Detailed Marketing Report: Tesco's Strategies, 5C's, and Marketing Mix

This report provides a comprehensive analysis of Tesco's marketing strategies. It begins with an introduction to Tesco, a multinational retailing giant, and outlines the importance of effective marketing in today's competitive business environment. The report delves into Tesco's marketing orientation, emphasizing its customer-centric approach, and explores the crucial role of branding in its marketing strategy. A detailed situation analysis is conducted using the 5C's framework (Company, Customers, Competitors, Climate, and Collaborators), providing insights into Tesco's strengths, weaknesses, opportunities, and threats. The report examines Tesco's market research methods, including sales projections and customer surveys. It then discusses market segmentation, target markets, and value propositions, culminating in a positioning statement. Finally, the report analyzes Tesco's marketing mix, including product, price, place, and promotion strategies. The report concludes by summarizing the key findings and offering an overview of Tesco's marketing approach.

MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................................3
TASK – 1.......................................................................................................................................................3
Brief description of Tesco........................................................................................................................3
Tesco’s marketing orientation.................................................................................................................4
Role of brand in marketing strategy of Tesco..........................................................................................4
TASK – 2.......................................................................................................................................................4
5 C’s of Tesco...........................................................................................................................................4
Figure 1: Competitors of Tesco................................................................................................................6
TASK – 3.......................................................................................................................................................7
Market research in Tesco........................................................................................................................7
TASK – 4.......................................................................................................................................................8
Market segmentation..............................................................................................................................8
Target market and value prepositions.....................................................................................................9
Positioning statement for target market...............................................................................................10
TASK – 5.....................................................................................................................................................10
Marketing mix........................................................................................................................................10
Figure 2: Marketing Mix.........................................................................................................................11
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................13

INTRODUCTION
Marketing refers to an important process of introducing a product of the company to
target customers of any type of market. In this current business scenario, business is required
to adopt workable marketing strategy to attain a competitive edge from the other competitor
firms and can significantly generate high amount of sales and profit (Brassington and Pettitt,
2006). In order to reach to the market, the marketing strategy of the organization should be
aggressive as well as effective. The chosen organisation in report is Tesco which is a
multinational retailing organisation in overall UK. In this current research report, marketing
approaches being adopted by Tesco will be studied efficiently. The company deals in food,
grocery, clothing, telecom and many other businesses. Further, company’s market
orientation, marketing strategy and role of brand will be elaborated. The current research
study will carry out situation analysis of Tesco through 5C’s and will develop a marketing
strategy and related tactics i.e. marketing mix.
TASK – 1
Brief description of Tesco
Tesco is one of the largest multinational retailing chain in United Kingdom and holds
a third largest position all throughout the world. The company has initiated their business in
UK in the year 1919 and at present they have their stores in 13 nations of the world including
Asia, Europe, USA etc. Firm have more than 4200 stores in UK and it is quite popular for its
valuable product at lower prices (Ryle, 2013). In addition to this, the company get its
operations in the areas of clothing, food, financial service, telecom, gas stations, insurances
and many more. Apart from conducting their business, the firm is also engaged in social
service where they work for the welfare of the society.
The philosophy of Tesco ‘Every little helps’ puts their customers, employees and
society at the heart of everything being performed by them. The firm also feels pride in
offering a great shopping experience for customer. Further, the main mission and vision of
the firm is to be the most highly valued business by the customers, community, employees
and shareholders. In addition to this, the core value of the organization is “we make what
matters better, together”. This core value statement clearly states what Tesco is seeking to
achieve (Tesco, 2018).
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Tesco’s marketing orientation
Talking in relation with the market orientation, it is being regarded as the core of
retailing brand strategy. There are many firms who are selling same good as their
competitors. However, the main key to success is that they have developed their own unique
position in the market (Drucker, 2008). Thus, with the market orientation, companies creates
a differentiation with their rivals. Market orientation is generally related with the processes as
well as activities being related with creation and satisfaction of the patrons by continuous
evaluation of their requirements and needs in such a manner that the performance of the
business is highly affected. Tesco is customer oriented brand and it is a prime example of a
market oriented firm. The core objectives of the firm is customer oriented and they always
hold on to this. The overall strategy of the company is committed towards this guidance.
There are three main elements of a market oriented firm i.e. customer focus, competitor focus
and finally, inter-functional orientation.
Role of brand in marketing strategy of Tesco
Speaking in relation with the brand, it is a product having unique features in design or
in image. A brand is quite consistent and well-recognized. Overviewing the current retail
climate, it is changing rapidly than ever before, even the trends of customers are altering at a
fast pace (Lim, Machado and Iglesias, 2015). In such a scenario, it is vital for Tesco to review
and update their brands on a regular basis so as to stay relevant and to maintain their share in
the market. Brand plays an important role in Tesco’s marketing strategy and it is being
defined below:
 It helps in offering a promise to the customers.
 It also supports in informing the audience both internally and externally on what can
be expected from the firm in relation with its products and services.
 Helps in creating a differentiation from the competitors.
 Support in increasing the revenue and share in the market.
TASK – 2
5 C’s of Tesco
For the purpose of making the customer satisfied their needs, each and every firm
require to comprehend its internal as well as external situation including market environment,
customers, own capabilities and opportunities. Further, they are also required to forecast the
trends in this complex environment wherein they carry out their business operations
(Lancaster and Reynolds, 2005). The situation analysis can be performed by important and
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most useful framework known as 5C’s analysis. It is nothing but a process of environmental
scanning on five key areas which is particularly applicable to marketing decisions such as
competitors, customers, company, climate and collaborators. Here are mentioned 5C's of
Tesco:
Company (Tesco) Strength – Tesco has strong brand image in the market and they are the market leader
which is quite positive aspect of the firm. Further, they have diverse business with
4335 approx. Stores all throughout the world and they have their operations in
different field which significantly act as a major strength for Tesco (Tesco SWOT
Analysis, 2018). Opportunities – Since, the demand for privately labelled products is increasing in UK,
the company can seek opportunities and increase their customer base. There are many
opportunities available for Tesco in unexplored market like S. Africa and India etc.
which can be tapped by them. Weaknesses – Tesco’s subsidiaries are not operating well in the market and it is the
major weakness of the firm. In addition to this, the company also lacks marketing
approach which can impact the sales of the firm. Threats – There are many stores and super markets which are offering products at
lower prices and posing threats to the business of Tesco. Moreover, the change in the
economic conditions like Brexit influence the operation of business effectively. The
new entrants into the market can also pose challenge to Tesco.
Customers of Tesco and their typical behaviour
Customer can refer to an individual who trade services and goods from their business
or stores. The company carries out extensive level of research into their shoppers. According
to the data gathered from the research, Tesco has developed “Tesco five families’. By
determining these 5 segments of the market, the company was able to target their products
effectively and can meet out their needs better (Wilson and Gilligan, 2005). Their behaviour
and types are being described in the subsequent paragraph: Pre-family – These group of customers are quite youthful, have less routine in their
lives and quite spontaneous. Tesco also prefer to have food outside in which social
media plays an important role in their engagement process.
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 Lower affluent families – These types of Tesco customers have less disposable income
and tend to buy cheap and convenient goods. High affluent families – Such individual targeted by Tesco have balancing budgets,
busy work schedule and look after their family. These people always favour quality
and nutritional products. Lower-affluent post families – Tesco generally bargain hunting and look for good
value. Customer’s belonging to this group prefer to cook simple food avoid packed
and frozen food. Higher-affluent post families – They have high disposable income and want to enjoy
good food. They travel regularly and enjoy traditional form of media (Butscher,
2002).
Competitors of Tesco
Talking in reference with the competitors of the company, key rivals are ASDA,
Morrison’s, Sainsbury, M&S etc. They are often being known as the major four in the United
Kingdom. In recent years, Aldi as well as Lidl also became the major competitor of Tesco.
Focusing towards ASDA, it is a wholly owned subsidiary of Walmart and posing great threat
to Tesco as it has also expanded its operations in major nations where Tesco is operating.
Further, it is also improving the nutritional value of private label products.
Figure 1: Competitors of Tesco
(Tesco launches 'pound zones' in bid to compete with rise of budget supermarkets, 2014).
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Climate of Tesco Political & Legal factors – The main dominant parties in the nation UK is Unionist
and conservative party. Further, the United Kingdom’s government is mainly lead by
Liberal Democratic Party. Rate of tax, interest, unemployment, economic conditions
and impending legislations impacts the operation of Tesco (Kotler and et.al, 2008). Economical – Tesco is majorly influenced by the labour cost significantly. For
example, there has been increase in the minimum wage rate by 4.5 percent and this
upward shift will cost in millions to Tesco. Other than this, increase in the cost of
borrowing in UK will affects the Tesco’s cost, price and profit. Social – There has been change in the taste and preferences of the customers with
each passing day. Tesco is basically dependent on the customers of UK and they must
understand their needs and meet the issues being faced by them. Further, obesity is
another issue being faced by Tesco as people are becoming more concerned about
their health. Technology – The technological advancement of UK is being denoted by their strong
information technology. Tesco need to get updated with the latest technology to
remain competitive.
Collaborators
The supply chain of Tesco is complicated as it involves chain of people. The company
has maintained good relations with the suppliers, distributors and other partners indirectly
(Palmer, 2011). The firm works with only top manufacturers which have strong and good
reputation in the market and provide highest quality waves. The major suppliers of Tesco are
Green yard, Gomez, Allied Bakeries, Froneri, Ornua, Greenwell and many more. Further,
they have more than 5000 members in the supplier networks and is building string
relationship with the business partners by fundamentally changing the way Tesco work with
them. They follow standard payment terms for all the suppliers in UK and has also reduced
the number of days which they calculate for commercial income i.e. from 24 to five (Keller,
2008).
TASK – 3
Market research in Tesco
Focusing in relation with marketing research, it is being defined as a process that
helps in linking the customers, producers and end users to the marketers by the way of
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information being used to determine as well as defined marketing opportunities and
problems. The research of the markets is being performed by Tesco to have general insights
about the needs and demands of the customers, competitor’s steps, business environment and
suppliers. The market research is being performed by the marketing department of the
company. Tesco is an international grocery and general merchandise retailer which is
headquartered in the Chestnut, UK. There are many important methods of market research
i.e. being adopted by Tesco for the purpose of underrating and learning several things such
as:
By understanding the past sales of the firm, they can easily project the future sales.
Further, they can also project the sales of the competitors and can make strategy accordingly
for retaining in the market (Lancaster, 2010). Further, the company also carry out surveys
which clearly depicts that customers consider price as the most important element than
anything else with a close significance for quality as well. Tesco makes use of the results of
market research and devise a brilliant advertising campaign showing the product’s quality
and cost effectiveness of the company’s product. Trade-off analysis is also known as conjoint
analysis which significantly takes involves asking several questions to large sample of
customers to trade off possible elements of store choice with a view to offer a clear picture of
changes in the taste and preferences of the customers over a period of time. It also helps in
determining the difference by grouping of customers. Every two years, Tesco makes use of
this technique. Other than this, Customer Question Time sessions and Customer Comment
Cards are also being adopted for gazing the patron’s needs.
The marketing research not only helps in offering information in regards with the
present state of the market, However, it also supports in anticipating future preferences of the
customers as well. Tesco can significantly make changes in their portfolio of the product and
level of output so as to remain effective (Kalenskaya, 2015). In addition to this, the company
also makes use of PESTEL analysis for getting the external information about the
environment in which they carry out their operation. Further, various qualitative research
techniques like focus groups, shops and home visits and many others have been used to
comprehend the wants of the customers.
TASK – 4
Market segmentation
Speaking in volume about segmentation, it is being defined as a process through
which customers are being divided into different categories such as demographic, geographic,
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physiographic and behavioural segmentation. There is a need of separate marketing strategy
for dividing the market into smaller groups with varied wants, features and behaviour (Craft,
2004). Tesco eliminate their market according to various segmentation and these are follows: Geographic – In this, the market is being categorized into different sections based on
the nations, states, regions ad cities. Tesco divides their market as per region such as
Asia, Europe, Africa, Middle East etc. Demographic – It is being defined as that segmentation that divides the market on the
basis of age, sex, gender, income level, religion, caste, education, nationality etc.
Tesco has many range of products which can offered to people of all ages as per their
level of income. Behavioural – In this type of segmentation, general behavioural patterns of the
patrons are being considered. It encompasses benefits, rate of usage, loyalty status and
many more. Tesco make special offers and discounts on special occasion on day such
as Halloween, Christmas, and New Year etc.
 Psychographic – This type of segmentation divides the market on the basis of taste,
lifestyle, attitude, class and preference of the customers. The firm is offering different
range of products such as clothing, food, grocery according to the taste and
preferences of their valuable customers (Kalenskaya, 2015).
Target market and value prepositions
Once the process of segmentation of market comes to an end, the firm has to decide
which market to be targeted. Thus, it can be said that targeting is nothing but a complex
process of analysing each segment of the market and choosing one or two segments to enter.
Tesco has adopted demographic, behavioural and geographic segmentation to target their
market. Here, the firm is offering products to both the gender and of all ages. Further, the
products are available both for middle and higher class of people. Tesco is selling their
products in more than 13 nations of the world including UK. The people who are cost
conscious and interested in bargain are the general target customers of the firm (Drucker,
2008).
Tesco offers outstanding value to their valuable customers which in turn makes them
lifetime customers of the company. The value preposition for the target market of Tesco
includes comprehending the choices of the customers, avoiding price wars, determining
segments of customers, improvement in the brand success, improving the quality of service,
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increasing competitive options and finally using the strength of the firm to offer unbeatable
value to the patrons.
Positioning statement for target market
Throwing light in relation with the product’s positioning, it deals with individual
elements of marketing mix for the purpose of attracting the target customer segment in the
most effective way. Tesco adopts numerous positioning strategies for attracting target
customer segment. The company has positioned itself in the market as a low price retailer by
making use of advisement and positioning statement, ‘Cheapest price everyday’ for selected
type of category in the store (Wilson and Gilligan, 2005). The strategy being adopted by
Tesco was quite successful and effective and helped in attracting large pool of customers.
TASK – 5
Marketing mix
The marketing mix of Tesco clearly explains the marketing strategy being adopted by
the firm. This will significantly encompasses advertising, promotion, pricing as well as
distribution strategy being adopted by Tesco. Marketing mix of Tesco are as follows: Product – Range of products are being offered by Tesco such as food, financial
service, electronics, clothing and many more. The product line of the company is
expanding continuously and catering the needs of the customers too. They have even
extended their operations in online marketing as well (TESCO, 2009). Price – They adopts low pricing strategy for their products. In addition to this, they
make use of club card system to accumulate points for the purchase made by the
customers. These points can be converted into money at future stage. Place – Tesco has its headquarters in Chestnut, UK and many other nations of the
world. Further, they have two main distribution channel i.e. Online and offline. The
offline forum of the firm has 6 stores such as Tesco Express, Tesco Metro, Tesco
Extra, Tesco Compact etc. Promotion – The firm follows advertisement where they highlight their low prices for
the products. They also provide many attractive offers such as buy one get one free
and discounts to attract customers (Rothaermel, 2015). They have club card service as
well which offers additional discounts to the members.
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 People – The sales assistants and other staff members of Tesco are excellent and
responsible. The firm make use of program like Save as you earn, Colleague privilege
cards etc. for motivating and gaining loyalty from the employees (Brewster and
Harris, 2004).
Figure 2: Marketing Mix
(Monster Energy and the Marketing Mix, 2016). Physical evidence – The stores of Tesco are clean and attractive. The products are
quite easy to navigate and find. Further, the website of Tesco is also very simple and
easy to operate.
 Process – The process in relation with Tesco will significantly refers to the way they
keep their customers satisfied and happy. They have quick and speedy services related
to billing, customer query and grievances. Further, they have competent staff who
addresses the issues of the customers effectively and make them satisfied (Bhasin,
2018).
CONCLUSION
It was analysed from the current research study that the current position being hold by
Tesco is clearly illustrating its expansion in numerous nations. The company has also
appointed around 530,000 employees in the year 2013. Such level of growth does not happen
by chance. The leaders and managers of the firm have always set high standards as well as
clear goals. They have never settle for anything less than the best. It was found in the analysis
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that marketing and its related tactics played a crucial role in leading Tesco towards this glory
and grandeur.
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