
case of domestic operations and for diversification (Proctor, 2013). Economic- Economic aspects covers various income groups, population, GDP of the
country which a company needs to analyze before going for diversification or applying
marketing strategy (Rhee and Mehra, 2006). Social- Social analysis of UK shows that more than half of the population in UK is of
retired people and this demotivate the food retailers like Tesco by eating less food.
 Technical- Tesco Company entails loyalty programs and digital programs that helps firm
to sustain client for long term (Salaimeh, 2008).
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KEY MARKETING ISSUES
 Further, the UK retail market is becoming more competitive therefore, it is essential for
business to capture high market by providing products at low prices. Here, Tesco
management faces issues as UK retail market is highly competitive and thus businesses
are forced to become price sensitive in order to enhance customer base.
 Other retailers provide additional discounts to enhance consumers. It is another marketing
issue faced by firm i.e. other competitors such as Wal-Mart, Asda and Lidl provides
varied discount schemes in order to attract consumers thus it affects Tesco in the form of
decreasing market share.
 Competitor issue- It is the main issue that affects Tesco because Wal-Mart take over
Asda in UK and thus raises issue for company to attract right consumers and enhance
market share. Thus, Tesco focuses upon building and restoring the price reliability in
market by selling the products at reliable rates and attract high consumer base (Doole and
Lowe, 2008).
Organization's marketing environment
In the current study the issues have been assessed regarding selecting and lack of
training, ineffective customer service, reputation damages and high prices. Thus, it is essential
for firm to overcome such challenges in order to attain desired goals. Strategic marketing play an
important role in Tesco by assisting it to choose the right products to meet the customers need.
This process is necessary in formulating marketing plans by making strategic decisions that
ultimately adds to implementation of marketing process in organization (Curtis, 2007). It assists
top management to outline and sharpen their mission that is embedded in marketplace and
abilities of their company. Consequences of strategies can be known only after their execution
and suggest the management of Tesco to further continue with that or not (Clark, 2000). It can be
assessed that from the report it helps in analysing the different issues that have been found such
as financial issues, market issues etc. so that best results can be attained in order to overcome it.
Further, STP has been developed in order to attain competitive edge over other rivals. It also
helps firm to develop best brand image in market and achieve desired targets. Further, business is
required to implement varied strategic approaches that helps them to enhance their segmentation,
targeting and positioning within firm and thus attain desired targets (Amalesh, 2011).
13

Internal Environmental Analysis
The resource based analysis reveals the capabilities of firm for conducting all business
activities. Tesco uses such an approach for analysing the strengths and weaknesses of company
and how it can be useful to organization for implementation of marketing strategies Doole and
Lowe, 2008).
Integration of Internal and External Analysis
After proper analysis of internal and external aspects company can assess the internal and
external opportunities and used to make situations positive for the organization. It is very
important that all primary activities of the Tesco must align with supportive activities to retain
customers. However, it can be assessed that both these analysis assists in carrying out the
marketing environment audit and attain best results (Walker and et. al., 2006).
Marketing strategies underpins marketing plans and activities of company so that it can be
assessed that what Tesco does and what are its USP (Unique Selling Point). Thus, it can be
helpful to Tesco for making strategy that underlines company’s mission and objectives (Walter,
2011). Being a marketing consultant it can be assessed that there are varied issues related to
marketing which has been faced by firm. It also affects firm's operation in order to gain strategic
position in market. However, it is essential for firm to overcome such issues so that they can
achieve desired competitive advantage. Following are the marketing issues that affects the
business strategic position are discusses as under- It is essential for the top management of Tesco to select the right product and service in
order to meet the consumers demand. For instance, in order to accomplish such goals,
Tesco needs to determine the requirements of consumers and thus develop such products
so that best marketing tactics can be implemented in order to attain desired goals. Also,
top management is required to outline the mission objectives so that they can enhance its
market position in market. Management is required to execute effective policies so that
growth can be continued (Walter, 2011). For instance, in order to attain maximum results
in market it is essential for Tesco to obtain online presence so that they can deliver the
products and services faster to clients and give tough competition to rivals. Selecting and lack of training- It can be stated that business faces serious issues regarding
selecting the personnel and provide them training in order to provide them satisfaction.
Therefore, it is essential for the management of firm to adopt best practices so that
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selection and training and development can be given to employees and attain results.
However, if business lacks in selecting capable candidates and also provide them
ineffective training so that it affects the operations of firm in market. Ineffective customer service- However, Tesco is not able to provide effectual customer
service that leads to dissatisfaction among clients. Thus, it is essential for workers to
determine the needs of clients and provide them required products in order to attain
customer satisfaction (What is Marketing Strategy. 2013). Further, if employees are not
effectively trained then they are not able to provide the best consumer service and thus
decreases the productivity of firm. High prices- It is another challenges faced by Tesco that affects them in the form of
declining market share. Hence, it is crucial for firm to provide best prices so that results
can be attained (Jaakkola, 2006). If business charges high prices then it affects the firms
operations as compared to competitors. Therefore, it is essential for firm to charge low or
minimum prices from rivals to enhance the sales.
 Reputation damages- Further, business is required to focus on its enhancement of
customer in order to attain better reputation. However, it has been noticed that promise as
not been met and thus it results in diminishing the brand image of firm in market
(Wilson, 2005). Moreover, if firm does not focuses on its reputation that it reduces its
client base and therefore, it is essential for firm to improve the brand image to attract
clients.
Thus, it can be assessed that unskilled sales representatives and cultural issues are the
main highlighting issues that need to be prioritized by Tesco in order to attain desired outputs.
However, business is required to provide the best training and development to its workers so that
they can enhance their skills and abilities with the aim to satisfy needs of clients (Amalesh,
2011).
It involves different strategies that can be used by firm in order to attract consumers.
These strategies are Segmentation, targeting and positioning. For instance, it is essential for
Tesco to use all these strategies as they are beneficial for firm to conduct its operations and
achieve high sales and profitability. Tesco, segment its market based upon demographic and
income level. However, the effectual segmentation criteria involves certain measurable point
such as measurable, accessible, sustainable and differentiable (Jaakkola, 2006). Within
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measurable point it involves size of population or purchasing power of people like Tesco possess
high customer base of old people in UK therefore, it is essential for company to adjust its product
accordingly in order to fulfil the needs of consumers. Then it is essential for Tesco to develop
effective strategy so that business can effectively focus upon the selected market and sustain
within it. Also, it is crucial for Tesco to distinguish its target segment upon different parameters
and then apply marketing strategies to achieve organizational goals. Furthermore, after proper
segmentation, targeting and positioning can be done, Tesco can be easily accessible to
consumers within both domestic and international market.
It is essential for business to analyze its target consumer market. There are three main
issues that need to consider when determining the target market. It is as follows-
 Segmentation- Following are the varied ways that helps in segmenting the target market.
It can be categorized into demographic that focuses on the features of clients such as age,
gender, education and cultural background etc. (Allio, 2005). Furthermore,
psychographic segmentation can be stated that it refers to the individual lifestyle such as
social class, personality and attitudes and so on. Geographical location needs to be
selected by business for operating its function and also it should be favorable to the target
market like country, continent and state where the target market resides. At last,
behavioral aspects is based on consumer behavior that states that firm is focusing to
operate its business on the basis of consumers such as online shopping, mall culture etc.
Here, the main challenge faced by Sainsbury is that they find difficulty in analyzing the
behavior of consumers regarding their attitudes and beliefs. Thus, they need to focus on
that and provide the best solution so that results can be attained. For instance, there is any
travel agency that provides worldwide adventure holidays. However, segment A
comprises young couples who are married while segment B consists of middle class
families and segment C is high class retired people. Thus, firm provides them travel
packages as per their choice (Baig and Akhtar, 2011). It can be evaluated that challenges
faced by firm is that they are not able to identify the right segment to target and thus face
challenges so that it needs to be overcome to attain desired goals. For instance, Apple is
required to identify its target market i.e. upper class people and thus provide them
necessary products with effective marketing strategies in order to attract them towards
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firm. Also, Asda is attracting people from different age groups such as young, old and
children by providing them required products for their use and attain satisfaction.
 Targeting- It is divided into different categories in order to select the target market.
Undifferentiated targeting is the approach that helps in viewing the market as one group
with no individual segments. Concentrated strategy helps in focusing on selecting a
particular market niche on which business puts its efforts (Clark, 2000). Here, Sainsbury
faces serious consequences in regard to target which market so that they can provide
them maximum profits. For instance, Adventure travel company assesses that its profits
and revenue from all the three market segment. Here, business faces problems or
challenges selecting the appropriate targeting strategy so that sales can be enhanced. For
instance, different marketing theorists states that Apple targets the differentiated market
so that it has a complete range of target customers I..e high class people and thus it
decides the price range accordingly. While, Asda decides its targeting tactic as per
undifferentiated targeting so that it can concentrate on different target market as per their
paying capacity and thus increase the market base. However, as per my opinion it is
essential for business to adopt undifferentiated marketing strategy so that they can
increase consumer base and thus enhance profits and sales. However, if they stick to one
single target market then it is difficult for business to achieve results.
 Positioning- It helps in developing the brand image of firm in the minds of consumers.
Further, business can positively influence the needs of selected target market so that best
results can be attained (Curtis, 2007). Moreover, it is crucial for business to position its
brand image in market as there are varied competitors available therefore it needs to
select best strategy to attract them. For instance, the positioning done by Apple in the
minds of consumers is that it is a status symbol for people who uses Iphone. Therefore, it
has separate target market and thus they focus on to fulfil their needs. While, Asda has
positioned their image as providing every product for every age group. Thus, as per my
view it helps in satisfying the needs of larger number of people and attain goals.
Furthermore, it can be assessed that STP is best done by businesses through matching
their target market as compared to firm's current core competencies. Thus, it helps in attaining
desired targets and thus achieve competitive advantage of firm in marketplace. With the help of
effective STP it helps business to assess its core competencies effectively and thus achieve
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desired targets. Also, it assists businesses to target a different market and then position their
product effectively in order to meet the needs of that target segment so that business can flourish.
Tesco undertakes effectual STP strategies in order to attain competitive advantage in
market both strategically and competitively. However, the internal and external environment
helps firm to assess its opportunities and develop strategies so that best results can be attained.
Thus, Tesco can become market leader and overcome competitors. The management of business
is required to develop effectual marketing strategies on functional level so that implementation
can be done effectively and efficiently. Through, implying STP it helps firm to gain high market
share. It also helps in minimizing the risk by following government regulations and laws and
achieve desired goals. Companies can make use of above following strategies in order to gain
advantage both strategically and competitively. The internal and external environment can help
company to analyze its opportunities and simultaneously design strategies. Tesco can become
leader continuously for future time as well. With available resources in form of assets company
can make strategies and progress (Pride, 2010). It can be stated that Tesco is required to
implement STP in order to improve its current approach and thus achieve competitive edge over
other. Tesco wants to become market leader in retail industry as it is leading in market recent
time. So the need of company is to revise its strategies according to market and maintain its
position for future time (Jaakkola, 2006).
Recommendation
By developing current approach of STP it helps Tesco to attract more number of
consumers both existing and new so that their needs can be satisfied. However, business provides
them quality products at affordable prices so that best results can be attained in the form of high
profits and market share. Further, Tesco aims to become market leader in retail sector and thus it
can be achieved through following its STP strategies and become best retail organization. Also,
firm is required to develop effectual strategies in order to attract target market and thus position
them within future market. Tesco marketing team is required to develop marketing strategies so
that consumers can be attracted and overcome different competitors such as Morrison, Sainsbury
and Asda. It helps firm to develop brand image in the minds of consumers and thus enhance the
sales of firm in market. This is helpful in obtaining competitive advantage by knowing market
and minimizing risk associated with it.
Further, firm can apply SAFe model so that results can be attained-
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 Suitability- It is essential for Tesco to achieve overall objective of the implemented
strategy so that best relationship can be developed with each other. Management of Tesco
design the strategy in order to enhance the market share and deliver best value to
consumers (Wilson, 2005). For instance, it is essential for marketing team of Tesco to
determine the needs of its target consumers and thus provide the suitable products so that
their needs can be satisfied. Thus, such strategy helps in attaining customer satisfaction
and achieve organizational goals.
 Feasibility- Here, Tesco possess feasibility strategy so that internal analysis of company
could be done and capabilities can be assessed. However, it helps Tesco to gain
competitive advantage in market by overcoming the rivals. Business is also required to
enhance its product range and target new consumers so that market share can be
enhanced.
 Acceptability- Further, the proposed strategy is required to meet the expectations of its
stakeholders or not. For instance, here stakeholders are divided into four different groups
such as economic, social, technological and community stakeholders. Thus, Tesco
delivers its products range as per the requirement of such consumers and attain
satisfaction.
It can be assessed that business is required to use STP strategies in order to implement
effectual tactics for future course of time and thus implement within firm to attain objectives.
Business can become market leader through segmenting its client base and providing them
suitable products in order to satisfy their needs. Further, Tesco adopts social media networking in
order to improve its brand image in market as more and more consumers know about the firm
and purchasing the product (Walker and et. al., 2006).
 Interacting customer through social media- It can be stated that business is required to
connect with consumers through social media so that best relationship can be developed.
Further, it is essential for Tesco to provide information through such medium so that they
can save their cost and time. Through adopting social media strategy it helps to interact
with target people. It helps in interacting with target market i.e. young people. Benchmarking to attain successful customer relationship management- It is essential for
management to set benchmarks so that their employees are able to provide effectual
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customer relationship management. It helps in satisfying the needs of consumers and thus
attain satisfaction. Revised pricing strategy- Further, it is crucial for firm to revise the pricing strategy so
that firm can undertake effectual tactic in order to increase the market share. Increase and retain customer’s base: The main STP objective of Tesco Company is to
increase customers and provide them a huge range of products. Become market leader: Tesco wants to become market leader in U.K as well as in
overseas market (Walter, 2011).
 Provide products of varied range: Company wants to make innovative products and
satisfy customers globally.
There are several strategies which can be used by organization to market its product to
customers.
 Business undertakes different targeting methods such as television, newspapers so that
old people can be targeted and thus provide them information regarding the products
available in order to enhance the sales and profits. Tesco targeted different segments
through adopting different methods such as promotion and enhance the sales and profits.
Firm position their brand image in the minds of consumers through squeezing their profit
margins and thus attract old people to purchase the products from Tesco (Islam, 2003). Tesco
targets each and every target group so that they can provide them attractive products and enhance
sales.
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