Principles and Practices of Marketing

This report explores the principles and practices of marketing, focusing on the promotional mix strategies employed by Tesco, the world's largest British retailer. It discusses advertising, direct marketing, and public relations, and examines the impact of these strategies on Tesco's sales and market share. The report also highlights the importance of corporate social responsibility activities in building a positive brand image. Overall, it provides valuable insights into the marketing strategies used by Tesco to achieve success.

Running Head: Principles and Practices of Marketing
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Principles and Practices of Marketing
Report
Student Name
3/18/2019

Principles and Practices of Marketing
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Table of Contents
1.0 Introduction.....................................................................................................................................2
2.0 Task 1 - Promotional Mix.......................................................................................................................3
2.1 Advertising.........................................................................................................................................4
2.2 Direct Marketing................................................................................................................................7
2.3 Public Relation.................................................................................................................................11
3.0 Task 2 - Promotion strategies..............................................................................................................13
3.1 AIDA Model......................................................................................................................................13
3.2 Above and below the line activities.................................................................................................14
4.0 References...........................................................................................................................................16

Principles and Practices of Marketing
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1.0 Introduction
TESCO is a supermarket chain of UK and is the world largest British retailer in term of sales and
market share. The company was founded by Jack Cohen in 1919 as a grocery shop later on it
expanded into other sectors. TESCO has 3,739 stores in UK in 2017 and 500,000 people are
employed worldwide in 7000 stores and its product portfolio includes food and beverages,
clothing, home appliances and financial services (TESCO, 2019). Most of the company profit is
generated through the sales in UK and some other from European and Asian countries. The
biggest competitors of TESCO on the basis of market share are Asda and Sainsbury. The current
scenario in this retail industry is that most of the customers are attracted towards discounted
outlets such as Lidl or Aldi which is affecting the sale of these big giants in high street
supermarkets (Vizard, 2018).
Tesco took a step to take over the food wholesaler Booker for £4bn, this major step was taken to
survive in the market and to respond the challenges the retail sector faced. Merger and
acquisitions become the way to compete in the market and to grow market share. The deal with
Booker gave an edge to company by accessing to wholesale market that is growing faster than
retail sector (Rovnick & Odell, 2018). The company focuses on consumer needs through its two
core values; no one tries harder for consumers and, treats people how we like to be treated. Tesco
follow different schemes to promote their brand in different countries firstly through spending in
advertisement that include banners, billboards, television and print media. The loyalty scheme
Club Card for customers is another way of promotion. Indeed they use direct marketing to
connect with people and to make an emotional touch with them (Turner, 2016). All these things
basically connected with the implication of practical theories of promotion that are AIDA model
and above and below the line activity.
The aim of this project is to evaluate the different promotion mix strategies of the Tesco and its
practical implication. In the first task, promotion mix would be explained briefly followed with
the strategies employed by Tesco. Further the evaluation of the theories of promotion and its
impact on the company.

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2.0 Task 1 - Promotional Mix
Promotional Mix is a mixture of different tool opted by the companies to promote their products
or helps in to create the demand of goods and services. Promotion is included in 4 P’s of
marketing mix; promotion means to reach the audiences and make them aware about the
products to initiate the purchase and the promotional mix is considered as integration of some
tools that help in reaching to the customer that are advertising, personal selling, public relation,
digital marketing and direct marketing (Blakeman, 2018).
Elements of Promotion Mix
Promotion mix is a strategy that is used to create brand awareness for selling of product and
services. This include several factors to keep in mind such as the goal of the company, target
market for understanding the customer behavior, designing the content that is to be delivered,
setting up of promotion budget and then choosing the best promotional tool to reach the
audience. To compete in the market promotion become an essential element every company
promote their product by using different ways for gaining larger market share. The concept of
promotion mix can be better understood with the example of TESCO a giant supermarket chain
in the UK. Tesco used different techniques for promoting their product which include billboard,
discount code, television ads, in-store announcements and social media marketing.
Promotion
Mix
Advertising
Direct
Marketing
Public
Relations
Sales
Promotion

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2.1 Advertising
Advertising is paid form of promoting the ideas, goods or services by a company or it is a
medium of communicating essential information to the user to initiate purchase of a product
(Kotler, et al., 2016).
There are various ways to promote a product via advertisement that are newspapers, billboards,
magazines, radio, television and social media. All these mediums can be used to convey the
message to the public or building a brand, good advertisement can build a strong brand for the
company and wrong promotion leads to product fail (Griffith, et al., 2015). TESCO main
strength in their huge investment in advertisement, they invest in different sources to advertise its
products that lead to a great promotion and boost up the sales of the company.
Tesco do in-store advertising that includes poster and sales in the stores to increase the footfall of
customers.
In Store advertising
Source: (Gwynn, 2018)
Coupon Offers by Tesco Source: (Gwynn, 2018)

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Out of store advertisement is done by Tesco using banners, billboards, television ads and
website.
Stations Source: (Hill, 2018) Billboard Source: (Reid, 2018)
Social Media Advertising: Facebook Source: (Facebook, 2019)

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Advertising is the tool that can give huge benefits to the company if used effectively. Tesco
brand image is the result of good advertising strategy and its high investment that can be well
understood with the help of SWOT analysis of TESCO.
Strengths Weaknesses
 Tesco mainly offers low cost product
and focused on customer needs
 Strong market position in the UK into
various sectors
 High customer base and customer
loyalty
 Best marketing strategy- club card,
offers, vouchers
 Majorly based on the market of UK and
most of the profit comes from this area
 High employee turnover rate in the
company
Opportunities Threats
 Diversify in different sectors and can
use the online platform more
effectively for boosting sales
 Expansion in Asian region will prove to
be the biggest advantage to the
company
 Low profit margin in near future
because of high competition
 Tough competition from discounted
outlets such as Lidl or Aldi
Tesco biggest strength is their brand value and market share that makes brand more valuable for
the customers and its expansion strategies are successful because of huge investment in the
advertisement for long run. The total expenditure on advertisement by the supermarkets was
£73.9 million or approximately 68.2% in the year 2017. Tesco was the second biggest advertiser
in retailer after McDonald’s and spends £89.5 million in advertising as compare to others in this
field they invested Lidl (£70.5m), Aldi (£48.8m), Asda (£59.5m) and Sainsbury (£44.4m)
(Ebiquity, 2018).
Tesco gained the market share because of its heavy investment in the advertisement, the pretax
profit of the company during the year 2017-2018 was £1.3bn or 800% increase in sales. The
impact of advertisement is greater in the retail segment mainly for supermarkets, due to huge
investment in this promotion tool Tesco gained an overwhelming profit that was more than
expected in compare to the previous year profit (Marketingweek, 2018).

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2.2 Direct Marketing
The main aim of direct marketing is to get the response or feedback from the customers for
further improvement or for changing the behavior of target customers regarding the brand.
Generally contacting the customers through various media to make direct response is called
direct marketing (Housden & Thomas, 2012).
Response of direct marketing can be easily understood with its implementation in Tesco, The
Company updated its marketing strategy and to solve the problems faced by their customers and
for taking direct feedback from them. They got to know that customers were not interested in
responding to the mass media campaign that include “buy one get one free” offers and after that
Tesco started to market its product by using real people and real stories (Latestdeals, 2019).
Tesco identified a new marketing technique that was “Tesco Food Love Stories” to connect with
the customers by involving them in responding to the campaign with the dishes they made for
any specific reason using Tesco products (Retailweek, 2019). Company started to connect with
the customers by bringing the campaign into the home by delivering a direct message to the
people that worked to boost its campaign.
Some of the direct marketing campaigns used by Tesco are Club Card for the loyal customers of
the product, online offers on tesco.com, weekly offer and join delivery saver option for
maintaining customer relationship (Felgate & Fearne, 2015).
Tesco Delivery Saver Source: (Tesco, 2019)

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Tesco Promotional Offers Source: (Tesco, 2019)
Tesco Weekly Offers Source: (Tesco, 2019)
Tesco Club Card
Source: (Deeney, 2016)

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Tesco Twitter Account Source: (Twitter, 2019)
Tesco’s segmenting, targeting and positioning (STP) model:
Segmentation: Tesco cover all segments and reached to them using flyer, television, brochure
and catalogue or through direct mailing. The market segment is big and profitable to serve which
was captured by their effective marketing techniques and mainly to reach whole market by
offering low price positioning in the market.
Targeting: Tesco is using mass marketing targeting strategy to capture the customers. This
strategy targets the large population or target the whole market with similar offers without
focusing on the particular area they appeal to common needs of the customers with their lower
price product. Hence, Tesco used to target the common needs of customer rather than focusing
on differentiate the customers.
Positioning: Tesco marketed itself as the giant or leading player in the retail market by focusing
on their customers and not only on pricing. Through their changing campaign they showed their
customers that how easily Tesco fits into their lives and solves the problems faced by them. This
help the brand to positioned itself as the low price product supermarket with qualitative goods.
Now customers have trust and confidence on Tesco that will last for the longer time (Smigielska
& Stefanska, 2017).
Tesco opted many marketing strategies to engage its customers but they finally opted for the
customer focus marketing that was implemented successfully by targeting the customer need
which helped the company to increase its market share, profitability and sales. Through focusing
on customers Tesco again repositioned itself as the most demanded supermarket by the people,
the company maintain relationship with customers by using their marketing tactics and believes

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that if a company understand its customers they can bring their business in line because without
the trust of customers and loyalty there is no business.

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2.3 Public Relation
In today’s competitive environment businesses need to have an image that makes them different
in the crowd so here public relation comes in the picture. A public is group who has interest in
the growth and activities of the company or a group which has greater impact on the company
potential to attain its objectives.
Public relation simply means maintain good relation with the people or publics who have interest
in the company that is done by obtaining positive publicity, maintaining corporate image and by
handling harmful rumors, stories and events related to the company. Public relation includes
various activities to promote the company image that is done with the help of media and public
(Kim, 2016).
The main reason for public relation is to develop the positive image of the company as this is
consider as the automatic marketing strategy that do not want any investment by the company. It
can be better understood by knowing the public relation building activities or programs run by
Tesco.
Tesco got advantage from their corporate social responsibility activities as seen below they
collected and then redistributed food to needy people on Christmas and that reflects Tesco’s
positive image to society.
Tesco CSR activity on Christmas
Source: Edie.net 2018

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At Tesco stores more than 78% of the packaging on branded products is recyclable
Source: Edie.net 2018
Corporate Social Responsibilities by Tesco
CSR activities help the company to create positive image in front of public by looking into the
some aspects of the society Tesco also took some voluntary initiatives by involving itself in
maintaining a healthy environment and include their all employees in its initiative.
Tesco launched an energy awareness campaign which included the reduction in use of energy by
the workers in their stores, depots and offices. Tesco successfully implemented this initiative and
reduced the consumption of energy by 35% with the help of its employee participation. Some
other initiatives took by the company because of its size and scale of operations, Tesco had
influence on society at large in many ways by motivating their employees and customers to
become socially aware. The social responsibility activities included by the company were charity
and fundraising for educating the people, distributing food to the needy one and for environment
safety (Jones & Comfort, 2018).
The company shared their 1% of profit to charity and approximately did charity of £21,762,931
mainly in UK and other countries. Tesco also contributed to development of economy by
providing job to more people and by offering goods to people at affordable prices. Main scheme
of employment launched by the company for hiring single parents, older people and first time
workers through that they provided employment to 8,000 unemployed in different countries
(Tesco, 2016).

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3.0 Task 2 - Promotion strategies
3.1 AIDA Model
AIDA stands for awareness, Interest, Desire and Action this model helps in understand the
buying behavior of the customers or the process followed by them for final purchase. It creates
the relation between customers and company for finalizing the purchase (Fortenberry &
McGoldrick, 2019).
Awareness: The model firstly creates the awareness of products to the customers by using any
promotional tactics for spreading awareness of the brand.
Interest: Encouraging buyers to buy the product is essential as it create the interest among the
people regarding the product so that they further proceed to purchase.
Desire: Converting their liking into wanting is the stage where buyers get desire for purchasing
the product by creating emotional connection.
Action: The action taken by the buyers according to their desire is the last stage where final
purchase happens by the people.
These steps are followed by every company to attract the people towards the brand. This model
helps in knowing the way a buyer can react to the advertisement and when they initiate the final
purchase so it is necessary to see the implementation of this model in practical manner and
evaluate it effects on the company performance for that Tesco retail supermarket is chosen.
Tesco used this model for creating awareness among the customers for their retail products and
then that will generate the interest of buyers. All the interested buyers show their want to
purchase the product and finally take action to finally purchase the product they desire. The steps
used by the company to apply this model are;
A marketer can attract the customers by using correct way of communicating that take attention
of the buyers. Tesco used different colors and pictures in their advertisement through banners
and billboards which attract the buyers towards buying the product and mainly one tactic used
by the company was its low price product strategy that they highlighted in different ways to
increase the reach. With the help of advertisement in television and newspaper they showed the
benefits of using the products of the company and successfully conveyed their values in the way
they advertise products.
Tesco with using different medium such as direct marketing, digital marketing and advertising
promote its product in the target audience which create the interest of people to know more about
the product. The best way to build the interest of the people in company’s product is to deliver
them or show them what they need and Tesco do same things to encourage the buyers to buy the

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product by changing the way they advertise and using the real stories and customers experience
to build the brand awareness in market.
Creating the needs of product in the market is necessary to build the strong base for the company
so for that Tesco offer a big range of different products by targeting the whole market and
generate the desire in the people to buy more and more products. The customer focus strategy of
Tesco helps the company to build desire in the people to buy their products rather than buying it
from other stores. Discount, coupons and offers on occasions is the strategy used by company to
promote its product in market and that generate the demand amongst people even when they do
not want to buy but because of this attractive deals and offers they end up in purchasing the
things.
Purchasing decision is the last step in the model which is totally depend on the perception of
customers whether they are convinced with benefits and usage of things or not so after
communicating it through advertising or proper medium last step is to know the response by the
way sales increases and Tesco by investing in traditional marketing proved that increase in their
revenue is totally depend on the way they advertise and position the brand in public.
3.2 Above and below the line activities
These terms are used in advertising or for promoting the product, above the line means when any
company opted for mass media advertising to reach the customers at a larger number through
television, radio and internet. This activity includes communication to wider target audience and
not to any individual person (Baker, 2014).
Below the line activity include reaching to customers in one to one manner by distributing
pamphlets, brochure and discount coupons or offers. Mainly retailer used this activity to increase
their reach because it targets the limited customers who have interest in buying (Baker, 2014).
Other activities under below the line include banners in crowded area such as malls, stations and
public places. This activity is mostly preferred when some specific group is targeted by the
company and in below the line promotion company itself handles sales promotion through email
marketing, public relation source and direct marketing.
In current digital era these activities have no boundary lines as through social media marketing
reach and audience become wider so digital communication offer the same solution at low cost
to the companies. Now, it is an era of using mass media plus below the line together in the
market (Kotler, et al., 2017).This concept of above the line and below the line can be simply
understood with the help of a supermarket retailer Tesco.
Tesco used various activities to promote the product and recently invested huge amount in above
the line activities. Tesco ranks second in investing the bigger amount in media advertising and its
implication gave an outstanding result for the company by increasing its pretax profit (Gwynn,
2018).

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Tesco uses different activities related to direct marketing that comes under below the line
strategy, as email marketing, use of internet, pamphlets used for promotion and brochures are
some other way through which they promote the brand. From above analysis and pictures it is
clear that they also focus on niche market audience because the company also use below the line
strategy for promotion. Tesco mainly advertise itself as the affordable or low price products
brand of different varieties and cover whole market this continually benefiting the company and
helps in growth and expansion.
Digital marketing in current scenario also ruin the aspect of above the line and below the line
activities because companies started to focus on promoting their brand on online platform so as
done by the Tesco. Tesco also promote its products through website, Facebook and Twitter to
connect with their customers and to increase the reach. In this digitalized era it is very important
for the organizations to understand the need of a systematic plan of marketing so that they can
invest in the way they get higher return.
Tesco have large market penetration due to its promotion mix, different promotional techniques
that comes under above the line and below the line activity have great impact and positive effect
on the company so from this study it can be concluded that advertising is a best tool to bring
awareness amongst the buyers and same is effectively done by Tesco a retailer supermarket.
Tesco spending on above the line activities and below the line activities have positive effect on
the company performance and effectively implemented by the company keeping in mind the
target audience according to demand and wants of customer.

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