Strategic Marketing Management

This document provides an in-depth analysis of strategic marketing management, focusing on the case of Tesco plc. It covers various components such as PEST analysis, Porter's five force model, STP framework, 4C's marketing model, BCG matrix, Ansoff matrix, and more. The document also discusses the objectives and strategies used by Tesco in their marketing plan.

STRATEGIC MARKETING
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
SECTION 1.....................................................................................................................................3
Pest Analysis................................................................................................................................3
Porter’s five force model.............................................................................................................4
SECTION 2.....................................................................................................................................5
STP framework............................................................................................................................5
4C’S Marketing model................................................................................................................6
SECTION 3.....................................................................................................................................7
BCG Matrix.................................................................................................................................7
Ansoff Matrix..............................................................................................................................7
Objectives....................................................................................................................................8
SECTION 4.....................................................................................................................................8
4 P’s.............................................................................................................................................8
SECTION 5.....................................................................................................................................9
Budget..........................................................................................................................................9
Monitoring and Controlling.......................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
It is a British multination grocery company which is famous as general merchandise
retailer in UK. It operates into multiple markets like supermarket, hypermarket, convention
stores and others and offers their product and services such as food items, non-food items,
financial services, mobile services and others across the world. The main market of the Tesco plc
is UK whereas large number of stores of companies offers it’s services to the UK’s customers.
The main objective of the report is to provide high understanding about marketing plan and
different growth strategies that will practices in this plan. This report has wide scope for MNC’s
because it will discuss over marketing plan that is used by each organization to achieve different
objectives and goals within timeframe.
SECTION 1
Marketing environment
Pest Analysis
It is analytical model that is used to analyse external environment of the business. This
model is applied for the Tesco to analyse it’s external environment of business (Bateman, 2017).
Factors are described as follows:
 Political factors: Trade restriction policies has reductant by Brexit that has improved
trading behaviour of retail companies like Tesco plc because now it can trade it’s
products and services many countries at single time. In recent time, Tesco operates in
more than 13 countries except others that denotes organization achieves advanced
benefits from non-trade restriction policy.
 Economical factors: Brexit has led change in policies, new legislations for trading and
products due to this unemployment rate has increased in UK. So, UK’s government has
announced that mortgage interest rate will decrease from 18% to 17%. Thus, Tesco gets
positive impact on it’s product selling because it can save extra funds that have to pay in
UK’s bank (Camilleri, 2018).
 Socio-cultural factors: UK’s people become more health conscious especially young
generation who always wants such food which does not give any negative impact on their
health. So, organization has included organic food products in it’s wide product line so
that it can attract large group of customers to buy their expected products and services.

 Legal factors: UK’s government has imposed various rules and regulation regrading
UK’s people safety as well as environment such as health and safety act, anti-
discrimination policy, product awareness and others. To comply with government
policies has started to conduct marketing campaign wherein marketing representatives
give brief description about it’s product and services. It is quite time-consuming and
costly process that directly impact on Tesco’s economical infrastructure.
Porter’s five force model
It is another analytical model that is used to analyse competitive environment of business
and it’s competitors.
 Bargaining power of suppliers (Low): High availability of suppliers in UK market has
decreased bargaining power of suppliers. For example, Tesco has opportunity to replace
skilful and talented suppliers from unskilled one due to high presence of suppliers. Thus,
company enables to gain high quality products at lower without paying extra salary to the
supplier.
 Bargaining power of buyers (High): Tesco is second world’s largest supermarket
company but it is mainly headquartered in UK (Rosnizam and et.al., 2020). There are
lots of supermarket companies who also have captured good market share like Tesco and
posses’ similar products like Tesco. Due to high presence of supermarket companies with
similar product improves switching behaviour of customer. Due to this company often
gets negative impact on it’s selling revenue.
 Threats of substitute (High): Retail sector has become more competitive market in the
UK because there are various large companies like Marks & Spencer, Sainsbury, Asda
and others which offers similar products like Tesco. So, it become quite easy for other
companies like Primark, Waitrose to introduce new product in order to gain competitive
advantage.
 Threats of new entrants (Low): Threats of new entrants is quite low in UK’s market
because there are big four companies like Marks & Spencer, Sainsbury, Asda and others
already has captured large market share. So new entrants require good financial resources
and innovative product to enter in the UK market.

 Degree of Rivalry (High): Intensity of the competition in the UK’s retail sector is quite
high. So, Tesco have to face price cut throat competition while selling it’s product to the
customer in UK.
Swot Analysis
 Strength: It has strong global presence that helps company to sell it’s products at
competitive price and in exchange gain high profit.
 Weaknesses: Limitation of marketing approach is the major weakness of the Tesco.
 Opportunity: Influences demand of private labelled products in UK that helps company to
sell it’s patented product at wide scale (Singh, 2016).
 Threats: Brexit and high competition in the UK market have decreased profitability of
Tesco.
SECTION 2
STP framework
 Segmentation:
Segmentation strategy is the approach of dividing market into small segments for further
process. In this strategy markets are classified into different segments such as behavioural,
demographical, behavioural and geographical segmentation. These segments are further sub-
segmented on the basis of customers. Tesco targets three segments such as:
Behavioural segment: In this segment market is classified base on customer’s needs and their
behaviour regarding products prices. With this segment Tesco wants to target such people who
are highly affected by prices (Szalay, 2017). But such customers support to influence selling
revenue of the company.
Demographical: In this segment customers are classified on the basis of age, culture, gender
and others. With this segment Tesco wants to target all type customers in UK.
Psychographic: In this segment customers are classified on the basis of disposable income,
spending behaviour, products requirement. Company targets this segmentation base because it
posses’ such products that are quite expensive with branded quality. So, these products help

company to influence such customers buying behaviour and in exchange generate high
economical profit.
 Targeting: Targeting is second stage of STP model after selecting market, Tesco targets
it’s targeted audience such as all UK’s people for it’s wide product line and services.
 Positioning: It is last stage of STP model that uses by Tesco to maintain it’s positioning
in the UK effectively. Tesco has achieved more success in multiple countries due to it’s
wide product availability with effective customer services as compared competitors in the
retail sector. In UK, company has achieved second positioning as largest supermarket
chain due to large market share rather than competitors like Asda, M&S.
4C’S Marketing model
It is used to defined successful positioning of company. This model is applied for Tesco to
highlight effectiveness of it’s positioning.
 Clarity: Clarity element stands for the business or product idea, thought that wants high
class positioning to make sense for the stakeholders. For example, Tesco has aim to gain
no one position in the all markets like hyper market, supermarket and conventional stores
so it always focus on product quality and customer’s need.
 Compelling: According this element company must aware about targeted customers need
and expectation then it can gain good positioning in it’s sector and among customers as
well. Tesco has targeted all customers and offers such quality products with wide features
that gives values of the customer’s money (Wallis and et.al., 2019).
 Credibility: Positioning is properly dependent on vision, mission and values. Tesco
always stands on their commitment, mission that impacts on customer’s buying
behaviour positively.
Contrasting: Contrasting is the last term that denotes company must differentiate it’s band from
others. With this strategy Tesco has differentiate it’s brand, product and services effectively in
the UK. So, it has achieved large market share on it’s product.

SECTION 3
BCG Matrix
It is very important for the organization to know as to where do they stand in the market
so that they can develop themselves further accordingly. BCG is one of the best matrix which
can make the company be positioned themselves in the market so that there is going to be a good
functioning (Makarova, 2018). There are four types in this matrix which are dog, cash cow,
question mark and star which can help the company to know where they stand in the market.
 Dog
The organizations which are in this type are once which are new in the market and they want
to get a higher growing opportunity for themselves.
 Cash Cow
These organizations have a high market share because the products are unique in nature but
when the substitutes are out for the same product and service the company will not be able to
maintain their growth in market.
 Question mark
There are a lot of companies which have high growth opportunities for themselves in the
market but due to lack of experience of knowledge they are not having high market share. There
are a lot of promotions which are required for these businesses to be able to function in the
market.
 Star
Tesco is a star type of organization because they have a growth in the market and also has a
strong market share which is going to make the company have stability in the market as well.
This model is used by Tesco so that they can find out where they stand in the market
(Varadarajan, 2018).
Ansoff Matrix
This is a strategic tool which is used by executives and senior managers to be able to
have a better future in the market. This is a very important framework so that they will be able to
grow themselves further in the market. There are four divisions in the market which are going to
be discussed in the further report.
 Market Penetration

This is when the product and market are existing is market penetration. This is going to make
the company have a strong base for themselves in the market and that is not good because the
economic flow in the company is also going to be limited. The prices are going to be same and
the company will be able to get an idea and experience of being in the market.
 Market Development
The existing products are then sent to new market to get a higher growth opportunity in the
market and that is going to be a great growth for the organization (Chiweshe and Ellis, 2019).
There are going to be more customers who are going to be attracted and understood by the
organization so that there is going to be improvement for the future.
 Product Development
It is very important for the organization to have new products in the market and to get a
proper feedback the company launches their products in existing market. It is very important to
have the right feedback which is going to be very helpful and useful for a long run. This is not
going to be risky for the organization and the right measures will be able to be taken on the right
time so that there is a good growth.
 Diversification
This is the most risky measure which any organization can take because this consists of new
market as well as new product. Tesco can afford to do this which is going to be very good for the
company because they have a lot of experience so that understand the customer’s needs and
demands which is going to be very helpful for a long run (Enckell, 2016).
Objectives
 To improve the market share up to 40% with the end of 2023
 To boost sales up to 70 to 80% between the year of 2021 to 2023.
 Augment the revenue around 40% within a year of 2021.
 To increase the customer base at the end year of 2023.
SECTION 4
4 P’s
It is very essential for businesses to evaluate the functioning and marketing environment
so that there are right decisions and measures can be planned by the company.

 Product
The products are very imitable but the company has made a place for themselves in the
market so that there is a good capture of attention. The products are also having a stable quality
and standards of the products are being well maintained which is a very essential factor for the
organization (Yang, Cheng and Zhang, 2017).
 Price
Tesco is having a strong pricing strategy for them and that is going to be very useful for a
long run. Skimming strategy is being used by the company and as well as competitive pricing
which is going to be very useful for the company to be able to grow.
 Place
There are a lot of stores which Tesco has started worldwide and online is the best platform
which can be used by the company so that they can service more customers.
 Promotions
There are a lot of promotions which are being done through different modes which are
discounts, offers, etc being provided to the customers from time to time which keep the
customers intact with the company (Alvarez-Milán and et.al., 2018).
SECTION 5
Budget
Basis Amount
Labour €2,500
Raw material €3,000
Technology €3,500
Components €1,500
Total €10,500
The company has a lot of sources which can be used by Tesco for getting in the funds the
funding source which Tesco would opt for is capital funding which is a very good factor for the
company because they will not have to lose the control on the organization. The other funding
can make Tesco lose the control and that would make the decision making of the organization
get affected and the chances of risks would be higher (Lehtinen, 2017). It is very important for
the company to be able to maintain their standards and quality of services and products in the

market and for that there should better understanding and knowledge. The profitability of the
company is present in the market which will have to be maintained so that there is a higher and
better functioning for a long run in the market.
Monitoring and Controlling
There are a lot of changes which have to come in an organization because of the change
in demand and needs of the customers. The competition in the market is also increasing which is
why getting in the changes is going to be very essential and especially in Tesco so that they can
maintain the customers and market share. The employees have to get in those changes effectively
so that there would be better functioning (Kreutzer, 2019). Employees are trained effectively and
from time to time so that there would be better functioning and the reputation of the company
can be maintained in market. The employees have to cope with the expectations of the
organization and the standards have to be met which is why there is monitoring which is very
essential. Benchmarking and balance score card are methods and measures which are being used
by Tesco so that they can evaluate the employees of the organization and reward or punish them
according to the efforts they are putting in the organization.
CONCLUSION
From the above report it can be concluded that there is a need for a strategic planning by
organizations which are present in the market so that they can compete with the competitors who
are present in the market. The competition is increasing which is why the organizations will have
to plan and improve accordingly and get in unique features so that they can have a strong
functioning for a long run. There are a lot of decisions also which have to be taken after analysis
which has to be right so that the profitability margins are not going to be affected and the risks
are going to be reduced.

REFERENCES
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Lehtinen, N., 2017. Strategic Marketing Analysis: Case: DNA Plc.
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