Principles of Marketing: Organic Food Market Analysis

This report provides an analysis of the organic food market, including product description, market analysis, key market trends, customer attitudes, and key competitors. It also includes a recommended marketing mix for Tesco's new organic food product.

Principles of Marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAINBODY...................................................................................................................................3
Product Description.....................................................................................................................3
Market Analysis...........................................................................................................................4
Key market trends........................................................................................................................5
Current customer attitudes...........................................................................................................5
Key competitors and their positioned..........................................................................................6
STP Analysis...............................................................................................................................6
Recommended marketing mix..................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing can be defined as the activities of a business undertakes to influence the
purchasing or selling of a goods or services. It includes commercialization, selling and supplying
products to users or other companies. It is important because it supports to sell goods or services.
It gives high contribution in the development of economy and influence it’s living standard of
living. It follows different functions such as advertising, direct selling, packaging, transportation
etc. enhance job opportunities for the large group of people and stimulates growth of business.
To understand significance of marketing has an example Tesco company. It is a British
multinational grocery company which is famous as a general merchandise retailer across the
world. the brief study provides understanding aboutnew products and it’s scope in the market in
this report.
MAINBODY
Product Description
Tesco company has wide products line such as clothing, financial service, mobile
services, home furniture, ready-made food items, groceries and others and trades it’s product
across the world to the customer. It operates in wide number of markets such as supermarket,
hypermarket, conventional shop and retail stores. Due to high availability of it’s stores around
the world easy to retail large number of products by the Tesco in the global market. To capture
large market share of the product has planned to launch new product. The new product is organic
product that has wide scope in upcoming years (Amaral, 2017). There has a reason that causes it
decides tom launch this new product such as young generation becomes health concern so they
avoid to take fatty food. So, it has made plan to launch this new product which has pure
nourishments and minerals. Organic foods farms without using of artificial chemical, hormones
and antibiotics as result impacts on user’s health positively. This food comprises artificial
sweeteners, preservatives, colouring, flavouring and monosodium glutamate that reduces fatness
in users’ body as well as improves immunity power of them. It contains more nutrient as
compared non-organic foods. It contains 58% more antioxidant and up to 52% higher amount of
vitamin that is quite high as compared non-organic foods. (Cagalj, Haas and Morawetz,
2016)Overall, it has full enrichment of proteins, minerals, antibiotics and others which gives

positive impact on consumer’s health. Organization keeps wide range variety in organic products
such as organic groceries, organic ingredients/spices, ready-made organic food items and others.
such kind organic food varieties help company to gain competitive advantage in the business
market and builds sustainable brand image between customers.
Market Analysis
Opportunities for the new product in the market
Currently, organic product is highly demanded product in the global market and has wide
scope in upcoming years. There are some other factors such as demographical changes, political
stability, unemployment rate, education level, disposable income, foreign exchange rate,
environmental factors and legal factors etc. these factors can impact on Tesco’s new products
positively and negatively. For example, political stability in UKfrom past few years that explores
opportunities for the Tesco because it can expand itsnew products in the different market at a
time. It has made plan to launch organic products which is promoted by UK’s government as
well because it is effective initiativeto overcome pollution and improves quality of customer’s
life. It includes recession period, tax rate and unemployment rate etc. are economic factors that
impacts on organization’s operation. For example, High unemployment rate gives positive
impacts on organization’s new products because Tesco gets chance to strong supply chain by
recruiting large group of people in the workplace (Chong, Han and Park, 2017). Additionally,
there has high unemployment rate so people has willing to work on lower wages. Thus, company
easy to enhance demand of the organic products in the UK market effectively. Government is
highly concerned for the environment issues and climate change so it has imposed sustainable
product or services policies. It proves beneficial opportunity for the organization because it is
going to launch organic products. therefore, government also supports Tesco by offering
distribution facilities. With new product Tesco comply with health and safety policy which is
imposed by FDA to keep people safe from unsafe or contaminated foods. Such kind
characteristic of organic foods helps to build brand image in the business market and impacts
customer’s choice positively. These are the major opportunity of organic food which can get in
the UK market to the company.
Issues for the new products in the market

Currently Brexit can give negative impact on the new product because they have changed
in policies, tax rates and foreign exchange rate etc. it leads political instability, increase
unemployment rate, change in disposable income and others that causes Tesco can get negative
impact on it’s new product. The reason behind is that organic food is quite costly as compared
non-organic foods whereas high employment rate impact on their income negatively as result
reduces profit ratio. Overall cost factor is the major factor of the organic food that can decline
demand of it in customers. Thus, organization can face this issue in upcoming year but it has
made plan to overcome this issue (Cummins, Loe and Peltier, 2016). It uses diverse supplier
strategy that helps company to get organic raw products on lower cost than it become easy to sell
organic products on optimum cost which improves purchasing behaviour of the customer as well.
Key market trends
Organic food has high market trends in today’s world because people starts to use
chemicals in non-organic food extensively for the private gain that causes faces large number of
health disease in people. So, new generation is highly health conscious consumers who wants
that food which improves their health and reduces harmful effects. Organic food requires more
time to grow and needs more care to till then grow. Therefore, people do not like to grow organic
foods but past few years demand of the products becomes higher in the people. Tesco uses deep
research market strategy and gathers information that global market has wide scope for the
organic products in upcoming years, especially in highly developed regions like UK, US and
others. Organization uses organic food farming strategy because it does not harm farm like non-
organic food and limiting the use of pesticide and chemicals for farming of organic foods. On the
geography basis has large market share in the global market. Europe has generated high revenue
on the organic products. So, it can interpret has organic product has high growth rate globally in
upcoming years.
Current customer attitudes
Tesco make plan to launch it’s new product in the UK market because there has wide
scope for the new product. Shifting in customer trends and lifestyle constantly can give positive
impact on the organization’s productivity, performance and operation (DeLong and Elbeck,
2018). The reason behind is that consumers becomes more health concern so they avoid take
highly carbohydrate food and expects that food which impacts on their health positively. So, it

become easier for the company to attract customers towards new foods and will enable to capture
large market share on organic foods. Development in the new technology can help Tesco to
improve product delivery across the world. it can offer online home delivery services to the
consumer that maintains their wellbeing and gets chance to gain high profit margin on the
organic food. UK has good technology performance so customers are highly updated for e-
commerce marketing and prefer to online shopping instead of traditional shopping. Then, it is
quite easier for the Tesco to sell it’s products across UK through the digital marketing.
Key competitors and their positioned
Tesco is a British multinational company that operates in multiple countries and offers
it’s product to the customer. It is headquartered in England, UK and popular as general
merchandise retailer in the UK market. Tesco have face tough competition in UK market while
retailing it’s product to the customer. The key competitors of the Tesco are House of Fraser,
Asda, M&S, Sainsbury and Aldi & Lidl because they operate in retail sector like Tesco and
offers similar products like Tesco’s product to the customer. Aldi & Lidl has wide product line
and sells it’s product on lower cost to the customer that causes it also has captured good market
share and impacts profit margin of Tesco’s product negatively. Asda and Marks &Spencer retails
similar products and has captured large market share on it’s products. Therefore, these
competitors have good brand positioning in the business market. So, it can possible that after
sometime these competitive companies can sell organic products on lower cost, in that case
Tesco can get negative impact on it’s profit margin and sales revenue (Tariq and et.al., 2019).
STP Analysis
STP Analysis is denoted as the analysis about the segmentation, targeting and positional
of the company. Tesco Company is among the top company associated with retail sector.
Strategies used by the company in respect to its STP influences the sales of the company in
market. STP strategies allow company to improve the reach of product in the market.
Segmentation: Segmentation plays an important role for improving the product presence in
market. Tesco Company gives priorities to demographic, geographic, psychographic and
behavioural approaches of product segmentation in market. All the four approaches of product
segmentation allow company to segment the product in the market effectively. Demographic
segmentation involves age, gender, income, occupation, marital status of target customers, social

class, religious and education of people in society. This new product of company is organic in
nature that allows company to attract educated people in society who understand the significance
of the organic products. Company will contain the prices affordable in nature that will allow
company to segment the product in between the all middle class and upper class income
background people in society (Bröchler and Seifert, 2019). This product will also attract all
social class people. Geographic segmentation involves location at which company is planning to
segment the product. Tesco Company will launch these products in all stores irrespective to its
geographical location. This will improve the sales potential of the company in respect to selling
the new product. Psychographic segmentation involves interest of people, social status,
personality type, attitude, opinions and values of people. This product is healthy in nature that
will be able to attract the customers consisted with all the psychographic factors. As the Tesco
Company consist an effective brand value which also involves effective brand value of all
customer this will allow company to use the behavioural segmentation approach for the product.
Targeting: Targeting is also an important factor that influences the sales of company. Tesco
Company will target all social class people and economic background people as the organic food
has a potential to attract all such customers. Targeting will also focus on young people in society.
As the youngsters are more keen towards health and safety as compare to old people in society.
Company will target to all young food enthusiast people in society. Company will channelize its
marketing campaign in all geographical locations weather it is village or a urban area (Collins,
Silarova and Clare, 2019). This product has a potential to attract all economic background
peoples weather rich or middle class background. Company is keeping the prices in the
affordable nature that will allow company to target effective customer base. Tesco Company is
aiming to follow the diversified targeting strategies so that all majority of the customer base can
be covered for these products. All such targeting policies and approaches company channelizes
in general cases. Targeting put a huge impact over the sales of the company in market.
Positioning: Positioning involve how the product of company will be placed in the market.
Company is following the cost positioning strategy to launch the new product. Management of
Tesco Company is aiming to use the cost positioning strategy to position the new product call
organic food. This strategy will allow company to use the low pricing strategy to position the
product in all stores of company (Panchal and Batra, 2018). Price is an important factor that

attracts customers as all consumers all across the globe aims to procure the best product in the
most affordable price structure. Company will channelizes different marketing campaigns like
radio and television marketing, digital marketing, holdings, search engine optimisation and
different strategies to position this product.
The above mentioned points demonstrated about the STP strategies company will use in
order to gain success for its new product launch call organic food. Tesco Company also contain
an effective brand value that will also support company in gaining an effective success for its
new product launch. All strategies use by the company to launch the product will allow company
to entertain popularity of this new product event at the initial stage of the product launch.
Recommended marketing mix
Marketing mix is a diversified tool use in planning marketing campaign of the company.
This tool will involve analysis about the product, price, promotion and other key factors involves
in the growth of the company’s products in market.
Product: Tesco Company is launching its new product call organic food. This product involves
different food products produced in organic manner. Traditional food production technique is
used to manufacture these products. Organic food products are healthy in nature and also
contains all nutrients requires in the food products (Kucuk, 2017). These products are well in
demands all across the globe. In recent times due to huge demands modern farming techniques
are channelized by company to product different food products to meet up the needs of society.
This product is organic in nature and company will offer all kinds of food products.
Price: Prices for all organic food segments launching by Tesco Company will be affordable in
nature. Company will offer all such products at the most reasonable price range. Due to attractive
prices company will entertain huge demands even at the initial stage of product launch. Price is
among the key factor that involves in the purchasing decision making of customers. Due to
attractive prices company will be able to target all economic background peoples in all its stores.
Promotion: Tesco Company will utilise all its promotion mediums to promote this product.
Promotion plays an important role in the success of the product in market. Company will
channelize digital marketing, radio and television marketing, holdings, search engine
optimisation and other various techniques to promote these products (Gropp and Boyle, 2017).

Tesco Company will also channelize YouTube marketing in which different top You Tubers will
promote these products.
Distribution strategy: Distribution strategy involve all such channels Tesco Company use in
distributing all its products in case of other products. Tesco Company is a well established brand
which also allows company to carry an effective distribution network.
The above factors demonstrate about different elements of marketing mix will be used to
make the success of the new product launch of company.
CONCLUSION
It can be summarized a brief description of new product i.e. organic product and it’s
benefits for the company and customer as well. It has been concluded key market trends for new
products and key competitors of the Tesco company who could impact on it’s productivity,
performance in the business market negatively. It has been summarized current customer
attitudes and market behaviour for the new products. Key opportunities and threats for the new
products in the business market can be evaluated in this report. Segmentation, targeting and
positioning of new product in the market can be summarized in report.

REFERENCES
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for organic food. British food journal.
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marketing class to improve interest in a sales career. Journal for Advancement of
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on entry level marketing position interviews. Marketing Education Review, 28(3),
pp.159-169.
Gropp, K. E. and Boyle, M. C., 2017. A Brief Overview of the STP 36th Annual Symposium:
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Kucuk, S. U., 2017. Marketing and Marketing Mix. In Visualizing Marketing (pp. 3-7). Palgrave
Macmillan, Cham.
Panchal, S. and Batra, N., 2018. Effectiveness of Structured Teaching Programme (STP)
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Tariq, A and et.al., 2019, August. Online Impulse Buying of Organic Food: Moderating Role of
Social Appeal and Media Richness. In International Conference on Management
Science and Engineering Management (pp. 586-599). Springer, Cham.