Tesco's Marketing Strategy: SOSTAC Model, Tactics, and Effectiveness

This report provides a comprehensive analysis of Tesco's marketing strategy, focusing on the application of the SOSTAC model. It begins with an introduction to marketing principles and the context of Tesco as a multinational supermarket. The report then delves into the SOSTAC model, examining the situation analysis, including the macro-environment (PEST analysis) and competitor analysis. It outlines Tesco's objectives, strategies, and tactics, including product, price, and place strategies. The report further evaluates the effectiveness of Tesco's current SOSTAC strategy in the UK market. The report also discusses the implementation of the marketing strategy and concludes by summarizing the key findings and recommendations. The report uses various sources to support the analysis and provides a detailed understanding of Tesco's marketing approach.

Principles and practices of
marketing

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
SOSTAC model to the marketing strategy used in the organization .........................................1
Macro environment in the situational analysis ...........................................................................3
Price, product and place in tactics ..............................................................................................4
TASK 2 ...........................................................................................................................................5
Effectiveness of current SOSTAC strategy used in UK ...........................................................5
TASK 3 ...........................................................................................................................................7
Implementation of the current marketing strategy utilised by supermarket ..............................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

Background of Organisation's marketing
Tesco is the largest multinational supermarket and general merchandised in the UK.
Company has operated many of nations across the world. Also, they has provided the online
services to increase the consumers attention and attraction in the market. Selected company make
highly efforts for marketing of business as well as its goods. This can help to raise the profits and
sales within the retail industry. Also, this can aid to enhance the market share, revenue and create
higher position in the industry. For marketing of business, Tesco utilize the social media
marketing for attracting the consumers towards the goods and services. This strategy is important
and very beneficial for consumers for purchasing each and every products on online. This helps
to increase satisfaction and fulfil the needs and requirements of the customers. This can create
competitive advantage as compared to their competitors in the retail industry.
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INTRODUCTION
Marketing is determined as the sum of actions included in the movement of products
from producer or seller to the consumer or purchaser, involving ads, shipping, storing and
selling. It is conducted all actions to make for sales (Nowak and et. al., 2015). This study is
based on Tesco. It is a multinational and general merchandised supermarket in UK. Report will
explain about SOSTAC model applied to the marketing strategy which is integrated in business
strategy. It will state situational analysis which involves macro environment of business. It will
explain tactics which involves prices, products and place of the company. Furthermore, study
will evaluate effectiveness of current SOSTAC strategy used in the UK.
TASK 1
SOSTAC model to the marketing strategy used in the organization
SOSTAC model is the marketing model which involves six fundamental features of
marketing such as situation, objectives, strategy, tactics, action and control. This model includes
general marketing strategy that can be implemented in different commercial situations. It is the
expansion of SWOT analysis that aids businesses get ready for marketing campaigns
(Singhapakdi and et. al., 2015). This model focuses more on the execution steps of the
procedures and marketing communications. The structure of model is simple logic which builds
on deeply situational analysis that inform consequent judgements made about strategy and
tactics. This can help to increase sales, profits and revenue of selected company.
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Illustration 1: SOSTAC Marketing Model
Source: (SOSTAC Marketing Model, 2013)

Situation:
In this section, it is assessed the present situation of the company. In this, companies
needs to determine the key competitors, digital consumers and utilization of digital channels by
the Tesco. Also, they require determining market trends, competencies analysis like brands and
SWOT analysis of firm. In this, company needs to competitor analysis because of there are many
of selected firm in the market which involves price, products, distribution and promotion tools
(Andronie and et.al., 2019). This can aid to company for expanding the business in the Romania.
This can help to increase sales, profits and revenue of selected company.
It is the necessary to determine the macro environment in the situational analysis for company
which is entering into new market in relation to business expansion. In this context, Tesco has
faced many problems such as government regulation, economic conditions, technological
advancement, social and cultural within the international market which is also called PEST
analysis of business environment.
Political Factor:
It involves current legislation of the market, taxes, government policies and procedures,
trading policies etc. The condition of the Romania capital market begins European directives.
The range of European regulation is to secure investors, safeguard market unity by set up
consonant needs governing the actions of approved mediators and to promote fair, transparent,
efficient and unified financial markets. Therefore, Tesco needs to analyze the political factor for
expanding the business in the Romania. This can impact on sales profits and revenue of business
in selected nation.
Economic Factor:
It involves GDP per capita, unemployment rate, foreign capital dependence, population
exchange rate, inflation etc. Romania population of 19.76 million is the year 2016 and expected
to reach 19.04 million by 2022. The real gross domestic product was around RON 631.084
billions in 2016. Therefore, Tesco needs to analysis the economic factor for expanding the
business in the Romania. This kind of factor will affect on sales and profits of Tesco in the
selected nation. This can impact on sales and profits as well as their revenue of business in
selected nation.
Social Factor:
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It includes demographic, households, cultural, society, consumer demand etc. Also, it
includes Hofstede's dimension cultural like power distance, individualism or collectivism,
masculine and feminine values, uncertainty avoidance and so on. It is necessary to determine the
Hofstede's dimension for expanding the business in the Romania. This kind of factor affect on
sales and profits of Tesco in the selected nation. This can impact on sales and profits as well as
their revenue of business in selected nation.
Technological Factor:
It includes information sector, research and development and so on. This factor impact on
operations of Tesco while they expand the business in the Romania. The fact that the investors
can trade stocks and other titles through internet which is really essential chance for capital
market of Romania. It is the common process in the developed nations. This kind of factor affect
on sales and profits of Tesco in the selected nation. This can impact on sales and profits as well
as their revenue of business in selected nation.
Objective:
In this section, it is setting the mission and objective of company. In this, selected
supermarket needs identify the key performance indicators, 5Ss such as sell, serve, sizzle, speak
and save. In this, Tesco needs to determine consumer acquisition and retention targets, consumer
satisfaction, added value, number of engaged consumers as well as quantified efficiency gains of
firm (SOSTAC Marketing Model, 2013). This can aid to company for expanding the business in
the Romania. It is necessary to objectives can be SMART which stands for specific as the
business expansion, measurable, attainable, realistic and time bound of the Tesco. This can help
to increase sales, profits and revenue of selected company.
Strategy:
In this section, company needs to determine for getting these objectives by implement the
different strategies such as segmentation, targeting and positioning, social media as tactical tool,
strategic alliances as partnerships, marketing automation as procedures and integration. This can
aid to promote the goods and services in front of consumers within the market. This can aid to
company for expanding the business in the Romania (Dameri and et.al., 2019). In this context,
company follow market development in Ansoff's Matrix in which they introduce the existing
product in new market. This can aid to new target consumers and creating the large position in
the new marketplace. This can help to increase sales, profits and revenue of selected company.
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There are mainly three generic strategy like cost, differentiation and focus. This helps to increase
value of goods and services in front of consumers.
Tactics:
It is the necessary to determined detailed strategies like marketing mix, campaigns to
consumer life cycles, content plan, magic marketing formula and tactical matrix by the Tesco.
This can aid to increase the presence of company and its goods in front of the consumers within
the marketplace (Kwon, 2016.). This can aid to company for expanding the business in the
Romania. In this, company need to focus on the product portfolio, price strategy and distribution
networks which helps to target the consumers in the new market. This can help to increase sales,
profits and revenue of selected company.
Action:
It is necessary to take actions for executing the plan prepared by Tesco. It involves detail
of tactics like responsibilities and structure, procedures and methods, guidelines, internal
marketing, execution excellence and internal staff as well as agencies. This can help to execution
of plan within the marketplace. This can aid to company for expanding the business in the
Romania. This can help to increase sales, profits and revenue of selected company. It aids to
target the consumers in the new market.
Control:
Lastly, it is necessary to monitor and control the plans, determine key performance
indicator, 5Ss, usability testing, mystery shopping, frequency of reporting and procedure of
report which help to implement the plan in the marketplace by the Tesco. This can aid to
company for expanding the business in the Romania (Roudometof, 2015). It aids to target the
consumers in the new market. This can help to increase sales, profits and revenue of selected
company.
Particular Amount (£)
Marketing research £30000
Promotion tool £60000
Social media advertisement £50000
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Price, product and place in tactics
It is necessary to determine and evaluate the product, prices and places as tactics which
are utilised by Tesco while entering into new market. Also, it is needed to determine these
elements as compared to their competitors within the international market. This can help to
introduce the existing products at existence prices in the new marketplace. Through this,
company can target new consumer groups and creating the high position as compared to
challengers within the international marketplace.
Product: It involves determination of product life cycle of Tesco. The steps through
which individual goods develop over time is called as product life cycle. There are four stages
such as introduction, growth, maturity and decline. Goods enter the life cycle as they enter their
market. Profits begins to develop as buyers get to know the goods. The finest grated cheese of
Tesco will be in the growth stage because prices are lower at this stage (Androni and et.al.,
2019). On other side, the lard of company is in decline because it is unhealthier. Now, there are
cheaper and more healthier options. Selected company has different goods for targeting the more
consumers in the business.
Price: Selected company follow cost leadership strategy in its pricing strategy. It gives
the lowest priced products while at the same time maintaining quality. Company utilises
economies of scale and the best channels for acquisition to maintain low prices. They constantly
works with their suppliers to improve and create supply chain cost-efficient to decrease prices.
They has brought down the cost of average weekly shop by over 3% in 2016. Selected company
gives the lower and stable prices after receiving feedback from their consumers. They cut down
promotional expenditure to further lower prices. They has unique programmes known Brand
Guarantee in which if consumer can get lower cost of any branded good at any other place.
Place: Tesco has 6900+ shops in 11 nations. They provide the goods and services by
social media and other digital platforms. Tesco superstores are large supermarkets that sell
groceries and small range of non-food products. In relation to, Tesco also provides the goods and
services on online for attracting the more consumers in the marketplace (Singhapakdi and et.al.,
2015). Every person prefer online shopping, so that consumers are attracted towards the goods
and services of Tesco. This can help to increase sales and profits of firm while expanding the
business in the Romania.
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TASK 2
Effectiveness of current SOSTAC strategy used in UK
The SOSTAC analysis of the Tesco company in the international market of Romania for
expanding their operations.
Situation analysis:
It helps to analysis the current position means overall picture of the Tesco by using
SWOT analysis and PESTLE analysis. With the help of situational analysis the Tesco can
analysis their performance by its sales, market share and customer portfolio etc. It is effective for
find-out the advantages of the Tesco in Romania by analysing the strength and weaknesses as
well as competitive advantages. It provides the structure of the SOSTAC that play an important
role to identify the target market, segments, positioning and objectives(Hamed, 2016).
Objectives:
It aims to address all the needs and demand of the customers and target to hold number of
physical stores in Romania. It implements digital technology to their stores as well as websites. It
enhances the awareness of their brand that impact positively to enhance the sales and revenues of
the company. The objectives of the Tesco is effective to enhance their market share and sales of
the company by developing innovative products as well as innovative technology solution and
marketing within 2 years in the Romania. Its one more objective is to increased their number of
customers within 1 year.
Strategy:
The achievement of the objective is so far, for achieving the objectives they have to
imply strategy that is related to fulfil the changing needs and demands of the customers. With the
help of PEST analysis and global strategy, Tesco can identify the opportunities as well as threats
for the organisation that helps to make an effective strategy. In Romania, the society is keen
about the technology innovation and their implementation in the retailer industry. So, the
company can adopt the effective technology for attractive their customers and provides best
shopping experience. They can use promotional strategy such as advertisement, magazine and
newspapers etc. to enhance their customers(Tantsurina, 2017).
Tactics:
The products offered by the Tesco in Romanian market will be identical such as
menswear. Women-wear, grocery and home-wares. For their pricing they can offer discounted
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prices of the products. They can use various promotional tactics to promote their products such
as advertisements, newspapers and magazines etc.
Action:
It takes effective action to achieve effectively their tactics. It is important to choose and
take right action plan for implementing their tactics. It is the stage where they draw the schedule
for implementing their tactics. It decides the what need to be done, when will do and who will do
etc.
Control:
It is a final stage that helps to layout the plan of Tesco as well as measure the
performance with the objectives. They have to control over their tactics that they have made to
achieve their goals(Cowley-Cunningham, 2016). It monitors and measure the strategy that meets
the objectives or not. Tesco controls and monitors their all the strategy by the qualified and
experience people. The rough budget is effective for forecast of expenses and sales of company
in relation to business expansion.
Therefore, this strategy is very beneficial for company in relation to business expansion,
target new consumers, raise the profits and sales of the organization. Also, this can create the
high position as compared to competitors in the retail industry in the Romania. Therefore, it is
necessary to determine all the factors effectively which are involved in the SOSTAC strategy.
Also, it is needed to follow all strategies, tactics and actions of company for their expansion in
the international market (Nowak and et.al., 2015). Through this strategy, company focus on
product portfolio, pricing and distribution network within the new market. This can aid to raise
competitive edge in the selected market. Also, they needs to control on the plan for improving
the performance and productivity of organization.
TASK 3
Implementation of the current marketing strategy utilised by supermarket
Tesco is the multinational groceries and general merchandised supermarket in the UK. It
is the largest supermarket in the UK. Now, they expand their business in Romania. Therefore,
they are utilised Glocal strategy as the marketing strategy for their products, price and place.
Glocalization is the combination of globalization and localization which is utilised to describe
goods or services that is developed and distributed globally, but it also adjusted to change the
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user or customer in localised market (Kwon, 2016). It is the adaptation of globalized and
international goods into the localised context which they are utilised and sold in. In particular
goods related, this refers the adaptation of internationally marketed goods and services into
localised marketplace. This can impact on sales and profits as well as their revenue of business in
selected nation.
In order to that, glocal strategy regulars certain core elements sand localise other
components. It is the prospected among glocal and domestic marketing strategies. Glocal
marketing reflects both the ideal of pure global marketing strategy as well as identification which
locally related issues of marketing actions need to be considered. This kind of strategy is giving
the global offer of brand, products or services while taking localised relate issues into account. In
relation to, Tesco should adopt glocal strategy for product, price and place to their goods and
services.
Advantage of Glocal strategy:
 Glocalization make sense when company faces large pressure for localised sensitivity and
where there are important chances for leveraging valuable abilities within operations in
multinational or global network.
 With the help of it, international goods are adapted to the localised taste of the
populations. Thus, localised people are introduced to various views of foreign cultures.
 This can aids international organizations like Tesco to grow and gain trust of the people
of particular areas (Dameri and et.al., 2019).
 Also, this assists in linking with the consumers of than area on an emotional level and
leverage global position of Tesco.
 It is the most significant aspect which leads to success of the firm.
 The positive view of glocal strategy is that multinational organizations like Tesco bring
in international revenue and offer employment chances for localised people.
Disadvantages of Glocal strategy:
 Organization are unable to gain location economies or failure to movement core abilities
to international markets.
 It is the really difficult to apply glocal strategy due to organizational problems.
 This refers that glocalization does not always benefits multinational companies like
Tesco individuals and team in each area or nation (Andronie and et.al., 2019).
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 It can select to accept or reject the goods offering or presence of the organization.
PEST affect on strategy
In this context, PEST analysis of business environment that is Romania where Tesco
want to expand the business. Therefore, this PEST affect the glocal strategy which is utilised by
selected supermarket.
 The political factor involves government policies and procedure, trade policies which are
highly effected on the glocal strategy which is utilised by company for entering into
international market in negative manner.
 In this context, some of technological factor like technological advancement which is
positive impact on the strategy of firm and it expansion in selected nation. This can help
to business expansion of selected company in the international market like Romania.
Thus, company needs to adopt technological advancement for effective operations of
business which help to increase its sales and profits (Singhapakdi and et.al., 2015).
 Another factor is social and culture which is highly influenced on sales and demand of
products and services of Tesco in the Romania in negative manner.
 On other hand, economic factor involves interest rate, inflation rate, GDP, foreign
investment which are also negative effected on operations and expansion of Tesco in the
international market like Romania.
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Illust
ration 2: Glocal strategy
Source: (Glocal strategy, 2018)

CONCLUSION
This report has summarised that SOSTAC model utilised by company which is beneficial
in relation to business expansion in the selected nation. It can be concluded that PEST analysis of
macro environment for selected nation which aid to determine the factors affected on operations
of business. It can be discussed that company utilised glocal strategy as marketing of the
products, prices and place which has implemented in the international market for business
expansion. This can aid to increase profits and productivity of business in selected nation. Also,
this is beneficial for selling the products and profitability in the new market.
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REFERENCES
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Model to an Online Confectionery Start-Up. QQI-Applying Marketing Theory to
eBusiness-Confectionery-Digital Marketing Certification Programme DkIT (2016).
Dameri, R. P. and et.al., 2019. Understanding smart cities as a glocal strategy: A comparison
between Italy and China. Technological Forecasting and Social Change. 142. pp.26-41.
Hamed, M., 2016. The development of a framework for design of web presence and associated
online marketing strategy for museums in Saudi Arabia.
Kwon, S.J., 2016. The Digital & Glocal Strategy of CJ E&M for the Growth of Hallyu. The
Journal of the Korea Contents Association. 16(12). pp.78-90.
Nowak, G. J. and et.al., 2015. Addressing vaccine hesitancy: the potential value of commercial
and social marketing principles and practices. Vaccine. 33(34). pp.4204-4211.
Roudometof, V., 2015. The glocal and global studies. Globalizations. 12(5). pp.774-787.
Singhapakdi, A. and et.al., 2015. A Comparison of American and Thai Managers on Some
Important Marketing Ethics Variables. In Proceedings of the 1998 Multicultural
Marketing Conference(pp. 261-262). Springer, Cham.
Tantsurina, A., 2017. Developing a social media marketing strategy for the horse industry
customer group: Case: Avant Tecno UK LTD.
Online
SOSTAC Marketing Model, 2013. [ONLINE]. Available through. :
<https://medium.com/@danielnilsson77/sostac-marketing-model-top-ranked-planning-
system-66dabb931435>.
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