Marketing Principles and Strategies: Tesco's Competitive Advantage

This report analyzes the marketing principles and strategies employed by Tesco, a major retail chain. It begins by examining the micro and macro environmental factors influencing Tesco's marketing decisions, including customer behavior, supplier relationships, and governmental regulatio...Read More

MARKETING
PRINCIPLES

Table of Contents
INTRODUCTION......................................................................................................................3
TASK 2......................................................................................................................................3
2.1 Macro and micro environmental factors which influence marketing decisions in Tesco3
2.2 Segmentation criteria if Tesco enters into different market.............................................4
2.3 Targeting strategy for the new watch introduced by Tesco.............................................4
2.4 illustrate how buyer behaviour affects the marketing activities in different buying
situation..................................................................................................................................4
2.5 Propose new positioning strategy.....................................................................................5
CONCLUSION..........................................................................................................................5
TASK 3......................................................................................................................................5
INTRODUCTION......................................................................................................................5
3.1 How products in Tesco can be developed to sustain the competitive advantage.............6
3.2 How distribution is arranged to provide customer convenience......................................6
3.3 How prices are set to reflect Tesco objectives and market condition..............................6
3.4 How promotional activity are integrated to achieve marketing objectives in Tesco.......7
3.5 Analyze the additional elements of marketing mix..........................................................7
4.1 Plan for marketing mixes of Tesco mobile for two different segments...........................7
4.2 Illustrate difference in marketing products and services..................................................8
4.3 Difference between domestic marketing and international marketing............................8
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................10

INTRODUCTION
Marketing principles are the laws which the government has made so that at the time
of marketing the products the company uses ethical means. This task provides insight of the
macro and micro environment factor which affect the marketing decisions of the Tesco.
Further, it emphasizes on the new product which introduced by the Tesco for entering into the
different market segment. Lastly, it stresses on the positioning strategy which can be used by
the organization to target its customer.
TASK 2
2.1 Macro and micro environmental factors which influence marketing decisions in Tesco
It is very important for the Tesco organization to analyze the market scenario of the
country. The marketing decisions are made according the needs and requirements of the
customer and the condition which is persisting in the particular country.
Micro environment
 Customers- Customers are the one which affect the marketing decisions of the Tesco.
Tesco has to choose the source of marketing according to the preference of customer.
 Suppliers- they have to power to control the supplies of the Tesco retail organization.
It is very important to satisfy them.
 Government- Tesco should make the policies according to the government. The
government of the country has made several marketing rules for safeguarding the
interest of the customer (Ceylan, 2008).
To identify macro environment PEST tool can be used
 Political factors-Tesco should consider the political rules and laws which are made by
government and the political scenario of the country.
 Environmental factor- The marketing decision should be made by keeping in the mind
the environmental acts which are followed in the country by the environmental
department.
 Social- These are the social values and beliefs of the people living in that particular
country. The marketing activity should be done by Tesco by not harming the interest
of the society (Femie, Femie and Moore, 2013).
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 Technological- in the developed country, the medium used for marketing is
technological advanced. It is feasible for the Tesco to use the source of medium
according to the technology prevailing in the country.
2.2 Segmentation criteria if Tesco enters into different market
For entering the new market it is important for the Tesco to identify the target
customer as according to that they can make the products which can satisfy the needs and
requirements of customer. As Tesco is the retail market chain so now it is entering into the
watches market. It is manufacturing the watches which are costly and is required by the youth
(Kotler, Shalowitz and Stevens, 2011). The two segments which the company has targeted
are demographic segmentation and the psychographic segmentation. In the demographic
segmentation the company can target the youth who are doing job and are at good position. In
case of psychographic segmentation, Tesco has made the watches for the individual who
emphasis on the status and wear watches for the status symbol. These two segments are
interrelated to each other. Tesco has targeted these segments customer foe its new product
(Olimpia, 2011).
2.3 Targeting strategy for the new watch introduced by Tesco
The target customers are the youth who are working at the good position. To target
them, the company is using the social media for targeting for promoting their products.
Besides this, they have tied up with the big multinational companies because of this they have
created awareness in the minds of the customers. Further, in many events multinational
companies are giving this gift in the competitions which are held in the organization. With
the help of this, Tesco has promoted their products. By using this watch the individual will
come to know its quality and will the buy the product later on. On the other ha, they are also
giving advertisement in social media because the youth uses the social media for interaction
and communication (Wise and Sirohi, 2005).
2.4 illustrate how buyer behaviour affects the marketing activities in different buying
situation.
It is very difficult but on the other hand it is important for the organization to judge
the buyer behaviour regarding buying of the product. At the time of marriage season the
buyers are keener to buy the products to gift at the time of wedding. So at that time, the
company gives more advertisement in the newspaper, TV so that to make the customer aware
about the product. The marketing activity at this time is on the peak and the advertisement is
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made to make them remember about the product. Besides this, when there are no festivals or
the season is low then the Tesco will not market its watch heavily because it will prove
expense as the sale would not be that high. There are different ways through which the buyer
behaviour affects the marketing activities of Tesco (Torlak, 2011).
2.5 Propose new positioning strategy
There are various types of strategy through which the company can position its
products in the minds of the consumers. In case of watch which is made for the youth it is
essential to build an image in the minds of users about the product. The positioning strategy
which can be used by Tesco is the brand positioning. In this strategy, the company will focus
on the brand name (Zweifel, 2003). Tesco is very popular as well as successful brand so it
can position its watch on the name of the company. It will be beneficial for the organization
as with this name they can attract more customers and with the name of the brand user will
feel satisfied. Even Tesco can position its new watch with quality because it is the concept
that the thing which is expensive will be of high quality. So Tesco can position its watch in
the name of quality as well as the brand (Walker, Mullins and Larreche, 2006. ).
CONCLUSION
From this task it can be concluded that it is important to identify the customer needs
and the requirements and this is possible with the help of PEST tool. Further, the watch
which is introduced under the brand name of Tesco will prove advantageous for the company
because the promotional strategy which is used by the company is new and will help in
targeting the right people.
TASK 3
INTRODUCTION
This task will focus on the strategy for developing the competitive advantage of the
product and will explain the two different marketing mixes which are added recently in the
marketing mix model. It will highlight the strategy which will be used by the Tesco to market
its products successfully. Further, it will explain how the prices of the Tesco products are set
according to the objectives of the company and the market condition.
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3.1 How products in Tesco can be developed to sustain the competitive advantage
The company has to play on different level to make the product competitive in the
competitive world. In this case, Tesco can focus on the differentiation strategy in which they
can differentiate the product with the other watches brand. There are many competitors of the
watch so it can introduce the new feature and make it different from others. It can be
introduced that the cells which are set in the watch can be charged at the home. This feature
makes it different from other brands (Henley, Raffin and Caemmerer, 2011). Even the
customers are basically the high income group so if the price of the product is high then also
they will buy because they are insensitive to the price. This will help in sustaining the
competitive advantage as mostly the youth wants the product which is different from other
watches and for them it is the status symbol so because of the quality of the watch and the
feature attached to it, it will easily maintain its position in the market (Jocumsen, 2002).
3.2 How distribution is arranged to provide customer convenience
For the product to be successful it is very essential for the company to have proper
distribution channel so that the customer will not suffer any problem in finding the watch.
The watch which is introduced by the Tesco is manufactured in own factory and the company
has opened its new store for selling this watch (Haley, 2006). This watch store is opened to
highlight the watch and make the people aware about the product. From factory it will be
directly available in the store so that customer can comfortable choose their watch and be
satisfied with the product. The store in which the watch will be available will be near to the
Tesco as this will be easy for the customer to identify the store. So the distribution procedure
of the watch for the consumer is very convenient for the customer of Tesco who wants to buy
the watch (Stern, 2006).
3.3 How prices are set to reflect Tesco objectives and market condition
The prices are set according to the company’s objectives and the market conditions
which are prevailing in the company. In case of the watch the company can use the method
product life cycle which tells about the stage in which the product is operating in the market.
in case of watch it is the new product and it is in the introductory stage so the price which has
to set should be according to competition and at the introductory stage it is important to set
appropriate price as it will be perceived by the customer in this way only. The objectives of
the company are to make high profit and cater to the niche market so it will set the price high.
According to the supply and demand of the economy it can modify the prices as per the
situation (Aguirregabiria and Ho, 2012). For setting the price of the product it is very
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important to analyze various things which affect the price of Tesco watch. If the objective
would be to serve more customers then it can set the low price which will attract more
customers (Guo, 2012).
3.4 How promotional activity are integrated to achieve marketing objectives in Tesco
Promotional objectives are directly linked with the marketing objectives of Tesco as
according to the marketing objectives the company makes promotional activity which helps
in fulfilling the objectives of marketing. In case of Tesco watch the goal of the marketing
department is to spread awareness regarding their product and tell the customer about their
prices and the feature attached to it (Retseptor, 2005). In this case, the promotional activity
which is used by the Tesco firm is advertisements in the newspaper and television as this
helps in telling the user about the attributes of the products. Another objective is to spread
the awareness among the youth so they will give pay per click advertisement which will help
in making the consumer aware about the product whenever they will open the social media.
So it is rightly said that according to the objectives the company adopts several promotional
techniques to promote its new product (Belobaba, Odoni and Barnhart, 2009).
3.5 Analyze the additional elements of marketing mix
Marketing mix helps in designing the product and further assist in delivering to the
customers. The two additional marketing mixes are people and the process. In case of people
it emphasizes on the employees of Tesco who make the product. Tesco Company provides
safety and comfortable environment for the employees to work in the factory. The firm also
praises the employees on the skills which they put in enhancing the product. Another
additional element of marketing mix is process in which after purchasing of the product
Tesco gives after sales service to its customer so that they can feel satisfied and this will
further help in building a strong relationship with the customer. These marketing mixes have
been recently developed in the country with the evolution of several marketing strategies
through which the company can attract its consumer.
4.1 Plan for marketing mixes of Tesco mobile for two different segments
Basically there are different marketing mixes which the Tesco can use to target the
customer of different segments. In case of demographic segmentation, the Tesco can use the
price marketing mix to attract the customer of low income group. The mobile is not costly
and the company can target the individual on the basis of the income level. For this, they can
emphasize on the price of the product which is cheap so that the low income level customer
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can buy its products. further, it can segment its other market on the geographical basis, in
case of developed country then can sell its mobile on the much higher price as the individual
income are not very low but in the developing country Tesco can sell its mobile with price as
more customer will be attracted to the product and the profit which it will get will remain
same (Walker, Mullins and Larreche, 2006). So for this segment they can use the promotion
technique to make the customer aware about the product. This plan can be executed by the
Tesco to attract the customer towards its mobile phones.
4.2 Illustrate difference in marketing products and services
There is huge difference between marketing of the products from business to business
to business to customer. In case of new product of Tesco they can market their product to
different business as in this the personalization criteria is demolished and the business
organization promote their products through journals and direct mail. There is not direct
relationship between the customer and the business and the distribution channel in case of the
Tesco watch will be small in business to business relationship as other business is basically
the customer of the Tesco (Torlak, 2011). But in case of business to customer the distribution
channel is large and there are several mediums through which the product is delivered to the
customer.
4.3 Difference between domestic marketing and international marketing
There is huge difference between domestic and international marketing as domestic is
done in the local areas but in case of international marketing it is extended to vast area. The
source which the Tesco will use to market its products will be different from the media which
will be used for the domestic market. In case of watch they can use the local newspapers and
several television channels which are used in that particular country. But in case of
international marketing they have to use the social media which is very large and the entire
individual can see their product (Kotler, Shalowitz and Stevens, 2011). The money spend in
the international marketing is also large as they have to use several medium for successfully
marketing their products. The money spend will be less as compare to the domestic
marketing. Further, the laws which are made by the government are also different so Tesco
has to market the products by abiding by the laws which are governed in that particular
country. It can be said that international marketing is more complex than the domestic
marketing.
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CONCLUSION
From this task it can be concluded that Tesco should use the competitive strategy to
develop the competitive advantage in the market. They can use the differentiation strategy
and highlight the feature which will help in attracting the customer. Further, the best
marketing mix which can be used by the Tesco Company is price marketing mix for the
mobile phone which is introduced by the firm for the lower income group people. It is
inferred that, internal marketing is more complex as it requires many resources to market the
products effectively.
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REFERENCES
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Wise, R. and Sirohi, N., 2005. Finding the best marketing mix. Journal of Business Strategy.
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Zweifel, D. T., 2003. Culture Clash: Managing the Global High-performance Team. Swiss
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Guo, V., 2012. 5 Must Know Pricing Strategy Ethics Issues. Available through:<
http://www.priceintelligently.com/blog/bid/164830/5-Must-Know-Pricing-Strategy-
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