LCBB4004: Marketing Fundamentals - Tesco and Globalisation Report

This report delves into the marketing strategies employed by Tesco, a multinational retailer, to create customer value within a competitive global environment. It utilizes PESTLE analysis to evaluate the external business environment, encompassing political, economic, social, technological, environmental, and legal factors. The report examines the impact of globalisation on Tesco's business operations, including its market positioning in the global economy, cultural considerations, and the analysis of its competitors. The study explores how Tesco adapts to technological advancements, addresses environmental concerns, and navigates legal frameworks in various countries. Furthermore, the report discusses the influence of economic factors, social trends, and political landscapes on Tesco's marketing approaches. The analysis highlights Tesco's strategies to build a strong customer base, manage its supply chain, and maintain its ethical reputation in the international market. Overall, the report offers a comprehensive understanding of Tesco's marketing strategies and its ability to adapt to the challenges and opportunities presented by globalisation.

MARKETING FUNDAMENTALS
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Table of Contents
Table of Contents
Introduction......................................................................................................................................3
MAIN BODY ..................................................................................................................................3
Determine different marketing direction to create customer value in the competitive
environment ................................................................................................................................3
Impact of globalisation on business and determine how it position in global economy and
cultural factors, market and competitors of Tesco .....................................................................6
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12
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Introduction
Marketing is an important tools to promote the goods and services of the company to the
final customers. Marketing plays an important role in reaching it target customer. For the
multinational companies having a large target market reaching large number of customers at
different location physically be time consuming and ineffective (Bainess and et.al, 2017).
Marketing helps to reach to large number of target customer by just a click. Marketing helps to
influence and attracts customer by effective market offering. It helps in building market image
and business stability in the global market. It helps in globalisation as it helps to promote and
build strong customer base. Tesco is an international retailer dealing groceries. Acquiring its
large market share position in the market place, it builds a strong customer base. This report
covers different marketing strategies followed by company to create customer value, impact of
globalisation on business, determine factors that how it position itself in the global market and its
competitors.
MAIN BODY
Determine different marketing direction to create customer value in the competitive environment
To evaluate the market position of the business environment and create the customer
value. Tesco uses PESTLE analysis to render market offering and create customer value in
accordance to the business environment. As the business environment is continuously changing
so it becomes important to analyse the market environment and develop market offering which
satisfies market demand (Baker and Hart eds, 2016). Pestle analysis in an important tool to
analyse the business environment and factors which can negatively or positively impact the
business. Pestle analysis includes different factors such as political, economical, social,
technological, environmental and legal factors which impact the business performance. In Tesco
the executives formulates different strategies to evaluate marketing policies to attain business
stability from different external business environment.
P- Political factors
Political factors includes different legal policies and laws formulated by the government
or political bodies. As Tesco operates in different location, so it has to bind it different legal laws
and policies of the particular countries. It follows specific legal compliance of different locations
in order to carry ethical business functioning. With the Brexit, where UK exited from the
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European union, it impacted many business negatively. Due to Brexit, the performance of
Tesco was affected, the import and export policies, sales and other business opportunity with the
international retailer affected the business (Chaffey and Ellis-Chadwick, 2019). The other
political issue faced by Tesco which has impacted the business operation of Tesco is the US-
China trade war which impacted the sales, supply and profitability of the business. As Tesco is a
global retailer brand, the political framework of each countries affects the final stability of the
business. The favourable government policies positively impacts Tesco where as unfavourable
political factors negatively impacts the performance of Tesco. This is important to analyse these
political factors in order to develop ethical reputation of the business in market. When business is
able to accomplish all the legal accomplish set by specific market, it helps to build reliability in
the minds of customers (Zhang and Wu, 2017).
E-Economic factors
Economic factors includes the economic stability of the country where the business
operates. Organisational formulates different strategies in order to combat different economic
challenges which affects sales and profitability of the organisation. The market share of united
kingdom is expanding which Tesco in generating revenue for the organisation. Tesco formulates
different strategies with monitoring the economic conditions of the business. With an economic
condition where the inflation or deflation, Tesco sets the prices of it products and services
accordingly to influence the purchasing behaviour of the customers. These economic factors
impacts profitability of the business. The changes in the taxation policies can affect financial
abilities of the business. Due the growing economy UK, Tesco has also switched from luxury
product to value brands (Chernev, 2020). Tesco analyses these economic factors by keeping
check on different economical factors, at the time of inflation where the prices of the goods and
services goes up, it manages it supply chain management and other production activities to
control the flow of expenses in the production prices which further reduces the cost of
production. Tesco implement different measures in order to deal with the economical changes in
the business environment.
S-Social factors
Social factors includes buying behaviour of the customers the choices and preferences of
the people buying products and services. Tesco produces the products and services which
satisfies consumer neds and wants. The research and development department of Tesco conduct
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market survey to analyse social needs and wants. The social lifestyle in UK is been ascertained
where people are more professional and they prefer to buy product at bulk. This has affected
Tesco to switch its to food cum non food model (Davis, 2017). Similarly Tesco implement
different social policies in accordance of the social factors of different countries where people
follow different cultural factors. Tesco produces the products which in accordance of the social
needs and concerns, where the changing shift in the demand, of people buying more environment
friendly and natural products, Tesco produces products which are organic in nature. By
following the social concerns of its customer it achieves and develop strong customer base and
segment with value market offerings. To address the social concerns of customer, it takes
different measures to promote its goods and services to the target customer while addressing
marketing strategies it acknowledges the social concerns and measures taken in the products an
services. It takes different measures to support the social concerns of its customer in which it
address the marketing strategies without clashing the beliefs of its customers.
T-Technological factors
In this modern era, whee technological advancement is increasing, it becomes important
to determine to adapt different technological changes. Tesco implements different polices to
adapt to the technological shift in the environment. Tesco has paired up with amazon go to
achieve the technological factors. With the rising concern of customer involving in online
shopping and social media marketing. Tesco has developed an online site to attract large number
of customer base of taking the services of the company (Wetherly and Otter, 2014). Online sites
of Tesco provides services to different customer where they can purchase the products and
services via online networks, customer from different locations can easily access the services of
the company where ordered products are been delivered at the doorsteps. It also provides a
customer feedback section where customer can upload and share their valuable to the company.
To comply with modern technological factors, the research and development department of
Tesco formulates identifies technology in daily business opportunity to achieve efficiency and
smooth functioning of the business activities (DeCenzo, Robbins and Verhulst, 2016).
E-Environment factors
Environmental factors includes climatic changes and environmental issues in the society.
Tesco implements different action to take environmental issues and concerns, it has taken
different actions to reduce the carbon emission, it has taken several measures to reduce the
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carbon footprint by 50%. Tesco has also promised for conducting business activities by
minimising the waste products. It is taken responsibility of social concerns and saving the social
cost. To combat with the environmental factors Tesco has implemented the reduce, reuse and
recycle plan where Tesco uses the policies of reducing the use of plastic and recycling the used
plastic in the business operation in order to take social responsibility of saving the environment.
Moreover, it uses paper bags instead of plastic bags in the business operation (Deepak and
Jeyakumar, 2019). Tesco implement different policies in order to achieve save the social cost of
the business. It produces environmental friendly products which helps develops goodwill in the
market place, it build a positive image in the minds of customers which develops profitable
relationship with the target customers.
L- Legal factors
Legislative factors includes government policies which impact the business performance. Tesco
follows the policies framed by different countries in order to abide with rules and regulations
framed by the different countries. As Tesco is a multinational retailer in order to operate and run
business in different countries it follows legal laws framed by different countries to run the
ethical business. Tesco sets the prices of products and services in accordance to the changing
laws and legislations. Tesco has to practice both international and national laws. In the year
2016, allegation were been imposed on Tesco for discrimination of women and men in the
workforce which spoiled the goodwill of Tesco in the market (West, Ford and Ibrahim, 2015).
Thus, it is important to follow and practise the legal law and framework of different countries to
build and maintain business goodwill in both national and international market.
Impact of globalisation on business and determine how it position in global economy and
cultural factors, market and competitors of Tesco
Globalisation is defined when business operated in the global environment. When
business operates at international market, it is affected by different external challenges that
impact the business operation. Where internal business deals in trading by sharing common
political borders. Globalisation helps the business with different opportunities with increased
growth of the business (Farris, 2016). With the expansion of business extension in global market
it helps to develop the financial development of the business. Companies in the international
business faces foreign competition. There are different factors that affects the business
operations in the business activities, these factors are as technological, political, competition,
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expenses and internal business climate. Tesco analyses these factors while operating its business
in the international market. Different factors which affects the business in the global market as
been discussed below:
Political factors
When business operates in global market, it has to comply with different political
changes followed in different countries. When business operates in global market it is important
to comply with legal and political legislations of each locations. Tesco complies with the
political and legal factors of the different countries in order to build ethical reputation of the
organisation in the global market (Ferreira and et.al, 2013).
Technology
With the increase in the technological advancement, which has lead to easy flow of
information and efficiency in the business operation. Tesco follows different technology in the
business operation to accomplish business objectives. Tesco adopts latest technologies like
RFID, cloud based technologies and other to achieve organisational objectives.
Competition
Competition is the most important factor faced in the international market. Tesco faces
the foreign competition in the global market. It implement policies by considering competitive
policies and market offering (Wang and Ellinger, 2011). Competition is the factor which helps in
developing strong competitive advantage and market positioning. Tesco implements different
strategic plans and policies in order to achieve competitive positioning in the organisation.
Development of market
Entrance in the foreign market renders restriction and complexities as the existing
companies in the market has already accomplished as marketplace. It render restriction for new
companies to entry in the marketplace which act as a barrier to the company to conduct its
business operations in the foreign market. Tesco implement different marketing strategies to
influence and attracts new customer segment in order to achieve strong customer base. Different
marketing strategies involves advertising and promotional tools to influence the target customers
for purchasing the products and service of the company (French and Gordon, 2019).
International business environment
It is most important factor for an business to analyse the international environment,
analysing international environment helps to determine to the effective marketing and
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operational activities for the business to conduct smooth functioning of its business operation.
The international business environment may serve different challenges to the business like
unfavourable credit policies, import export policies, ineffective market research the the research
and development department (Grishchenko and et.al, 2016).
As Tesco is a multinational retailer operating its business to different locations. It conduct
s its business operation to different countries where it has to bind with different cultural factors.
Cultural factors defines the pattern lifestyle followed and adopted in a country. Tesco follows
these cultural factors in order to achieve organisational objectives. It formulates business
activities by evaluating the needs and cultural preferences of customer from different countries.
Tesco plans out strategies which support the needs and wants of the cultural factors of the
customers living in different countries (Nargundkar, 2020). To evaluate the cultural preferences
Hofstede model is been followed which determines the cultural preferences of people at different
location. Hostede model compares different cultural factors of two different countries which
gives a basis for Tesco to formulate effective market offering that suits customer needs and
preference at different location. To compare the cultural dimensions between two different
countries, India and UK are the two countries for analysing the cultural factors of customer of
Tesco. These cultural factors are discussed below:
Power distance
Power distance is defined by the power of authority in hands of different individual in an
organisation. For Tesco to operate its business in India, it has to develop business strategy which
has to develop hierarchical structure of assigning different roles and responsibility to the
employees in an organisation. As the people in India follows the culture of authoritative and
power dominant where the whole power lies in the few hands. For Tesco to operate in India it
has to follow the Indian culture to adapt to cultural dimension (Hollensen, Kotler and Opresnik,
2017). The internal management in Tesco India should follow the power dominant culture.
Whereas the cultural dimension in Tesco UK, focuses on equal power in the hands of all the
employees. As people living in UK follows the cultural factor of giving equal authority and
power to all employees. Tesco UK follows the cultural dimension in the internal management of
organisation where employees in the organisation takes part in the decision making and takes
important decisions related to organisational productivity.
Uncertainty avoidance
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uncertainty avoidance is an cultural dimension which involves the amount of risk taken
by each individual (Kidyaeva, 2020). In order to effective conduct business operations it is
important for Tesco to analyse the this factor to efficiently conduct business operation in
different countries. People living in India are more focusses about the consqeunces as they future
plan about each event. For conducting the business operation in India it is important for Tesco
analyse the cultural dimension of uncertainty avoidance. Tesco should implement policies which
determines in the internal management of the organisation which involves future plan and
policies and critical analysis of business environment to ascertain the risk inn the business
activities (Mugurel-Alin, 2021). The manger and top level executives should develop policies of
future business events as people in India are not adaptable to changes. Where as the cultural
dimension in UK, determines people are more risk taking and adaptable to change. Tesco in UK
follows the cultural dimension where it involves flexible business decisions are been taken.
Employees in Tesco UK formulates the business decision in accordance to the flexible changes
in the business environment. Where Tesco UK come up with new innovation in accordance to
the business environment and takes risk in different business scenario.
Individualism and collectivism
Individualism is defined by the cultural dimension where people take individual decision
and follows the concept of achieving individual growth and objectives. Individualism is a
cultural dimension where people take independent decisions. Whereas collectivism is defined by
taking collective decisions for any business event. To understand the cultural dimension of
people living in different countries. Tesco India follows collectivism cultural dimension where
people takes collective decisions for different business events (Kleinaltenkamp and et.al, 2015).
Employees takes agreement and formulates plan and policies for achieving organisational
objectives. Whereas the Tesco UK, follows the individual cultural dimension as people living in
UK are more independent and they believe in taking individual decisions. In Tesco UK,
individualism cultural dimension is been followed where employees take individual decision and
policies.
Masculinity and Femininity
Masculinity and femininity is determined by rendering equal opportunity to men and
women in the organisation. Cultural dimensions in are followed different in India and UK.
Where people living in India are more focussed are more male dominant and give more
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opportunity to the men in the society. People living in India considers men as the working
working professionals and women as the house makers (Lichtenthal, 2020). With this cultural
parameters, Tesco India focuses on rendering the male opportunities to the employees, they
focus on giving employment opportunities to the men than women. All the major business
decision are taken by the male manager to continue the culture dimension of male dominance.
Whereas Tesco UK follows cultural dimension of femininity where more opportunities are been
given to females. UK follows the culture where more opportunities are been given to the
females. Females are more financially independent and takes decisions. Tesco UK follows the
cultural dimension where females are given more opportunities no matter if it is top level
executive job roles or any other job position.
Long term versus short term orientation
Short term orientation is defined by the cultural dimension where people emphasis on
conducting business on short term basis. They told plan for future events. Short term orientation
is the culture where people believe in carrying the business activities for increasing the profit, the
moment when there profit goals are not met they drop there idea for further carrying the
business. Where as long term orientation is the cultural dimension where people focus on
running the business with for long period of time whether they formulate long term goals and
objectives to carry organisational functioning for long run. In short term orientation is been
followed, Tesco India, it plans different plans and policies in order to maintain the stability of
the business in the marketplace (Lockhart, 2016). With the diverse population and increasing
demand of people in the workforce. It becomes important to develop strategic long term planning
for the growth and sustainability of the business. In Tesco UK, long term orientation is been
followed where executives plans for long term planning and implement different strategies that
will helps to attain business stability and position in the market place. As people living in UK,
are more long term panning future oriented so they well establishes plans and policies which
render growth and stability to the business.
Indulgence versus Restraints
Indulgence and restraints are determined by culture dimension which determines the
involvement of people in decision making process. Indulgence is the culture dimensions which
involves that people are indulged and formulates collective de scion. Whereas, restraints cultural
dimension are determined when people restraint each other for performing different assigned
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task. In Indian people are more likely to restraint each other for accomplishing certain task,.
People are not focussed about their fulfilling their own gaols and objectives rather they focus on
restraining other people in doing different task (Malhotra and Dash, 2016). Whereas, people
living in UK, follows the cultural dimension of indulgence where people get indulged to each
other and coordinates efforts of individuals for accomplishing group goals. Tesco India, operates
in business activities which follows restraints cultural dimensions, where employee in the
organisation focuses on restraining the job of different individuals which losses the focus of
accomplishing organisational objectives. Executives adopts different policies to achieve
efficiency an productivity at the work. Tesco UK, employees focuses on indulgence where
people believe in achieving organisational objectives by indulgence, coordinating efforts of
different employee so that organisational objectives can be accomplished. Where group efforts
leads to efficiency and productivity in organisational performance (Malhotra, Nunan and Birks,
2017).
CONCLUSION
Marketing is an important activity to control and monitor business function. It involves
different functioning which involves analysing the business environment so that effective
marketing strategy can be implemented. Marketing helps to engage to different customers and
build profitable relationships. Marketing helps evaluate different marketing strategies which
helps to develop effective marketing offering. It helps to determine different ways for
accomplishing organisational objectives. Marketing helps top determine different policies to
maintain organisational stability in the market place. Marketings support for establishing strong
market positioning in the market place and develop strong customer base. For smooth
functioning of the business, it is important to formulate effective marketing policies which
contributes in achieving organisational objectives and profit goals.
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REFERENCES
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