Comprehensive Marketing Report on Tesco PLC: Strategies and Analysis

This report provides a detailed analysis of Tesco PLC's marketing strategies. It begins with an introduction to the evolving retail landscape and the importance of market research. The main body of the report includes a SWOT analysis of Tesco, examining its strengths, weaknesses, opportunities, and threats. Furthermore, the report applies the STP (Segmentation, Targeting, and Positioning) model to understand Tesco's market approach. The marketing mix for Tesco's new organic food product is then discussed, followed by recommendations for improvement. The report covers Tesco's adaptability, innovation, and market share, while also addressing weaknesses such as quality control and inventory management. Opportunities in organic food and online grocery sales are highlighted, along with threats like Brexit and increasing competition. The STP model is applied to Tesco's segmentation, targeting and positioning, and the report concludes with a discussion of the marketing mix, including product life cycle, place, and pricing strategies. References are also included.

Marketing Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
SWOT Analysis of Tesco PLC:..................................................................................................1
STP(Segmentation, Targeting and Positioning)..........................................................................5
Marketing mix for Tesco ............................................................................................................6
Recommendations.......................................................................................................................7
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................10

INTRODUCTION
Businesses are evolving very rapidly with the growing technology and changing
customer trends. In retail industry customers demand and expectation from an organisation is
changing every second. This has increased the need of market research for an organisation in
order to stay alert and aware of new customer trends and market opportunities. In contemporary
business environment marketing is very essential in order to interact with the customers and to
increase brand recognition (Krasyuk and et. al., 2017). The present report is discussion on Tesco
Plc- a largest supermarket chain of UK that operates under the retail industry of UK. Tesco plc is
the British multinational grocery and general merchandise that is headquartered in the Welwyn
garden city, England. The company is the ninth largest retailer of the world in terms of revenue.
The report aims to discuss SWOT analysis of the chosen organisation and further STP is applied
to understand the market of Tesco plc. The report all contains the Marketing mix of the new
product of the Tesco and in the end the recommendations are provided on the basis of above
mentioned issues.
Main Body
SWOT Analysis of Tesco PLC:
Swot analysis is an essential tool that is used to plan strategically in the business to drive some
competitive advantage for the business. This tools helps in identifying the major strengths of the
business ,current weaknesses that effect the organisation ,Opportunities that are available to grab
and the threats that the company may have in the environment (GURL, 2017). Further this tool
is applied on Tesco PLC to asses the different factors and future potential of the organisation.
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(Source: What Is A SWOT Analysis: How To Do It For Social Media Marketing?)
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Illustration 1: What Is A SWOT Analysis: How To Do It For Social Media
Marketing?

Strengths  Market Share- Major strength of Tesco is that they have the highest
percentage of market share in the grocery market, even their closest
competitor is far behind them.
 Adaptability- They are extremely adaptable in the changing
environment and situations, for instance in covid-19 they increased
their delivery capacity which helped them in maximizing the profit in
tough times (Abdel-Basset, Mohamed and Smarandache, 2018).
 Innovation- They regularly work on the innovation to increase the
productivity in the organisation. Recently they enhanced the
customer experience by adding features in the online grocery
shopping. These new features attracted more customers which helped
them in customer acquisition.
Weaknesses  Quality control- This is one of the major areas where they have
lacked in past , frequent customer complaints suggest that there is
still room for improvement. Betterment in this field will increase the
trust of consumers in the organisation.
 Inventory Management- Tesco has failed several times in keeping a
check on the inventory. They do not conduct this on regular basis
which results in expiration of the products. This puts a bad impact on
the revenue and the goodwill of organisation. If they overcome this
weakness than their profit margin will increase and they will no
longer be in risk of getting sued from the customers for showcasing
expired products in their stores (Longhurst and et. al., 2020).
 Leadership change- Frequent changes in the management leads to
inefficiency, as the new people in the organisation will take time to
get comfortable in the ways in which Tesco operates. Tesco needs to
bring consistency in the management so that their efficiency in the
field of operations will increase.
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Opportunities  Organic food- Tesco does not offer a variety of organic food at their
stores and this food has a great demand in the market. A expansion in
the organic food sector can exponentially increase the revenue of the
organisation as the demand of these food is ever increasing.
 High unemployment growth- Tesco can use the as an opportunity
by hiring young minds who will bring new innovations in the way
organisation achieve its objectives. Supermarket is one of the place
where people can easily find job so this will also help in eradicating
the problem of unemployment in the country (Longhurst and et. al.,
2020).
 Growth of online grocery sale- While everything is getting
digitalised , people are shifting from offline grocery shopping to
purchasing their monthly needs online. With this Tesco need to
continue their operations in online selling so that they won't lie
behind of any other supermarket.
Threats  Brexit and supply chain- As they majorly rely on imported food ,
they will face issues if there are changes in restrictions on the import
of food. Their whole supply chain would get disturbed and they won't
be able to meet the demands.
 Increasing competition- Grocery market does not have much entry
barriers and there are already multiple competitors of Tesco. This
would result in decrease in the market share and the company will no
longer be able to dominate this market (Leiber, Stensaker and
Harvey, 2018).
 Economic recessions- A company which operates in a country who
is suffering economically is one of the major problems. Tesco might
face crisis in case UK face recession because they won't be able to
make profit on the luxury goods and the items which are not
necessity.
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STP(Segmentation, Targeting and Positioning)
The STP model is the marketing model that has three divisions i.e. Segmentation,
Targeting and Positioning. All the three steps are used to analyse what organisation offer to the
customers are communicated with benefits and values among the specific group (Andayani and
et. al., 2020). The model is useful because it assist an organisation in identifying most valuable
customers, that ideally suits that product. The three divisions of the STP in context of Tesco are
discussed below:
Segmentation
This the process in which the Tesco market is divided into different segments on the basis
of different aspects such as geographical, demographic, behavioural etc. this is done through
different segmentation practices. Basically in Tesco, The segmentation is dividing the large
group of audience or customers into the smaller ones in order to reach them effectively. As in the
market of retailing there is huge trend of personalization therefore segmentation is highly
important to understand the appropriate audience for appropriate product category of Tesco. For
instance for the organic product lunch box the Tesco has segmented the market on the following
basis:
Geographical segmentation: Under this for the organic food product lunch box the company
has divided the market of university on the basis of different states and regions of UK. The Tesco
will divide the audience on the basis of University, high school and primary school (Bonesteve,
2021).
Demographic: the Tesco also segment their customers on the basis of demographic factors such
as age, income, lifestyle etc. For the new organic health lunch box the segmentation must be on
the basis of age of the students as the product is mostly for the high school and universities.
Behavioural: The Tesco also segment their customers on behaviour basis as for the food product
in retail industry the behaviour of the customer matters also. The customers with the healthy
eating habits are segmented differently with the others who more prefer junk food.
Targeting
The targeting is the strategy of marketing in which the specific segmented group of
customers are targeted by the Tesco. For the targeting the customers or group of customers the
Tesco use different targeting strategies (Chen and et. al., 2020) .
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Marketing mix for Tesco
Tesco PLC is a leading brand and is a Multinational British retailer and merchandisers
headquartered in UK. The company aims at providing the best quality of products and services to
its customers at affordable costs. The company is designed in order to fulfil all the needs and
demands of the customers at the cheapest rates possible. It helps the company in having a loyal
customer base and will also provide competitors advantage to the company in the market
(Gardas, Rautand Narkhede, 2019).
Product: The Tesco PLC provides wide range of products to its customers such as food,
clothing, electronics, financial services, etc (Zhang and Hardaker., 2021). The new product that
the company is currently focussing on is organic food which is new in the market and is a
healthy and safe food option for the customers of the company. The company has a wide range
of their own product line as well which includes Everyday Value, Tesco Lotus, Tesco Value, and
F&F Clothing. The product life cycle is given below:
 Introduction: The introduction stage of the product where the company newly launch
their product into the market which they want to capture. The new product of the
company tries to capture the new market segment which will help the company in
increasing the sales and demand of the customers. It is important for the organisation to
make sure that they are working according to the trends of the market otherwise the
product of the company will not be able to reach to the next step of product life cycle
(Panja and Mondal, 2019).
 Growth: The next stage in the product life cycle is growth stage where the product of the
company starts to gain popularity in the market and people are willing to try the new
product which the company is offering in the market (Galipoglu and et. al., 2018). In case
of organic food products by Tesco, the company is making sure that the product is able to
fulfil the needs of the customers and also the company is using effective marketing
strategies which will help the product in gaining popularity in the market.
 Maturity: The next stage in product life cycle is maturity stage where the customers are
liking the product and are using the product of the company. At this stage the product
have a customer base who are willing to purchase use the product (Lim, 2021).
 Decline: The last stage of product life cycle is decline stage where the product of the
company start to loose the market because of several reasons such as competition in the
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market, availability of substitutes and at that point of time the company needs to bring
innovation in their product.
Place: It refers to the location where the company is situated. In case of Tesco, the
company is having presence in more than 12 countries and is providing services to the customers
with the help of effective distribution channel (Gbadamosi., 2020). The company uses two
distribution channels which is online and offline which helps the company in providing products
to the customers effectively and efficiently (He and et. al., 2019). However, currently the
company is focusing more on online distribution channel as it is not only cost effective but will
also help the company in meeting the safety standards while provide products. The organic food
products of the company will be provided on both online as well as offline channels of the
company as the market segment of the product includes kids as well and the aim of the company
is to provide food in all schools so that kids can have healthy and safe food which are utmost
beneficial for their overall growth.
Price: It refers to the pricing strategy which the company is using in order to in order to
attract the desired markets segment towards the products of the company. In case of Tesco, the
company is launching organic food products in the market which will act as a healthy food
substitute to the customers of the company. The company is going to use cost advantage strategy
which helps the company in keeping the price of the products low. The company is making sure
that they take the advantage of economies of scale and will also make sure that they are
continuously fulfilling the expectations of the customers by keeping the price of the product low
(Rattanaphan, 2017).
Promotion: The promotion strategy of the company includes TV advertisements, gift
cards, discount coupons, etc. The company uses promotion strategy to attract the customers of
the company (Sen, Rajagopal and Bhattacharjee., 2019). In order to promote the organic food
product and to provide information about the new product of the company, the company is going
to use social media platforms as it has a wider reach also the company will do sales promotion in
schools as well as universities as it is one of the major target segment of the company. It will
help the company in reaching to kids and to provide them healthy as well as nutritious food.
Recommendations
 From the above SWOT analysis it is analysed that Tesco's Strength of innovation provide
a company a huge competitive advantage of thinking out of the box in order to develop
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new product that beats the other competitor's of the market. Therefore, it is recommended
to the Tesco to use its innovation power with the new technology in order to garb new
market opportunity of digitalization which will increase the sales of the company and
also make the operation's of Tesco fast and unique.
 It is analysed from the weaknesses of the Tesco that company that must look forward to
them and mitigate them with the help of the strengths as the company's strengths are
more powerful over the weaknesses (Rosnizam and et. al., 2020). In regard of this
company is suggested to stuck to one leadership style such as transformational and
transformative as will help the company in increasing the power of its strength of
innovation also the adaptability of the employees of Tesco towards this leadership styles
will be more favourable.
 After analysing the STP model of the Tesco the company is suggested to pay attention to
its targeting and positioning strategy as the company has moderate strategies to target its
segmented customer base which does not completely reach to the audience mind.
Therefore, company is recommended to utilize the digital marketing strategy in order to
reach large audience through one medium. With the help of social media channels the
company must opt for the best channel such as Instagram and twitter as the highest youth
is available their especially of the high school and university.
 It is recognised from the STP of the Tesco that company positioning strategy into the
market it enters is weak as the company not doing proper market research therefore, it is
suggested to the company to strengthen its pricing strategy as company to position in
market always chooses to lower its prices which sometimes leads the company into low
profits. Therefore, company must change this strategy and must focus on the quality and
quantity rather than pricing (Hanaysha, Shaikh and Alzoubi, 2021).
 After analysing the 4P's of marketing mix of the Tesco it is analysed that the lower price
for the organic food as compared to the market may lead to the assumption that the
quality of organic food is not better as the Tesco has low pricing strategy for the new
product. Therefore, it is recommended to the Tesco to use the price optimization
technique in order to set the appropriate price for the product as the market and the other
competitor's. The price optimization technique of the financial accounting will help the
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company in increasing its profit margin and also the customers will believe that the
quality of the food is maintained with price.
 From the 4P's of marketing mix of Tesco it is critically evaluated that the promotional
strategy of the Tesco is effective as company is adopting to use the advertisement and
social media to promote their new product and also the other strategy is also effective.
But in order to stay away from the decline stage in the product life cycle the company
must maintain the quality of the food and also keeping modifying the items in lunch box
in order to stay in race. As the customer trends change the company must innovate new
organic food to remain competitive with this product portfolio.
 Thus, it is recommended to Tesco to manage its overall marketing plan and marketing
activities very minutely in order to avoid any disruption. Because currently the marketing
plays a huge role in influencing the buyers decision making and also helps the retailers
like Tesco to increase is brand recognition, visibility and brand image in market and to
maintain its market share.
CONCLUSION
From the above report it is understood that the for an organisations under the retail
industry the major strength is the innovation in service and product in order to remain
competitive. It is concluded from the report that the organisation has huge capacity to garb
market opportunities through its market research skills. It is concluded that to reach correct
audience as right place the STP is highly necessary in order to stay focus on one group rather
than disoriented on multiple groups. For the positioning into the market the price and quality are
the two most important aspects that every firm must pay attention to. Thus, it concluded from the
above report that in retail industry there is high trend of healthy and organic food and to create
marketing plan 4P's of marketing mix is the most appropriate technique.
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References:
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