Marketing Report: Tesco and Iceland's Strategies and Techniques

This report provides an in-depth analysis of marketing techniques employed by Tesco and Iceland. It begins with an introduction to marketing and its importance, followed by an examination of growth strategies using Ansoff's Matrix and survival strategies. The report details branding and relationship marketing in Iceland, and legal requirements affecting marketing. It then describes Tesco's use of marketing research, including qualitative, quantitative, primary, and secondary methods, and how this data contributes to marketing planning. The report also explains customer targeting strategies and concludes with the development of a coherent marketing mix for a new product or service, offering a comprehensive overview of the subject.

UNIT 3 IM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describing the marketing techniques such as growth strategies (Ansoff’s Matrix); survival
strategies; branding and relationship marketing are used to market products in the two
selected organisations..................................................................................................................1
Branding and relationship marketing in Iceland.........................................................................2
P2 Describing with suitable examples the limitations and constraints of marketing with
reference to legal requirements...................................................................................................3
TASK 2............................................................................................................................................3
P3. Describing the way in which TESCO uses marketing research such as qualitative;
quantitative; primary internal/external research; and secondary internal/ external research to
contribute to the development of its marketing plans.................................................................3
P4. Describing the way in which TESCO utilises data and information collected through
marketing research for marketing planning................................................................................4
TASK 3............................................................................................................................................5
P5 Explaining ways and reasons of targeting groups of customers for selected products.........5
TASK 4............................................................................................................................................5
P6 Developing a coherent marketing mix for a new product or service.....................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Marketing is a crucial function in all businesses and organizations, and is becoming
increasingly crucial to success in our modern global economy. This course, regardless of your
industry background, will teach you core concepts and tools to help you better understand and
excel in marketing (Blau, Ferber and Winkler, 2013). Marketing is the science of meeting the
needs of a customer by providing valuable products to customers by utilizing the expertise of the
organization, at same time, to achieve organizational goals. According to The American
Marketing Association: Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
TASK 1
P1 Describing the marketing techniques such as growth strategies (Ansoff’s Matrix); survival
strategies; branding and relationship marketing are used to market products in the two
selected organisations
Ansoff matrix of TESCO as public sector firm-
The Ansoff matrix represents the strategies an organization can plan based on the four
different product market combinations. The company to follow a strategy of market penetration
being a leading brand in the US is not feasible and neither diversifying to new markets with new
products as it is a risky venture. The strategy options for TESCO for the next five years are:
Market Development: It is a strategy to enter new markets with existing products. TESCO
though is operating in 14 countries its concentration is in the UK markets contributing 71% of
the total revenues (Hayes, Wallage and Gortemaker, 2014). Entering new markets, a strategy of
internationalization by strategic alliances and joint ventures would enable TESCO to tap the
global resources and cash flows on a higher scale. This strategy would enhance the global market
share of the company and its brand recognition across boundaries. This would require extensive
research on the different markets and understanding the local customer’s needs and preferences
for TESCO’s success
Ansoff matrix of Iceland as private sector firm-
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Product development: Product development strategy by Ansoff is a step by the company to offer
new products in the existing market. This denotes diversification of the product lines to attract
new customers in the present area of operation. Diversifying Iceland's product mix further can be
a profitable strategy for the company. But implementing this strategic option requires
maintaining focus on well developed R&D and investment on the technologies and the expert
professional team. The success factor is high reaping on the reputed brand image in the existing
markets.
Survival strategies of TESCO
TESCO has a successful history since years of its start. Today, TESCO Plc is a successful
retailer in the United Kingdom. TESCO has put some series of practical marketing strategies.
According to Ansoff matrix strategy, TESCO could develop its markets and products in the UK
market, and ultimately with diversification strategy has got in front of other rivals (Kern, 2014).
Ansoff, by applying these different strategies, TESCO successfully got its competitive
advantages over it other rivals. In the UK, the groceries market has been among the major
businesses. Now TESCO is also securing the large market shares in this ever-changing global
retailer market.
Branding and relationship marketing in Iceland
Iceland Bonus Card
In October 2008, as a key component of its enhanced customer relationship strategy, the
company planned to go nationwide with the Iceland Bonus Card, offering shoppers its “Win,
Save and Deliver” benefits. In return for the Bonus Card benefits, customers allow Iceland to
capture data about their store transactions and to conduct automated basket analysis.
Selecting and implementing a solution
“Prior to launching the Bonus Card, we reviewed several of the leading data quality solutions as
defined by Gartner Group,” says Laura Vost, a business systems manager at Iceland. “After
extensive trials, we selected the Trillium Software System for its flexibility to use across our
multiple data sets and technologies (Pavan and Vives, 2015). We were also persuaded of the
software’s suitability by its extensive functionality and ease-of-use and by the clear expertise of
Trillium Software’s professional services consultants.”
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P2 Describing with suitable examples the limitations and constraints of marketing with reference
to legal requirements
Goods Act 1979- The Sale of Goods Act 1979 (c 54) is an Act of the Parliament of the United
Kingdom which regulated English contract law and UK commercial law in respect of goods that
are sold and bought. The Act consolidated the original Sale of Goods Act 1893 and subsequent
legislation, which in turn had codified and consolidated the law. Since 1979, there have been
numerous minor statutory amendments and additions to the 1979 Act (Valdez and Molyneux,
2015). It was replaced for consumer contracts from 1 October 2015 by the Consumer Rights Act
2015 (c 15) but remains the primary legislation underpinning B2B transactions for selling /
buying goods[citation needed]. The Act applied to contracts where property in 'goods' were
transferred or agreed to be transferred for a monetary consideration, in other words: where
property (ownership) in personal chattels was sold. It is therefore required to be considered by
both TESCO and Iceland to abide by the mentioned clauses of the aforesaid act.
The Consumer Protection from Unfair Trading Regulations 2008- The Consumer Protection
from Unfair Trading Regulations 2008 (SI 2008/1277) is a statutory instrument in the United
Kingdom made under the European Communities Act 1972. It is designed to implement the
Unfair Commercial Practices Directive, as part of a common set of European minimum standards
for consumer protection and is required to be adhered by both TESCO and Iceland.
Consumer Credit Acts 1974 and 2006- The law that gives consumers protection and sets out
how credit should be marketed and managed. The Consumer Credit Act 1974 (as amended by the
Consumer Credit Act 2006) regulates consumer credit and consumer hire agreements (Wellinger,
Murphy and Baxter, 2013). Its protections apply to agreements between traders and individuals,
sole traders, partnerships and unincorporated associations, but not agreements made between
traders and corporate bodies such as limited companies.
TASK 2
P3. Describing the way in which TESCO uses marketing research such as qualitative;
quantitative; primary internal/external research; and secondary internal/ external research
to contribute to the development of its marketing plans
Below are the research methods adopted by TESCO for researching its market-
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There are two main types of market research. Both involve the collection of data that is used to
find out about customers' needs and buying habits. Primary research is data collected in the field,
directly from the customer (Zarnikau, Woo and Baldick, 2014). Secondary research is data that
already exists or may have been collected for another purpose. This can be used to back up
primary research. The data collected may be qualitative. This means that facts, feelings and
opinions are collected. This type of information helps to develop new products that customers
want. It also ensures that customers are satisfied with the service they have received. Other data
may be quantitative. This focuses on statistics and figures. These provide a business with
information that can be represented in a table, graph or a chart.
P4. Describing the way in which TESCO utilises data and information collected through
marketing research for marketing planning
As TESCO wanted to improve their value-for money offers, they carried out research on
their customers to identify long-term preferences and differences between consumer groups (e.g.
better-off and poorer customers). This research was carried out every two years and involved
asking a large sample of TESCO customers to state 49 possible store factors in order of
importance. In 1997, TESCO looked at the top 30 of these factors for each of the customer
groups- 'up-market, 'mid-market', and 'less affluent' (Valenzuela, Bellei and Ríos, 2014). For the
'up-market' segment, the most important factors were standards of hygiene, quality of food
overall, and value for money. For the 'less affluent' segment, the most important factors were
standards of hygiene, value for money, and quality of fresh meat. This was the same for the 'mid-
market' segment, showing that all of TESCO's customers valued their standards of hygiene a the
most important attribute when they are shopping. This suggests that research such as this is
important as companies cannot guess what their customers want. Therefore, TESCO have used
these results to produce a better service to their customers.
Also, TESCO has monitored its performance relating to competitors, using a survey
called 'Image and Attitude survey'. This surveyed around 11,000 customers over a year on ten
measures: overall value for money, quality, price, choice of branded goods, own-label range,
own-label quality, service levels, store environment, stock availability and range (Satchell,
2016). The results were reported every four weeks and covered nine supermarkets. TESCO
showed a long-term improvement in perceptions of overall value for money. They used the
results of this survey to improve some of their techniques and try to beat competition.
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TASK 3
P5 Explaining ways and reasons of targeting groups of customers for selected products
From a high-level, the goal of a marketing strategy is to identify a target market and
develop a marketing mix that will appeal to those potential customers. Decisions regarding the
ideal marketing mix can be organized in terms of Price, Promotion, Product, and Price. However,
the goal is not to just come up with a particular strategy, but rather to focus on providing value to
your key market segments (Marino, 2014). Use Demand Metric’s Market Segmentation Tool to
analyze market segment sizes and develop Customer Profiles based on Demographic,
Psychographic, and Environmental criterion.
1. Analyze the features of your products and services. Determine the benefits that your customers
get from your products and how your products fill the needs of those customers. Make a list of
those features and needs to make the analysis easier.
2. Look at the types of customers who are likely to purchase your products and use your services.
Consider things such as age, gender, income level, marital status, occupation, educational level,
gender and ethnic background (Kates, 2017). Identify which customer categories have the
greatest need for your products.
TASK 4
P6 Developing a coherent marketing mix for a new product or service
Below is the marketing mix of TESCO consisting of its 4Ps-
Products- Tesco provides a wide range of products that include food, clothing, electronics, financial
services etc. This ever expanding, product line caters to every possible need of its consumers and has
thus expanded into the online marketing sector too! It offers grocery delivery service and free music
downloads besides the other 40,000 or more product lines that its retail stores exhibit.
Price- Tesco attempts to maintain as low prices as possible without reducing the quality of its
products or running itself in loss. In order to pass all cost advantages to its customers and keep
them happy, it uses a number of measures which includes the economies of scale it enjoys
(Cohan, 2017).
Place- It is headquartered in Chestnut, Hertfordshire, England. Its stores are spread far and wide
in the world. It employs two main channels of distribution for its products and services – online
and offline.
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Promotion- Tesco’s biggest advantage is its low prices. This is what sets it apart from other
supermarket chains. And this is what it uses to enhance its brand image. Its major objective has
always been to improve its brand image by reducing costs and being true to its words, while
maximizing its profit (Kern, 2014). To this end, it makes use of television advertisements, offers
promotional discounts, sponsors charitable events, uses point of sale strategies and so on.
Physical evidence- The Tesco stores are not overly elaborate like those of Sainsbury and other
grocery stores. This is because Tesco doesn’t see the point in spending more than the necessary
amount of money on furbishing its stores. Having said this, all its stores are clean attractive.
They are easy to navigate with all products well categorized and easy to find. Offers are also
placed such that they lure customers into buying more than what they need, all the while feeling
that they are in fact conserving their financial resources. The Tesco Website is also simple and
easy to operate.
People- Tesco’s excellent sales assistants are also greatly responsible for its success. It uses
programs such as Colleague Privilege card, Save As You Earn, and Buy As You Earn to gain the
loyalty of its workers (Valdez and Molyneux, 2015). Its employees are highly competent and
well compensated for their contributions in making Tesco a success.
Process- The Process aspect of a marketing mix in Tesco’s case refers to the process of keeping
its customers happy by speedy billing services and easy acquirement of product in its stores
offline as well as online. Tesco achieves this by employing competent staff and paying attention
to customer grievances and addressing issues that create them.
CONCLUSION
The above report has demonstrated the marketing activities of TESCO by together
comparing some of its functions with another similar organisation named Iceland. Both being
into a similar industrial sector are actively participating in coherent marketing practices by
together corresponding to the lawful clauses of their marketplace.
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REFERENCES
Books and Journal
Blau, F. D., Ferber, M. A. and Winkler, A. E., 2013. The economics of women, men and work.
Pearson Higher Ed.
Cohan, P. S., 2017. Introduction. In Disciplined Growth Strategies (pp. 1-20). Apress.
Hayes, R., Wallage, P. and Gortemaker, H., 2014. Principles of auditing: an introduction to
international standards on auditing. Pearson Higher Ed.
Kates, S., 2017. Free market economics: An introduction for the general reader. Edward Elgar
Publishing.
Kern, R., 2014. Introduction. In Dynamic Quality Management for Cloud Labor Services (pp. 3-
7). Springer International Publishing.
Marino, R., 2014. Introduction. In The Future BRICS (pp. 3-18). Palgrave Macmillan UK.
Pavan, A. and Vives, X., 2015. Information, coordination, and market frictions: An
introduction. Journal of Economic Theory. 158(Part B). pp.407-426.
Satchell, S., 2016. Introduction. In Asset Management (pp. 1-8). Springer International
Publishing.
Valdez, S. and Molyneux, P., 2015. An introduction to global financial markets. Palgrave
Macmillan.
Valenzuela, J. P., Bellei, C. and Ríos, D. D. L., 2014. Socioeconomic school segregation in a
market-oriented educational system. The case of Chile. Journal of education Policy.
29(2). pp.217-241.
Wellinger, A., Murphy, J. D. and Baxter, D. eds., 2013. The biogas handbook: science,
production and applications. Elsevier.
Zarnikau, J., Woo, C. K. and Baldick, R., 2014. Did the introduction of a nodal market structure
impact wholesale electricity prices in the Texas (ERCOT) market?. Journal of
Regulatory Economics. 45(2). pp.194-208.
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