TESCO’s Marketing Report: Analysis of Marketing Environment and Integrated Marketing Communication

This report analyses the marketing environment of Tesco with the help of appropriate academic theories and covers integrated marketing communication and integration of online and offline media. It includes SWOT analysis, Porter's 5 forces analysis, SLEPTS analysis, and DRIP model. Tesco's internal and external environment is analysed along with the use of appropriate marketing theories and tools.

TESCO’s Marketing
Report

EXECUTIVE SUMMARY
Marketing is playing a crucial role in the success and growth of organisation as it
gives the reason to the customers for buying the goods and services of organisation. It is
necessary for organisation before making any marketing strategy that they should focus on
analysing the marketing environment. It includes both internal and external marketing
environment which should be analysed with the use of appropriate marketing theories and
tools. This report will be undertaking a comprehensive analysis of marketing environment
which is necessary for the achievement of goals and objectives of organisation.

Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................4
Company profile.........................................................................................................................4
Marketing environment analysis................................................................................................5
Internal environment..............................................................................................................5
Micro Environment................................................................................................................6
Macro environmental analysis...............................................................................................7
Integrated Marketing Communication.......................................................................................8
Advertising.............................................................................................................................8
Sales Promotion.....................................................................................................................9
Direct and Digital marketing..................................................................................................9
Integrated of online and offline media.....................................................................................10
CONCLUSION........................................................................................................................12
REFERENCES.........................................................................................................................13
Books and Journals:.............................................................................................................13

INTRODUCTION
Marketing is defined as an activity performed by a company in order to promote the
goods and services of the organization (Bala and Verma, 2018). In today's business world, the
marketing function is playing an important role in the success and growth of the company as
it helps to attract consumers to the organization. This is necessary to understand the
organization the need to perform marketing actions in an effective way which assists in the
accomplishment of goals and objectives. The purpose of marketing is to generate revenue for
the organization. This report will be discussed the marketing environment of Tesco. It will
cover marketing environment analysis with the help of appropriate academic theories. It will
also cover the integrated marketing communication and integration of online and offline
media.
Company profile
Tesco is found to be a British multinational retailer of groceries and general
merchandise headquartered is located in Welwyn Garden City, England. That identifies that
Tesco is doing very well in the business environment and because of it becomes the third-
largest retailer in the world in terms of gross revenues and the 9th largest in the world in
terms of revenues. It has a large number of shops in five countries across Europe and it
becomes a market leader in the UK of groceries (Morgan and et.al., 2019). It is identified that
not Tesco has expanded its operations in the world. They are running their business in
approximately 11 other countries. It is identified that Tesco is operating their business in
retailing. They are currently engaged in the business of retailing and other associated
activities such as insurance services and retail bank services. They have a wide range of
products and services that are not limited to the UK but it becomes a global brand.
It is identified that Tesco is found in the competitive capability pyramid as it includes
core competencies, strategic assets, etc. It is necessary for an organization to understand the
capability pyramid. It is identified that Tesco has already implemented big data analytics.
They are implementing data analytics for the purpose of analysing business requirements,
making better decisions, does not abandon legacy data systems, etc. Big data is defined as
data that includes avoiding a range of information that arise in more velocity and volume. Big
data is found to be more complex, larger data sets, etc. Tesco is implementing big data
analytics for the purpose of providing a better customer experience to the customers. They
are doing this with the help of transforming their business with innovation and digital

transformation. It includes access to a huge pile of information and data related to the
preferences and behavior of customers.
Marketing environment analysis
The marketing environment is including both factors that are internal and externals
which provide and impact a firm's ability in order to build and maintain successful customer
relationships. In order to run a business successfully, it is identified that the company needs
to do a market environment analysis both internally and externally (Kotler, 2021). The reason
behind this is it provides and direct or indirect impact on the organization's performance so
that's why the company needs to make sure about the use of academic theories in order to
analyse the market environment. Tesco is found to be the third-largest company in terms of
gross revenue which shows that they are running their business very well and that's why
becomes necessary for them to have good marketing in order to attract and retain their
existing and new customers. Marketing environment analysis is very helpful for Tesco to
identify the possible barriers to success as it will provide the information related to possible
risks and challenges.
Internal environment
SWOT analysis method will be used for the purpose of analysing the internal
environment of the organization. It is the tool that is used for the purpose of analysing the
strength, weaknesses, opportunities, and threats. It is necessary to understand for an
organization that the internal environment is providing a direct impact on organizational
performance and that's why they need to identify and analyse the factors which may provide a
negative or positive impact. The SWOT analysis of Tesco is mentioned below:
Strengths:
 Tesco is found to be the leading grocery retailer in the UK and has high sales and
revenue as compared to other supermarket chains (Rust, 2020). They have a wide
range of products and services which helps to satisfy the needs and wants of
consumers.
 Tesco is leading and market share with the help of an efficient supply chain network
and superior technology usage. It helps to gain a competitive advantage.
Weaknesses:

 It is identified that in 2021, Tesco's operating profit fell by 21.3% and due to it, they
are struggling with their prices. Their share prices also declined by 8% in the first
quarter of 2022.
 Due to its low-cost strategy, Tesco faces challenges as its profit margin is reduced
because of this strategy.
Opportunities:
 Expansion in emerging markets was found to be a very profitable opportunity for
Tesco such as South Korea, Indonesia, and Turkey.
 Their cashless stores are found to be very beneficial for consumers as they are seeking
cashless transaction options which will be completed by Tesco Store.
Threats:
 Tesco is facing a threat of high competition in the market as it is increasing day by
day.
 They are also facing supply chain issues which are necessary for their success and
growth.
Micro Environment
It is important for Tesco to analyse the microenvironment which can be done with the
help of using Porter's 5 forces analysis. It is the model which can be used for analysing the
microenvironment (Kumar, Paul and Unnithan, 2020). It is identified that they need to focus
on two important elements that are customers and competitors. Then the company is able to
achieve its goals and objective.
 Customers are found to be very important for the success in the growth of the
company as their purchase goods and services of Tesco. But it is necessary to
understand the microenvironment analysis by Tesco with the help of Porter's 5 forces
model as there is a threat of substitutes that can influence the decision-making process
of customers. With the help of Porter’s five forces model, Tesco is able to understand
that which products will become a threat for their success. They can make the
strategies accordingly and able to achieve the goals and objectives. This is an
important framework that helps to guide an organisation about the competitive
market.

 Competitors are the people who are responsible for the success failure of the
company. It is necessary to find the competition in the market and also find out the
most important competitors who make the barriers to the success path of Tesco. The
porter 5 forces analysis is very helpful in order to identify the competitors and
understanding the competitive market. The most important competitors according to
the Porter’s forces model of Tesco are Sainsbury's, Morrison's, and Asda. These
competitors are making barriers in the success path of company and gaining
competitive strategy. These are not only the competitors as due to globalisation the
competitive forces are increasing which creates a threat of new entrants in market.
Macro environmental analysis
There are many external forces that provide a direct or indirect impact on the
organization's performance. This can be understood and analysed with the help of using the
SLEPTS analysis model (Kotler, Kartajaya and Setiawan, 2021). It includes all the external
forces and factors which may provide an impact on the marketing strategy of the company.
This is necessary to analyse the macro-environment factors by company. Tesco is a
multinational organization that is not only limited to the United Kingdom but its operations
are continuously increasing around the world. Due to this, it becomes necessary for the
company to include important factors in their analysis of the macro environment which are
mentioned below:
 Social: It is identified that there are many social factors that affect Tesco such as local
social trends, vegan trends, etc. It is identified that Tesco follows cultural and local
social trends and serves dear customers accordingly. They are also now switching
towards plant-based vegetarian food because of the vegan trend in the Western and
European markets. It provides a direct impact on marketing strategy as now company
needs to promote their vegan food products.
 Legal: It is necessary to understand for organizations that there are many types of
legal laws which need to comply with Tesco in order to run the business successfully.
It is also found that the company is facing legal issues in their marketing strategy as it
should not hurt the sentiments as well as should use the appropriate content in their
marketing for the success and growth of the company.
 Economic: The pandemic situation has provided a negative impact on the economy of
the country and also provided and impacted companies and businesses negatively.
This was due to the restriction on physical contact, lockdown, social distancing, etc. It

is identified that the online shopping and e-commerce platform of Tesco saved the
company from becoming the victim of the pandemic situation.
 Political: Tesco is a multinational company that operates its business in different
countries and because of it then needs to a dear all the laws of Government and
political regulations which vary from country to country (Grewal and et.al., 2020). It
becomes very difficult for the organization. It becomes difficult to manage all the
rules and regulations.
 Technological: In the technology world, it is identified that the usage of Technology
is increasing every day which helps to provide a better custom and experience to the
customers. Tesco is also adopted much latest technology such as m-commerce and e-
commerce business operations in which they need to change their marketing strategy
accordingly.
 Sustainability: Sustainability is becoming a need for every organization to adopt as it
is the responsibility of the company to take care of the environment. Due to this, the
company needs to provide the best care to the environment. Their marketing strategy
should not provide any harm to the nature and sentiment of people.
Integrated Marketing Communication
Integrated marketing communication is defined as the process used by the
organization for the purpose of increasing awareness of products and services in the market.
It is used to unify the important marketing communication elements such as social media,
public relations, advertising, audience analytics, and business development principles. It is
found to be a planning process that is designed by the organization for the purpose of
assuring that Tesco should be able to receive the customer response towards their products
and services (Wang, 2021). For the purpose of integrated marketing communication, it is
necessary to use marketing communication makes which helps to achieve the goals and
objectives of the company.
A marketing communication mix is a set of advertising, publicity, personal selling,
and public relations which helps the organization fulfil the goal of marketing. It helps to
deliver the promotional message with the use of multiple communication channels in an
effective way to the customers. Marketing communication makes include many elements
which help to achieve the organizational goals and objective as it is very necessary

communicating the message to the customers. Three important communication makes
elements are mentioned below:
Advertising
Advertising is the most common communication mix element which helps to promote
the goods and services of a company (Appel and et.al., 2020). Tesco is using advertising for
the purpose of promoting the goods and services of the organization. Tesco is using television
advertisements, hoardings, and charitable events for the purpose of promotional channels. It
is also found to be used a large extent of promotional offers in discounts such as buy one get
one free.
Sales Promotion
They do not only rely on advertising as they also use sales promotion which is found
to be an important marketing communication element as it involves giving a reason to the
consumer why they are purchasing their products. It includes discounts and incentives for
distributors and dealers which helps to sell the goods and services of the company. Tesco you
sales promotion because it required less capital and has a lower cost. They are used as a
marketing tool, especially with the rise of online sales and e-commerce sales.
Direct and Digital marketing
Mobile phones and emails are the most common methods used by the organization in
order to communicate directly with the customers without any involvement of a third party. It
is only because of technology (Hoekstra and Leeflang, 2020). This is the reason that now
digital marketing is increasing and has nearly surprised television advertising in terms of
popularity and spending of money. Small business can easily promote their goods and
services only because of digital advertising tools as it is less expensive compared to
traditional television advertising methods. It generates more revenue as compared to radio or
television.
DRIP model
It is one of the important model which is necessary for supporting marketing
communication planning. It includes four important elements which can be show with the
help of figure. This model is useful when an organisation is trying to launch some new
products or repositioning their existing business. The elements are mentioned below:

 It is the first element which focuses on differentiating the product and services with
the help of defining where it is positioned in the market.
 The second element is to reinforce the message of the brand which should be
considered strengthening and consolidating messages and experiences. It is necessary
to demonstrate in front of the customers why the product and services of companies
different from other organisations.
 The third element is information which is focused on making people aware of the
product and brand. It is necessary in order to show that the product and services of a
particular brand are available.
 The fourth element is to persuade the audience so that they can behave in a particular
way which can be possible with the help of encouraging the purchases.
Integrated of online and offline media
Before taking any decision, Tesco will think about the customer satisfaction level. For
this Tesco have to use data analytics. It helps the Tesco to enhance their customer experience
or it helps businesses to increase their performances, with the help of data analytics Tesco
have to take some decision on marketing campaigns
1) Creating new product lines - While launching any new product Tesco will be to
change the product lines, which suits more products.
2) Change the product packing – For attracting more & more new customers or make
the stability of old customers in Tesco, for this Tesco will change the product packing &
make it attractive or creative, this thing will become very helpful for Tesco to achieve their
target.

Online marketing strategies & offline marketing strategies, both are different ways but both
strategies are very important for the company. There are two different - different ways for
Tesco which helps with Online & offline marketing strategies.
1) Online Media – In today’s world online media is very popular to promote their
product because most of the time people are using the social media & it is very useful for
Tesco, like ads posted on Facebook, Instagram, etc playing the video in YouTube ads,
Instagram reels & so many of them are options in social media for product promotion, or
things helps every organization to attract more & more customers.
2) Offline Media – Offline media is also very important for Tesco because so many
people read the daily newspaper while traveling on trains, buses, or any free time. In this
case, Tesco is posting their ads in the newspaper, making holding on roads, and distributing
the templates in the area. In the newspaper, Tesco is posting some weekly scheme templates
near the store. These are some small – small effort which is followed by Tesco.
For increasing the sale both media is playing a very important role in their own place.
These small – small efforts or steps are talking by the company to increase their customers
flow in their outlet.
Social media is playing very important in Tesco because with the help of social media
Tesco is receiving so many orders from across the borders, it is just because of the regular
online ads posted on different – different pages or sites, playing Tesco video ads on
YouTube. It helps to attract more & more customers which is very helpful to increase their
sales & demand in the different-different market. Social media promotion helps the company
to make their brand popular & local for the market like regulatory ads posting is making
popular or receiving the repeat orders from the same market or area is making their brand’s
name local which helps to boost their sales from the area & market. While posting the ads
Tesco is receiving so many enquires for their franchise & their products, these small-small
efforts are creating the atmosphere in markets & in customer’s minds (Mothersbaugh and
et.al., 2020). Tesco is solving the problems which are received on their portals from the
customers, this thing will create a very positive image about the Tesco in the customer's
mind.

According to all the concepts & examples are important for Tesco which is written
above. Each concept is explaining a different meaning about it is very useful for the
company, because the motive of all the concept is the same but in a different way, for
example, online media is playing a different role but its help the company to achieve its
targets in the other hand offline media is playing the different role but the motive is same &
data analytics helps both media because before launching any product it tells about the
market situation but the motive is same. These are some small efforts that are taking by Tesco
to achieve its goals in the market & beat its competitors.
CONCLUSION
It can be concluded from the above discussion that marketing is playing an important
role in success and growth of organisation. It is analysed that marketing is necessary but it
requires an environmental analysis as the company faced internal as well as external
environmental impacts. This is the reason which is analysed to do a marketing environment
analysis. It is found that in marketing environment analysis, integrated marketing
communication is paying an important role as it helps to communicate the message to the
customers easily. It includes advertising, sales promotion, and direct and digital marketing.

REFERENCES
Books and Journals:
Appel, G., and et.al., 2020. The future of social media in marketing. Journal of the Academy
of Marketing Science, 48(1), pp.79-95.
Bala, M. and Verma, D., 2018. A critical review of digital marketing. M. Bala, D. Verma
(2018). A Critical Review of Digital Marketing. International Journal of
Management, IT & Engineering, 8(10), pp.321-339.
Grewal, D., and et.al., 2020. The future of technology and marketing: A multidisciplinary
perspective. Journal of the Academy of Marketing Science, 48(1), pp.1-8.
Hoekstra, J.C. and Leeflang, P.S., 2020. Marketing in the era of COVID-19. Italian Journal
of Marketing, 2020(4), pp.249-260.
Kotler, P., 2021. Marketing 4.0 do tradicional ao digital.
Kotler, P., Kartajaya, H. and Setiawan, I., 2021. Marketing 5.0: Technology for humanity.
John Wiley & Sons.
Kumar, A., Paul, J. and Unnithan, A.B., 2020. ‘Masstige’marketing: A review, synthesis and
research agenda. Journal of Business Research, 113, pp.384-398.
Morgan, N.A., and et.al., 2019. Research in marketing strategy. Journal of the Academy of
Marketing Science, 47(1), pp.4-29.
Mothersbaugh, D.L., and et.al., 2020. Consumer behavior: Building marketing strategy. New
York, NY, USA: McGraw-Hill Education.
Rust, R.T., 2020. Outside-in marketing: Why, when and how?. Industrial Marketing
Management, 89, pp.102-104.
Wang, C.L., 2021. New frontiers and future directions in interactive marketing: inaugural
Editorial. Journal of Research in Interactive Marketing.