Evaluating the Effectiveness of Brand-Positioning Strategies

The provided content discusses various concepts related to brand positioning strategies from a consumer perspective, as well as articles discussing Tesco's marketing and branding efforts. The topics include market segmentation, integrated online marketing communication, integrated marketing communication, positioning theory, and marketing strategy. The sources are mainly academic journals and news articles.

STRATEGIC MARKETING

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
ACTIVITY 1..............................................................................................................................3
1.1 Role of strategic marketing .............................................................................................3
1.2 Relationship between corporate strategy and marketing strategy....................................4
1.3 Developing a marketing strategy......................................................................................5
ACTIVITY 2..............................................................................................................................7
2.1 Evaluation of approaches to internal environmental analysis..........................................7
2.2 Evaluation of approaches to external environmental analysis.......................................10
2.3 Integration of internal and external analysis..................................................................13
ACTIVITY 3............................................................................................................................14
3.1 Decisions and choices at corporate level........................................................................14
3.2 Assessing the impact of varied decisions on the marketing function of firm at both
business unit and functional level .......................................................................................16
3.3 Approaches to competitive positioning..........................................................................17
ACTIVITY 4............................................................................................................................18
4.1 Strategies which helps business in gaining competitive advantage ..............................18
4.2 Marketing communication strategies for business.........................................................20
4.3 Marketing strategies and their implementation..............................................................22
CONCLUSION........................................................................................................................23
REFERENCES.........................................................................................................................24

INTRODUCTION
As every organization operates in a highly competitive as well as a dynamic market, it
needs to have strategic marketing. In this, companies have to enhance their knowledge about
competitors they are having with their strategies. Strategic marketing is a process of making
long term plans which ultimately integrates with business strategy (Davies, 2011). It provides
guidelines for assessing customer preferences and also helps in creating a strong relationship
with them.
In this report, complete knowledge about role of strategic marketing and the relation
between corporate strategy and marketing strategy is being discussed. It will be done by
keeping a firm, Tesco in focus. It is one of the largest retail organizations in UK (Ries, 2003).
Here, an elaborative study on its internal and external environment will also be done. At the
international level Tesco faces many local challenges and there has been significant
speculation about possible exits from underperforming markets, due to recent scandals as its
share fell to 11.5% to 11 year low (Wearden, 2014). But the company had been reluctant to
withdraw from further markets if there are other options available.
ACTIVITY 1
1.1 Role of strategic marketing
According to Boykin (2014) strategic marketing can be defined as identification of one or
more sustainable advantage that firm can have in order to get competitive advantage in
market. It allows companies to deal with different kinds of issues like the products that can be
launched in market, the price of products, distribution strategies, etc. According to Hunt and
Arnett (2004) strategic management can be defined as proper formulation and
implementation of different goals and initiatives that are taken by company so that it can
present itself strongly in market.
At Tesco, the main role of strategic marketing is to know about the markets where they
are going to operate and compete. After that it decides how they will compete and can gain
competitive advantage. The time of entrance in those markets is also predetermined so as to
know at which time they would get the highest benefit (Nandakumar, Ghobadian and
O'Regan, 2011). To maintain the high position within the retail industry and to promote goods
and services among its customer, these preparations are essential.
Tesco performs strategic marketing so as to build customer relationship by creating value
for them (Hobbs, 2015). For instance, Tesco Club card strategy has been specified as the

most effective promotional tool which greatly contributes to the business strategy of cost
advantage. It helps the company in collecting some valuable information about consumer
behavior as well. Furthermore, it has helped the company in achieving value for the brand.
For the purpose of marketing, the brand will continue to open stores where opportunities exist
and focus on displaying some imaginative thinking in all sizes of stores.
The main aim behind strategic marketing is to increase the market share and establish a
good identity among the people. Tesco uses strategic marketing to show their unique features
and capabilities (Yannopoulos, 2011) and it justifies their mission statement. Through the
strategies which Tesco has made, actionable goals can be formulated. Marketing strategies
are made for the products that the company offers and the audience to which they are
offering. Strength of the products of the organization can be easily determined through these
strategies (Roetzer, 2011). At Tesco, competition and revenue also plays an important role in
strategic marketing. Competition pricing as well as its distribution criteria are also important
parts of strategic marketing (Parsons 2015).
In addition to this, the concept of product and customer varies as per different
organizations. In this context, it is assessed that different firms follow varied types of
concepts. For example, there are some firms that comply with the product oriented concept.
In this regard, these firms do not consider the needs and demands of its buyers and their main
motive is to raise the significant skills and knowledge among its employees which enables
them to produce superior products and services for the buyers. For instance, product oriented
concept is usually followed by different manufacturing firms.
Besides this, customer orientation is another concept in which firm does the
production of products and services as per the needs and demands of its buyers. This concept
is popularly known as customization. The corporation such as Tesco tends to follow the given
approach. In this regard, it tends to produce or offer the products which are demanded by its
buyers.
Furthermore, manager of Tesco should make the arrangement of necessary
resources as per the marketing tactic which is being selected by it. For example, Tesco has
decided to place its advertisement in social networking site. Thus, with an aim to fulfill the
given objective, firm has to make the recruitment of such employees who have ability to
frame and place the advertisement of company in the respective site. After making necessary
arrangements, enterprise should make efforts in terms of performing the implementation of
tactic which is being framed by it. Here, after implementation of the tactic, manager should

monitor and control the respective tactic. Here, through monitoring, manager can assess that
whether the mean which is being selected by the firm for promotion is working well or not.
1.2 Relationship between corporate strategy and marketing strategy
Corporate strategy is a set of goals and the steps leading towards reaching these goals;
therefore corporate strategy is something that is decided to bring effectiveness in the business
processes. Undertaking a corporate strategy requires great concentration and focus on
different types of factors. Marketing approaches are part of corporate strategies.
One of the major corporate strategies of Tesco is to provide value for money and
perform promotion as one of the companies that has cheap and quality products available.
The company also has a strategy to focus on customer services and customer loyalty and for
that it has launched different loyalty card schemes and other loyalty programs which have
helped it to attract customers in most appropriate manner (Jordan, 2015).
Tesco's corporate strategy is one which primarily focuses on value for money and
offering quality customer service. For this, the company gives training and development on
regular basis from which standard services can be offered to customers. For increasing
revenues, this firm has taken various initiatives as it diversified number of its products. It also
bought another business so as to enhance their business (TESCO Annual Report, 2014). It
assesses new technologies and also takes steps to increase sales volume of their products
(Daft, 2008).
At the time of making business plans, Tesco's executive management has to be in
contact with the marketing department. This is to check whether business strategies are
aligning with marketing strategies or not. Through marketing strategies, research is done on
things like consumer behavior and their needs. It also tells people about their superiority on
competitor’s product (Narasimhan, 2005). Without giving attention to marketing strategies,
the long term business strategies cannot be made. Whenever a corporate strategy has been
made, it may look hopeful but if strategy at marketing level is not referred, it could easily fail.
At Tesco, to be a good business unit first it has to be a good marketing unit (Linus,
2001). Both marketing and business units can be described as customer oriented. As for the
corporate strategy of Tesco, the focus is on the overall business concept, and it is made by the
top management. While marketing strategies are made at middle level, here the focus is on
the product, its advertisement and selling (Hunt, and Arnett, 2004). Business plans are made
for all the departments in this company. Marketing plans are just for its department only.

In addition to it, company focuses on CSR (Corporate social responsibility) activity
in order to develop a sound relation with the society. For this purpose, company runs
different campaigns such as environmental steering group, energy-saving, eco-friendly
transport packaging design, conserving water and other related. It has framed the tag line for
CSR i.e. “we see ourselves as good neighbors with a real sensitivity to environmental concern
(Sir Richard Broadbent, 2015).” Furthermore, the marketing tactic of company also links
Tesco’s vision and mission. For example, Tesco has the mission to increase its market share
in the global market by 5%. Here, in order to attain the respective mission, cited firm will
have to take help from different marketing tactics. Here, with the help of effective marketing
tactic only, information about the produced product will be spread by the firm among large
number of buyers. Thus, through this way only, customers will get attracted towards the
products and services as being offered by the enterprise. Thus, through this way, mission of
Tesco will be met.
1.3 Developing a marketing strategy
A well-defined marketing strategy proves to be very helpful in setting mission, vision
and objective of the firm. It helps in gaining competitive edge and contributes towards
earning revenue and profits. It has to be made with great concentration and focus. Strategy is
something which helps in achieving differentiation for the business. It is very evident that
retail industry is highly dynamic and competitive. Companies operating in the industry are
required to adopt effective marketing approaches from time to time so that awareness can be
created and customers can become familiar with the products and services.
Tesco may provide a framework in which information about what steps need to be taken are
mentioned (Holm, 2006). Tesco develops its marketing strategies through various steps.
These steps are as below:
 Identifying business goals – In the first step, Tesco decides about their business goals
which they have to achieve within a stipulated period, time, and term. Its objectives can be to increase awareness about products they are offering or to
capture a new target market (Klausner, 2013). Stating the marketing goals – In the next step, marketing goals of the firm is decided.
These targets will specify the standards which they have to meet. Benchmarks help
the employees of Tesco to achieve their goals on time (Clayton and Heo, 2011). Market research – For any marketing strategy, research is the most important part. It
includes the complete knowledge and information about market as its size, social

trends and growth. It is essential to do this so as to know if any changes in the
environment occur (Brooks and Simkin, 2012). Profiling the potential customers – Tesco profiles those customers who come in its
target market for assessing their needs. It helps it to identify their buying patterns as
well as in maintaining a relationship with them. Profiling the competitors – It is the practice of creating the detailed profile of
competitors. Thus, while doing so different type of information will be gather by the
manager of firm. It consists of information related to products and services, supply
chains and their pricing strategies etc. This will help Tesco in making right decision
and thus through this way only idea of developing the competitive advantage can be
developed by manager of firm. (Banerjee, 2009). Developing strategies helping in marketing goals – The strategy is made in this phase
in order to attract the target market and retain existing one. Here, advertising is used
in different ways. Using 5 Ps of marketing – Product, price, place, promotion, process and physical
environment are taken into consideration in this step to make marketing strategy more
successful (TESCO, Annual report, 2013)..
 Testing ideas – In the last step, a new idea or decided strategy is being checked by
taking reviews from staff and customers of Tesco. It proves to be very helpful in
improving the sales results. (TESCO, Annual report, 2014).
ACTIVITY 2
2.1 Evaluation of approaches to internal environmental analysis
For the purpose of assessing the internal environment, SWOT analysis can be done. It
includes strength and weakness which are internal factors whereas opportunities and threats
are external factors. With the help of it, companies can manage their threats and weaknesses
through their strengths and market opportunities.
SWOT Analysis:
It is a valuable technique for understanding, evaluating our company Strengths and
Weaknesses, as well as to identify Opportunities, Threats you will face, during the analysis.
 Strengths: It is the capacity or unique point which helps firm in developing the
unique image in market.
 Weaknesses: It highlights the weak side(s) of the business

 Opportunities: It comprises actions that can be taken for boosting the
operation of the company.
 Threats: elements that can affect the operation of company (Jordan, 2015)
(Figure: SWOT Analysis)
(Source: Yannopoulos, 2011)
Referring to the above for evaluating the internal environment of the organization,
Tesco can use the approaches like SWOT Analysis and Value Chain Analysis in order to get
the information about its internal environment. In some cases, functional approach is also
being used. Through value chain, the organizational, functional activities can be determined.
In this context, value chain can be referred to a practice of creating and building value by the
company at every steps of the operation. Value chain is full range of activities comprising
production, design, marketing and distribution. Companies that operate in production
industry, value chain initiates with procurement of raw material and ends when the item is
being sold to customers. Main purpose of this model is to develop value from each stage of
activities so that operational efficiency of the company gets increased (Saha 2011). Porter
divided the business function into two categories i.e. primary and support activities. Primary
activity comprises of following elements:
 Inbound logistics: It comprises of raw materials and its procuring, storing and
distribution are taken into account.
 Operation: Here, raw materials are transferred into final goods.
 Outbound Logistics: Final products are distributed to end users.

 Marketing and sales: It is required that company must conduct marketing so that
awareness among target customers can be increased. Here, practice like advertising,
promotion, CRM; pricing and other related factors are taken into account.
 Service: This refers to after sales service that been offered to customer in order to
address their grievances. It is also comprises of training, installation, repair, warranty
and maintenance (Arline, 2015).
Apart from this, following are the support activities:
 Procurement: This refers to obtaining raw material for products.
 Technology: Through this, company is able to produce high quality products. Also, it
aids in R&D from which company is able to develop advanced and effective products
that directly meet the needs of the customers.
 Human Resource Management: Company needs to recruit and retain skilled
employees so that they are able to design and develop quality products.
 Firm Infrastructure: It is comprised of company structure and its management
(Arline, 2015).
Value chain helps Tesco to know how to create values for their customers. These have
proven to enable the company to understand what activities are creating maximum value for
their customers (Parry, 2004).
Primary and supportive activities can be differentiated here with respective strategic
target areas. For evaluating the internal environment of this company, this approach
sometimes creates confusion as it is somewhat complex in nature (Narasimhan, 2005).
Using SWOT Analysis helps Tesco to know about their strengths and weaknesses. It
will also help the company identify the areas from where they can increase their profits.
Areas which can reduce their revenues are also identified through this approach, and also
create many benefits for it (Linus, 2001). It tells about the strengths of competitors from
whom it is having threat. Ultimately it reduces the risk which can occur due to any uncertain
event.
Furthermore, there is one more tool that can be used by the company in order to
understand its resources based capabilities and that is VRIO (Value Rarity Imitability and
Organization) (Klausner, 2013). It is one of the best frameworks that can be used by Tesco in
order to understand its capability to determine competitive potential. It helps the company to
see its resources from 4 perspectives which are rarity, value, imitability and organization.
Tesco has been using this particular analysis on the regular basis in order to place its products
in market and to claim that they are different from others (Butler, 2014). For example, Tesco

loyalty cards were marketed on the basis of their rarity and imitability in market and it helped
the company to increase its value and attract customers directly. Loyalty program helps the
company in enjoying benefits in terms of repeat purchase. Through this, edge is attained over
rivals.
In addition to it, performance based internal analysis can even be incorporated. In this,
Tesco can assess its performance based on ratios such as financial ratio, operations efficiency
ratio, and quality control standard and employee productivity statistics. Through this, actual
performance of company can be evaluated based on standard performance level. In case of
deviation, corrective measures can be incorporated by Tesco (Nandakumar, Ghobadian and
O'Regan, 2011).
On the other hand, functional analysis can also be used by Tesco as part of internal
analysis. It includes arranging the function of the company so that it meets with the needs and
wishes of the customers. Tesco being a retail giant offers customized services in terms of
self-payment, bar code reader for identifying the price of varied products, online portals and
other related services (Roetzer, 2011). This helps the company in boosting its competency in
the market place.
2.2 Evaluation of approaches to external environmental analysis
(Source: Clayton and Heo, 2011).
External factors include varied influences that affect the operation of company. To
ascertain the same, PESTEL analysis can be done that comprises of political, economic,
social, technological, environmental and legal factors. Based on it, the company can identify
which appropriate strategies can be considered.
There are many factors which influence the external environment of Tesco. PESTLE
analysis is an effective tool to evaluate the external factors that influences the business
operation of the company. It helps in focusing on the various forces that affect the business
unit and influence the working system (Jurevicius, 2013). If the external environment of this
company is assessed, both macro and micro environment can be studied.
Before entering into any new market, its economic conditions can thus be seen as well
as the role of government there, which must be analyzed in order to obtain appropriate
information of the regulatory framework of the country or market in respect of the
organization (Hunt and Arnett, 2004). It helps in knowing the restrictions that the government
has imposed on some firms. The complete regulatory framework is studied while operating a

new business. Legal environment plays a vital role in the success or failure of any firm. If
government rules and regulations are being ignored, it can lead the firm to failure. Tesco
takes various initiatives for having feedback from their customers so as to know at which
areas they fail (Holm, 2006). Through this, they make their products according to the
demands of people. It increases customer satisfaction which ultimately leads to increase in
sales as well as profits. Technology also plays a very important role in affecting external
environment of this organization. Those techniques which create highest profits for the firm
are being used. To select the best technology for the organization, the firm closely observes
the competitor's process of working and the technology they have implemented to acquire the
desired results. Selecting the wrong technology can entail huge losses for this company
(Clayton and Heo, 2011). The social values of a new target market are studied in which Tesco
is going to operate. This is being done to make their product successful. To stay in the market
in the long run, Tesco needs to have proper knowledge about its external environment.
Competitor analysis of Tesco can be done from one of its biggest competitors that is
called Morrison which is also a UK based retailer. Both of these companies represent
different characteristics in grocery retailing industry (Butler, 2014). Tesco is market leader in
the industry and it uses different types of strategies in order to influence the whole market.
On the other hand, Morrison can be called a market follower and can act vulnerable against
Tesco. Tesco has more than 3000 stores in the UK and it delivers different services to fulfill
needs of different people. Morrison on the other side has fewer stores than Tesco and its
market share is also very low compared to the company (Vizard, 2015). In the past few years
it has been observed that the sales of Tesco has reduced because of not analyzing needs of
consumers appropriately and Morrison has taken this as an opportunity to present the market
with goods that are demanded. It has helped them to increase its market share.

(Source: Porter, 1979)
The Porter's Five Forces is the framework which helps firms in analyzing the level of
competition prevailing in the respective industry. In this regard, following is the Porter’s five
force analysis of Tesco:
1. Threat of new entrants: Entry of new competitors requires huge investment in order to
give tough competition to firm like Tesco. Also, UK retail sector is stagnant due to
prevailing of strong competition. Due to this, threat of new entrants is low.
2. Threat of Substitute product: In grocery sector, threat of substitute product is low in
the case or food items and high for nonfoods products. There is wide range of
substitute to Tesco such as convenience stores, license stores, organic shop and other
related. However, this doesn’t pose threat to Tesco as it has high brand image and
presence in the market. Tesco faces high threat of substitute products in the case of
clothes etc.
3. Extent of Rivalry: UK retail market witnesses high competition due to which company
need to develop new set of strategies and tactics on regular basis. (Fuchs and
Diamantopoulos, 2010).
4. Bargaining power of Buyer: It is high for Tesco as numerous competitors exist that
offer almost same set of products
5. Bargaining power of Supplier: Majority of suppliers is inclined towards food and
grocery retailers and this factor helps in decreasing the bargaining power of suppliers.

2.3 Integration of internal and external analysis
(Source: Banerjee, 2009)
SWOT analysis is what integrates the internal and external analysis. PESTEL and
Porter Five Forces are for the external environment, while McKinsey 7S and Porter’s Value
Chain analysis is for the internal environment. Based on these models, company is able to
make choices for future expansion.
The graph above shows the integration of internal and external environment of the
company. If the internal and external analyses of Tesco's environment are integrated, it would
help to formulate future strategies for the organization. When there is a complex knowledge
about the internal and external factors of the company, it would also increase the quality of
performance of employees working at Tesco (Spector, 2012). By having thorough knowledge
about both of the environments, its opportunities can be captured by assessing its strengths
(Fuchs and Diamantopoulos, 2010). Here, with an aim to deal with the threats related with the
political and legal environment, Tesco can use its strength. One major weakness that was
analyzed by Martin in Asia was Tesco as a company was not able to represent themselves
appropriately in front of people. In India, company was forced to shut the stores that had been

established in collaborations with some third party companies because it affected the
operations of local retailers. In order to cope with that the company made different deals with
local retailers and continued its business on the name of partner through which business was
initiated. Furthermore, the company also made an agreement with government to ensure that
if rules are changed in the future, the company will be given some advantages (Mookerji,
2015).
ACTIVITY 3
3.1 Decisions and choices at corporate level
Vision of Tesco is based on 5 key elements i.e. wanted and needed around the world,
continuously growing the business, innovating services, winning local market and earning
loyalty and trust of customers. In addition to it, mission statement states “We make what
matters better, together” (Corporate strategy, 2015). In order to attain their vision and
mission, corporate level officials play a significant role. Here, corporate level can be referred
as top level management that develops strategy and tactics for business growth. It makes
critical decisions at the time of deviation so that chances of losses or negative impacts of
company can be reduced. Also, it makes decision on providing funds in the company for
attaining growth. With the help of it, the company is able to meet the objectives and hence
able to sustain in the market for longer.
As in any organization, at Tesco also, decisions and choices are being made on three
levels. These are top, middle and lower level. Corporate decisions affect all these levels in
one way or another. Decisions which are directly related to the objective or goal of the firm
are made at corporate level (Nandakumar, Ghobadian and O'Regan, 2011). It is the highest
stage where resources are allocated to each area and strategies at all levels are coordinated.
Decisions taken at corporate level include for example the diversification of products.
Here, it refers to either superiority on quality or price of Tesco's products. At its corporate
level, decision is taken regarding different features that the company wants to provide to their
customers and that no other firm has (Indridason and Wang, 2008). Therefore strategies are
being made at the top level of the organization, including differentiation in its products like
change in taste or packaging.
Furthermore, top level officials make decision regarding business expansion also
through Ansoff’s matrix (Bērzins, n,d). In this, decision is made by Tesco regarding market
penetration, product development, market development and diversification. This model
comprises of four quadrants and each has been enumerated below:

Market Penetration: It includes marketing existing product within existing market.
Tesco has increased its grocery market through this.
Product Development: Tesco developed Tesco Mobile that offer telecom services to
customers across the UK. This helped the company in entering into new segment through
which sales of the company is increased.
Market Development: Tesco has moved into convenience store market in order to
boost its sale and operational base.
Diversification: Tesco even entered into petroleum and financial sector for developing
wide product portfolio. This assisted in boosting operational efficiency of the company.
Figure 1: Ansoff matrix
(Source: Fuchs and Diamantopoulos, 2010)
Porter Generic Strategy
Porter generic strategy is a tool that helps company in pursuing competitive edge in
the allotted market segment. In this regard, there are basically four types of strategy i.e. cost
leadership, differentiation, cost focus and differentiation focus. In cost leadership, company
aims to offer low cost product so that more customers can be attracted towards it.
Differentiation aims to develop distinctive products or services that that of competitors in
order to remain attractive in the world. On the other hand, focus strategy concentrates on
particular niche markets.
A cost leadership strategy is done at the corporate level as well. The main aim behind
this is to lower its prices by producing products at low cost. If it provides identical products at
low cost but with equal quality, people will prefer these products and only this will lead to
increase in sales and thus profits (Gurau, 2008). These decisions are being taken to gain

competitive advantage in the market. Being a cost leader is the most powerful tool for Tesco
to capture market as consumers are price sensitive.
Figure 2: Porter Generic Strategy
(Source: Daft, 2008)
3.2 Assessing the impact of varied decisions on the marketing function of firm at both
business unit and functional level
Marketing activities make impact on business units because promotion is done based
on needs and demands of the customers. Considering this, the marketing plan is developed to
give support to attract customers. Also, it includes funds which certainly affect the business
operation if not planned appropriately.
There are different decisions that influence the marketing of a business unit and on
functional level. These include decisions regarding segmentation, promotion, price setting,
selection of source for promotion, or targeting strategy for example. In order to manage
decisions with regard to marketing, proper market research and feedback from customers
need to be taken so that effectual results can be attained through them. Through this, better
strategies are developed at business units.

Tesco is a large corporation and has various business units. Decisions on competition
as well as on different channels of distribution are also made here (Doole and Lowe, 2008).
For dissimilar product groups, different strategies are being made. It is the responsibility of
each business unit to set its own strategy for its specific product group. Coordination in
between all these units with their decisions leads to accomplishment of corporate level
strategies (Daft, 2008). There must be proper cooperation in between these business units as
without that, the ultimate result of the organization cannot be achieved. However, it does not
mean that corporate strategy is the total sum of business strategies. Nevertheless, decisions
made at these levels have crucial impact on decisions at top level of Tesco (Fuchs and
Diamantopoulos, 2010).
At Tesco, functional or tactical decisions are made by different departments of each
business unit. Here, there are strategies such as marketing strategy and pricing strategy that
come into the picture (Dekimpe and Hanssens, 2004). Various specialists are involved at
Tesco to make these decisions. All the functional strategies have to be properly linked with
business and corporate strategies to make their best use in achieving the organizational goal.
Besides, marketing objectives are set by the company so that they can attract customers and
hence are ready to boost the sales volume. Additionally, marketing content is developed at
functional level and same is promoted through different media in order to spread the
awareness. Other functions related to marketing is assessing the response rate of the
marketing and identifying loopholes so that they can be rectified. In addition to this, at the
functional level, managers of Tesco have to make different decisions regarding other
functions such as human resource, finance and research, etc. With respect to marketing,
manager makes necessary arrangement of employees who will support the marketing tactic
which is being framed by it. In the similar way, sufficient finance will also be required by the
marketing manager of Tesco in order to use different means of marketing. Thus, at the given
level, manager has to make decision about the sources from which it can obtain finance in an
effective manner. Finally, at the end, research is also being carried out on market in order to
get different information. Thus, at the function level, manager will have to make the decision
regarding number of functions.
3.3 Approaches to competitive positioning
Competitive positioning can be defined as a situation in which firm possesses high
capability in the market which its competitors are not able to imitate. It is essential to acquire
competitive edge so that firm can sustain in market for longer and hence is able to earn high

profit. For competitive positioning, different measures can be taken into account by company
such as offering sound customers service, loyalty card, customer oriented products, low
queue for payment system and other related (Doole and Lowe, 2008).
At Tesco, competitive positioning is done through various ways like becoming the
market leader or follower or challenger. To become a market leader, its positioning will be
based on its quality. In this endeavor, it will try to keep in mind of consumers that they are
the providers of the best quality of a particular product (Yannopoulos, 2011). Therefore
Tesco has to make various strategies to show their superiority over competitor's products. It
will bring differentiation as well as diversification in their products and will create value for
the market. Without showing how the product is different from others, it will take more time
to position that (Roetzer, 2011).
Additional method that Tesco uses to position their product is cost leadership that is to
provide the cost to the people that are easily affordable to them. Also, they do not have to
compromise at quality. This strategy proves to be the most advantageous for gaining higher
profits for the firm as the target market as well as the competitor's market can be easily
captured through this. Product specialization is also used by this company to position its
separate category of products for a specific group of people only (Ries, 2003). It can be done
for their luxurious products which are highly expensive too.
Additionally, there is risk in attaining competitive edge as the company needs to
develop varied sets of strategies and incur different set of cost. Should any deviation arise, it
certainly increases the marketing cost from which the profitability of the company gets
hampered. If things go well, firms like Tesco are ready to attain the position of market leader.
In this context, market leader refers to a superior position compared to its rivals in every
sense such as high customer satisfaction, enhanced loyalty and high market presence
(Dekimpe and Hanssens, 2004). Through this, other company will follow the strategies and
approaches taken by Tesco in order to attain competitive positioning. This particular situation
is termed as market follower. Apart from this, market niche can be referred to a small yet
profitable segment in the market that been created by recognizing the needs of the clients
ACTIVITY 4
4.1 Strategies which helps business in gaining competitive advantage
Tesco has many strategies which contribute to the competitive advantage it gains in
the market so as to bring stability. The most common among these are defensive strategies. It
helps the firm to maintain competition for its business from other firms and gaining an

advantage from that (Badur, 2011). In reducing risks from uncertain activities as well as from
the threat of competitors, it proves to be the most effective. By bringing innovation in their
products through use of latest technologies, Tesco gains the competitive advantage of
providing the most advanced product. In the present scenario, people want innovation in
things which they are using and company is successful in providing this (Nandakumar,
Ghobadian and O'Regan, 2011). Their customer service also uses one of the best strategies
for making benefits from their competition. As they are providing many products which are
the same as those of competitors to attract customers, they have to adopt defensive strategy. It
increases the satisfaction level of customers (Indridason, and Wang, 2008). Also, it helps to
increase the customer loyalty towards Tesco’s brands as they get their demands, expectations
and needs fulfilled.
Furthermore, there are some more strategies that can be used by the company:
 Market Development - It will allow Tesco to gain competitive advantage. Through
this the company can advance its business by entering into new market segments
(Doole and Lowe, 2008). For this, the company will require a good marketing strategy
so that proper mission of market development can be defined. This particular strategy
will allow the company to gain more revenues and it will also be able to capture new
customers.
 Differentiation - It is one of the best strategies that can be adopted by Tesco in order
to enhance perceived value of its brand. Company can attain differentiation by
developing techniques like competitive pricing, distributor location, enhancement of
functional designs and features and expanded distribution channels (Badur and et.al.
2011). By offering unique and good services to customers, the company will be able
to attract more and more customers and it will also help them to create a unique brand
identity in market.
 Cost Leadership - This strategy facilitates competitive advantage. By using this, the
company can set the prices of goods low but still keep the quality of products very
high. It will create a positive impression in the mindset of customers and they will
become loyal customers of Tesco. By using this, company will also be able to
increase its revenues and enhance market share as compared to its competitors
(Nandakumar, Ghobadian and O'Regan, 2011).
In addition to it, Tesco needs to conduct STP (segmentation, targeting and
positioning) so that it would be capable in capturing the attention from right set of customers.
Here, segmentation refers to divide the whole market on the basis of different factors such as

demographic, geographic or psychographic. Based on this, targeting strategy is applied such
as differentiated, un-differentiation and concentrated. By doing this, company is able to
position itself in the eyes of customers.
Further, relationship strategies refer to address the grievances and issues of
customers from different means and making regular contact with different means such as
email, mobile marketing and through social media in the form of newsletter. This aids in
gaining regular support from customers and it ultimately helps in gaining loyalty from them.
Tesco does the same through email, mobile marketing and social media. Besides that, concept
of developing unique and novel product or service is termed as product innovation that helps
company in catering the attention from distinct customers. In this regard, Tesco offers low
cost products and concept of click and collect that helps in meeting the needs of different
customers (Butler, 2014).
Branding is another concept that helps company in attaining an edge over rivals. It is
a practice of developing unique and distinctive image at the marketplace. In this regard,
Tesco has a brand image of offering quality and variety of products at relatively low cost as
compared to their competitors. Additionally, service marketing refers to promotion of
economic activities that is being offered by company. Besides this, competitive advantage
can be attained with the help of marketing strategies of pricing and distribution. Price needs
to be quoted in a manner so that target customers can afford it and distribution should be in a
manner that products are available within convenient reach of clients. Tesco focuses on these
particular aspects and offers low cost product through physical store and from online portal.
It also does marketing on internet as majority of customers access the internet on regular
basis. In this regard, Tesco conducts e-marketing in the form of email marketing, mobile
marketing, SEO (Search Engine Optimization), pay per click and other related.
4.2 Marketing communication strategies for business
Marketing communication can be referred to as a practice of sharing messages to
customers and potential customers so that brand awareness can be increased. Through the use
of marketing communication, brand awareness is being increased by Tesco towards their
consumers. With the help of this, customers make perceptions about what information they
get from the market. It also helps in positioning its products to the target market. Tesco uses
target and benefit strategy for marketing communication (Gurau, 2008). Benefit strategy
shows various profits along with its products so as to make customers believe that they have
benefit and value for what they are spending. For this, Tesco uses many promotional

activities like advertising showing the product's features with benefits. In target strategy, the
communication is done in order to know which market segment is going to produce the
highest revenues for the amount invested (Doole and Lowe, 2008). This is defined as
segmentation as well as prioritization. Personal selling and direct marketing is also applied in
marketing communication of Tesco. It is helpful in interacting face to face with the customer
as in this; their actual and instant reaction can be captured. Ultimately it helps in making
various decisions regarding a particular product (Daft, 2008).
Some of the marketing communication strategies that can be used by Tesco are:
 Direct communication - This method targets the consumers directly and personally.
In this, popular media tools like TV, radio are not used but instead some personalized
techniques like event organization, door to door selling, etc. are used to attract
customers (Banerjee, 2009). Through this, Tesco will be able to define its key
consumer groups rather than mass audiences. Some techniques that can be used in this
are personal selling, public relations, sponsorship, etc. It is a traditional mode of
promotion but is very effective in the existing business environment also. It helps in
knowing the customers in more personal manner and provides more information
about their taste and preferences (Doole and Lowe, 2008). Above the Line Promotions- This technique can be used in order to communicate
with people via mass media channels adequate to the intended target audience in an
appropriate manner. There are different methods like print, TV, radio, advertisement
which are used under this approach (Roetzer, 2011). This helps in reaching maximum
audience thus creating high measures of promotion for the company (Badur and et.al.
2011).
 Public Relation- It is an indirect influence of public (customers and business partners)
by portraying positive image on the corporate in media. Most typically, PR articles
show company and brand name in connection while delivering news on charity events
or supporting social causes. The objective of PR activities and PR communication is
both; to increase brand awareness in the relevant public audience as well as to
enhance the brand image. Thus, it has an effective role within firm.
 International communication: Tesco can even do global communication with the
help of internet and by using social media as platform. This will help in boosting the
awareness of company in the market that helps in attracting large number of
customers towards it.

 Cost Decisions: Additionally, cost decisions with regards to marketing
communication need to be considered. Here, with an aim to distribute goods to the
buyers, manager should select such mean which has cost effective advantage.
Furthermore, the frequency of using specific marketing communication mean should
also be decided. Moreover, the communication strategy must also be selected by
Tesco manager on the basis of area where it operates its operations. For example, if it
is operating its function in international market, then in the given situation, manager
must select such media in the respective market which is highly popular.
All these strategies are very popular and it helps Tesco to attract customers in the best
possible ways.
Besides this, with an aim to develop effective marketing communication strategies,
manager of Tesco can take help from MARCOMS strategic process. The detailed explanation
of the same is depicted as below:
 Getting the information about the customers: The process begins with assembling
thorough information about the customers. Here, basically the firm has to assess the
behavior which is being carried out by its buyers while making the purchase decision.
 Uncover the USP of firm: Tesco’s USP is to deliver high quality of services as per the
needs and demands of buyers.
 Preparing the message for the product: In the given step, manager of Tesco will have
to prepare single and consistent message for the products and services which is being
offered by it.
 Finally make the selection of communication media: Here, after framing the message,
manager of firm will have to make the selection of appropriate mean with the help of
which it can spread its framed message among respective buyers. Here, in the given
step, manager can take help from MARCOMS approach wherein it makes the
selection of number of marketing communication tools with an aim to spread the
information about the product among large number of buyers.
Furthermore, Tesco must choose its media on the basis of its objective. For instance,
Tesco is planning for reducing different costs which are being incurred by the enterprise.
Then in the given situation, enterprise should have to make the selection of some economic
marketing communication mean which would assist the firm in given tactic. In this context,
firm can use the marketing communication mean such as newspaper. The firm should also
measure the effectiveness of marketing communication tactic which is being used by it. For

example, if organization has identified that its selected marketing communication tactic is not
working well then in this situation, manager should switch on other strategy.
4.3 Marketing strategies and their implementation
Tesco implements a variety of strategies in its organization to ensure smooth
functioning. These strategies are applied in the firm to manage its resources as well as to
achieve its target in the most effective and efficient way (Chun and Kamins, 2010). Some of
these strategies are:
Scarcity marketing – Tesco provides some products whose raw materials are not
easily available because of their higher quality. In this case, the company makes these
products only for those customers who can afford them ((Badur and et.al., 2011).
Diversified marketing – Tesco targets different segments of customers. It includes
distinct tastes, beliefs and expectations of people for whom certain products have been made
(Banerjee, 2009). Here, with the help of given marketing only, Tesco maintains its
competitive advantage which is to offer the product as per the needs and demands of its
buyers.
Relationship marketing – Tesco believes in building relationship with their customers
so as to increase their brand loyalty and satisfaction, too. It helps in maintaining stability in
the organization and also increases its period, time and term to stay in the market for further
years (Salaimeh, 2008).
Furthermore, there are some more strategies that can be used by Tesco:
Direct Marketing- It is the most basic method of marketing that can be adopted by Tesco
in order to attain all objectives in an effective manner (Clayton and Heo, 2011). This
particular method includes different techniques like personal selling, emails, telephone
conversations, filtering, catalog distributions, etc. These methods are very costly but they
generate quick results for the company (Brooks and Simkin, 2012). Using this technique,
Tesco will be able to contact its customers in an appropriate manner and this will help
them to achieve their business objectives more easily.
Online Marketing- This type of marketing strategy is considered as increasingly
significant these days because more and more consumers are moving towards the online
market and with this technique the company will be able to target people more efficiently
(Fuchs and Diamantopoulos, 2010). Marketing is done through social media websites,
websites and other sources of internet. Through this, Tesco will be able to attract large

masses with very low cost (Roetzer, 2011). Furthermore, the company can also make use
of interactive media to target the customers appropriately.
Organizational Monitoring - Tesco can directly monitor the performance of all strategies
that it has implemented as it will help them to understand the drawbacks of all these
strategies which will focus on corrective actions (Yannopoulos, 2011). Thus, it is through
this way only, firm establishes control over the marketing tactic which is being used by it.
The marketing tactic has applicability for both organization and Tesco’s management.
Here, with the help of different marketing tactic, the objective which is being formulated by
the cited firm, management will be met. Overall, benefit will be incurred by the corporation
in the form of increased profits and sales in an effectual way.
CONCLUSION
Strategic marketing helps the company in developing the competitive edges of the
company, to evaluate the actual measures, to promote its products and services and to
establish the brand image in this competitive market. It can be concluded from this report that
Tesco's strategic marketing is powerful enough to generate high revenues for the firm. All
strategies whether they are made at corporate, business unit or functional level, are important
for the organization.
These have helped the company in creating an edge in the retail market, in
developing its business and evaluating the scope of growth as well. To enhance the
relationship between Tesco and their customers, its marketing communication proves to be
efficient (Singh, 2007). It increases the satisfaction level of the customers and thus leads them
to stay with the company for many years. Tools like PESTLE helped in analyzing the internal
and external factors affecting the business of the company. In order to cater for the needs of
customers, Tesco needs to employ more modern and dynamic methods of marketing.

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