Marketing Report: Analysis of Southern Business Technologies and Tesco

This report analyzes the marketing strategies of Southern Business Technologies (SBT) and Tesco. The first part focuses on SBT, examining the marketing process, including situational analysis (SWOT and PESTLE), strategy development (segmentation, targeting, and positioning), marketing tactics (product, price, place, and promotion), and implementation/control. It explores SBT's potential for internationalization, identifying winning orientations like joint ventures, and evaluating associated costs and benefits. The second part of the report shifts to Tesco, reviewing its segmentation criteria, targeting strategy, buyer behavior influences, and positioning strategy for a selected product. It also examines the marketing mix for different segments and contrasts the marketing of products and services for businesses versus customers. The report provides detailed insights into marketing principles and their practical application in two distinct business contexts.

Table of Contents Page#
Introduction:..............................................................................................................................3
Task 1:........................................................................................................................................3
Elements of marketing process that Southern Business Technologies can adopts...................3
Identification of winning orientation and evaluation of cost and benefit:................................6
Micro and macro environmental factors that influence marketing decision:............................8
Reason and the way by which international marketing differs from the domestic marketing:
..................................................................................................................................................10
Explanation of how products can be developed to sustain competitive advantage: ..............11
Explanation of how distribution needs to be arranged by British SME: ................................13
Setting of price to reflect the market condition and objective of organization:.......................13
Promotional activities that British SME can be integrated to achieve marketing objective:..15
Additional elements of marketing mix:…………………………………………………...….15
Task 2: …………………………………………………………………………………….....16
Segmentation criteria of Tesco: ………………………….…………………………..............25
Targeting strategy Tesco uses for a selected product: …..…………………………………...27
Buyer behaviour affects marketing activities of Tesco: …….……………………………….28
Positioning strategy for selected product: ………………………………………………...…29
Marketing mix for two different segments of Tesco: ………………………………….…….31
Differences in marketing products and services for businesses contrast to customers: ……..32
Conclusion:………………………………………………………………………………......34
References: …………………………………..………………………………………………35
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1.0 Introduction:
The learner is appointed as the Marketing Executive of Southern Business Technologies.
The primary task of the student is to provide a report that will help improve the marketing
approach of the company as it attempts to internationalize its operations in an increasing
complex international environment. The piece will improve the knowledge about the
marketing process and orientations businesses need to adopt, environmental factors that
influence marketing decisions and the dynamics and impact of the wider marketing mix and
its applications.
The second part of the assignment requires the author as a Consultant to review Tesco’s
marketing and operations so as to bring back its competitiveness and profitability.
Task 1:
1.1 Elements of marketing process that Southern Business Technologies can adopts
Marketing can be defined as the management process through which the products or services
move from the concept to customers. Marketing is the combination of 4 P’s that are products,
price, promotion and place.As stated by Applbaum (2014) marketing process is the technique
that can recognize the impending and feasible marketing opportunities in the market as well
as it develops the strategy for utilizing the opportunities. To grab these opportunities,
Marketing is considered in the light of four stages which are (Situational Analysis,
Developing Marketing Strategy, Designing Marketing Tactics and Implementation and
Control)
Situational Analysis
Situational Analysis is one of the methods that examines the strength and weakness of any
organization and helps the organization to evaluate threat and opportunities for the
organization. Simply, it uses the SWOT Analysis (Strengths, Weaknesses, Opportunities and
Threats). For grabbing the market opportunities, detailed situational analysis is necessary for
the area in which organization is operating. That situation has two elements, which are Macro
and Micro. Micro environmental factor of any organization directly affect the ability of the
organization to serve their customers. On the other hand, macro environmental factors are
large societal forces that affect the microenvironment of any organization. This analysis will
enable Southern business technologies to set SMART objectives. Macro environmental
factors can be analyzed by conducting a PESTLE analysis. It is one of the techniques of the
environmental scanning, which can analyze the influence of the micro environmental factors
on the business. Different scheme of the government plays an important role on the operation
of the Southern business technologies but the current instability of the UK affect the profit
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level of the organization. Due to fewer amounts of monthly disposal income southern
business technologies is facing difficulties, for this reason they should offer low pricing
strategy. They also affected by technological factor and implemented the best technology to
attract their customers. Their businesses are affected by environmental factors so they use the
most effective technology to reduce the harsh impact of magnetic wave.
Their objective is to be one of the largest telecom service providers and to achieve huge profit
from the market. As Southern Business Technologies is one of the biggest SME that can
apply its capabilities to analyze the loopholes and eliminates them easily. Along with that, if
the business can internationalize its brand effectively then the company can achieve huge
success. This objective is measurable because success can be measured in terms of different
key performance factors. This objective is achievable because they are one of the largest
SME in the UK so they can invest money and their capabilities to achieve this objective. This
objective is relevant because they can achieve huge profit by internationalize their brand
through their capabilities and revenues. They can achieve this objective within 2 years if they
show their highest capabilities in the market. The second stage in the marketing process is
strategy Development
Developing marketing strategy
As stated by Piercy (2011), marketing strategy can be defined as the process that can allow
any organization to focus on the limited resources of the organization so organization can
achieve the best opportunity by increasing their sales and achieving sustainable competitive
advantage. Marketing strategy development generally involves three elements that are
Segmentation, Targeting and Positioning. As the Southern Business Technologies is one of
the SME that operating in a small region and the business segment the target customers
through psychographic segmentation and behavioral segmentation.
They mainly target the middle class and lower middle class families. They follow the focus
targeting strategy. In this targeting strategy, different segments are identified but company
concentrates only one them. Southern Business Technologies concentrated on the middle
class family and developed their pricing strategy according to them.
In order to attract those people, they follow Price positioning strategy to attract a specific
segment of customers that are price sensitive and attract them with low price services. The
third stage in the marketing process is Designing Marketing Tactics.
For targeting potential sections of customers, the company adopts strategic public relation
techniques that allow relationship managers to let know media know that Southern Business
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is also a potential player in respective fields and it has industry spokesperson. Using media
will be the fastest way to connect and communicate with customers.
Designing Marketing Tactics:
Considering this strategic plan, it is important to make different tactical decisions for the
proper parameters of the marketing mix. In the case of the Southern business technologies, it
is important to make marketing decision by considering promotional and development
decision of the product and services, pricing decision so the product and services and the
distribution decisions.
Product:
The product range of the Southern business technologies include publishing services, hosting
services, web services and different varieties of IT services.
Price:
There is several established organization in the market so in order to make them attractive to
the customers, they select a low cost pricing strategy to provide professional services.
Place:
Southern business technologies organization should be created in that area where customer
can easily access their services.
Promotion:
Southern business technologies follow an effective communication strategy through various
channels to spread awareness regarding their services. For promoting their service, they select
mainly online media. The main reason behind this is it incurs less cost and they have
expertise on that. They mainly select different social media sites like Face book, twitter and
YouTube to promote their services.
The last stage in the marketing Process is the Implementation and control.
Implementation and control:
To decide the element for the marketing mix, different British SMEs should conduct various
techniques like situational analysis and analysis of the marketing strategy and should take
decisions regarding the marketing and they should implement those decisions on business. As
the initial investments of the British SMEs are not high, so they should choose that product or
services, which can benefitted them. In the recent time, customers are more prices conscious
so price should be selected according to the ability of clients.
1.2 Identification of winning orientation and evaluation of cost and benefit
Orientation can be defined as the practice that can help organization to capture best strategy
making practices, firm behaviors and different managerial philosophies in order to make
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organization most effective. There are mainly five orientations, which can help Southern
business technologies to internationalise their organisation. Those orientations are the export
strategy, franchising, joint ventures, turnkey projects and licensing. As cited by Dikova et al
(2016, p.199)Through an effective export strategy, any organization can have a significant
impact on their export plan and different marketing strategies. Franchising can be defined as
the arrangements where one party grants another party to utilize their trademark along with
their business process or systems in order to produce an effective market for goods and
services according to the specification. Joint venture establishes among two organization
when one organization is undertaken jointly by two or more parties and retaining their
distinct identities. Licensing can defined as the authorization of the use, performances or
release of their business in a new market. As stated by Hastings (2011), turnkey project is one
of the compete project that mainly includes different major units of any plants that are
completed under one overall contract like the power station complex or chemical works.
For internationalizing the organization, it is important to the Southern business technologies
must follow joint venture strategy because this process can provide them an identity in a new
market. Along with that, Larrañeta et al (2014, p.769) states, this internationalised strategy
can help them to access new markets as well as distribution networks, help organisation to
increase their capacity and help organisation to access the greater sources that also include
the technology, finance and specialised staff. However, there are different disadvantages of
this strategy that are the partner organisation may have different objective than the Southern
business technologies. Moreover, there is huge possibility that the partner organisation may
not provide sufficient leadership to the organisation.
As such, fostering joint venture can have significant cost on the current budgetary allocation
of Southern Business technology. The costs can be both monetary expenditure as well as
qualitative compromise. According to (Arensman et al (2016, p.12), in every joint venture or
shared ownership, there is a difference of stakes based on the agreement. If the partner is the
minority shareholder in the venture, it can affect adversely for the organisation in concern.
The costs are divided in the proportionate order, which is exactly commensurate with the
shared divisions, and if the minority does not respond promptly to the issues, it can be
disastrous. Qualitative costs include the need for compromise on the overall objectives of the
organisation and providing leadership personnel who can cost a great deal to the company.
There are a number of benefits, however, that can result from such venture. The company can
benefit from the increased capacity and the entire cost of entering a nascent market can be
shared. More specialised resources like staff, technology, finance etc. can be gained through
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venturing with a locally established firm with respect to the market that the organisation
wants to enter. Globalisation benefits include access to new and capacitive markets, trade
associations and distribution networks etc.
Massive investments
For implementing the strong market orientation, massive investments of money and time is
required because it needs to involve different business intelligence strategy to attract the
customers as well as require association of detailed research. For satisfying the needs and
requirements of the customers, Southern business technologies should invest that amount of
money that they can easily retrieve from their business within several years. As stated by
Ennew and Waite (2013), to make an SME successful, it is important to invest the average
amount of money because their first revenue is not so high. If Southern business technologies
invest medium amount of money, then only they can retrieve that with an ease because
massive investment requires tremendous time to recover it.
For implementing strong market orientation along with the massive investments, a good
pricing strategy is also important. It is seen that their main target customers are the lower
middle class customers so they should develop low pricing strategy by which Southern
business technologies can grab their attentions.
For implementing stronger market orientation, it is important for the Southern business
technologies to implement an effective marketing strategy. This is important to make more
customers aware regarding their services. This strategy will help the organization to increase
their customer base.
2.1 Micro and macro environmental factors that influence marketing decision
For every business organization, environment is considered a prime factor as it helps them to
identify and understand their business status in the market. Internal business environment
also known as the micro factor explains the strengths, weakness, opportunities and threats of
the company. Based on their analysis, the organization develops proper strategies to minimize
their loopholes and ensure smooth business operations. On the other hand, the organization
has to understand their external factors as well as it help them to understand the political,
economic, social, technological, legal and environmental factors accordingly. Post the
analysis, the organization develops appropriate strategies in case the organization decides to
expand their business operations in a new market. The environment is made of two aspects,
which are Micro (Internal), and Macro (External) factors.
The Macro-environmental factor can be defined as the uncontrollable external factors that can
affect the operation of any business (Fitchett and McDonagh, 2010). Several uncontrollable
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and external factors can affect the decision making of the Southern business technologies.
The macro-environmental factor of Southern business technologies can be considered in the
light of macro environmental tool called PESTEL (Political, economic, socio-cultural,
technological, legal and environmental)
Political
Different legislation regarding the employment, rate of tax, stability of the government in
British and in another market in which Southern business technologies is planning to develop
their business creates a huge impact on their business. Due to employment related act, the
government is liable to reduce discrimination in their organization and they must assign a
fixed and standard working hours to their employees. Due to instability of the government,
they should implement an effective pricing strategy to attract customers. Due to huge amount
of corporate tax creates an effect on their profitability.
Economical:
Foreign direct investments, financial stability of the states, the rate of inflation, current
customer's flow creates a huge impact on their business. Recently UK left the EU that creates
a huge impact on the organisation. Due to increasing rate inflation, the monthly disposal
income of the customers decreases and affects their business negatively because this makes
customers lower level of investments for their communication. However, they can increase
their revenue by FDI.
Socio-cultural:
The belief of the customers regarding the quality of the product, living standards, population
in the country in Britain and that country they are operating, workforce creates a huge impact
on the business of the organisations. Customers are currently more aware regarding quality so
Southern business technologies must invests more on their business to increase the quality of
their services. Population in the UK is increasing and their living standards are increasing so
Southern business technologies must increase their capability to increase their coverage and
they should invest more on their research and development to meet the growing need of
population.
Technological:
Digital marketing, research and development and the e-commerce can affect their business so
Southern business technologies must adopt those technology so they can attract the present
generation and satisfy their needs. All those technology can create a positive influence on
their business.
Legal:
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Due to Safety related act in the UK, they are liable to provide some safety measures to their
technician and they must invest more on their wellbeing.
Environmental:
Due to different environmental factors such as pollution, greenhouse effect, carbon footprint,
Electra they are liable to reduce the harmful effect of their business. They must implement
the strategy by which they can reduce the harmful effect of the radio frequency.
On the other hand, the micro environmental factor can be defined as those factors that have
very significant impact on the operation as well as the success of any organization. Different
micro environmental factor that affects the marketing decision of Southern business
technologies could be analyzed using Porter 5 Forces framework below:
Threat of substitution
There can be several substitutions of the Southern business technologies because there are
different established player in the market, so the risk of change is high. This is because; any
customer can stop their services from the small and middle-level organization and can accept
their services from the big organization.
Bargaining power of supplier
Bargaining power of the vendor is high because of the availability of so many providers and
less amount of switching costs.
Bargaining power of buyer
Due to huge competition in the market and less amount of switching costs, bargaining power
of buyer is high. They have the control to make bargain with the company or else they may
turn to other competitors who may agree to sell them at their desired costs. This influences
management in ways to make appropriate pricing proposals so as retain existing customers
but inflicting potential loss to itself.
Intensity of competitive rivalry
Due to the presence of several same types of organization in the market, the intensity of
competitive rivalry is very less. The company has to assess the competitiveness of
communications market in England and make necessary proposals based on revenue shared
among all business players. This is influential in the aspect of analysing competitive rivalry
and shared market among them.
Threat of new entry
As the investments in the SMEs are not so high, so there are potential threat of new entry is
very high. If any network communications company plans to make entry into the market,
Southern Business Technologies need to identify prospects of competitor’s market share
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created post introduction and make adequate strategic arrangements in order to avoid
customer turnover. Therefore, competition in this market is very much high.
4.3 Reason and the way by which international marketing differs from the domestic
marketing:
Domestic market can be defined as the market in which the supply and demand of the goods,
securities and services are involved within a single country. On the other hand, the
international market can be defined as the market where the marketing principles are applied
in more than one country.
Differences:
Different tax rates
In the case of the local market, the price of the product is low because the product is intended
for the home country (Golding and Peattie, 2012) whereas in international market,
introductory price for the product might be high because of the presence of different tax rates
in the different country.
Revenue generated
Revenue generated by the domestic market is lesser than the international market because
scope of profit generation in domestic market is lower on the other hand, the inclusion of
foreign currency makes the scope of revenue generation is high in international market
Size of the market:
This size of the local market is small, so the scope of work is low in this market. On the other
hand, the scope of work in the international market is huge because of the involvement of the
vast operational area.
Cost of promotion:
In the case of the domestic market, the cost of advertising and promotion is lesser than the
international market because it is intended for the customers of a particular region. On the
other hand, the International market requires the investments of the huge revenue because of
the huge promotional and marketing costs to attract the diverse range of customers.
Consumer Attitude: Consumer attitude can be said, as another perspective in this region, as
there are many consumers who do not prefer the international products and services and
mainly rely on domestic products, as they have been accustomed to the products for a long
time. So this is another area where the organisation is not able to change the perception of the
consumers as they have a proper mind-set.
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3.1Explanation of how products can be developed to sustain competitive advantage
Product innovation can be defined as the process of creation and introduction of any of any
goods or services that are either new version or the enhanced version of any goods and
services.
As opined by Hastings (2011), the most important thing to improve a product is inventing the
idea to produce a product. For promoting any new product and services and for gaining
competitive advantage high-quality product as well as pricing strategy is necessary to achieve
competitive advantage than the competitors. Therefore, to develop the sustainable
competitive advantage, Southern business technologies should:
Adopt staged release of products: Staged release of products would enable Southern
Technologies to hold back certain developments that they may have made into the product
and release an improved and updated version of the product periodically rather than at once.
Staged release would make the products appear dynamic and appealing over competitors’ that
may be perceived by customers as static and impoverished.
Differentiation and positioning: If Southern Technologies are able to differentiate their
products and services with that of their rivals they can create a general perception that the
offered products are better and productive from others, building a position that would give
them a competitive advantage. If the company is successful in providing unique and effective
services in communication sectors that no other are able to provide they can take themselves
to prime position of the market from where it would be very hard to remove them thereafter.
Implement innovative costing strategy:
All of the customers want a high quality product in low price so Southern business
technologies must adopt some effective strategy by which they can offer more lower pricing
to their customers. In order to make this happen they should cut their operational cost in
innovative way so they can operate their organization effectively and cut their operating
costs.
Introduce new types of services:
They are a telecommunication organization so in order to increase their sustainable
competitive advantage they can increase their service range. They can provide coverage that
is more effective to their customers by research and development or they can make a
partnership with the mobile manufacturing organization to provide more personalized
services to the customers.
Implementing innovative marketing strategy:
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In order to facilitate an innovative marketing strategy they can rely on the content marketing
strategy and develop different an effective content that can motivate their customers.
Moreover they can implement the social marketing strategy to maintain their sustainability.
Implementing innovation in cutting operational costs
In order to maintain their cost leadership strategy they must cut their operational cost in
innovative way and they also implement some effective motivational strategy to their
employee so they can be motivate and can bear extra responsibilities.
Provision several offers
Southern Business Technologies will enjoy competitive advantage if it offers wide ranging
services to its target customers. To maximize this benefit, it may implement effective
promotional strategy and pricing strategy, and they should provide some discounts to their
customers or they must provide some free services to their customers. For the development, a
new product an excellent after sales service is also important.
3.2 Explanation of how distribution needs to be arranged by British SME:
Distribution can be defined as the action to share something among different recipient. It is
associated with the spreading of the product in the marketplace so that large amount of
customers can buy that product.
To increase the revenue in the market and create a huge market for any organization,
Southern business technologies should develop an effective distribution channel so they can
make their product available to their customers.
There are mainly three different level of the distribution coverage such as intensive coverage,
selective coverage and exclusive coverage. For facilitating an efficient distribution channel, it
is important for Southern business technologies to open their retail store in that location
where the number of customers is high. This strategy will help them to avoid extra cost
because of the involvement of intermediaries. Making use of the middlemen will maximize
convenience to the target audience. Therefore, it would be helpful for them, if they open their
store in the most convenient place that can be easily accessed by the customers (Joneset al.
2012).Along with that, they should make retailer, wholesalers and stockiest available for their
businesses. They can utilize the direct marketing strategy to attract different customers so
they can access the distribution channel of the organization and buy their product.
Involvement of retailers and wholesalers would allow Southern Technologies to make their
presence felt into market where customers do not have easy access to its services. Customers
would be at their convenience to visit any nearby outlet where they make themselves availed
of the services offered by the enterprise. They can utilize the intensive and exclusive
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coverage to serve their servicers to the customers. By intensive coverage, they distribute their
services among the population of UK. They can establish tower BTS and serve all the
customers that are located in the area near to that tower. Taking their service online through
availability of websites, it can make the process of registering complaints or grievances more
easy and user friendly without customers having to visit its offices to register complaints. It
would also allow new customers to register themselves on company websites and view
various offers of broadband services. On the other hand, through exclusive coverage they
provide their broadband services to different companies. This is because, exclusive coverage
are intended to provide services to a very narrow markets.
3.3 Setting of price to reflect the market condition and objective of organization:
The pricing strategy can reflect upon companies’ future objectives and market conditions.
With respect to Southern Business Technologies, setting price too high or too low can affect
company in its position in the market. In this regard, there are strategies that can be employed
by Southern Business to meet its business objectives and understand market conditions.
Penetrative pricing: Company set low prices to reduce competition for boosting sales and
gain market share. SME have very small market capture compared to large scale industries
and reducing product price is one of the viable options for SME like Southern Business to
gain foothold in the market.
Satisfactory rate of return: SMEs usually follow this for product price only to gain nominal
rates out of it. Southern Business can expect good return with no further interest of going
beyond nominal amount through cost cut policy.
Differential pricing: SMEs tend to follow different prices for products or services on the
basis of demand oriented policy. Demands from customers are evaluated and different prices
are set accordingly to target certain customers.
In the recent times, maximum customers are price concerned, and they want superior quality
products in low price. In different economy need of customers are also different so in various
economies price is one of the most concerning elements that mainly decide the sales level.
Therefore, it is important to set the price according to the need and ability of the customers.
In the context of setting the right price in the prevailing market conditions and S T the 4Cs
(Costs, Customers, Competition and Company policy/objectives) framework can be
followed:
Cost: In order to set a right price, it is important for the Southern business technologies to set
a price that can satisfy the customers. Here their targeted customers are the lower middle
class family so they should set a low pricing strategy for their customers.
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Customer: Here their convenience customers are the lower middle class families of the UK
whose monthly disposal income is very less.
Competition: There are different established player like EE limited, O2 Electra who provide
communication services to the customers so they should choose an effective pricing strategy
that can help them to get sufficient number of customers.
Company policy/objectives:
According to Meghraoui and Benabou (2014), the ultimate objective of any organization is
earning the profit by serving customers with quality products so to fulfill this purpose they
must attract customers attention. Therefore, this goal can be fulfilled by offering goods or
services at low costs. If any organization higher their price that means they are concentrating
on quality, while lowering price indicates they want to achieve immediate profit. Southern
business technologies should set different price in different time. At the initial phase, they
should offer lower pricing strategy to create demand for their product. At the later date, they
can charge higher pricing strategy. However, they should offer different discounts in a
different era.
3.4 Promotional activities that British SME can be integrated to achieve marketing
objective
Promotion can be defined as the set of activities that help any organization to communicate
the product, service or brand to their users.
There are several promotional strategies, which can help the Southern business technologies
to increase their sales; they are advertising, sales promotion, direct mailing, etc. These
promotional mixes attracts huge amount of customers and make them aware regarding the
service provided by the Southern business technologies. Elements of promotional mixes
generally influence their buying behavior and help them to buy the services from Southern
business technologies. The promotional mix element should reflect the costing strategy of
Southern business technologies so it can attract customers and make customer aware
regarding the services of the organization. Along with that, it is important to adopt effective
promotional mix elements so it can help the organization to share their thoughts with the
customers. Southern business technologies should adopt effective promotional mix so
customer can adopt that.
In this aspect, the company can apply certain measures to integrate promotional mixes into
marketing objectives. The company needs to determine its target market, segments of markets
that need or benefits from its products or services. Then the company should determine its
future objectives in the respect what does it want to achieve. This determines versatility.
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Company should also set promotional channels to successfully communicate its strategies
and connect with customers. In this regard, company must determine the budget to prevent
excessive cost. With this the company can attain its market objectives and gain competitive
advantage.
For every organization, the effective promotional strategy is important because it creates a
sufficient awareness in the mind of customers. As stated by Piercy (2011), the different
promotional strategy attracts customers towards the products and services of the organization
that helps them to secure a good amount of profit that is one of the marketing objectives of
any organization. In the later time, it helps the organization to establish a good brand image if
they can be successful to satisfy those customers. Southern business technologies require an
efficient promotional activity that can lower their operational costs and reduces their
inventory so it can benefit those organizations with a high amount of profit. Southern
business technologies also require various personal and professional skills so it can help
British SMEs to achieve their marketing objective. Huge technical knowledge is also required
regarding the need of customers, as well as marketing trend is also needed to achieve a
marketing goal.
3.5 Additional elements of the marketing mix:
Southern business technologies should consider the extended marketing mix elements like
people, process, and physical evidence to gain the competitive advantage.
People: To gain competitive advantage, Southern business technologies should attract and
retain highly experienced employees so they can provide most effective customer services to
their organization (Jamal, 2015). Having skilled and knowledgeable employees would enable
the company to deliver satisfactory services such as its broadband services and maintain
business effectiveness and operations. It will not be effective for them to hire fresher
employees because they incur some extra costs for training. The initial investments of SMEs
are small, so it will not be effective for them to hire fresher. It is important to hire employees
based on their skills and service knowledge. Along with that, it is important to train their
staffs so they can maintain the best practices as well as prescribed standard.
Process: For gaining effective operability, it is important for Southern business technologies
to have effective processes like delivering effective customer services with the help of
professional executives. To provide effective services, they should minimize all of the
conflicts among their employees. The business and service processes should be productive
and user friendly in the aspect that are usable and easily accessible and customers can readily
understand the functions of it. The company should employ people in delivering service who
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can efficiently explain customers the procedures to avail broadband services offered and how
would the company help in getting one in their homes. Along with that, they should cut their
excessive cost so they can increase their profitability. They should promote a consistent
service and should avoid the confusion in order to increase effectiveness of the services.
Moreover, all of the process must be clearly defined as well as efficient.
Physical evidence: This element distinguishes any organization from their competitors so it
is important to select this element very carefully. Customer judge any organization based on
this elements. Physical evidence would provide an assurance to customers that Southern
Technologies have registered office located in specific locations where they can visit and
make them accountable for any inconvenient services. Having offices would also enable the
company to store equipments and products in storehouse that can be further utilized in the
need of service integration and development. Along with that, this element is utilized for
charging a premium price for the services and establishing a positive experience in the mind
of customer so Southern business technologies should effectively select this element. For
satisfying customers, they should provide some extra facilities to their customers like car
parking. Along with that, right packaging style, interior, and exterior of the store is also
important.
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Task 2:
Power point slides
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Slide 9
2.2 Segmentation criteria of Tesco:
As stated by Hastings (2011), segmentation is known to split the market into segments that
can be defined, accessed and show a profitable growth. Organisations use this strategy to
design their appropriate target consumers and market their products or services to them.
Organisations use segmentation-marketing tool as a strategic option to identify the market,
gather data using factor, and cluster analysis. Prior to the analysis of these data, the
organisation is able to identify their prospective consumers. Tesco apparently deals in a
variety of products and services to cater to the consumers and hence their way of marketing is
completely different as they focus on the entire market due to the availability of different
products. Therefore, a segmentation criterion of Tesco is based on 5 factors which are:
1. Demographical variables: In this segment company targets their position based on the
location, like if it is the best suited for the company or not. Some marketing people targets a
group of industries while some targets a specific type of industries. Suppose a company that
manufactures clutch wires for motorcycles will definitely go for a motorcycle company.
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Whereas a company that manufactures Styling Kits, Spoilers, Rear Parcel Shelves GRP
Panels and components will opt for GRP Components, construction equipment
manufacturers, Automobiles, Trucks and Buses manufacturers.
2. Operating Variables: This variable deals with the customer capabilities and technology. If
the status of the user is heavy or not.
3. Purchasing Approaches: Few companies have decentralized purchasing whereas others
have centralized purchasing. Tendering is always a competition in marketing industry. The
procuring organization purchases the required goods and services from the appropriate
suppliers. This is usually done for high amount of purchasing for which the organization
needs to bid on from competing with other suppliers and the best offer will be chosen. This
process is called strategic procurement. The organizational structure is an important criterion
as it gives a vision into the purchase policy of the organization.
4. Situational Variables: This includes scheduled delivery, urgency or quick delivery of the
products as required by the consumers. Size and specific application of the product is also a
beneficial criterion for this variable.
5. Personal Characteristics: In marketing industries, many products are needed to be
customized for the requirements of each customer for which personal selling is very vital &
effective. Buyer’s seller relationship as well as attitude towards loyalty and risk of an
industrial customer is also a major criterion.
CONSUMER MARKET SEGMENTATION AND INDUSTRIAL MARKET
SEGMENTATION:
The most important part of segmentation is consumer market segmentation and industrial
market segmentation. Industrial market is the market where one finds buyers and traders
of goods of industrial involvements such as machinery, land, labour, capital. This can
also be termed as factor markets.
Consumer market is the market where the customers will consume goods and services
manufactured by the industrial sector. This can also be termed as product markets. TESCO
has started the production of Groceries item, household’s item and kitchen items based on
different customer segment and targeted different customers to increase their sales.
Therefore, industrial market segment is dependent on the customer’s requirement.
2.3 Targeting strategy Tesco uses for a selected product:
Targeting refers to the process where an organisation is able to identify their prospective
consumers through proper segmentation analysis that included the tools like factor and cluster
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that helps the organisation to identify their consumers respectively (Ennew and Waite, 2013).
Based on the information, the organisation is able to strategize their marketing plans.
Figure2 – Targeting Criteria of an organisation
(Source :)
Undifferentiated mass marketing strategies ignores all kind of segmentation opportunities as
it is considered to target all consumers. This marketing strategy is mainly implemented for
organisations that retail stores or supermarket. Differentiated marketing (segmented) refers to
the planning process that aims in targeting various segments and implement offers for each
segment. Another aspect of targeting is niche marketing also known as concentrated
marketing aims to target a specific set of consumers that are small in groups. Micromarketing
refers to the local market targeting strategy that aims on specific market group locally.
It has been observed that Tesco has started production and sale of poultry product to attract
food lovers. The organization has targeted chicken lovers by their mouth-watering ready to
eat product “Tesco Everyday Value Chicken Breast fillets”. According to the market
research, it has been observed that youth generation and health conscious customers prefer
chicken items. On the other hand, maximum customers are busy to maintain professional
career so they have not enough time to prepare delicious dishes. Tesco specially targets youth
generation and health conscious customers for Chicken Brest Fillets. Therefore, the targeting
strategy of this particular product is dependent on the segment of the customers. The
organization has used their industrial resources to produce this product.
As for targeting strategy, Tesco can utilize segmentation and positioning strategy.
Segmentation would allow it segment the market based on geographic, demographic,
psychographic and behavioural aspects. This would determine consumers’ eating habits and
preferences in how chicken is cooked or prepared. By this, Tesco would gain design of who
are the prospective customers that could be attracted to its Chicken food product. Positioning
would enable Tesco to evaluate its market position and condition with other competitors such
as KFC or The Burger King.
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2.4Buyer behaviour affects marketing activities of Tesco
Buyer behaviour determines the aspects that a buyer seeks or looks for before buying
products or services. Behaviour of buyer enables companies to propose marketing strategies
that may be effective in attaining customer’s attention.
Buying process involves certain steps that are based on buyer behaviour.
1. Problem recognition: First buyer recognizes the problem and need to buy new
products. Buyer identifying his need can be short term or long term and it can affect
business marketing on the basis of buyer opting for costly or cheap product.
2. Information search: Buyer searches for products that can fulfil his needs. Information
search generates various alternative products within same range or from competitors.
This buyer behaviour can be futile for businesses as their marketing efforts may fail if
buyer opts to competitor.
3. Purchase decision: Buyer then makes final decision to go with purchase or not. He
decides if he can do without making purchase and only go with it when he is
convinced with the benefits of the product. A company marketing its product
extensively for buyer to make purchase faces jolt when buyer opts out.
4. Post purchase servicing: Buyer expects service from the company post making the
purchase. If the company do not provide service, it would not attract customer even
with its quality marketing efforts.
Every consumer follows a series of pattern towards a product before they make a purchase.
Buyer behaviour defines the important factors which includes cultural, social, economic, and
psychological factors. Every consumer is different and they have different needs.
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Figure3 – Buyer Behaviour
(Source :)
In order to attract the consumers of all categories, Tesco has to develop certain strategies that
can help them to achieve the desired activities. Using the Maslow’s hierarchy of needs, the
organisation can segregate their consumers as they will be able to determine the needs of the
consumers. Buyer behaviour affects the business in a variety of ways. Social media, pricing,
and word of mouth publicity are some of the ways through which buying behaviour affects
the performance of an organisation. In today’s world, users can go online and can see reviews
of a product which they intend to buy. If a positive consumer has reviewed the product, then
the user is most likely to go ahead and make the purchase. On the other hand word of mouth
publicity plays a crucial role in the development of the product. A negative consumer will be
discussing the negative aspects of the products and would recommend their consumers not to
make a purchase (Golding and Peattie, 2012).
It has been observed that the buying process of the consumers are divided in six different
stages such as requirement identification, searching information, evaluation of alternatives,
purchase decision, purchase and post purchase evaluation. Therefore the buying process
varies on different factors such as requirement identification, value of this product, expense
limit of the customers and product availability. Therefore, the marketing strategy of Tesco is
highly influenced by buyers’ behaviour and decision. Consumer buying behaviour is
influenced by cultural, social, personal and psychological factors. This popular retail store
has found that some buyers are influenced by Halal types of food. On the other hand personal
factors such as age, lifecycle stage, occupation, economic circumstances and life styles
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influence purchase decision of customers. Therefore the organization has designed individual
marketing strategy for every product.
2.5 Positioning strategy for selected product:
Tesco Cola is beverage offered by Tesco. Tesco Cola has recently been launched for
consumer to enjoy having soft drinks. Tesco has given somewhat different taste than other
cola drinks. It has been priced averagely considering the likeness of soft drinks by its visiting
customers. It has been kept in stock in all of Tesco’s superstores. Tesco promoted its Cola
drink through running many competitions and promotional schemes where customers were
allowed to participate and win Tesco Cola.
As it has just begun its growth in the market, Tesco needs to up its promotional efforts and
set competitive pricing strategies to gain market share. In this regard, it should offer free Cola
bottles at specific billing amount. Through this Tesco can promote its Cola drink and boost
sales.
Post development of segmentation and targeting, the next and the final steps that waits for the
organisation is dependent on the positioning strategy of the organisation. Prior to the
development of these respective strategies, the organisation has to create a strategy in the
market that can attract the target consumers that the organisation aimed for. Positioning
strategy helps the organisation to strategize based on advertisement, sales, and price
(Hastings, 2011).
Repositioning in an organisation occurs when they decide to alter the status of a particular
brand in a market. For example, mother energy drink in Australia that was a product of Coca
Cola. When the product first came to market, it followed the marketing style of the brand and
eventually was well executed.
To offer the superior quality products, Tesco should develop practical positioning strategy for
their product “Tesco Cola”. The main reason behind this is practical positioning strategy is
mainly associated with the development of a different range of services and products. This
positioning strategy can help Tesco to resolve various organization related problem and help
them to attract the attention of the customers for their premium range of products.
4ps of Tesco:
1. Product:
Tesco offers a huge range of product at its various stores to cater every customer to
different parts of the markets. Tesco has its own brand and also has different kind of
stores depending on the product availability and type of stores.
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Tesco’s finest products are:
Pet care products, Food, Beverages, Bakery products, Frozen food, Technology and
gaming products, Home and garden products Tesco, Finest, Home electrical
products, Tesco Loves Baby, Tesco Lotus, Everyday Value, and many more
2. Price:
Cost leadership is Tesco’s primary strategy. At reasonable price it provides quality
product. For maintaining low prices it uses best channels and economics of scale. To
reduce the prices of the product Tesco keeps on working with the suppliers for
efficiency. After getting the feedback from the customer’s Tesco started providing
products at low prices maintain the quality of the product. Recently Tesco has
launched a food brand at a very reasonable price.
3. Place:
In 11 countries Tesco has 6,900+ stores. Following are the type of stores:
One stop- Very small stores but they charge higher rates than the other stores of Tesco
Tesco express- Contains high margins and essential products but stores are smaller in
size. They also charge higher rates
Tesco superstores-Out here they sell groceries with a small section of food items.
These are larger super markets.
Tesco Extra-This kind of store are very large in size and they provide a huge range of
products like groceries, apparels and many more so that customer can get everything
at a single place under one roof
Tesco Metro- These is located in city centres and towns and they are usually of a size
of 1,000 sq.m
4. Promotion:
As Tesco always relies on reasonable price rates so it has a strong and good brand
image. Tesco basic theme for promoting its business is television ads, promotional
discounts, charitable events and hoardings.
4Ps of Tesco cola:
Product
Tesco has presented variation in their carbonated
drink segment. Variations in the product is
available such as diet cola, can, regular cola,
Tesco cola classic and different flavored cola is
Price
The price of the Tesco cola is fluctuating. At the
beginning, the price was not too high due to the
attractive promotional strategy. However, the
price of Tesco cola increases gradually along
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available in the market. with increasing popularity. Therefore, the
organization has faced price regarding
competition in super market.
Place
Tesco is a global retail brand which is supported
by many sales officers and market research
teams. On the other hand some controversy about
Coca Cola products gives Tesco cola advantage
in different location. Tesco cola is sold in almost
all Tesco retail shops in different location.
Therefore, Tesco cola faces some advantages and
disadvantages in global market competition.
Promotion
The promotional strategy of Tesco cola is
different based on the character of the market.
The organization still believes on the online
marketing strategy rather than traditional
marketing strategy. The organization is hope full
to attract the youth generation through online
advertisements and promotion.
On the other hand, symbolic positioning strategy can help Tesco to offer products with lower
prices. Tesco can provide their grocery products, beverages, and fashion items through this
positioning strategy. This is because this positioning strategy is effective to increase the brand
image by achieving the competitive advantage in the market.
Tesco Cola
4.1 Marketing mix for two different segments of Tesco:
There are different types of customers, and for satisfying the need of those customers, Tesco
set premium and economy range of products.
Marketing strategy 1:
Tesco plans to launch their product “Tesco Everyday Value Chicken Breast fillets” in the
UK market at a very reasonable price rate of £3.85 per Kg. This product will be available at
Tesco Superstore as well as online shopping. The promotions of this brand are done by
Celebrity endorsements.
Marketing strategy 2:
Tesco has re-launched their product “Tesco Cola” 2 litre bottle for the customers and also
reduced their pricing and it has been set to £0.50. This product will be available at all kind of
retail stores of Tesco. Promotions of this brand are done via social media, newspaper and
television ads as well.
4.2 Differences in marketing products and services for businesses contrast to
customers:
B2B MARKETING:
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Business-to-business focuses on logic of the product. And to do this, one need to
focus on the features of the product. This basically works in favour of the consumer;
here the organizational goal depends upon customers’ needs or satisfaction. B2B is
not about the product it is about the customers who are using the goods or services.
Business-to-business market is required to validate their purchase through data
financial scrutiny and logical argument.
B2C MARKETING:
Benefits of the product are the key while marketing to a consumer. The decisions of
the people are very emotional and their demands vary on different distribution
channels for ease which B2B market can’t provide. Consumers like to get straight to
the point than reading an overlong marketing text basically they want the organization
to point out the benefit of the product to them. So the marketing promotional activity
of the organization must be clear and brief.
B2C B2B
Product High in quality Low in quality
Price Low to attract the attention of
customers
High
Place Fewer More places
Promotion More effective promotional
strategy to attract the attention
of customers
Promotional strategy is not
important here
Table 4: Differences in marketing products for B2B and B2C
(Source: Piercy, 2011)
B2C B2B
Product More to attract a range of
customers
Low
Price Less High
Place More effective promotional
strategy to attract huge
customers
More effective promotional
strategy to attract huge
businesses
Promotion Less More to attract huge number of
organizations
Table 4: Differences in marketing services for B2B and B2C
(Source: Piercy, 2011)
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The perspective of B2B and B2C is considerably different from one another as the target
audience is completely different in this scenario. For business to business activities,
organisation approaches other organisation for their product or services since they develop
products that can be of commercial use. For B2C, business organisations target the
consumers for their products or services that can help them to gain business profit. The
quality matters in these areas as, business organisation would be requiring high end products
for their office use. On the other hand business to consumer business activities are purely for
domestic purpose and hence they have a different criteria for quality altogether.
Comparing marketing products between B2C and B2B, product of B2C are higher in quality
than B2B. Product prices for B2C are less for gaining customer attention and they have fewer
places to operate when compared with B2B. Promotion is important for B2C as they business
is highly dependent on it. On contrary, promotion is not so important for B2B.
Tesco generally prefers online marketing and social media marketing strategy rather than
traditional marketing strategy. The marketing professionals are confident about handling
online feedback in social media. However, according to the marketing experts of Tesco social
media marketing and online marketing strategies are the cost effective and efficient for their
products such as Tesco Everyday Value Chicken Brest fillets and Tesco Cola. On the other
hand different services like delivering customer values, online service, easy return policy and
safe and secure monitory transaction increase the customer satisfaction. However sometimes
customers have faced different issues regarding products and services such as faulty products,
hidden taxes, delay in delivery and short return period. Those issues forced them to go
against of this organization.
Conclusion:
From the above discussion, it can be easily concluded that marketing principles and the
product development strategy must be selected based on the marketing mix. Therefore, it is
important for any organization to select effective marketing mix by considering all of the
elements for the specific products. It is only possible then when there is clear knowledge
regarding the organization objective, and there is an effective plan to achieve those
objectives.
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