International Marketing Plan for Tesco in Australia: ASB 4439

This report provides a detailed marketing plan for Tesco's potential entry into the Australian market. It begins with an executive summary outlining the key findings and recommendations, including an analysis of Australia's economic, legal, cultural, competitive, and technological environments. The report then explores Tesco's organizational background, mission, and values, followed by a justification for selecting Australia as a target market. It examines the economic and legal frameworks, the cultural environment, and the competitive landscape, highlighting key competitors like Wesfarmers and Woolworths. The report also considers the physical infrastructure, geography, and technological factors influencing market entry. It analyzes entry mode options, defines the target market, and proposes a positioning strategy. Finally, the report outlines the 4Ps of the marketing mix—Place, Product, Price, and Promotion—tailored to the Australian market, concluding with a summary of opportunities and challenges for Tesco's expansion.

Running head: THE MARKETING PLAN
THE MARKETING PLAN
Name of the Student
Name of the University
Author Note

1THE MARKETING PLAN
Executive Summary:
The purpose of this paper is to analyze the internal and external environment of a company to
assess the industry potential and market attractiveness of a particular company. The report
highlighted minute details of how Tesco Plc can penetrate new market. The country selected
for Tesco in this paper is Australia. Tesco imports a lot of raw materials from Australia. The
paper presented a discussion about the business environment of Australia. It provides a
thorough analysis of the economic and legal, cultural, geographic, physical, competitive and
technological environment. The entry mode has also been analyzed. The paper also reflected
the target market and positioning strategy that Tesco can select for Australia. The 4Ps- Place,
Product, Price, and Promotion strategies have also been analyzed. After analyzing the report,
it can be understood that Tesco has got an immense opportunity in the Australian market.
Although the company will receive huge competition from Wesfarmers and Woolworths, it
has got a huge growth opportunity in the online market sector and the fashion apparel and
electronics sector.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
About the organization:..........................................................................................................4
Country Selection:..................................................................................................................5
Economic or Legal Environment-......................................................................................5
Cultural Environment:........................................................................................................6
Competitive Environment:.................................................................................................7
Physical Infrastructure:......................................................................................................8
Geography:.........................................................................................................................8
Media and Technology:......................................................................................................9
Entry Mode Selection:............................................................................................................9
Target Market.......................................................................................................................10
Positioning Strategy.............................................................................................................11
Place Strategy.......................................................................................................................11
Product Strategy...................................................................................................................12
Pricing Strategy....................................................................................................................12
Promotion Strategy...............................................................................................................13
Conclusion................................................................................................................................14
References................................................................................................................................15
Appendices...............................................................................................................................17

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Introduction
The marketing plan of an organization consists of the overview of establishing a
newer business, updating am existing business plan and/or expanding operations in a newer
market for recognizing the opportunities. The operational outline, which includes the
advertising or promotional strategies of an organization for an identified and recognized
target market demonstrate the document of the marketing plan. The marketing plan enables
the functionalities of an organization to undertake PR campaigns over a certain period with
the measurement metrics for the effectiveness of the marketing initiatives. A marketing plan
helps in the identification of the competitors, the value added by the company to respond to
the strengths and weaknesses of the organization followed by brand positioning. A well-
structured marketing plan also helps in setting specific and measurable goals with a certain
time frame for conducting the activities. The strategies in a marketing plan aimed at reaching
out to the target audience by the elements of messages and tools.
The purpose of the paper is to construct a well-structured marketing plan for
facilitating an international marketing motive of the company Tesco in the international
market of Australia. The paper will include components such as an overview of the existing
multinational company followed by the main goal of assessing the targeted country for
expansion. The paper will also strategize the entry mode approach for the targeted market of
Australia. The positioning strategy of the company in the foreign market will be discussed
along with the discussion of the marketing mix. The paper will be concluded by summarizing
the main components of a marketing plan for expanding offerings and operations on Tesco in
the Australian market.

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Discussion
About the organization:
The British multinational general merchandise and grocery retailer, Tesco plc is
headquartered in Hertfordshire, United Kingdom. Tesco plc is considered one of the largest
retailers in the world in regards to the flourishing revenue and market expansion. The Tesco
branded businesses are the instances of the company's organic growth along with with the
acquisitions (Nguyen et al. 2017). The vision of the retailing company is to construct and
establish the offerings for serving the customers and communities of the surrounding with the
contribution of committed and loyal colleagues and shareholders. The mission of the
company is to become the market leader amongst the target market with the motive of
supporting them with an easier and better way of living.
The core purpose of Tesco is to serve the customers better from the day before.
According to the data of the United Kingdom, Tesco serves around 66 customers in every
single second. The values of Tesco comprises of understanding the customers by being the
first one to address the needs and involve responsible practice for the communities. The retail
brand practices the value of accountability in managing the environment from food waste,
pollution and overutilization of resources. The company operates in the form of brick and
mortar and click and mortar format. Followed by its organic and strategic expansion, since
the years 1960s, the company has involved in diversifying the offerings in segments other
than groceries and homeware, such as retailing clothing items, books, furniture, petrol,
financial services, toys, internet services, electronics, and telecom services. The current target
market of Tesco is a low, middle and high-income group, families, parents with children,
whose preference and lifestyle decisions are made on quality. The target customers, focussed
by the company are based on the four segments geographic, demographic, psychographic and
behavioral. Based on the geographic segment, Tesco targets local regions of the United

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Kingdom, for both urban and rural population (Tosun, 2017). Based on demographic profile,
Tesco targets all age groups (young adults, adults and old age), male and female, low, middle
and high-income groups. Tesco also targets students, professionals, skilled workers, and the
working class.
Country Selection:
The selected country for recognizing the potentiality of expansion of Tesco is
Australia. The only present connection of Tesco with Australia is with importing goods.
Australia has been the home for many international corporations for many years now, which
indicates the attractiveness of the market and majorly the acceptability of the customers
(Lenzen et al. 2017). One of the rationales behind selecting Australia as the prime location of
further expansion can be the similarities and trade relationships between the United Kingdom
and Australia. The United Kingdom has been witnessed to have positive and strong trade
relations as the United Kingdom is the 8th largest partner in terms of trade with around 26.9
billion dollars trade value during 2018. The United Kingdom is also the 2nd largest stimulator
for foreign investment in the year 2018 with around 574.8 billion dollars. The two countries,
Australia and the United Kingdom are economically and politically connected with close
relationships due to international affairs. The legal system, social structure, and language are
similar, which plays a major role in establishing a market expansion plan.
Economic or Legal Environment-
The Australian economy is considered highly developed with an estimation of 1.89
trillion dollars GDP as of the year 2019. The inflation rate of Australia experienced a slight
rise from 2018 to 2019 1.29 percent to 1.90 percent in 2019 (Cornish 2019). The moderate
inflation rate in a country enables price adjustments and the real price attainment of the
goods. Australia is considered as the home for an attractive open market with minimum to
low trade restrictions, which allows the businesses to practice import strategies from all

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across the world. The most significant import markets of Australia are regions from the Asia
Pacific region, which offers comparatively lower cost goods. The opportunities for utilizing
the benefit of being closer to these regions geographically are immeasurable (Uddin 2106).
The wealth distribution is stable as the income growth in the country has been almost non-
existence but with the maintenance of income equality. The tax rate on income earned by
Australian companies is either 30% or 27.5%, which depends on the yearly turnover of
companies. Australia is also good importers of vehicles mineral fuels, machinery, oil, medical
apparatus, electronic equipment, furniture, and plastics. Tesco being a supermarket can take
advantage of this situation and try to make the country self-reliant in production. Fair trading
laws, Consumer laws, and Competition laws prevail in this country. The law related to the
prevention of the production of the harmful product also exists in the country, which is the
Product liability regulation.
Cultural Environment:
Australia is one of the best countries to live in. According to the estimates of the year
2020, 18.3% of the people in Australia are under 15 years of age, 67.7% of the people are
between 15 to 64 years old and 14% of the population is above 65 years. The total
dependency ratio as per the above data is around 47.7%, which is relatively low (Johnston,
Szczepanski and McDonagh 2017). The male and female population distribution as per the
latest data shows that 49.8% of the population is male and 50.2% of the population is female,
which states a somewhat equal base of male and female and hence Tesco can provide equal
employment opportunities for both males and females in Australia. Equal employment
opportunity will increase the goodwill of the company. Religions in Australia include
Christianity, Buddhism, Judaism, Hinduism, Islam, Religiously Unaffiliated, Folk Religion
and others, Christianity is the majority. Tesco needs to penetrate this market as per this
prevailing religions and need to design and distribute its products accordingly.

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Approximately 60% of the students in Australia study from government schools and the
remaining 40% from the non-government schools. Most of the universities in Australia are
public and the fees of the students are also subsidized via the student loan program. Tesco
can tap into these local resources by employing them which will enable them to get better
market insights.
Competitive Environment:
There has been a change in consumer spending patterns because of the advancement
of technologies. Although Tesco is the third-largest retailer in terms of gross revenue, yet it
will face competition from some major retailers already existing in Australia. The largest
retailers in Australia are the Wesfarmers Limited- Supermarket and Woolworths Limited-
Supermarket. Almost more than one-third of Australia's manufacturing sector comprises
grocery, foods and beverage industries. Woolworths have around 38% of the market share.
Woolworths is also one of the largest online retail shops in Australia. Tesco will, therefore,
face a huge competition from Woolworths and Wesfarmers while expanding its business in
Australia. The primary positioning statement of Wesfarmers is to provide satisfactory returns
to people investing in it (Campbell 2017). The core values of the company are integrity,
openness, accountability, and an entrepreneurial spirit. Woolworths has also introduced
several strategies to win over the grocery segment. The new strategy of Woolworths is to
place the customers at the start of everything that they do. This will enable low prices, more
offers, and innovation. It aims at increasing customer value by executing a Lean Retail Model
(Grimmer 2019). In UK Tesco has positioned itself as a low price retailer by advertising its
brand as the "cheapest price every day". In Australia, Tesco needs to position itself
differently as both Wesfarmers and Woolworths are customer-centric and both of them also
provide goods at cheaper prices. Tesco can aim for symbolic, functional and multi-segment
positioning in order to create more customer value.

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Physical Infrastructure:
Physical infrastructure relates to the condition of transport and logistics prevailing in
Australia. Around 14.5% of Australia’s GDP is generated by the Transport and Logistic
Industry of Australia. The current physical infrastructure of Australia supports the
transportation of bulk food commodities and other agricultural products. It also supports fast
and reliable local delivery that helps in fast online delivery of products. The physical
transport system also supports one-day delivery. There has been a growth of around 80%
within the last ten years in terms of carrying containerized material movements through ports.
Estimates suggest that it is about to double itself in the coming 10 years thereafter providing
an opportunity for growth in container handlers (Rogers and Park 2018). The Australian
structure also supports air freights. Speedy deliveries of parcels are now possible through air
freights as against the traditional shipping.
Geography:
Australia has stunning mountains and beaches. It also has a dense forest with precious
wildlife. It is known for its excellent biodiversity. However, it has a very dry climate and is
one of the driest inhabited areas of the world. Most of Australia is composed of arid desert.
Climate change is a major issue in Australia. Climate change results in insecurities of water,
food shortages and also causes diseases. The size of the country is huge and there are
different climatic zone in the country (de Dear, Kim and Parkinson 2018). The northern part
of the country has a climate that is tropically influenced. The southern part is mostly warm.
The condition in the outback areas remain extreme and undergo extreme climatic changes.
The climate and geographical condition of a place affect its agriculture and the farming
sectors. The business firm operates based on the availability of raw materials. Foods and
grocery markets also include agricultural products. It is thus important to consider these
factors and select the product and services needed to be expanded accordingly.

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Media and Technology:
One of the most powerful technologies in the modern world today is the internet. It is
through the internet that information is accessible. The Internet has helped in creating a
modern communication system across the world very fast and reliable. Australia has adapted
to all new technologies faster than any other country. Australia is one of the top spenders in
the research and development sector (Rice et al. 2016). It is one of the highest rates of
internet service providers in the whole world. The education and learning system in Australia
has also integrated communications and technological advancements into it. Smart
classrooms help in accessing the internet and studying through audio and video lessons. This
improvement in technology has been utilized by many retailers like Woolworths, Coles, JB
Hi-Fi and so on.
Entry Mode Selection:
There are several strategies and entry modes that can be selected by organizations to
expand and diversify its business abroad. The several entry strategies can be direct exporting,
partnering, licensing, franchising, joint ventures, turnkey projects and so on. Two entry
modes can be selected by Tesco in entering the Australian market. The two modes are
Greenfield Investments and the buying of a company. Woolworths has a great online
presence in Tesco whereas Wesfarmers does not have such an online presence. Tesco can
take advantage of this situation and it can buy the company and implement its technological
know-how and thereafter the company can reap the benefits of e-commerce as well. It is a
good strategy for entry when the scale is required. It will help Tesco in getting the ready
market share of Wesfarmers. The second entry mode Greenfield, however, requires huge
investment (Lee and Reis, 2016). This type of investment requires buying of land, facilities
like building, furniture, and machinery. This involves operating the business on an ongoing
basis in a foreign market. It is very costly in terms of initial setup. It also involves high risk as

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it needs to follow several government regulations, technological and communication factors.
Australia being a free-trade country will allow any firm to set up a new venture if it abides by
the Product, Consumers, Environment and other related laws applicable in the country.
Greenfield venture helps in gaining local market knowledge and autonomous decision
making. It can employ the locals and gain insider knowledge on the market and can have
maximum control over the market. In either way, this mode is suitable for Tesco.
Target Market
Tesco is a company that targets everyday people. It generally targets a market with an
average income group so that goods can be afforded by most of the consumers. The
consumers in Australia are relatively optimistic and they have continued growth in their
spending. The consumers also prefer online shopping. Australian also have high purchasing
power. The target market for Tesco in Australia should be the median age group as it contains
more than 65% of the population. Being a supermarket Tesco can also target other business
firms as well. It can provide extensive support to small businesses.
This target market does not have much difference in comparison to its original target
market in the UK. The basic difference, however, is the Australian spending style and
consumer perception in Australia. In Australia, the median age group is not a loyal segment
whereas the old age group tends to be more loyal in Australia. In the UK, the situation is not
similar. The main focus in Australia, however, should be the quality of the product and the
customer perception and value it can create. Another difference is that Tesco has ample
opportunities to target small businesses in Australia, unlike the UK.
As stated above Australia has been a major importer of many agricultural products,
equipment, and electronic items. The target group mentioned is also very eager toward new
fashion apparel. Most of the target market is Early Majority. They demand convenience,

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better flavor, nutrition, agri-tourism and so on. Thus Tesco can easily meet these demands of
the consumers with its diversified resource of food items, fashion items, electronics, telecom,
and financial services as well.
Positioning Strategy
The most important step is to position the business in Australia. The statement should
be made in a manner that will be set in the minds of the consumers for the long term. Tesco
should aim at Functional, Symbolic and Multi-Segment positioning. Tesco Finest Range of
products states the functional positioning and Tesco selling fair trade product refers to the
symbolic positioning. However, this old positioning statement will not work in a country like
Australia. Since it is also targeting B2B segments, the positioning statement should be
different. The company will provide products at concessional rates to the small business
segments so that the small business can grow fast. The positioning statement must include the
value, quality, and features that it provides. It can position itself as the "Company Offering
Finest Range of Diversified Products For All At The Finest Value.”
Place Strategy
Most of the population of Australia is concentrated along the eastern coast and the
southeastern coast. The southeast is the largest in terms of population. Thus, the business
should be set up in the southeast region. The climate in this region is arid and semi-arid.
Some parts also have a Mediterranean climate. Rainfall is also prevalent in this region. Thus
doing business in this region is more or less suitable. Grocery, food and agricultural products
can be easily preserved in these regions. Local regions should also be penetrated by the
company as meeting local demands will help in better customer perception.
Australia also has a sound logistics system. Tesco is a supermarket and it needs to
serve both businesses as well as consumers. It can have a direct channel of distribution by