Principles and Practice of Marketing of Tesco

Principles and Practice of Marketing

Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
Task 2...............................................................................................................................................9
Task 3.............................................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Introduction
Marketing is a broad process that includes research, product design, development and promotion
of products and services. The various function is performed under marketing such as marketing
mix, customer retention, research and development and promotional mix. In this report the
marketing mix strategy of the Tesco company have been discussed and its implementation, in
order to find the companies' ability to expand its business in Brazil(Evans and et.al., 2018).

Task 1
SOSTAC marketing strategy
SOSTAC is a planning model, developed by PR Smith in 1990 to help in marketing planning. It
stands for :
S – Situational Analysis
O – Objective
S – Strategy
T – Tactics
A – Action
C – Control
1. Situational analysis : Situational analysis provides an overview of the organisation. That
what we are, where we stand, what are the product and how we communicate.
Tesco is the largest retailer in UK and 3rd largest retailer in world. Tesco operates its business in
many country like India, South Korea, Pakistan, UK, Malaysia, Hungary, Poland, Ireland etc.
Tesco starts its business in Brazil also but because of walmart, Tesco has to wind up its business
in Brazil. Now Tesco again wants to establish there business in Brazil by proper marketing
strategy. Tesco deal in various product like food, grocery, books, clothing, furniture, software,
toys, petrol etc.
Political and economical factor : Tesco creates job opportunity for the population of UK
because of the government factor. To expand its business it mainly used the method of joint
venture and acquisition. These reduces cost and time of training and staffing of the employees.
To establish there business in Brazil they have to study the political environment. The population
of Brazil is increasing day by day and the unemployment also increase. There is a huge

opportunity to open a supermarket in Brazil because of the government support and it also
creates job opportunity for the country population. The growth rate of GDP was also lower in
Brazil. To open a supermarket in Brazil also help them to increase there GDP rate.
Sociological and Technological factor: The habit of customer in UK is to buy goods and
services according to there belief and attitude. The advance technology also change the buying
behaviour of customer. Now they use the credit card and online shopping to purchase the item.
To start business in Brazil, Tesco has to apply many strategies due to these changes. Tesco can
use the vouchers and extra reward points on using the credit card to attract the customer((Alon
and et.al., 2016)).
Legal and Environmental factor : Tesco committed to reduce the carbon footprints by 50% in
2020. Tesco organise many events to increase the social conscience in customer. Tesco also
apply different approaches to reduce the waste in the organisation and environment. It uses the
paper bag instead of plastic bag in there store to reduce the environment pollution.
To start business in Brazil, Tesco also has to focus on the legal and environmental factor. To
start business in Brazil it took 11 procedure and 90 days on an average. It is easy to start business
in Brazil. Tesco can use the block chain technology to solve the health issue. Tesco also has to
understand the different law of Brazil for effective implementation of strategies.
2. Objective : The aim of Tesco is to open a supermarket in Brazil. The objective of Tesco is to
sell, serve, speak, save and sizzle.
To achieve the 2.5% market share Tesco may adopt 5s strategy in Brazil in which sell refers to
growth and development of business. Serve refers to provide better services to the customer.
Tesco can provide the home delivery service to capture the attention of the customer. They can
use the online promotional techniques to reduce there expenditure.
To achieve sales of £25 per year they can use different promotional scheme and discounts to
increase there sales.
3. Strategy : Tesco use porter five model strategy in their organisation. These help to find the
new threat, bargaining power of customer, bargaining power of suppliers, close substitute and
threat of competitor in the organisation.
Tesco can use the porter model to analysis the market situation of Brazil. This model also helps
to find the competitor strategy. To reduce the transportation cost, Tesco may cop up with the
local brand and purchase the raw material from them. It can also collect the data from this local
brand to research the market and may appoint some local agents. They can use the differentiation
strategy to differentiate their product in market and provide a better and good quality goods to

the customer. Tesco can add some additional services, provide cheap and better quality product
to attract the customer and achieve the objective of organisation(Herrmann and et.al., 2017).
They can also use the STP technique to capture the market of Brazil. They segment the market
by age, income, gender and occupation and provide the product. They can target the youth of
Brazil because 62% Brazilians are below 29 year. They can target them by providing the latest
technology and fashionable product. They can use the different channel like social media to
target there customer. By providing better quality product and services they can position the
market.
4. Tactics : Tesco use different tactics for successful implementation of strategies in the market.
Tesco analyse different tactics by using 4 p's of marketing mix. Product, price, place and
promotion are the 4p's of marketing mix.
Product : Tesco has wide range of product like food and beverage, grocery, petrol, gaming,
technology, software, bakery and frozen food etc. To establish a supermarket in Brazil Tesco can
increase there product width and provide variety of product to the customer. They can offer
discounts and free product on extra purchase strategy to capture the attention of customer in
initial stage.
Price : The pricing tactic for Tesco is to manage the cost and time. To minimize the cost they
can use the social media for advertisement and promotion. Tesco follow the cost leadership
strategy in there organisation. They provide lower price good with quality.
They can purchase raw material from local retailers to minimize their transportation cost and
time. By reducing the transportation cost they can reduce the overall cost of the product and
provide them on lower price. They can also take feedback from the customer of Brazil. They can
use the online way to sell there product to reduce the promotional cost. The income level of
Brazilian is low because of the unemployment. The inflation rate is increase from 3.89 to 4.58 in
2019. By providing the product at lower rate they can easily capture the market.
Place : Tesco has more than 6900 store in 11 countries such as Tesco Metro, Express,
Superstore, Extra etc.
To open a supermarket in Brazil, Tesco can open physical store in public place. So the customer
get attracted and easily reach to the store. It also helps to check the quality of product and make
them more reliable. They can also open online store to provide various product. It helps them to
capture the wide range of customer and also reduces the physical barriers. They have to build the
physical store in public places like near hospitals, office, station and cinema halls.

Promotion : Tesco can use different techniques for promoting there product like using social
media, advertisement, mail marketing and digital marketing. Tesco also has a loyalty Clubcard
for there premium customer.
Tesco can use this loyalty Clubcard in Brazil also for there premium customer. In loyalty card
premium customer get the point and by redeem this point they can get the extra discount on there
purchase. It helps them to promote there services and goods.
Action : Action refers to proper implementation of the strategies. These also help them to
manage the risk of the organisation.
Gantt bar chart in marketing
Month Jan Feb Marc
h
April May June July Aug Sep Oct Nov Dec Budg
et
Activities
feasibility
100k
Research +
feasibility
100k
Recruitme
nt
50k
Supplier +
engageme
nt
1
milli
on
Stocking +
opening
100k
Control : Controlling is the method to regulate all the activities and strategies of the
organisation. Tesco apply the 5s strategies in their business to get the successful result. It also
took regular review and opinion from the customer to effective implementation of the strategies
and change some plan if they needed.
For effective implementation of supermarket in Brazil Tesco can use decentralized method. It
reduces the time of supervision and also delegate the works. It provides authority to lower level

management which motivate them to work hard. They have to set clear standard for achieving
the objective and create image in the mind of customer. They have to regulate the performance
of organisation regularly so they can find the obstacles timely and solve them to reduce the
hurdles. It also helps them to diagnosis the problem in the organisation and buying behaviour of
customer. It also helps them to take the corrective action and understand the market situation. It
helps Tesco in effective establishment of supermarket in Brazil(Tabrizi 2015).

Task 2
Situation of the company :
Tesco is a large retailer in UK of groceries and merchandise. It provides its services in four
manner extras, superstore, Metro and express. Currently it has 83 Tesco extra stores, 447
superstores, 161 metro stores, 277 Tesco express stores and it has recently acquired 917 t & S
stores. Tesco is a star company means it is one of the fastest growing company but it becomes
cash cows sometimes to retain their position. It operates 1878 stores in the UK and plans to open
184 stores worldwide.
At present the only threat to Tesco is that if any of the competitor captures 25% share in the
market than monopoly position will be in danger. Tesco claimed that “our share of the total
market is just is 12.3 % and there is lot left to go for”. According to the competition law which
states that their must be fair competition in the market it can be done by regulating anti-
competitive conduct by companies. The company cannot should not hold more than quarter off
Uk market but the study conducted by Sunday times shows that the Tesco has break this limit in
approximately 325 areas in UK(Atkinson 2016).
Objective of the company :
The mission of the Tesco is to be the “champions for the customers, helping them to enjoy a
better quality of life and an easier way of living”. The company understands that the consumers
want better product at low prices and they make an effort to do it accordingly.
The core purpose of the company is to “serving shoppers a little better everyday ”(Smith 2015).
Stratergies and Tactics used by the company :
Tactics used by the Tesco :
 Pricing strategies of Tesco: the company provides its products and services of the best
quality at low price. The company maintains a strong relation with the suppliers to make
the supply chain efficient and maintain the low pricing stratergies for its product and
services.
 Place: Tesco uses two channels for the distribution of its goods and services i.e., offline
and online channel. It has 6809 offline stores across the world.
 Promotion: mage of the Tesco in the retail industry is very strong which helps the
company to successfully carry its promotional activities. The company uses various
media outlets such as television, newspaper, magazines, radio etc.
 Products: Tesco provides variety of products such as groceries, stationary, clothing, foods
and various other products. Tesco provides products of various brands and the its own

products as well. Everyday value, Tesco lotus, Tesco value, F & F clothing are some
brands of Tesco.
Tesco is helping the customer by providing them products at an affordable price. Many people
are now shopping from Tesco ,the loyalty of customers are increasing for Tesco and in UK about
260,000 peoples are buying products from Tesco stores. The various strategies made by the
Tesco in order to make the customers feel more valued :
 providing a healthy food to the customers by removing 4,100 tones of sugar from there
products under the “little help to healthier living” campaign
 “weekly little help” : under this the customer save money on everything they buy from
food to fuel
 covering cost of the 'tampon tax' for the sanitary pads in UK
The Tesco has also launched various new brands such as Hearty food cooperation. And H.W.
Neville for its customer which include prepared meals, pasta etc.
In order to maintain sustainability they prepare some plans which include providing a healthy
food to the customers, quality products in affordable prices.
The Tesco has also maintained a healthy relation with the supplier, in a survey suppliers were
asked about the behaviour of the company towards the suppliers and around 83 % of the
suppliers of UK say that they have been treated fairly. The company also helps the suppliers for
the investment in innovation(Stead 2018).
Analysis and control:
Tesco uses various methods to evaluate its performance such as I) clubcard scheme :which is a
used to do research by means of telephone and ii) online panel of customers :to know the needs
of the customers and to check that whether the customer is satisfied with the performance of
Tesco.
The performance of each unit is evaluated and is reported monthly to the board of director. For
evaluating that whether a company is achieving its key business objective the company use KPIs
which is Key Performance Indicator, which helps in comparing current performance of the
company with the previous performance and help the managers to take the desired action(Wu
2018).
Task 3
Business culture in Brazil can be defined as a diversified culture. An important factor to be
considered before doing business in Brazil is that, most of the businesses in Brazil is engaged in

family business. Brazilian companies are vertically organised and in the absence of any higher
authority the senior member of the staff make the decision. The work culture of Brazil is quite
different from other culture. One has to understand the culture of other country in order to avoid
cultural differences(Othman and et.al., 2019).
The current market strategy which is prevailing in the UK can be applied in the Brazil as well.
The various factors show the reason behind the implementation of the following strategies in
Brazil market:
1. Low pricing strategy : Applying the low pricing strategy in Brazil would be beneficial for
the company as Brazil is a developing country. The recent strategies have showed that the
Brazilians are abandoning the brands in search of products of low prices so it is a great
opportunity for the company to expand its business there as the company serves the
products at affordable process and they are inclined toward buying more groceries.
Brazilians is always inclined towards the foreign product as a sign of wealth.
A huge no. of customers buy the product online which is also a good sign for the
company. Brazilians are more aware of the product quality which will help the company
to increase its consumer and gain consumer trust and their loyalty towards the company.
2.Promotion strategy :
 In Brazil everyone watches TV mainly during the Telenovela is on prime time and
during the any sports events in which country participate so by showing advertising
during the gap can help the company to grab the customer attention
 Newspapers like “O Globo” which is the second largest paid newspaper in Brazil can
help the company to print its advertisement
 Brazilian market is one step ahead of Latin market with 20 million regular internet user
which can be helpful for the company in advertising its products
The modes of advertisement discussed above can help the company in promoting its product and
services. As the company has already been using this mode of advertisement it will be helpful for
the company to promote the products by same mode.
3. Place : 52 % consumers of Brazil uses internet, media technology and social media for
the shopping purpose. The online shopping of clothes, groceries, and other necessary
products is high but the online shopping of food is not much popular in Brazil(Abdulla
2018).

4. Products : As already discussed Brazilians are in more found of groceries and high
branded products at an affordable price the company is eligible to meet the demand of the
Brazil population as it provides every necessities of the consumers at affordable price and
a healthy food too.
5. The another opportunity for the Tesco in Brazil market is that the Brazil population is
suffering with obesity about 52.6% of men and 44.7 % of women are overweight. The
people of Brazil is demanding for healthier food despite of low cost and the government
of Brazil has also launched the campaign to aware the people about the healthy eating
habits and physical activities and as the Tesco believes in providing healthy food to the
customers it will help the company to get higher amount of customers and high
profitability from the Brazil market.
The company should apply here standardisation strategy which implies using the same range of
products, pricing, promotion, and place strategy. It means using the same strategy across the
countries and the various cultures. As the company does not have to innovate any new products
to meet the needs of the Brazil market as the products the company currently selling meets the
demand of the Brazilians(Tregear, R., 2015). The main concern of the population and the
government of Brazil is obesity among the population so under the campaign “little help to
healthier living” run by the company will provide a healthy food to the consumers.
Conclusion
SOSTAC is marketing model which helps to analyse the market and the current position of the
company. The SOSTAC model shows that the company is eligible to expand its business in
Brazil also as it has various opportunities in the Brazil market as the company does not have to
invest much in order to expand its business in the Brazil same strategies which the company is

currently using can be applied in market as the products and services provided by the company
perfectly matches the need of the Brazil market.
References
Books and Journals
Evans and et.al., 2018. The lean supply chain: managing the challenge at Tesco. Kogan Page
Publishers.
Atkinson, D., 2016. CONCEIVING A MARKETING STRATEGY IN THE ERA OF
DYNAMIC CAPABILITIES. Economic and Social Development: Book of Proceedings.
p.386.

Smith, P., 2015. SOSTAC®: Guide to Your Perfect Digital Plan''. PRSmith, USA.
Tabrizi, S. and Kabirnejat, M., 2015. Management, Strategies, Tools, and Practices in
eMarketing. Journal of Knowledge Globalization. 8(2).
Stead, M. and Hastings, G., 2018. Advertising in the social marketing mix: getting the balance
right. In Social Marketing.(pp. 29-43). Psychology Press.
Wu, Y.L. and Li, E.Y., 2018. Marketing mix, customer value, and customer loyalty in social
commerce: A stimulus-organism-response perspective. Internet Research. 28(1). pp.74-
104.
Othman and et.al., 2019. The influences of service marketing mix on customer loyalty towards
Umrah travel agents: Evidence from Malaysia. Management Science Letters. 9(6).
pp.865-876.
Herrmann and et.al., 2017. Dynamic capabilities: fostering an innovation-friendly environment
in Brazil. Revista de Administração de Empresas. 57(3). pp.283-287.
Abdulla, N., 2018. Brazil's Africa policy: Continuities and changes.
Alon and et.al., 2016. Global marketing: contemporary theory, practice, and cases. Routledge.
Tregear, R., 2015. Business process standardization. In Handbook on Business Process
Management 2. (pp. 421-441). Springer, Berlin, Heidelberg.

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