Marketing Strategies for Tesco: An Analysis

This article provides an analysis of the marketing strategies adopted by Tesco, including SMART objectives, marketing mix, BCG matrix, Ansoff Matrix, STPD model, and customer-driven strategy. The article also discusses the company's recent objective of adding a healthy and organic range of products to its portfolio, and how it plans to achieve this through market analysis and development strategies.

Principles of Marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
SMART Objective.......................................................................................................................3
Marketing Mix.................................................................................................................................3
4P's of marketing mix..................................................................................................................4
Marketing Analysis..........................................................................................................................5
BCG Matrix.................................................................................................................................5
Marketing Developing Strategies....................................................................................................6
Ansoff Matrix ..............................................................................................................................6
Customers Driven Strategy..............................................................................................................7
STPD Model................................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................8
Books and Journals......................................................................................................................8

INTRODUCTION
In today's era there is lot of competition present within the market, so to stand out from
the crowd, organisations market it's products, which helps them in attaining competitive
advantage (Yakut, 2022). The organisations should also keeps on doing innovation to seek
attention of lot of customers. With this ideology Tesco brings up with the new objective which
will help them in it's expansion. Tesco is a Public Limited Company which was founded in 1919
by Jack Cohen in England, UK. The objective of company is to add on healthy as well as
organic range of products in it's portfolio. This decision was taken by organisation by analysing
the current market tend, that customers are focusing more towards their healthy after Covid – 19
pandemic. This file includes SMART objectives framed by organisation, marketing mix,
marketing analysis through BCG matrix, Market development strategies with the use of Ansoff
Matrix and lastly the customer driven strategy with the help of STP model.
SMART Objective
The SMART objective set by the organisation Tesco is mention below -
Specific Measurable Attainable Relevant Time bound
Tesco wants to
make
diversification in
it's existing
product portfolio
by adding healthy
as well as organic
products to it
(Gringarten,
2021).
It have being
analysed that by
adding new range
of product the
company will be
able to enhance
it's market share
by 30%.
The company
Tesco is already
having a good
brand image
which indicates
that customer will
definitely try the
new product
launched by
company.
The customers are
shifting towards
the healthy
lifestyle, so the
new product
range is as per
their needs and
wants.
6 months
Marketing Mix
Marketing mix refers to the strategies or action plan framed by the organisation in order
to make it's products or services promoted in the market (Tokarev, Shkarovskiy and Soldatova,

2020). This concept was developed by E. Jerome McCarthy in 1960 for building an effective
strategies for marketing.
4P's of marketing mix
The 4P's of marketing mix in context to Tesco is stated below -
 Product – The product for company is the item which is being sold by them to it's
customers (Swenson and Rhoads, 2019). In context to Tesco, they have a wide range of
products which they are offering to it's customers. In order to grab the attention of more
customers they had launched a new product which is health and organic for health
conscious customers. By analysing the current market condition they have evaluated that
the demand for healthy products among customers is growing tremendously after the
situation that has arise due to Covid – 19 pandemic. This new item added by them in it's
portfolio is also their product.
 Price – Tesco uses Cost Leadership pricing strategy, as they are having a large customer
base with this they are able to achieve economies of scale. Due to this the cost per unit of
product declines and they are able to sale it at low price, but with the introduction of new
product that are using Price Skimming pricing strategy (Chernev, 2019). This is because
they are launching new product which is in demand, with this very few organisations are
involved in producing healthy products and this is a opportunity for Tesco to grab
attention of customers for serving them products as per their requirements.
 Place – The place for Tesco is it's stores where they are involved in selling products. The
company is having more than 5000 physical stores where they sells it's wide range of
products. Now the new product launched by them will also be sold by the organisation in
these stores. With this, the organisation is planning to start selling it's products on E-
commerce websites and this the use of advance technology they are also involved in
owing their own websites for where the customers can directly make purchase and the
product will be delivered to the door step of customers.
 Promotion – The promotion refers to make the product or services of company promoted
within the market and building brand image which can create a positive and powerful
impact in the mind of customers. As Tesco is involved in making optimum utilisation of
technology so this is why they are using social media marketing to make it's new product
promoted among the customer. Now a day customers are more influencing by watching

the video make by the influencers and also they are paying attention towards healthy
products by watching the videos of influencers. This is why the company had taken help
of the influencers to make it's new product promoted. Within a spam of short period of
time the message or information about the new product will be reached among a large
customer base. With this, promoting products with the helps of social media is the most
effective and efficient way of promotion.
Marketing Analysis
The marketing analysis complies of certain set of activities which could be undertaken by
the management in order to understand the needs & wants of customers and make them products
available accordingly (Suryawanshi, 2020). Initially, Tesco makes the analysis of market that
what kind of products are available. Then requirements of customers and problems faced by
them are evaluated. The next step is to analyse the competitors followed with segmenting it's
customers as per their needs and wants.
BCG Matrix
The BCG Matrix is being prepared by organisations in order to evaluate where it's
products are currently lying means what is the position of it's different products. The concept of
BCG Matrix was first developed by Bruce Henderson in 1970s. This matrix comprises of four
quadrant which are named as Cash Cow, Star, Question Mark and Star.
 Cash Cow – The products which are able to generate a huge amount of cash for the
organisation by using less amount of investment underlies under the quadrant of Cash
Cow (Kotler and Armstrong, 2018). The fresh fruits, vegetable and meat supplied by
Tesco in the market have a huge demand and the capital required to make them available
amount the customers requires less cost. This makes these products retains in this cash
cow quadrant as they are able to generate a huge amount of profit by selling them.
 Stars – The products which are generating a huge among of profit for the company but
simultaneously requires huge capital are underlying under this quadrant. The bank of
Tesco comes under this quadrant as the banking sector have a potential for higher growth.
Along with this, the new product launched by Tesco will lie under this star quadrant. As
the product is at growing stage, this is why a huge amount of capital is required. With

this, the products is being produced by analysing the needs and wants of customers so the
demand for the product will also be high.
 Question Mark – The products which uses a huge amount of cost but then also it
generates a low range of revenue for the company lies under this quadrants. When the
organisations have a large range of product portfolio then the chances of having loss in
some of the products are quite normal so to avoid this situation the organisations should
stop making investment on it and wind up that product from it's portfolio. Some of the
products of Tesco lies under this segment due to lack of innovation made by the company
in it's products. The company should stop producing that products and make the money
invested to Cash Cow or Star quadrants in order to make it's market share grow.
 Dogs – The products which are not able to generate revenue for the company with this
the market growth of this product is also low comes under this quadrant. Now a days
customer are getting aware about environment protection and prevention. This is why
some of the products produced by Tesco is generating a huge loss to environment. That is
why the customers starts avoiding to consume those products and they starts coming
under Dogs quadrants.
Marketing Developing Strategies
The marketing developing strategies is the strategy made by the organisation to grow it's
businesses (Musakayeva, 2019). The growth is being undertaken by organisations in order to
make sales of it's existing products or services to the new range of customers.
Ansoff Matrix
The marketing development strategy in context to Tesco is being explained with the help of
Ansoff Matrix, which is stated below -
 Market Penetration – When the organisations establishes they have less customer base,
after the growth of the company they are able to grab for opportunities (Laczniak and
Murphy, 2019). When the organisations make sales of it's existing products to new
customers base is considered as market penetration. The company Tesco was initially
operating in UK, further the start operating in Ireland, Hungary, Czech Republic and
Slovakia. While operating in these countries they do not make any changes in it's product
portfolio, they just expand and grab more customer base.

 Market Development – The organisation is selling it's existing product in the new
market is considered as market development. The supermarket of Scottish is being
undertaken by Tesco and this is how they are able to find out the new market.
 Product Development – When a new product is being launched by the organisations in
the existing market then it is considered as product development. The new product
launched by Tesco is an perfect example of product development. As the new organic
and healthy product launched by organisation is being launched by them in the existing
market. The company is able to make expansion and grab a forces of new as well as
existing customers.
 Diversification – Diversification is considered as the operations undertaken by the
organisation in the new market with the new product. This type of marketing strategy is
considered as the most riskiest as they organisation is new in market as well as new to
product. The company Tesco has first started operating in the grocery segment and after
creating a brand name they keeps on diversifying in different segments such as, in
banking segment, mobile segment, booker group, Spenhill, Dunnhumby and so on. This
as risky diversification for employees as they may or may not be achieve in this segments
as they are new for the organisation. With this, a huge cost of company is being incurred
at the time of diversification so this is the most toughest decision taken by organisations
at the time of making diversification.
Customers Driven Strategy
When the organisations are involved in producing the goods or services only as per the
demand of customers and keeps their needs at the centre, declining all other facts are considered
as Customers Driven Strategy (Hay and Eagle, 2021).
STPD Model
The customers driven strategy in context to Tesco is being explained with the help of
STPD Model, which is stated below -
 Market Segmentation – In order to satisfy the needs and wants of the customers,
organisations segment or group the customers on the basis of their needs, wants, taste,
preferences, demand, culture, attitude, location and so on. The market segmentation is
further classified on four segments which are mentioned below -

Geographic segmentation – Tesco is involved in supplying it's products at different
areas, such as UK, Ireland, Hungary, Czech Republic and Slovakia. This is how they are
involved in performing democratic as well as international trade. When international trade is
performed by company then a huge transportation cost is being incurred by them, that is why the
cost of product supplied to customer rises.
Demographic Segmentation – Tesco segmentation of group on the basis of
demographic is being classified as classification on the bases of gender, occupation, level of
income, age, religion, etc. is termed as demographic segmentation.
Psychographic Segmentation – The segmentation of Tesco on the basis of
Psychography complies of distribution of customers on the basis of buying pattern of customers,
hobbies of customers, their opinion and characteristics.
Behavioural Segmentation – The segmentation of Tesco on the basis of behaviour
includes that attitude of customer, the knowledge of customer related to product and it's uses, etc.
 Targeting – For the new product which is launched by Tesco the targeted market is high
class income group. The reason behind this was that the organic products are tend to be
set at high price range, this is why the high level group can make consumption of those
products without facing any major issues. With this, the educated people are seems to pay
more attention towards consumption of healthy goods. This is how the high income level
group is being targeted by Tesco.
 Differentiation – The differentiation refers to adding some uniqueness in the product that
it looks different from the competitors products. This is how the organisations are able to
grab competitive advantage. The Tesco is involved in differentiation of the product by
producing it's new product range that is the healthy and organic product. The customers
are now a days looking for the healthy substitute of products. This is why the company is
involved in supplying healthy sugar free and gluten free products, with this whole wheat
flour is being used for preparing base. Along with healthy the products of Tesco also
comprises of good taste, which makes the customer feel more motivated to make
consumption of these products. Positioning – The new product produced by company is healthy substitute with this it
tastes good, so on this bases the company Tesco can position itself as the product is not

easy to be get imitated by it's competitors. The company is already having a good brand
image which help them in acquiring more customers base.
CONCLUSION
From the above report it can be concluded that, marketing is the most important tool that
is being used by the organisations in order to make it's products promoted and create the brand
image in the mind of customer. The objective of Tesco was to introduce a new product which is
targeting the health conscious customers. The objectives of company is being explained with the
helps of SMART objectives. Further the marketing mix using 4P's such as price, place,
promotion and product is analysed. The BCG matrix is being evaluated which product of
company lies under which position. With the Ansoff Matrix the existing product is being
targeted to sell to new customers. Lastly, the customers driven strategies such as segmentations,
targeting, positioning and differentiation is helpful in understanding the needs & wants of
customers and make supply of that product accordingly.

REFERENCES
Books and Journals
Chernev, A., 2019. Strategic marketing management: Theory and practice. Cerebellum Press.
Gringarten, H., 2021. Marketing: Principles and practice: A management-oriented
approach. Journal of Multidisciplinary Research, 13(1), pp.119-121.
Hay, R. and Eagle, L., 2021. Marketing social change: Fixing bush internet in rural, regional, and
remote Australia. In Broadening cultural horizons in social marketing (pp. 281-293).
Springer, Singapore.
Kotler, P. and Armstrong, G., 2018. Principles of Marketing (Seventeent). Unted Kingdom:
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Laczniak, G.R. and Murphy, P.E., 2019. The role of normative marketing ethics. Journal of
Business Research, 95, pp.401-407.
Musakayeva, P.M., 2019. Marketing economy at the business enterprise. Российская наука и
образование сегодня: проблемы и перспективы, (3), pp.15-16.
Suryawanshi, V.B., 2020. Principles of Marketing (202).
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Marketing. Business Education Innovation Journal, 11(1).
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Combining at Stages of Innovative Startup Implementation. In Institute of Scientific
Communications Conference (pp. 1687-1695). Springer, Cham.
Yakut, E., 2022. Effects of Technological Innovations on Consumer Behavior: Marketing 4.0
Perspective. In Industry 4.0 and Global Businesses. Emerald Publishing Limited.