Marketing Analysis of TESCO: Strategies, Models, and Growth

This report provides a comprehensive analysis of TESCO's marketing strategies and market position. It begins with an introduction to marketing and a brief overview of TESCO, followed by a detailed market analysis including PEST analysis, and an evaluation of TESCO's STP strategy and marketing mix. The report then delves into the application of key models and theories, specifically SWOT analysis and Ansoff Matrix, to recommend strategies for future growth and targeting different customer segments. The analysis covers market penetration, product development, market development, and diversification strategies. Finally, it includes a discussion on a marketing campaign, conclusion, and references to support the findings. The report offers insights into TESCO's competitive advantages and potential for expansion in the global market.

Introduction to
Marketing

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
TASK 1............................................................................................................................................3
A detailed analysis and evaluation of the company: its marketplace and its marketing
strategies......................................................................................................................................3
TASK 2............................................................................................................................................7
KEY MODELS AND THEORIES: SWOT analysis and Ansoff Matrix to recommend
strategies for future growth and to target different customer segments for purposes of
expansion into global market......................................................................................................7
TASK 3..........................................................................................................................................10
MARKETING CAMPAIGN....................................................................................................10
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Marketing is an activity undertaken by companies to promote the buying and selling of
goods or services and their offerings to public. It includes several actions which helps company
for making sales and earning profits. Marketing involves advertising, selling and delivering
products to customers or to the end users. Networking with potential customers or past clients is
part of marketing activity too for building relationships for longer duration. In this assignment, a
brief overview is given about the market condition of TESCO. PEST analysis is conducted of the
company for understanding the external environment. A thorough evaluation of STP policy is
performed for gaining knowledge about the company's targeted population and ways in which
they position themselves in market. After knowing the environment of business marketing mix
tool is analysed to known different strategies used by TESCO (Armstrong and et. al., 2018) .
Once audit of current market performance and strategy is done then, models and theories are
used for understanding competitors advantage and identifying future growth options of TESCO.
SWOT analysis is conducted and Ansoff's growth matrix is applied for examining all the growth
and expansion options for making the organizationmore effective and earning more units of
profits.
TESCO is a British multinational supermarket chain established in 1919 by Jack Cohen
and headquartered in Welwyn Garden City, Hertfordshire, England, UK. TESCO deals in retail
industry serving several goods and services to worldwide customers through number of stores
situated in different locations and regions. TESCO is a public limited company, listed on London
Stock Exchange and Financial Times Stock Exchange.
MAIN BODY
TASK 1
A detailed analysis and evaluation of the company: its marketplace and its marketing strategies
Market analysis:
TESCO is a British multinational supermarket chain situated in UK and serving to
worldwide customers. TESCO is one of the biggest and largest grocery retailers amongst all
companies of its type dealing in retail industry. Current TESCO has occupied nearly 27% of
market share of retail industry. Major success point of TESCO is expanding its operations
overseas, shifting to higher margin non-food merchandise, building strong UK core business.

TESCO is price leaders giving huge competition to others by maintaining low costs and offering
goods to end users in lowest cost possible. This cost leadership strategy, adopted by TESCO is
keeping it differentiated from other companies present in the industry (Kotler and et. al., 2017) .
TESCO has many competitors like Sainsbury, ASDA and Morrisons, having huge operations and
give strong competition to company but TESCO is also maintaining its position in marketplace
by using best and most effective strategies. Competitive environment in UK is regularly
changing possessing many threats on company still TESCO is maintaining its position in market
giving great competition to others and adapting dynamic market conditions.
PEST analysis:
This is a framework which is determined by researchers and used by organisations to
analyse their external market conditions. This tool comprises different elements which are macro
and possesses impacts on overall industry in which company is operating.
 Political- Since, TESCO operates globally, political factor has great influence on the
performance of company in different regions. These includes tax rates, legal regulations
and political stability of the country in which TESCO operates. Company understands
that their business has potential influence on the jobs and people, when they open any
new stores. TESCO has also benefited from the free trading blocs promotions made by
government, providing more and better opportunities to expand and earn higher profits.
 Economical- This is one of the most influencing and strong macro environmental factor,
holding great impacts on the overall industry and on businesses operating in it. TESCO
have its operations in various regions, therefore company have to deal with various
economies and perform their business actions accordingly (Gummesson, 2017). TESCO
pays utmost attention to economic factor as it is directly affecting the buying behaviour
of potential customers. Currently economies are going through several ups and downs
facing instability and uncertainty.
 Social- This element shows impacts of culture, values and preferences of population and
their beliefs. Consumers attitude nowadays towards food is continuously changing as
people are becoming more healthy conscious and due to which demand of organic food is
increasing which is accommodated by TESCO.
 Technological- It is another very essential and influencing element of macro
environment. Technology is becoming part of day to day life of people as it provides ease

and comfort to them fulfilling their needs and desires by just some clicks on smartphones.
TESCO has analysed this change and made changes in their measure and ways of
performing different actions. For instance, company introduced and start selling goods
online by making effective use of digital technology.
STP strategy of TESCO:
STP is an acronym for Segmentation, Targeting and Positioning, it is a strategy which is
used by organisations to develop and understanding of the market. After gaining knowledge
about the market condition and different population sectors now company will chose their
targeted audience in accordance of their operations and by studying all unique characteristics of
number of segments. Then at the end organizationwill make strategies for placing itself and its
offering in market in order to gain attention of people and make sales for earning effective profit
units. TESCO also made use of STP technique for acquiring potential market segment and gain
higher performance levels.
 Segmentation- Market can be segmented by using four unique dimensions which are
demographically, geographically, psychologically and by behaviours of individuals.
Segmentation is basically dividing the whole market into smaller groups or subsets
having similar characteristics and buying behaviour (Deepak and Jeyakumar, 2019) .
TESCO has segmented their population and potential buyers according to their loyalty
and by different types of club cards for varied products. Also, a new segment is identifies
by TESCO for satisfying their needs and desires and that is students. Company aims to
fulfil all requirements of students belonging to varies religions, classes and origins.
 Targeting- From identified segments holding unique characteristics, now company will
set their targets and aim at potential targeted audience. TESCO adopted mass marketing
strategy in which they targeted all the different segments and population sector, in other
words TESCO made their strategy and offerings to satisfy the needs of almost all the
different groups or sections. They do not bifurcate their audience, although company
regularly keeps on adding new segments in their customer base. They conduct market
research continuously for determining any new opportunities of expansion and
developing better target groups.
 Positioning- It is an act of designing offerings and brand image and placing them in such
a manner for occupying distinctive place in minds of the targeted market. TESCO is a

low price retailer attaining cost leadership, they use this feature in their positioning
strategy. Company advertised itself as low cost producer and retailer, which proved to be
very successful for TESCO and attracted all the attention of huge number of customers or
potential buyers.
Marketing mix strategy of TESCO:
 Product- TESCO serves wide variety of goods to its customers and including range of
products such as food , clothes etc. fulfilling and catering every possible need of their
customers.
 Price- Cost leadership pricing strategy is adopted by TESCO, in which they offer goods
to people in lowest possible cost by making effective use of economies of scale.
 Place- TESCO make effective use of two main distribution channels, offline and online.
organizationserves their offering to their customer through their stores which are easily
approachable by all potential buyers. Also, digital technology is used by organizationand
the make sales through their application.
 Promotion- TESCO has very strong brand image which enhance their promotional
actions they undertakes (Atwal and Williams, 2017). Several advertising means are used
by organizationfor promoting brand offering in targeted marketplace.
 People- TESCO has a huge task force associated with it for running their business and
operating effectively. Also, regular training and developments programs are conducted
for the employees to increase their knowledge and skills which ultimately enhance the
operations of TESCO.
 Process- It refers to the methods and manner in which activities are conducted by entity.
Very strict and effective processes are used and practised in TESCO management for
making sales and earning higher profit units by both offline and online distribution
channel.
 Physical Evidence- TESCO has a very attractive and excellent logo which is made by
efficient use of colours. Also, its stores which are present in different locations works as a
physical evidence and presence of organisation.

TASK 2
KEY MODELS AND THEORIES: SWOT analysis and Ansoff Matrix to recommend strategies
for future growth and to target different customer segments for purposes of expansion into
global market
SWOT analysis:
Strengths Weaknesses
 Brand image- TESCO is the leading
grocery retailer in UK, having great
brand value in eyes of customers and
population.
 Leading market share- Another
strength of TESCO is its increasing
market share. TESCO dominates the
marketplace of Britain with having
27% of market share (Iannuzzi, 2017) .
 Decrease in operating profits- The
share price of TESCO has fallen down
which leads to reduction in their
operating profits. This is due to the
impacts of BREXIT and proved to be
the worst performance of company
since BREXIT.
 Poor operations performance in
specific markets- Some stores of
TESCO are not performing as expected
and are constantly facing significant
issues to reach to their ultimate goals.
Opportunities Threats
 Strategic alliance with others-
TESCO can indulge with other
organisations, developing effective
partnership with similar objectives.
 Online shopping- Company make use
of digital advancement more effectively
by adding more and better feature to it
and earning good profits.
 BREXIT- The biggest currently
TESCO facing is BREXIT and its
impacts on the business and operations
of organisation (Keegan, 2017).
 Emerging competition- Another
potential threat which possesses great
influence on TESCO is new rising
competition.

Ansoff growth matrix:
The Ansoff Matrix refers to as the strategic planning tool that support an organizationby
providing with required information in order devise appropriate strategy for future growth and
success within the marketplace. This model is being proposed by Igor Ansoff for guiding the
organizationabout the kind of strategy they must adopt in term of product or services
management within marketplace to achieve competitive advantage. In order to deal with the
competition present in the market, TESCO should implement the Ansoff matrix that help it in
guiding over the actions to be taken in order to achieve sustainability at marketplace. This model
involves four strategies to deal with market expectation and competition which is explained
below:
 Market penetration:- This strategy suggest that an organizationkeep on offering its
existing product or services in current market by decreasing the price that remain below
the competitors in marketplace. This help in keeping the existing customers bind with the
company by avoiding brand switching and also support in attracting potential customers
over product cost benefit (Zhang, Pitts and Kim, 2017). By adopting this strategy,
TESCO become able to attract more and more customers who easily get influenced by
the lower price product with high quality. But this strategy is not valid to TESCO as it
already offer its product or services at lower possible price in market.
 Product development:- This strategy suggest that in order to achieve the sustainability
and competitive advantage at marketplace an organizationmust develop new product and
offer to existing market in order to cater the varying need of its customers at market
place. For adopting this strategy TESCO is required to perform extensive research and
development practices in order to gather information regarding the demand of market so
that product or services can be offered accordingly. This support TESCO in keeping its
customers satisfied by regularly offering them with product or services as per their
demand.
 Market development:- This strategy of Ansoff matrix suggest that an organizationmust
focuses toward entering into potential market which is full of opportunities and support
an organizationto gain success at marketplace. In order to adopt this strategy, TESCO can
either cater the need of different customer segment, enter to new domestic market or get
enter into foreign market for offering its product or services to new customers that

support in expanding market base and at the same time also support in enhancing the
sales as well as profitability of it.
 Diversification:- Under this strategy a firm get enters into a new market with new
product or services. It is consider to be most riskiest strategy as compare to other three
but most profitable at the same time if the organization be able to achieve mitigate the
risk and perform well (Perreault, 2018). By adopting this strategy TESCO become able to
enter into a new market that support it in expanding the business within several different
part of the world which in turn contribute toward enhancing its brand image and
contributed toward the achievement of competitive advantage.
Among the above mentioned strategies, diversification is most suitable for TESCO as it support
in performing well among the competition present in market while satisfying the expectation of
customers that leads to achievement of competitive advantage.

TASK 3
MARKETING CAMPAIGN
This marketing campaign is developed for promotion of new goods company started
offering to its new targeted segment which is students. These students belong to different
regions, classes and religions but TESCO is targeting them for fulfilling their needs and
satisfying their requirements. A whole new section is added in stores and online application in
which all goods are present which are required by students. Some item or products which are
being made available by TESCO are basic stationery for all different students, belonging to
different age groups.
MARKETING CAMPAIGN
FOR TESCO’S MARKETING DEPARTMENT
CAMPAIGN STYLE: online,
full targeted, marketing
TESCO'S marketing team will conduct this campaign
by using several different styles and means.
 The most effective and profitable method is
using internet and virtual world for doing so.
Managers will promote new offering of TESCO
on different social media handles of company by
posting attractive posters and images (Chaffey
and Ellis-Chadwick, 2019).
 Also, TESCO'S management are using
marketing tools and techniques for conducting
this campaign. They are performing thorough
market research to know the preferences of
students and to gain knowledge about their
buying behaviors. These are used in promotional
activities and techniques used by company to
gather the attention of students of different age
group and attract more and more of them
towards the brand.

 This campaign which is being planned and
performed by TESCO will be fully targeted and
concentrated. All strategies which are being
formulated are entirely for gaining attention of
students ignoring other segments (Payne and
Frow, 2017). This is because of the nature of the
goods company is offering is very specific and
which are useful for just students.
CONCEPT / DESIGNS /
IMAGES
Illustration 1: Tesco Aisle, 2019
Illustration 2: Tesco Malaysia, 2019

TARGET AUDIENCE The targeted audience for this campaign are students, of
different age groups, of various classes and of several
courses (Pasquier and Villeneuve, 2017). The main
focus here is on the students of sectors which are
different from one another. Students group is a very
broad segment in which all individuals are included
from varied classes and regions.
EXTERNAL SUPPORT
(Agency)
Different agencies are approached by TESCO for
developing posters and attractive taglines for the
campaign. Tagline is one of the most attractive element
for promoting any product and that is why its important
for TESCO to appoint experts and include them in
promoting actions.
OTHER PARTNERS For conducting this campaign TESCO will take help
from external parties for enhancing the value of their
campaign.
 Company is reaching to different educational
institutes for spreading word about their
products.
 Moreover, company is distributing samples of
their products in NGO's and making donations to
them for needy students and children's (Terech,
2018).
 Also, company can make use of partnership
alliance for marketing its offering. They are
made alliance with a bus agency to stick their