Strategic Marketing Planning for TESCO PLC

This document provides a comprehensive analysis of the strategic marketing planning for TESCO PLC. It includes an overview of the company and industry, environmental analysis, marketing objectives, marketing strategy selection, targeting and positioning, and assessment of the 7P's. The document also discusses the effectiveness of corporate and marketing strategy.

Strategic Marketing
Planning

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Overview of the Company and Industry to which the organisation belongs..............................3
Current position of Retail industry..............................................................................................4
Environmental Analysis..............................................................................................................4
Marketing Objectives..................................................................................................................5
Marketing Strategy Selection along with Rationale and usage...................................................6
Marketing Targeting and Positioning .........................................................................................7
Assessment of the 7P’s................................................................................................................8
Implementation, Control and Evaluation....................................................................................9
TASK 2............................................................................................................................................9
Effectiveness of corporate strategy ............................................................................................9
Marketing strategy for TESCO PLC.........................................................................................11
Appropriate strategy related to market entry, substantive growth and retrenchment for TESCO
PLC...........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic market planning is defined a continuous process through the use of which a
company creates and develop marketing strategies and other plans and it also facilitates effective
implementation of these strategies to achieves the desired goals in target market. This process
takes into account the current position of the organisation and further also helps in identifying
the promotional and existing opportunities so that best polices and strategies can be adopted to
evaluate and grab these existing opportunities for better growth and development of organisation.
Management and operations teams of a firm keeps on striving to come up with and implement
practical marketing strategies to ensure a stable and continuous flow of business operations for
an organisation.
For this assignment on Strategic market planning the selected organisation is TESCO
PLC which is a well known British multinational groceries and general merchandise retailer,
having its headquarters situated within the confines of Hertfordshire, England, United Kingdom.
This report includes a description about environmental analysis to understand the current local
economic conditions and also includes the marketing objectives. Beside this selection of most
suitable marketing strategy and marketing targeting and positioning also forms a part of this
report. Along with this an assessment of 7P’s (marketing mix) and implementations control and
evaluation is also included. At last, this project also consists of effectiveness of corporate and
marketing strategy.
TASK 1
Overview of the Company and Industry to which the organisation belongs
TESCO PLC is the leading supermarket chain operating by way of its large number of
outlets across the global periphery. It stands at Number 1 position in the retail sector of United
Kingdom which is its domestic market. Owing to this, this firm has a strong brand image across
the confines of UK. Its customer base is not willing to shift to other alternate brands looking
upon the quality of product as well as services offered by entity at market place. The core
product line of TESCO PLC is food segment but the entity is focussing upon expanding its non-
food segment to appeal to the people at global scale.
3

Current position of Retail industry
The current state of retail sector is affected by the exit of Britain from EU, referred to as
BREXIT. The sale of companies pertaining to this industry has been affected to a significant
extent as a result of this national decision. Thus, it is required for corporations belonging to retail
sector to take effective measures through which they can retain their position at market place and
ensure their long term sustainability amidst adverse economic situations.
Environmental Analysis
SWOT Analysis of Tesco PLC
SWOT is one of the most effective business tools which are required to analyze internal
environment & forces that exert influence upon the operations of a firm (Ahmed and Rafiq,
2013). The major purpose of SWOT analysis is to accumulate positives such as strength &
opportunities and negatives such as threats & weakness to pursue action in accordance with
same. TESCO PLC which is the leading retailer is under relevancy to discuss such analysis to
gather all possible competencies of the firm to get solution accordingly. SWOT analysis of
TESCO PLC is as under:-
Strengths Weaknesses
The main strength of TESCO PLC is
reputation of being tagged as the most trusted
brand in sector of grocery and other shopping.
Alone Tesco holds out 34 percent of the market
share in the UK. They have unique strength in
gross development of sales and revenue. It has
approx. 3751 stores separate in UK and total
6800 stores in the worldwide. The most unique
strength is diversified visibility to their
customers in the form of home plus, Tesco
extra and express. TESCO PLC also believes
in the superior usage of technology such as
advance checking and payment system to their
grocery stores. Also, brand loyalty of the Tesco
Plc is high, as it believes in customer
In 2017, Tesco was accused with penalties due
to an illegal accounting declaration and
misrepresentation to their profits. Also,
decrease in their operating profits has caused
decrease in the share prices of Tesco after the
declaration of the BREXIT Referendum. In
past time, TESCO PLC has struggled with
breakdown of their financial performance due
to low cost strategy and poor financial
estimation. Due to BREXIT, prediction has
been made on side of further business losses
that would be encountered by the retailer firm,
TESCO.
4

acquisition with getting their trust on the
higher basis. Lastly, they have strong brand
awareness, as their customer recalls on
frequent basis (Zook and Smith, 2016).
Opportunities Threats
There are numerous opportunities for joint
ventures on the part of which Tesco stores are
failing. Also, TESCO PLC can execute
profound market research which can help in
improving performance in least-revenue
generating regions for the company.
Development of the strategic partnerships with
well-known companies such as Sainsbury,
Marks & Spencer etc. may have excellent
opportunity for TESCO PLC to grow and
expand their business. It would enable Tesco to
give more products to their customer along
with pure customer satisfaction (Young, 2018).
TESCO PLC is having threats in the form of
legal cases at the event of Christmas and New
Year eve by offering false and defective
products at higher prices to make false
revenue. CEO of the Tesco has made false
statement on behalf of the Brexit which has
made controversies. Moreover, stiff
competition from Sainsbury, Marks & Spencer
etc. are having pressure on Tesco plc to put
down further investment to upgrade their
performance to survive in the market. In UK,
where low cost strategy is applied by other
firms to beat Tesco Plc, it is essential for the
respective supermarket company to adopt a
cost effective strategy.
Marketing Objectives
This is an effective part of the strategic marketing plan whereby the entity stipulates the
target to be achieved as a result of the execution of plan (Anche, Hozouri and Mehdizadeh,
2014). In this regard, the management of TESCO PLC has stipulated the following marketing
objectives:-
“To increase the share within global market by 4.25% by the end of next 6 months
through usage of social media marketing”
“To inflate the sale figures of organisation by 12.5% by next 1 year through execution of
effective marketing techniques”
5

“To enhance the profitability of corporation by 5% before the end of next 1 year by
launching promotional campaigns”
Marketing Strategy Selection along with Rationale and usage
TESCO PLC is a globally renowned brand which has extensive base of audience to serve.
This tends to inflate the expectations of people from the respective retailer. Thus, the
management of this retail firm is keen on making use of effective marketing strategy in order to
drive the attention of large base of people and enhance the existing level of revenues (Anwar,
2019). In this regard, the marketing strategy that has been finalised by the top management of
TESCO PLC is social media marketing. The rationale and the way in which this strategy would
provide aid to the retailer is given underneath:-
Social media is a wide platform that a company can use for marketing. Social media
marketing is one of the most cost effective and versatile strategies that a firm can use to reach to
their target audience and boost their sales. Some reasons and ways for TESCO PLC to make use
of social media for marketing are explained below:-
Number of people using social media: As per a study of statista, number of social
media users is expected to reach almost 3 billion by the year 2021. With so many people using
social media that too almost every day, it gives a great opportunity to TESCO PLC to reach its
online audience in an effective manner. The entity can promote its wide array of products, make
social media accounts on various platforms and thereby use proper hashtags so that the
organisation and its offerings can get required attention from people (Armstrong, 2015).
Marketing through social media can help increasing brand visibility: Social media
marketing can improve brand visibility and hence can increase brand recognition (Joshi, 2012).
For this, TESCO PLC can create their business profile and post as well as promote their content
which can get the respective retail company the eyes of so many customers at a single point of
time.
Social media marketing can increase inbound traffic: An organisation can add its
website to their business profile on social media networks which can increase the number of
users on their website. This will enable TESCO PLC to convert its traffic to leads and finally
sales. For this, the retail firm needs to post more engaging and quality content on their social
media profile and appeal to a large base of audience to enhance its existing level of revenues as
well as profits (BaackHarris and Baack, 2013).
6

Ease of targeting and retargeting the ideal customers: Advertisements on social media
can give a company an opportunity to reach the audience which is looking for such kind of
content only. In this regard, TESCO PLC can decide the age group, countries and segment of
market which are very helpful in getting a good response for the offerings of retail firm. The
respective firm will get audience according to the options they select while advertising their
products over online channels. In this manner, TESCO can target their ideal customers and
retarget them once the promotion is finished to inflate its revenues as well as profits in long run.
Social media marketing is cost effective: One of the most lucrative advantages of social
media marketing is that it cuts marketing cost without compromising with the results. A
company always look for the ways where they can invest less and get more results and social
media marketing could be an appropriate option in this regard. Thus, TESCO PLC will leverage
this marketing strategy to gain the attention of large number of people and thereby promote its
organisational offerings among them (Babin and Zikmund, 2015).
Conversion rate through social media marketing is high: According to a study, social
media has a much higher conversation rate than the other outbound marketing strategies. The
queries a company gets on social media platforms can be easily converted into a sale opportunity
and every interested person can be converted into a happy customer. In this manner, by making
good posts and giving customers a good service, the respective retail firm can gain the trust of
people and increase its brand value within global market place.
Marketing Targeting and Positioning
STP can be referred to as a comprehensive framework that is applied by organisation
across the globe with a view to identify the target audience and to place the products and services
offered by entity among them (Baker and Saren, 2016). This model has been applied by the top
management of TESCO PLC as mentioned below:-
Segmentation: This can be referred to as the process whereby division of marketplace is
executed in accordance with some elements, with the sole motive of determining the target
market for company. In this regard, the marketing manager of TESCO PLC has segmented the
market on the basis of demographics.
Targeting: Hereby, the segmented market is targeted by the firm to enhance its sales as
well as profits in the long run (Boelsen-Robinson, Backholer and Peeters, 2015). With respect to
this, the demographical aspects that have been selected by the respective retail firm to target
7

people are income level and age group. In this relation, the marketing manager has decided that
the firm would be targeting people belonging to lower, middle and higher class sections of
society, belonging to age group of 22 to 45 years. Such segment has been selected looking upon
the purchase as well as consumption pattern of offerings of TESCO PLC in past by people of
different age groups.
Positioning: This component of STP model informs the manner in which offerings of a
company are positioned among the customers. This is done by way of making use of a number of
communication strategies as well as techniques. In this relation, the marketing manager of
TESCO PLC would make use of social media, promotions, gift vouchers and lucrative discounts
to appeal to people. Social media handles of the retailer such as Instagram and Facebook would
provide aid to the organisation in attracting a large base of customers at a rapid pace (Brady,
2014).
Assessment of the 7P’s
This is an important part of the marketing plan as it lays down the marketing strategy
adopted by firm to gain a competitive edge at market place (Chokshi, 2016). In this relation, the
marketing mix of TESCO PLC is presented as follows:-
ELEMENT DESCRIPTION
Product The offerings of TESCO PLC include food, clothing, electronics, financial
services etc. These products are able to cater to the needs and preferences
of customers in an effective manner.
Price TESCO PLC makes use of penetrative pricing in order to significantly
gain the attention of a large base of audience.
Place It is seen that TESCO PLC operates via online and offline modes within a
number of countries across the globe.
Promotion Social media marketing as well as broadcast media would be the key to
setting effective relations with customers.
Process The production processes of TESCO PLC take place while ensuring the
compliance with highest standards of quality.
People The respective retail firm provides training and developing opportunities
to its staff members so that they can carry out professional development in
8

a timely manner.
Physical
evidence
The entailment of extensive customer satisfaction from people at global
market place would serve as the physical evidence for TESCO PLC.
Implementation, Control and Evaluation
Implementation The success of marketing plan cannot be achieved if the pre-determined plans
should not be implemented properly due to which it is important to take corrective actions
related with implementation without wastage of any resources. Here are the proposal investment
and allocation of funds to different promotional activities:
The financial budget for implementing the respective marketing plan of TESCO PLC is
given as below:-
PARTICULARS 1st Year 2nd Year 3rd Year
Initial investment 15000 16000 19000
Borrowings (Bank loans, credits) 13000 10000 14000
Retaining Earnings 8000 11000 12000
TOTAL 36000 37000 45000
MARKETING
OUTLAY
Promotion Activities 12000 12000 17000
Sales Publicity 10000 12000 15000
Distribution and supply expenses 6000 12000 14000
TOTAL 28000 36000 35000
Interpretation: From the above table, it is clearly identified that marketing manager of
Tesco Plc makes £15000 as investment, £13000 as borrowings and £8000 as retained earnings
for 1st year of launching new product which goes up to next years. On the other hand, the
marketing manager mainly focuses on using promotional channels such as TV advertisement,
social media channels etc. due to which they invest £12000 for its first years which goes up in
9

upcoming years. This will ensure them to get huge success of their new product in competitive
market.
Controls
After the formulation of marketing budget, it is necessary to control the activities in
accordance with marketing plan. This makes sure that all activities are carried out correctly and
fairly. TESCO PLC would also implement a control plan to ensure that all the activities get
executed as per the pre-decided planning and the deviation from desired target is low. This will
enable the retail firm to gain the attention of people and thereby enhance the existing level of
sale of organisation by a fair margin (ClowandJames, 2013).
Evaluation
The evaluation of targets stipulated by marketing management of TESCO PLC would be
done by making use of benchmarking as well as Key Performance Indicators. These will provide
company with the information regarding deviation lying between actual and desired
performance. As a result of this, TESCO PLC will be able to devise corrective measures through
which such deviations can be effective managed and assure to deliver effective results in the
favour of respective retail firm (Huang and Sarigöllü, 2014).
TASK 2
Effectiveness of corporate strategy
Corporate strategy basically define as a firm’s corporate action which are mainly aim at
achievement of companies objectives through increasing its competitive strength and efficiency
of other resources and operations (What is Corporate Strategy?, 2019). Corporate strategy is a
continuous process that requires constant effort of an organisation to engage its investors,
customers and other stakeholders to increase their trust and loyalty towards organisations, thus
increasing the company’s overall equity and profitability. Use of corporate strategy is also made
by TESCO PLC to deal with Brexit issue which has created a situation of slowdown in economy
of UK and adversely affecting the operations of all retail and other sector organisations. Use of
corporate strategy provides a more clear long term vision to TESCO PLC which is useful in
creating corporate value and motivate the workforce to implement the proper actions to achieve
customer satisfaction. Use of following types of corporate strategy can be made TESCO PLC to
have better growth and acquire more competitive advantage:
10

Cost leadership- it is a strategy that is focused on providing product and services of an
organisations at a lowest prices as compared to its competitors and which customers are willing
to pay. Thus, it provides a better competitive strength and realizing a volume of sales that makes
them leaders in their industry (Lovelock, 2011). Use of Cost leadership strategy can be made by
TESCO PLC as it is very effective in increasing the sales volume and productivity of an
organisation thus, yield high profit margin.
Product differentiation- this corporate strategy is mainly related with offering a product
that is different and unique from its competitors thus, more numbers of customers can be
attracted for exclusive features of product of an organisation (opolšek and Čurin, 2012). Use of
this strategy will realise higher profit for TESCO PLC through providing more competitive edge
and higher customer satisfaction through a good quality and unique product. Product
differentiation strategy is effective in creating better brand image and also increase loyalty of
customers through providing better product thus, lead to achievement of companies target of
increase customers base and profitability.
Horizontal integration- this is a growth strategy which is helpful in accruing new
business operations at same part or level of supply chain. Acquisition could be made through an
organisation through a merger or through its own new rollout of a new product. TESCO PLC can
adopt this corporate strategy as it is more effective in capturing a vast market share through
creating a monopoly and integrating the resources (RossiAllenby and McCulloch, 2012).
Vertical integration- this corporate strategy is focused on accruing focuses greater
control of an operations process by integrating a key segment. Use of this strategy can be made
by TESCO PLC as it ensures quality control and better planning.
From the above corporate strategy, use of cost leadership is most suitable for TESCO
PLC as it is very effective in attracting more customers thus, in current market conditions of UK
and to meet the consequences of Brexit issues, cost leadership is useful as it is focused on
offering product at reasonable prices so that every consumer can afford and purchase it. Thus, it
is effective corporate strategy for TESCO PLC to increase its competitive strength and earn
better profits (Silberschatz, Galvin and Gagne, 2014).
Marketing strategy for TESCO PLC
Marketing strategy exists as a procedure which undertakes all organisational goals and
objectives that are combined together and converted into a plan. Business executive draws a
11

successful marketing strategy by conducting a successful market research. In the context of
TESCO PLC, the main motive of organisation is to select an effective product mix. So
organisation enhances their profits by utilising an appropriate strategy for all their products and
services.
Appropriate strategy related to market entry, substantive growth and retrenchment for TESCO
PLC
There are various strategies related with market are mention which helps the management
of TESCO PLC to increase their market size. Some of them are mention as follow:-
Product market mix- According to the market growth and product market mix strategy,
the growth of business depends on the sale of innovative and existing products in the market.
This determines it is the combination of various strategy through which business enhances their
performance as well as productivity of business (Silver, 2012). Moreover, it undertakes several
factors which are area, size, mode, innovation and many more that all are related with business
growth and income of business. Therefore, TESCO PLC’s manager focus and implement product
market mix due to which it is easy for them to grow business as per existing market conditions.
Synergy strategy- An organisation gathers various resources to manufacture their
products which leads manager of TESCO PLC to achieve their goals and objectives in short
intervals (Sirajuddin, 2018). According to the present conditions it is difficult for the all
companies to perform their work on single based resources. So with the implement of Synergy
strategy TESCO PLC and other corporation arrange various resources due to which that produce
better results and enhance the productivity of organisation.
Divestment strategy- With the implement of divestment strategy it is easy for
organisation under which a single part of business is sold to the other market area. Similarly in
context of TESCO PLC this strategy is beneficial for organisation as it leads business to perform
their work as per profit basis. Like products which reduces the profit for TESCO PLC are pulled
from market (Telang and Deshpande, 2016). This results that small organisation face liquidation
so merger and acquisition are effective strategy which leads to achieve more success in market
by focusing on core business strength of organisation.
The market of UK is too wide and there are large number of organisations that are
performing their work in an appropriate manner. Similarly due to the wide customer’s base the
needs and demand of customer’s is also dynamic. Therefore, it is mandatory for TESCO PLC to
12

implement Product market mix strategy in organisation. Due to which it is easy for management
to focus on their retail business, it results in increasing the customer base for TESCO PLC’s
products that also enhances market size as well as revenue for firms (William and Zikmund,
2012).
CONCLUSION
On the basis of above discussion made in the report, it can be said that marketing is a
crucial component of every organisation which performs the role of creating awareness among
people about the offerings of company and developing healthy relations with customers.
Devising a strategic marketing plan is essential for company to reach out to people and build
connection with them. Further, it has been analysed that marketing through social media is a new
and emerging trend that can be leveraged by companies with a view to gain the attention of a
large number of persons at any point of time. It is also acknowledged that marketing manager
identifies the potential customers as well as target market for the company and thus adopts
strategies that can best fulfil the needs and preferences of customers at market place. In addition
to this, it has been recognised that marketing mix which is regarded to be the integration of 7
elements stipulates the tactics as well as strategies adopted by an entity to appeal to the audience
present within international landscape in an effective manner.
13

REFERENCES
Books and Journals
Ahmed, P.K. and Rafiq, M., 2013.Internal marketing. Routledge.
Anche, F., Hozouri, S. and Mehdizadeh, A., 2014. An exploration investigation on important
factors influencing e-marketing: Evidence from banking industry. Uncertain Supply
Chain Management. 2(1). pp.49-54.
Anwar, S.T., 2019. Kraft's acquisition of Cadbury: Was it an amicable transatlantic merger or a
hostile takeover?. Thunderbird International Business Review, 61(2), pp.439-451.
Armstrong, G and et al, 2015.Marketing: an in
Baack, D. W., Harris, E. G. and Baack, D., 2013.International marketing(Vol. 3). Sage.
Babin, B. J. and Zikmund, W. G., 2015.Essentials of marketing research. Nelson Education.
Baker, M. J. and Saren, M. eds., 2016.Marketing theory: a student text. Sage.
Boelsen-Robinson, T., Backholer, K. and Peeters, A., 2015. Digital marketing of unhealthy foods
to Australian children and adolescents. Health promotion international, 31(3), pp.523-
533.
Brady, D. L., 2014.Essentials of international marketing. Routledge.
Chokshi, P. and et. al., 2016. Perception of Consumers towards Cadbury and Nestle. Asian
Journal of Research in Marketing, 5(6), pp.8-27.
Clow, K. E. and James, K. E., 2013.Essentials of marketing research: Putting research into
practice. Sage.
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
equity, and the marketing mix. InFashion Branding and Consumer Behaviors(pp. 113-
132). Springer, New York, NY
Joshi, M., 2012.Essentials of marketing. Bookboon.
Lovelock, C., 2011.Services marketing: People, technology, strategy. Pearson Education India.
opolšek, D. and Čurin, A., 2012. The role of employee relations in the level of internal
integration between logistics and marketing functions: the case of Slovenian retail
companies.Organizacija. 45(1). pp. 3-13.
Rossi, P. E., Allenby, G. M. and McCulloch, R., 2012.Bayesian statistics and marketing. John
Wiley & Sons.
Silberschatz, A., Galvin, P. B. and Gagne, G., 2014.Operating system concepts essentials. John
Wiley & Sons, Inc..
Silver, L and et al, 2012.The essentials of marketing research. Routledge.
Sirajuddin, M.M. and Kumar, M.P.S., 2018. INNOVATIVE MARKETING STRATEGIES IN
RETAILING GIANTS: BIG BAZAR &D-MART. International Journal of Pure and
Applied Mathematics, 118(15), pp.151-156.
Telang, A. and Deshpande, A., 2016. Keep calm and carry on: A crisis communication study of
Cadbury and McDonalds. Management & Marketing, 11(1), pp.371-379.
William, K. and Zikmund, B.J., 2012. Essentials of marketing research.London: Cengage
Learning.
14

Young, P.N., 2018. A Practice-based Model of Effective Marketing Based on an Auto-
ethnographical Observation of Brand Management Training at Procter & Gamble
(p&g). The Marketing Review, 18(3), pp.243-269.
Zook, Z. and Smith, P.R., 2016. Marketing communications: offline and online integration,
engagement and analytics. Kogan Page Publishers.
Online
What is Corporate Strategy?. 2019. [Online] Available Through:
<https://www.myaccountingcourse.com/accounting-dictionary/corporate-strategy>.
15