Marketing Report: Tesco's Strategies in a Changing Market Environment

This report delves into Tesco's marketing strategies, examining the influence of macro and micro environmental factors on its decisions. It explores segmentation for new markets, targeting strategies to boost sales, and the impact of buying behavior on marketing activities. The report analyzes Tesco's new positioning for designer clothing, product development for competitive advantage, and the selection of suitable distribution channels. It covers pricing strategies, promotional activities, and the integration of the marketing mix, including new elements. Furthermore, it differentiates marketing mixes for various segments and compares marketing tactics for customers versus business organizations, along with the differences between international and domestic marketing. The report provides a comprehensive overview of Tesco's marketing approach.

Marketing
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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
2.1 Macro environmental and Micro environmental factors influence on decisions of marketing. 3
2.2 Segmentation for Tesco products while entering in new market rather than existing one........4
2.3 Targeting strategy to help boost sales for Tesco........................................................................5
2.4 Effect on marketing activities at the time of different situations in buying products or services
.........................................................................................................................................................5
2.5 New positioning for designer clothings.....................................................................................6
TASK 3.................................................................................................................................................6
3.1 How products in Tesco are developed to sustain competitive advantage..................................6
3.2 Selection of suitable distribution to provide convenience to customer.....................................7
3.3 How prices should be set by Tesco............................................................................................7
3.4 Explanation of integration of promotional activities to attain the marketing objectives of Tesco
.........................................................................................................................................................8
3.5 Three new elements of marketing mix.......................................................................................9
4.1 Different marketing mixes for different marketing segment.....................................................9
4.2 Tactics used in marketing for customers are different from the tactics implemented for business
organizations..................................................................................................................................10
4.3 International marketing is different from domestic marketing................................................12
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................14
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INTRODUCTION
Marketing is considered as one of most critical aspect for the business organisations as it
provides better opportunity to amend the sales and attain better marketing share. In other aspect,
it can be considered as an idea which provide better assistance to promotional actions of business
firm in respect of products and services (Bradley, 2013). Number of business organisations are
focusing on marketing actions for better optimization of organisational performance. Companies
can have better opportunities by effective promotion of existing products and introduce new
services in effective manner.
In this report, learning will focus on work culture of Tesco Plc in order to understand the
concepts of marketing. It will focus on various concepts which relates to segmentation, targeting
and positioning. It will also provide detailed information regarding individual elements of the
extended marketing mix. With an improved focus on various factors of marketing mic the
management of Tesco Plc can easily attain organizational objective and overcome the issues.
Furthermore, it will also focus on use of marketing mix in diverse contexts in order to boost the
business opportunities.
TASK 2
2.1 Macro environmental and Micro environmental factors influence on decisions of marketing
Macro analysis
Political: In this, it is necessary for business organisation to focus on various forces of
government. In other aspect, it can be said that the governance policies and rules regarding
business sector can impact the marketing decisions of Tesco (Kirca, 2005). The classification of
policies can be as tax rates, ethical terms and other changes in political aspect as influence the
procedure of marketing.
Environmental: In current conditions the environment scenario is changing rapidly
which can also influence the organizational decisions. It is necessary for Tesco to focus on
development of eco-friendly products and store management.
Social: Social needs also changes rapidly so it is necessary for Tesco to consider social
changes in decisions (Magrath, 2013). It is essential to understand social needs in order to have
effective development of as per social needs.
Technological: Technology is playing key role in marketing process as business
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organizations are focused to use technological tools in order to have advancement in sales as well
as market size.
Economy: UK economic conditions can also influence the decisions of Tesco. For
example, at time of recession it is vital for Tesco management to have decrease in cost of
products as compared to other organization in the industry (Use Strategic Planning to Renew
Your Organization. 2005). It will provide better sustainability and profitability to Tesco.
Micro environment factors
Employees: Tesco is managing high ratio of employees in current market and it manage
employees from globally located stores. It means Tesco have cross cultural employees which
allows to improve diverse skills by assisting in respect of diverse culture. Employees are also
well satisfied with the organisational culture (Benson, 2002).
Suppliers: There are number of retail industry suppliers so the needs of supplier can also
affect the decisions. It is necessary for management to meet the needs of suppliers as they
provide raw material which is essential for better demand and supply of product.
Competitor: The work culture and practices of competitors can also influence the
marketing activities of Tesco (Cooke, 2000). It is necessary for management to take decisions as
per current status of market in order to have better sustainability and overcome the pressure in
their retail market segment.
2.2 Segmentation for Tesco products while entering in new market rather than existing one
In order to have better success it is necessary for business organisations to focus on
various factors which can enhance the effectiveness of marketing actions. In this, respect it can
be stated that with an assistance of segmentation the management of Tesco Plc can easily have
better market share in new market (Ferguson, 2007). Moreover, in order to have better
segmentation the management of Tesco Plc can focus on some key criteria which will enhance
business opportunities.
Geographical segmentation: Tesco Plc is offering number of services in diverse sectors
so it is necessary for business organisation to focus on various geographical areas as per the
nature of service or product. In order to have effective development in the global market
conditions the management of Tesco Plc can have focus on geographical aspects (McDonald,
2012). Management can target its customers on the basis of new geographical area it will boost
the market opportunities and provide effective accessibility to new market with existing range of
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products and services. Company can introduce its retail store or services in USA. With an
assistance of diverse geographical aspects the management of Tesco Plc can easily market its
products and services in new market (Yannopoulos, 2011). In this it is necessary for management
to understand the buying behaviour process of domestic customers in order to create better
awareness. It is also necessary for management to develop actions and products as per needs of
USA citizens.
Demographic segmentation: Company can also focus on demographic segmentation
criteria for effective development of product and services as per the living standard of UK
citizens. It will provide better understanding about needs of UK market and boost product
efficiency in better way (Cavalcante, 2013). Products can also be developed as per the different
income level available within UK.
2.3 Targeting strategy to help boost sales for Tesco
To have effective sales of designer clothes, management of Tesco Plc can focus on
following targeting strategy. It will enhance the sales of company assist in effective development
of wide range of products and services in order to improve customer base.
Management can target age group of 18-30 (Girls) and focus on differentiated marketing
strategy. In this management can introduce new fashion products for girls who are looking for
differentiated designer cloths. With an assistance of differentiated marketing strategy the
management can easily understand the needs of customers and develop clothes as per the aspects
or requirements of targeted groups (Parrish, 2010). In this respect, it is also necessary for
business organization to have proper understanding regarding key trends in fashion clothing
markets. It will also allow management to overcome number of issues which are influencing the
overall development. It will bring uniqueness in the product which will attract more and more
customers and facilitate in advancement of customer base (Zhongbing, 2013).
2.4 Effect on marketing activities at the time of different situations in buying products or services
It has been spotted that the different buying behaviour of customers influences the
marketing actions of Tesco Plc. For instance, the changes in income level can impact the decision
regarding buying of product as customer always purchase goods as per income level and range of
spending (Publication, 2004). In this, management must focus on proper selection of targeted
groups and provide discount offers to attract customers.
In another way the social factors can also influence the marketing actions and buying
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behaviour. The values and social environment always need to consider as it can impact marketing
actions. Product must be developed as per market needs and cultural values otherwise emotional
appeal can influence buying behaviour in negative manner and lead business to critical failure.
2.5 New positioning for designer clothings
Tesco Plc is currently focusing on designer cloths and premium apparels products. In
order to have better positioning of products to the new segment, it is necessary for management
of Tesco Plc to focus on diverse strategies of positioning. With an effective focus on positioning
strategies the management can easily accomplish organisational goals and attain number of
benefits from this new product development strategy (Rao., 2004). In the support of this, it can
be said that the management can focus on celebrity endorsement for better positioning of
designer fashion cloths. Company can use female celebrity to to position females such as
Madonna, Britney Spears, etc (Bowman, 2010). It will also create better brand awareness among
customers and lead business to impressive level of success. Number of campaign and social
networking site promotions can also be used to build better awareness among target customers
about product. Company can also post advertising on the solely dedicated fashions websites.
TASK 3
3.1 How products in Tesco are developed to sustain competitive advantage
Competitive advantage refers to those privileges that are available to Tesco over its
competitors. They further help organization in performing better than its rivals. The competitive
advantages further help company in attracting more customers and retaining brand loving
customers. Tesco can sustain competitive advantage by developing unique, innovative and
quality products and services (Ferguson, 2007). The company can do research and development
to develop new techniques that will help company in manufacturing innovative products. Since,
its inception that Tesco is planning to launch high end designer clothes for ladies. Therefore,
company can develop new patterns of designs and fabrics that are still not provided by any of the
rivals. To sustain competitive advantage, business enterprise can use the concept of customized
clothing (McDonald, 2012). In this respect, organization can develop new designer clothes as per
the needs and preferences of customers. The customer can detail out the design she wants in its
designer apparel. However, the company will regard the customized viewpoints in specific areas
only like, choice of fabric, length of apparel, color combination, stitching pattern and choice of
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button etc. The major advantage of customized clothing is that such concept is not provided by
any of the rivals of Tesco. The customized clothing will also help in increasing the satisfaction
level of customer as apparels are designed by the specifications suggested by customer
(Yannopoulos, 2011). However, it is important for company to study the market environment to
have knowledge about prevailing fashion trends, new technique of designing clothes, colors and
fabric trends etc. This will further help company in sustaining competitive advantage.
3.2 Selection of suitable distribution to provide convenience to customer
To ensure satisfaction among customer and give competitive benefit to product it is
important for Tesco to select appropriate communication channel. A good choice of distribution
channel will ensure convenience to customers which will further enhance the satisfaction level of
customers. Therefore, to retain the consumers and ensure their repetitive purchase it is important
for company to select best distribution channel (Cavalcante, 2013). For this aspect, company can
select such distribution channel which enable customer to make frequent purchase with minimal
efforts. At present Tesco have more that 7817 stores around the globe that facilitate ease of
buying of retail and fashion products to customers. According to the current scenario, online
distribution is best and widely used distribution channel (Parrish, 2010). The online distribution
is most convenient option as it provide 24*7 hours availability to customers. Therefore, it mostly
liked by customers as they can view wide range of product compare prices and then make final
decision. Thereafter, it makes the product easily available when it is required. Hence, customer
can use online distribution to market its customized clothes as well as designer apparels. The
online distribution will require less funds to setup as compared to own dedicated store. This will
also solve the problem of lack of storage facility that company face in its superstores and brand
stores (Zhongbing, 2013).
3.3 How prices should be set by Tesco
The success of product in market depends to the large extent upon the pricing policy
adopted by company. Therefore, it is significant for company to select right price for appropriate
product. Tesco should aim to provide qualitative products to customers in comparison of value
paid by them. For this aspect company adopts value based pricing policy which states that
customer is required to pay for the value and benefits received. With this aspect, organization
tries to maintain a equilibrium between cost of product and quality of product (Publication,
2004). The main advantage of using value based pricing is to ensure satisfaction among
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customers. This further help in increasing brand loyalty and love among customers.
However, as company is providing custom made designer clothes company can charge
high prices. In addition to this aspect, such type of product is not provided by any of the rivals
like, Sainsbury, ASDA, M&S etc (Rao., 2004). Thereafter, Tesco can also chose price skimming
which means charging high prices initially at the launch of designer clothes and lowering down
the prices after some time.
3.4 Explanation of integration of promotional activities to attain the marketing objectives of
Tesco
The promotional activities play a key role in ensuring the success of designer clothes of
Tesco in competitive market. The promotional activities help in generating awareness about the
product in market and attracting more customers and increasing the profitability of business.
Therefore, promotional techniques will help Tesco in reaching the prospective clients of designer
apparels. Following are the promotional activities that can be used by company
 Online marketing: Tesco is distributing products online therefore it will be significant
for company to do online marketing. With the rapid increase in online mediums, it is
most viable option for company (Bowman, 2010). Therefore, company can do online
marketing and detail the benefits, attributes of customized designer clothes.
 Direct marketing: It is process used for linking up with customers personally rather than
through indirect channel. For this aspect, company can use direct channels such as direct
mail, instant messaging etc. thereafter, Tesco can design a site where customers and
management can interact and consumer can detail out their specifications.
 Social media marketing: With the increasing trend of social networking sites and their
usage, Tesco can promote its designer clothes on social networking sites. It is most
innovative, effective and cheap method.
 Celebrity endorsements: It is most effective and strong approach that can be used by
Tesco to promote its designer clothes. The company can market its product through
celebrities and famous personalities (Dransfield, 2001). The organization can conduct
fashion shows and concert where the designer products of Tesco can be marketed by
fashion models and celebrities.
 Advertisement: Tesco can use mass media advertisement to promote its designer
products. The advantage of using advertisement is that it help in reaching wide audience
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and increase the brand image. Thereafter, company can also give advertisement in fashion
magazines, fashion channels on TV etc.
3.5 Three new elements of marketing mix
 Physical evidence: It reflects the quality of services that Tesco provides to its customers.
Further, it involves the ambiance, design of the dedicated store of Tesco. Thereafter, it
also involves the packaging of product which should be attractive and impelling. While
distributing the product through online medium (Freytag, 2011).
 Process: It describes the procedure of manufacturing and delivering the product. It is
important for company to adopt systematic process of offering its designer clothes to
different segments of customers. Proper planning and distribution process should be
adopted by Tesco so that product reaches to maximum customers.
 People: It relates to human resources that are key assets of Tesco. It is important for
company to give proper training and development opportunities to its employees to they
can stimulate the customers to purchase the product of company (Hassan, 2003).
Thereafter, people should be trained so that they can identify the needs and preferences of
customer's and take effective steps to fulfill them.
4.1 Different marketing mixes for different marketing segment
Tesco Plc is currently operating in diverse market and they have deal with number of
customer’s needs, so it is necessary for business firm to focus on separate marketing mix in order
to meet the organisational objectives in effective manner. For example, the company is focusing
on demographic segment for girls designer cloths (Dransfield, 2001). In this management is
considering age group of 18-30, so management of Tesco must have correct information
regarding fashion style and then develop the product in order to meet the satisfaction level of
targeted group. It is also necessary for management to focus on effective assessment of income
level of targeted group then decide the pricing of the product (Freytag, 2011). The products can
be sold and promote at the Tesco reatil store as well as online portals. In order to have better
promotion the Tesco can focus on celebrity endorsement as it will create new opportunities for
the product and lead business to impressive success.
On the other side, for geographic segment, management need to focus on culture and
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local fashion of region. The product must be developed as per the cultural needs of local region
in order to have better product mix for this segment (Hassan, 2003). The price of product will as
per the average income level of citizens as customer always buy product as per spending level.
For effective promotion the assistance of local fashion experts can be taken into account. Tesco
can use local personality to influence the local community.
4.2 Tactics used in marketing for customers are different from the tactics implemented for
business organizations
It has been spotted that there are number of marketing tactics that business organisation
can use for better accomplishment of organisational gaols. In the support of this, it can be stated
that in order to have better development it is also necessary for management to use different
tactics for customer and business (Muhamad, 2012). There are number of differences in B2B and
B2C buying process so the different tactics are also required to be used by management of Tesco
Plc. In the current market conditions the business organizations are focusing more on business
practices which relates to B2B commerce (Shehryar, 2005). Business firms are expecting more
business opportunities in B2B as compared to B2C.
In respect of B2B, the management of Tesco is following commercial aspects in
better way. Moreover, the business organization can focus on small and specific market for better
targeting. In other aspect, it can be said that the niche marketing tactic is beneficial for Tesco
while dealing with B2B (Hasan, 2013). For illustration, management of Tesco Plc is focusing on
creating better B2B relation with online media portal for effective distribution channel. In this
respect, it is necessary for business organisation to ensure that they are not using emotional
appeal as it will not attract B2B market (Kotler, 2005). In this management must ensure that they
are providing correct information to the online portal organisation. In this management also need
to focus on quality of product as the standards of portal. It will provide brand reorganization in
the market and improve long term relationship.
On the other side, while dealing with B2C buying process it is necessary for management
to consider different aspect as compared to B2B. Customers have different kinds of needs so it is
necessary for management to develop product as per specifically diversified needs of customers.
In order to meet the needs customers the management can offer discount to targeted groups
(Murray, 2010). Moreover, the management can also influence customer buying behaviour by
focusing on social and emotional aspects. It will attract more customers and boost the business
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opportunities in context of B2C.
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4.3 International marketing is different from domestic marketing
Types of marketing strategies which are adapted in domestic marketing and international
marketing are different. For example in context of international marketing, management of Tesco
Company is carried out detail research by using different online and offline tools in order to
assess distinct needs and requirements consumer of different countries (Slater, Sengupta and
Mohr, 2010). In this process, Tesco also tries to assess the impact of different cultural and social
factors on purchase pattern and behaviour consumers. This approach supports Tesco in selection
of product range and marketing tools through which business entity is able attract consumers. In
overseas marketing operations, business entity also has to follow the framework and guidelines
while advertisements of target countries where Tesco is going to expand business.
At the time of planning for advertising, companies also has to follow the acts related to
environment also. The management of Tesco also considers culture based marketing plan while
developing and planning for international marketing plans (Proctor, 2014). Marketing manager
of companies also formulates the promotional plans with reference to traditions of citizens. It
will also help the management to make its good position in international market for its face wash
product. This process helps management to hold position of new face wash in international
market. For example: In new emerging markets, Tesco has tailored the store experience as per
preference and taste of local consumers. In addition to that company also carries out joint venture
with local partners as marketing agencies or suppliers.
On the other side in domestic marketing, there is no need of detail investigation of
external business environment as per the needs and desires of customers. In domestic promotion,
there is not any requirement of detail investigation of external business environment and interest
of consumers. In the process, Tesco is focusing on change in interest and lifestyle of consumers
(Brady, 2010). For example: Tesco is using different channels of direct and online marketing
such as sales executives, social media, and online website in UK. Apart from that Tesco
organizes various promotional campaigns with the help of different events that play important
role in promotion of brand in retail market UK.
CONCLUSION
As per the above study it can be said that the marketing principals plays a key role in
effective promotion of goods and services. With an assistance of segmentation, targeting and
positioning the management can have better opportunities in market as it allows to present goods

in appropriate manner. Moreover, it has also been spotted that with an assistance of marketing
mix the management can also boost the business opportunities. It is necessary for management to
ensure that the products and goods and services are developed as per market needs.

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