Marketing Management Report: Tesco's Environmental and Market Analysis

This report provides a comprehensive analysis of Tesco's marketing management. It begins with an introduction and then delves into the macro and micro environmental factors influencing Tesco's operations, including political, economic, social, technological, environmental, and legal considerations. The report then examines Tesco's sales figures, market share, profit margins, and costs, providing insights into its financial performance. A key section focuses on marketing information research, including an analysis of Tesco's marketing mix (product, place, price, promotion, and people). The report concludes with a discussion of Tesco's strategies, including the need to adapt to changing consumer preferences, particularly those of the GenY demographic, by focusing on product innovation and performance. The essay section emphasizes the importance of the product concept in marketing to millennials, highlighting the need for continuous innovation and R&D to meet their preferences and maintain a competitive edge. The report draws on various sources, including academic journals and industry reports, to support its findings and conclusions.

Running head: MARKETING MANAGEMENT
MARKETING MANAGEMENT
Name of the student
Name of the university
Author note

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Table of Contents
Task 1: Report..................................................................................................................................2
1. Introduction..............................................................................................................................2
2. Macro environmental consideration........................................................................................2
3. Micro environmental consideration.........................................................................................6
4. Sales, market share, profit margin, costs of Tesco..................................................................8
4.1 Sales...................................................................................................................................8
4.2 Market shares...................................................................................................................10
4.3 Profit margins..................................................................................................................11
4.4 Costs................................................................................................................................11
5. Marketing information research............................................................................................11
5.1 Marketing mix of Tesco...................................................................................................11
6. Conclusion.............................................................................................................................13
Task 2: Essay.................................................................................................................................14
References......................................................................................................................................17

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Task 1: Report
1. Introduction
The research will focus on examining the current internal and external environmental
factors that are shaping the marketing operations of Tesco. Tesco is an UK based organization
which proposes groceries and general merchandise in alignment with the needs of the customers.
Therefore, the report will examine the different external and internal environments that affected
the marketing capacity of Tesco Plc.
2. Macro environmental consideration
Political  Tesco is being operating in more than
12 economies and thereby the
different changes in the legislative
units and the imposition of increasing
tax rates and unemployment rates
might affect the capacity of the
venture (Wood, Wrigley and Coe
2016)
 Political instability in the different
economies affected the rate of
operations while aligning with the
expansion related goals of the venture
 Impact of Brexit is huge on the
organizational operations while
making expansion in the European

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markets (Mollah 2014)
 Enhancement of import taxes for
commodities that are imported from
China and East Asia affected the rate
of operations of Tesco
Economic  Enhancement of Labor costs in the
UK markets and the increase in
Minimum Wage Rate by 4.4%
enhanced the cost of operations of the
venture (Wood, Coe and Wrigley
2016)
 The enhancements in the GDP of the
operating economies supported Tesco
in increasing the rate of expansion in
the organizations. However, it has
been noticed that Tesco is still
dependent on the UK markets with a
27.7% share in the UK groceries
(Imrie and Dolton 2014)
Social  The needs and preferences of the
customers are changing. Ranging from
fast deliveries to the quality of the
propositions, assessment of every

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minute changes in the preferences of
the customers supported the venture in
enhancing the design of the
propositions
 It has been noted that more than 65%
of the UK customers are loyal to a
brand (Kumoi and Matsubayashi
2014). Therefore, the concerned
organization might take steps to
develop brand awareness among the
customers with the purpose of
retaining the same
Technological  Tesco introduced the RFID
technology with the objective of
enhancing the customer experience as
they visit the stores. The RFID
technology supported the venture in
enhancing the rate of operation in
alignment with the needs of the
customers (Dillon 2015)
 Tesco also developed an online
payment system through the design of
PayQwid application which would

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assist consumers to link their Clubcard
and NFC for making payments in the
stores located within London and
Edinburgh (Haddock-Millar and
Rigby 2015). The development of
easy payment options supported the
venture in enhancing the customers
buying experience and gain a
competitive edge against the players in
the market (Ramanathan, Bentley
and Pang 2014)
Environmental  The concerned organization faced
different stringent environmental
regulations which mandated the
evolution of different policies like
utilizing renewable sources of energy
for generating 100% electricity for
powering the operations by 2030
(Zhao 2014). On the other hand, the
concerned venture is planning steps to
reduce its carbon footprint to 50% by
2020 (Holland, Lindop and Zainudin
2016)

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Legal  The organization encountered legal
issues from the employees relating to
gender discrimination and unfair
payments for working at night and in
holidays which affected the goodwill
of the venture (Wood and Alexander
2016)
 The operations of Tesco are bound by
the legislations forwarded by Food
Retailing Commission (FRC), which
might affect the smooth functioning of
the venture (Zhao 2014)
3. Micro environmental consideration
Threat of new entrants
(Low)
The sector requires a huge investment in the
initial levels which has affected the potential
of the new entrants while entering into the
markets. The minimized threat of the new
entrants would support Tesco in retaining the
customer base while operating in the different
economies (Zhao 2014). The minimized
threat of new entrants would support the
venture in ensuring the effectiveness of the

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operations in alignment with the needs of the
venture
Bargaining power of the suppliers
(Low)
The existence of a large range of suppliers
have dominated over the bargaining power of
the suppliers and diminished the same. It
supported the concerned venture in
maintaining the efficiency of the operations
while operating in the different markets
Threat of substitute products
(Low)
The threat of the substitute in the market is
lower which provided Tesco with the
opportunity of dominating over the prices and
propositions while aligning with the interests
and the preferences of the customers (Dillon
2015)
Competitive rivalry
(High)
The concerned organization, Tesco, encounter
a high competition while operating in the
different markets. ASDA, Sainsbury's and
Morrison's infest a higher rate of competition
in the markets where Tesco operates, which
has enhanced the competitive rivalry among
the existing firms (Imrie and Dolton 2014).
The enhanced competition in the markets has
backed the bargaining power of the buyers.

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Bargaining power of the buyers
(High)
For an example, if the beans that are being
offered by Tesco are high priced than the
customers can opt for the propositions made
by Sainsbury. The presence of large amount
of businesses have affected the monopolistic
competitive edge of Tesco (Mollah 2014)
4. Sales, market share, profit margin, costs of Tesco
4.1 Sales
Factors Sales unit (Fiscal year 2019)
Geography  United Kingdom and Republic Of
Ireland: 44,883 units
 Central Europe: 6,030
 Asia: 4,873
(Tescoplc.com 2019)
Industry Value of UK retail sale in 2018 was £381
Billion and the sector experienced a growth in
sales by 4% (Tescoplc.com 2019)
Customer Consumer spending for buying commodities
out of retails was £338,901 in the year 2018
(Tescoplc.com 2019)
Product £24.4billion indifferent occasions

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(Tescoplc.com 2019)
Figure 1: UK retail Customer spending
(Source: Adewuyi 2016)
Figure 2: Sales of Tesco in different geographical regions

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(Source: Tescoplc.com 2019)
4.2 Market shares
Company names Market share (computed in May 2019)
Tesco 27.3%
Sainsbury 15.2%
Asda 15.2%
Morrisons 10.04%
Aldi 8%
Figure 3: Market share of Tesco in UK
(Source: Statista 2019)

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4.3 Profit margins
The net income of Tesco, as computed in February 2019, was £1,322,000, which was
enhanced by £114,000 from the previous year (Tescoplc.com 2019). The enhanced profitability
of the venture contributed to the overall operations while operating in the different markets.
4.4 Costs
The total operating expenses that were incurred by Tesco in the year 2019 was
£61,080,000, which was enhanced by £5,896,000 from the previous year (Tescoplc.com 2019).
5. Marketing information research
5.1 Marketing mix of Tesco
Product Tesco developed a huge range of propositions
with the objective in alignment with the needs
of the customers. The organization designed
more than 40,000 propositions in the line of
food, clothing, electronics groceries and the
like with the intent of gaining a competitive
edge while operating in the different markets
(Mollah 2014)
Place The concerned organization operates through
the utilization of two major channels, online
and offline, through which they distribute
their propositions to the end users (Kumoi
and Matsubayashi 2014).
Price The concerned venture operates through the