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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