Tesco's Marketing Strategies, Economic Impact, and Business Challenges

This report provides a comprehensive analysis of Tesco's business environment, focusing on its marketing processes, the impact of economic factors, and the challenges it faces in a global economy. It evaluates Tesco's marketing operations, including market analysis, goal setting, and the marketing mix elements (7Ps: Product, Price, Place, Promotion, Process, People, and Physical evidence). The report also examines how economic factors like inflation, demand and supply, tax rates, and interest rates affect Tesco Plc. Furthermore, it discusses the various challenges Tesco faces, using PESTLE analysis to explore political, economic, social, technological, environmental, and legal factors. The report highlights Tesco's strategies for dealing with these challenges, such as cost leadership, supply chain improvements, and employee retention, providing a detailed overview of Tesco's business strategies and market positioning.

Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
A knowledge and understanding of the marketing process in the contemporary business
context in regards to Tesco.........................................................................................................3
Understanding of the concept of marketing mix and how this is employed when developing a
new product/service ...................................................................................................................5
Economic factors affects Tesco Plc............................................................................................7
Businesses facing challenges in the economy.............................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Activities an organisation is required to do to promote the buying or selling of a product
or service are known as marketing. It includes advertisement, delivering and selling products to
consumers. The chosen organisation for this report is Tesco which is a UK multinational
supermarket retailer chain dealing in food, domestic and general goods and has head office in
Welwyn Garden City, England (Betti and Sarens, 2020). This report included a brief discussion
on study conducted to evaluate the marketing process in the current enterprise context, concept
of marketing mix, investigating influence of economic factors on business activities &
challenges facing business in a global economy in regards to Tesco.
TASK
An evaluation of process in the present-day enterprise context in reference to Tesco.
Marketing operations involves whole process from the identification of demands to customer's
satisfaction. In this process, the seller tries to achieve customer satisfaction by offering value to
them. It is defined as the process by which businesses produce valuable goods for consumers and
gain monetary value from buyers in exchange by construction of strong client
relationships(Contractor and et.al., 2020).
The marketing process is divided into five stages.
 Understanding the market and the customer needs and wants
 Develop a basic marketing strategy and integrated program delivering superior values
 Execution of plan
 Building profitable relationships
 Capturing value from customers
Tesco marketing process comprises the following elements:
 Marketplace and environment analysis: There are strategic models to conduct this
analysis which consists of analysis like SWOT and PESTLE, five forces model of
Michael Porter and others.
 Identification of advertising and marketing goal: Particular section of population in the
UK and different international locations in which the supermarkets of the organisation
operate is targeted by Tesco.

 Setting objectives: Maximization of ROI in short term as well as long term orientation &
increase in brand value are marketing objectives of TESCO (Gaganis and Voulgari,
2019). Marketing goals of Tesco are intently related to their enterprise approach which
encompass the following seven factors:
1. to be developing the UK core
2. growing worldwide presence by online and offline channels
3. developing retail offerings in existing markets
4. awareness on CSR
5. improving value of brand
6. accomplishing extra diversification
7. growing value via teamwork
 Dealing with marketing mix elements: The significance of dealing with each factor of
marketing mix contemplating needs, desires and different particular traits of target
section is absolutely understood through the management of Tesco.
 Reflection, manipulation & revision: It is a factor of marketing activity which is utilised
by marketers of Tesco in a frequent way so as they can check effectiveness level of
marketing approach and viable some factors used in this approach because of changes in
internal or external environment.
Marketing orientation of TESCO plays an important role in achieving their centre mission that is
maximization of profit. Connection among Tesco's competitive advantage and their marketing
orientation is powerful.

Interpretation of marketing mix concept and its role in developing a new commodity.
Among advertising topics, marketing mix is most commonly used term. There are a lot of
factors that symbolises the marketing mix, however, Edmund McCarthy had diagnosed the four
major factors particularly commodity, rate, area as well as publicity(Gogokhia and Berulava,
2021). It is truly a group of moves which an organizations increase & enforces so as to sell their
produces commodity to target customer. This report makes a speciality of the mixes in marketing
of TESCO. In this report a brief discussion will be made on 7Ps of marketing of TESCO that are
Product, Price, Place, Promotion, Process, People and Physical evidence and explanation of
marketing mix & advertising techniques of organisation (Khajeheian, Friedrichsen and
Mödinger, 2018).
Products of Tesco

TESCO deals in a large variety of goods such as food products, garments, stationary,
beauty products, etc. Along with it, TESCO also deals in viable demands of their customers. It
sells products from different big manufacturers in almost each of products and sells it their
buyers along with it, their own produced goods such as Everyday Value, Tesco Lotus, Tesco
Value, and F&F Clothing that are TESCO's personal producers. However, the supply of variety
of their products relies on customer's personal visit to outlets of the firm (Khajeheian and
Mödinger, 2018).
Price and pricing techniques of Tesco
TESCO has adopted cost leadership strategy in their pricing. As a result, the enterprise
tries to carry on in offering lowest price to their customers without compromising quality of
goods offered. Economies of scale is enjoyed by TESCO and it operates continuously with their
suppliers to to ensure lower prices to be delivered to their ultimate consumers. Furious
competitive organizations that involves Aldi as well as Lidl within the British marketplace
influences pricing method of TESCO. However, it's far really well worth bringing up that
Tesco has deliberate foremost rate wars in opposition to the discounters(Nam and Bao Tram,
2021).
Place/Distribution techniques of Tesco
TESCO utilises primary mode of delivering their product particularly in online and
offline mode of selling like most of other retailing firm. Tesco has approximately 7000 outlets all
over the globe that are categorized into six segment that are TESCO express, TESCO extra,
TESCO metro, TESCO compact, TESCO home plus as well as TESCO superstore. While online
sector of the firm is referred to as TESCO Direct. This suggests that Tesco makes use of specific
channels to be had to attain out to its clients.
Promotion techniques of Tesco
TESCO has a robust recognition in market that allows them promotional support.
Organisation utilizes TV, newspapers as well as different channels of media in order to advertise
their product. As per Nielsen AdIntel it's far the most important spender in conventional
marketing and marketing withinside the British grocery retail industry. It spent over £80.8m in
2019 which changed into loads better than the expenditure made on marketing 2018.
In addition to marketing and marketing, Tesco makes use of different varieties in promoting their
product such as it frequently gives buy one get one unfastened on a number products. It has a

TESCO Clubcard which is a loyalty cards and card holders get factors every time they save that
they can exchange to get reductions. The firm frequently get personalized reductions and gives
as well.
Process in Tesco
A set of operations that are completed to gain something is referred to as process.
According to Baltzan & Philips (2008), organisational method is a standard group of sports
which are used to complete a given goals, which includes processing a customer's desire. In
offline outlets of TESCO, customers select out up their merchandise and meet patron pay
supporter. Self carrier machines can also be utilized to make payments.
he seller tries to achieve
Economic factors affects Tesco Plc
These are primary information about the economy that is considered when an money investor
calculates its business value. In other words, businessmen have to give their critical time to
analyse outside economic forces while valuing their intrinsic value of an asset. Economic factors
consists of economic growth, interest rates, tax rates, laws, policies and unemployment. There
are two types of economic factors which is internal and external (Nikitina, and Lapiņa, 2019).
Some of the economic factors are discussed below which affects the business of Tesco Plc:
Inflation: It happens when the supply of money is very high than required in the market. The
prices of goods have to enhanced in order to generate earnings or to sustain in the market.
This is because there is an increase in the raw material cost, labour cost and overhead which
are necessity for production as these rises affects the retail prices. In context to Tesco Plc,
they are tackling this through giving more payments to retain their trusted employees,
discount ranges and making their price match with their competitors like Aldi and Lidl.
Demand and supply: Demand is an economic activity that relates to customer's wants to buy
goods and services and willing to pay a specific price during period of time while supply
refers to the given product and services a supplier offers to consumer at a given prices
during a given period. Tesco plc handling demand by increasing its online delivery by more
than 20%. They has hired 45000 new staff to manage the demand during Covid-19. They are
tackling their supply by making their supply chain more efficient. They are improving their
supply chain by establishing Green initiatives and making more distribution network.

Tax rate: It is critical part of the economy. The tax rate influences on the prices of goods and
their sales which affects every business in the market. It represents the amount which is to
be charged from customer and impact of increasing tax rate on business. This means
workers have to pay more tax on their income as a result consumer has reduced money to
spend on goods and services. Business expect to sell less so that will reduce their investment
level. Tesco plc paying the right amount of tax in accordance with the tax laws of country
wherever they operate. This super market handle the increasing tax rate situation through
adding value to their offerings or by lowering their prices of goods.
Interest rate: It is important factor which affects the fluidity of cash in the business. In other
words, an interest rate is the sum a lender charges from borrower which affects the cost of
borrowings, return on savings and total return of investment.
Businesses facing challenges in the economy
There is many challenges faced by businesses in today's world as there is rapid shifting in every
element of market(Nudurupati and Bititci, 2021). The analysis of challenges faced by Tesco Plc
is to be done through the Pestle and swot analysis. All the factors of Pestle analysis are discussed
below:
 Political factor: Political factors includes tax policy, tariffs, environmental regulations
and so on. The political environment in UK is presently affected by Brexit. Tesco Plc got
affected as the closure of plants and many job losses happened, some industries do not
have any way to handle a hard Brexit.
 Economic: Economic factors includes economic growth, inflation and wage rates,
interest, exchange, unemployment and so on. With the speed of inflation there is no
growth in the payout in UK. Because of the high inflation Tesco has come up with a pay
deal with the employees who will beat inflation, pay a higher reward, extra dividend, a
source as the living cost increases after Brexit.
 Social: Social factors includes population growth rates, age distribution, heath
consciousness, safety and so on. Due to the increase in population, demand of goods and
services increases which leads to the new products of Tesco need to be launched in the
market.
 Technological: Technological factors state the changes and developments in the
technologies which affects the companies operations. The modern technological

framework provide entrepreneurs vast opportunities in UK to establish or expand their
enterprise. Tesco has adopted an intelligent Start/Stop technique where the engine do not
exhaust.
 Environmental: These factors are related with the issues of the surrounding environment
which includes environmental protection law, waste disposable law and so on. Currently
UK is facing environmental problems such as pollution and contamination which is
affecting the environment a lot. Tesco machines are not eco-friendly because of the
pollution that directly affects the nature, species, animals and humans.
 Legal: In UK, the Equality act 2010 is implemented which protects people from being
discriminated because of cast, colour, race, gender or any other differences. Tesco Plc
have signed a document of the Equality and Human Rights Commission (EHRC) to get
better strategy and actions related to freedom.
Swot analysis of Tesco Plc is given below:
Strengths
 Workforce: Tesco have proficient and motivated employees working actively in
the company. Training and development of the employees are on the priority basis
for the company.
 Increasing sales: From last 11 months the sales of Tesco is continuously
increasing. By this it can be observed that it creates a good brand image and have
earned a good amount of goodwill in the market.
Weakness
 Product Range: Tesco have a good amount of products available in the market
and when compared with the competitors they are leader.
 Need of High Technology: Tesco needs a change in the technology as its vision
do not meet with the automation they are making use of now.
Opportunities
 Target new markets: To get the untapped prospects of the customers Tesco needs
to target the developing markets of India and China and grow their sales in these
areas.
 New Technology: Hybrid technology will be soon adopted by the people in the
near future and Tesco needs to hurry up and start as soon as possible.

Threats
 Competition: Tesco has a powerful competition from ASDA, Sainsburg's,
Morrisons, Aldi, Lidl and so on. The competition is high in this segment as all of
them have the same target audience and good brand image.
 Financial instability in the market: Due to inflation and recession people spend
less on grocery products, therefore, it will directly affect the sales of Tesco.
CONCLUSION
Marketing is the most interesting of all business sports. It can be said as a heartbeat of
every successful business. It is dynamic in response to the expansion of technology, and the high
competition at all levels and in every organisation(Sedej, 2019). All business activities are
marketing activities Marketing can be learned by practice, experimentation like all business
skills. This report explained various concepts relating to marketing, its process and marketing
mix.

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