Tesco Marketing Essentials: A Comprehensive Analysis

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MARKETING ESSENTIALS
MARKETING ESSENTIALS OF TESCO
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MARKETING ESSENTIALS
Table of Contents
Introduction......................................................................................................................................3
LO1: Analysing the function of market and its interrelationship with the other units of an
association........................................................................................................................................3
Main roles and responsibilities....................................................................................................3
Developing marketing strategies.................................................................................................3
Market research...........................................................................................................................3
In-house development of product................................................................................................4
Providing support to the sales team.............................................................................................4
Interrelationship...........................................................................................................................4
Inter relationship with other departments....................................................................................4
LO2: Comparison by which businesses use 7P’s to attain and fulfil organisation’s goals.............5
LO3: Analysing and creating a marketing plan...............................................................................7
Vision and Mission of Tesco.......................................................................................................7
Goals of the company..................................................................................................................8
Situational analysis......................................................................................................................8
Marketing Strategy of Tesco.......................................................................................................8
Marketing mix.............................................................................................................................9
Action Plan................................................................................................................................10
Analysing and monitoring performance....................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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Introduction
Marketing is a very important tool in the business scenario as it influences market place, demand
of the consumers and varieties of functions of the company so that they can provide products of
superior quality. The companies are creating awareness about the various marketing strategies to
improve customer relationship and to explore new opportunities to capture the target market
(Baker, 2016). In this project, the UK based company Tesco is chosen to show the inter
relationship among its various functional units and its business objectives will be achieved by
using the 7P’s of marketing. A new business plan will be devised for the company for efficiency
in functions and management.
LO1: Analysing the function of market and its interrelationship with the other units of an
association
Main roles and responsibilities
The roles of marketing are the base of any organisation and it aids to recognize the prospective
of a product before launching in the market. In case of Tesco, it is necessary to do market
research, plan for the product before launching, developing such product and effectively
managing its sales for good performance in the market. According to Armstrong et al. (2015),
the company has a selling purpose comprising of market research units, strategic management
divisions, sales support, and product development units for efficiency in delivery. The marketing
functions of Tesco are:
Developing marketing strategies
The senior and experienced managers play a very crucial role in the marketing team. This helps
in developing the process of specifications and creating new distribution channels of the products
offered by Tesco in the market. Its main tactics is to appreciate the thinking process of
consumers and spot their potential requirements to fulfil their demands.
Market research
The most important responsibility of a company is to do effective research of the market that
helps the company to set the marketing strategy for the company, which it will use to attain the
overall aims of the company. Tesco uses these opportunities before entering into any new sector
of the market. As reflected by Kozlenkova et al., (2015), the Company can penetrate the market
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of other country after successfully conducting market research in the country. If they find the
demand of the consumers are tremendous; the company can capture the market easily. It is
concentrating more on consumer satisfaction rather than fulfilling their needs.
In-house development of product
The key conscientiousness of the team of selling is to focus on the improvement of novel
commodities. The sales team of Tesco is designing budgets and designing promotional contents
in order to see that the consumer visibility increases. The finance team of the company prepares
the budget and helps the marketing team to make an estimate of the product to buy and develop.
The finance team has the most responsibility as they are entrusted with the job of allocating
funds for product development (Mishra and Modi, 2016).
Providing support to the sales team
The marketing team of Tesco should helps in creating a co-ordination between the marketing and
the sales team to work with efficiency. This efficient process helps in increasing the sales for the
company (Ryazanova and Volchkova, 2017). Tesco provides training and other facilities to such
sales personnel by means of which they can comprehend the consumer’s demands and up-to-date
their skills accordingly so that their performance level rises.
Interrelationship
Tesco maintains a strong relation between all the departments within the organisation. The
proper functioning of the departments contributes to the growth of the product produced by the
company (Kyriakopoulos et al., 2016). For creating a proper and full proof plan, the company
needs co-ordination and support from finance department, sales and production department and
HR department. They must all co-ordinates to raise the fruitlessness of the company. Without
their proper functioning and co-ordination, the company cannot perform efficiently in the
market.
Inter relationship with other departments
The relation with the other departments of Tesco is discussed as follows:
Production department
The marketing department comes together with the production department:
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 To make extensive research so that to be aware of the present and future demands of the
consumers.
 To design a proper time limit for Tesco so that the company can enjoy a strong advantage
while competing with its rivals in the market.
 To efficiently manage the huge dimensions of orders and supply generated due to intense
promotional activities of the company.
HR department
This unit performs one of the main crucial functions for the marketing department. It helps the
department to pick up the correct employees who can understand the prospects and drawbacks of
the market and products well. It aims to solve the various issues of the department and helps the
department with the accurate set of employees by:
 Aiding in meeting production target
 Providing proper training to the marketing workforce
 Designing a experienced sales team
 Conducting market research to build up new ideas for product development (Hammody
and Hussein, 2019)
Finance department
This unit ensures that the cash flow is stable within the organisation. It is the backbone of the
company. The finance department is responsible for approving appropriate funds and budget for
making market research and product promotion of the company. The funds sanctioned by the
department will help the marketing team and if there is any problem in allocating funds, the
marketing department will suffer (Hammody and Hussein, 2019). Hence, finance department
should frame their policies and procedures in such a way so that they can help the department of
marketing to undertake and perform every task with no hindrance.
LO2: Comparison by which businesses use 7P’s to attain and fulfil organisation’s goals
The market condition and the marketing mix of the company will help to solve various problems
that are existing in the marketing scenario. The 7P’s of marketing mix will be used to attain the
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business objectives fully. The problems in companies as Tesco and Sainsbury will be discusses
by means of 7P’s.
 Product- Tesco offers products belonging to beverages, bakery, technology, electrical
and even baby foods. They have their own brands like Everyday Value, Tesco Kipa that
provides the consumers with the best services. The company also sells its products online
and offers more than 35 product categories by reducing the product life by 22%. On the
other hand, Sainsbury has more than 35,000 product varieties that include Free from
range products, TU range as well as home collection range. They also produce
biodegradable products to attract the consumers at large.
 Price: Tesco uses the scheme of cost leadership styles that helps the company to provide
low priced and superior quality product within the same timeframe (Themba et al., 2016).
It has decreased the cost of products by 5% to create a tough competition with its
consumers. The company has also lessened its costs on promotional expenses to provide
good quality product in less time. On the contrary, Sainsbury follows the strategy of
providing products to consumers that are worth for the money. This policy helps the
company to retain its consumers (Hammody and Hussein, 2019). It also used price
discrimination strategy by designing premium pricing for its products. The childcare
goods of the business are priced very low to target the marketplace of the consumers.
 Place: The Company Tesco has more than 7000 outlets in more than 12 countries
distributed all over the world. It has stores like Tesco Metro, Tesco Extra, Tesco Express
and Tesco Superstore (Bhasin, 2018). On the other hand, Sainsbury has 600 supermarkets
and 70 stores many of which are operating all through the day. It has around 15
distribution centres that are situated locally and 3 distribution centres that operate
nationally. It also has storehouses to store foods and other objects.
 Promotion: The Company Tesco has a good position and fame in the market because of
its low priced products and the promotional events conducted by the company is based on
this concept. Tesco uses various commercial as well as social media platforms to promote
their products among the consumers (Chockalingam and Isreal, 2016). The company has
a Club card that targets the consumers of the company. The owners of such card receive
points that they can use as discounts while purchasing products. On the contrary,
Sainsbury uses above the line and below the line strategies to promote its products in the
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market. By means of above the line strategy it uses media platforms to target its
consumers. Below the line, strategy is used by the company for marketing databases and
packaging.
 People- Tesco follows a policy of strict job selection for the employees. There are at
present 500,000 employees in around 15 countries of the world. The company provides
supports and opportunities to its employees to motivate them in their work (Baker, 2016).
In case of Sainsbury, they employ people who are trained in understanding consumer
behaviour easily. The employees are trained in such a way that they never fail in
satisfying consumer needs. They have implemented new levels of training for its
employees and formed a new institution devoted to leadership training of its employees.
 Process: The process of Tesco is designed is such a way that the policies of the company
are not violated on the execution of the plans and implementation of new ideas and
products. On the other hand, Sainsbury follows the policy of online shopping to attract its
consumers (Bhasin, 2017). The Company is thinking of designing new plans for its stores
and devised an innovative plan to efficiently deliver its products and ensure consumer
loyalty.
 Physical Evidence- Tesco has its stores everywhere that provides examples of its
evidence. The taglines, packaging and logos used by the company to meet consumer
demands (Baker, 2016). On the contrary, Sainsbury provides excellent shopping
experience and its stores; products and shopping baskets are uniquely designed to meet
the demands of the consumers.
LO3: Analysing and creating a marketing plan
The selling plan of any company must include details of the company and the products they
offer. It should also highlight the way, a company deals with its consumers to meet their needs.
In case of Tesco, which is a famous grocery distributor, the selling plan is developed to in know
the aims and goals of the company.
Vision and Mission of Tesco
The dream of the concern is to be loyal to its consumers so that they give value to the
organisation. The company wants to provide top quality and finest quality services to the
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community and to its employees as well (Reference, 2017). It will implement its modern and
innovative ideas by using their skills to get together the wants of the consumers. The mission of
the company is to produce and provide services that are superior in nature and they are aiming to
produce them by uniting all the members of the organisation.
Goals of the company
The corporation has their particular aim to meet the wants of the consumers
 To infuse the sense of awareness about brand among employees and consumers
 To engender new opportunities in the market
 To widen the customer base by using data
 To maintain environmental concepts in the company by producing eco cleaning products
Situational analysis
For efficient conduction of situational analysis, SWOT analysis will be conducted.
Strengths Weakness
 Biggest retailer of groceries in UK
 Diversified products and outlets
 Highest share in market
 Global presence
 Decrease in operating profits
 Low-cost strategy
 Financial scandals (Dudovskiy, 2017)
Opportunities Threats
 Expanding its business
 Strategic partnerships
 Joint ventures
 Online shopping
 Economic crisis and recession
 Competition with supermarkets like
Aldi, Walmart
Table 1: SWOT Analysis
(Source: Learner)
Marketing Strategy of Tesco
Brand image:
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Tesco tries to create a good place in the minds of the consumers by providing superior quality
and trust worthy products that are worth for money. The company follows the policy of
“Everyday Low Pricing Policy” which provides the consumers with good value for money of its
products (Campaignlive.co.uk, 2016). They yardstick their own products by applying
comparatively cheaper prices than others to give a tough competition to its competitors. The
strategy of the business is framed in such a way that the brand image of the consumers is
maintained well.
Market segmentation
The company Tesco uses the process of segmentation and positioning its products to fulfil its
marketing objectives. By proper analysis of the market, it is seen that the company uses its
geographic segmentation to target the local as well as the international consumers (Goldring,
2015). It targets the age group of 25-45 while focussing on the demographic segmentation. The
behavioural segment focuses on the loyal customers as well as the first time users. The
psychographic segmentation targets both the middle class and upper class people of the society.
Target market
The company targets the local as well as international consumers of the market. The target
market has been designed depending upon the income level of the consumers and the frequency
of visit for fulfilling their demands (Loveland et al., 2015). The market will also capture the
demands of the new users and their demands shall be satisfied by the business.
Marketing mix
 Product: Dealing in premium retailing segment, the corporation has launched products
based on the needs and demands of the consumers. The company is planning to develop a
product that is a eucalyptus cleaner which will be made of natural ingredients and such
liquid will be supplied in bottles that are totally eco friendly and contains mere amount if
plastic.
 Price: The Corporation, Tesco specially focuses on the consumers who will be able to
meet the expense of its products or are their loyal buyers. The company is planning to
keep the price as low as £2 that will be attracting the consumers at large. It is also
offering 10% discount on its labelled price to the first 100 consumers of the product
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(Rahman et al., 2016). It is keeping the price of the product low than its competitors to
grab the target market.
 Promotion: The Company uses social media, print media and other forms of platforms
for promoting their goods well. The company is also using public relations, endorsements
and e-marketing for promoting its product in the market.
 Place: The business has their outlets in the various areas of the UK. The head quarter of
the business is positioned in Hertfordshire, UK. The company is planning to spread its
new product in its other branches of Japan, Mexico and many other countries to capture
the market of that country.
 People: The Company is depending on its expert and skilled employees to produce the
product with efficiency (Amyx et al., 2016). It is making an efficient co-ordination with
all the departments of the organisation so that finest quality product can be provided to
the consumers.
 Process: The Company depends upon its manufacturers, dealers and consumers to
provide best quality product and service to its consumers (Rahman et al., 2018).
 Physical evidence: The Company has their bodily outlets in many parts of the world.
The company provides the patrons with various services and has expanded their branches
in various developed as well as the developing countries of the world.
Action Plan
Objectives Tasks Success criterion Evaluation Time
Improving brand
awareness among
consumers and
employees
Engaging
consumers
Connecting with
consumers on social
media
Help organisation
develop brand
awareness
2 weeks
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Increase consumers
in outlets
Increasing
consumers
To attract new
consumers
Help consumers
engage with the
company
14 weeks
Maintain the
concept of eco-
cleaning products
To encourage eco-
friendly ideas
Limiting production
of nature harmful
products
Environmental
sustainability will
increase
120 weeks
Table 2: Action Plan
(Source: Learner)
Analysing and monitoring performance
The monitoring strategies should be adopted by the company for efficient management of the
marketing plans as follows:
 Analysis of sales- The trend in the volume of sale scan be used by the managers of Tesco
to take decisions about the plans. It also helps to identify market trends and opportunities
for the company to perform well. The action plan will help the company to compare
previous sales record with the present based on present market, price and demand.
 Analysis of market share- The managers of Tesco calculates the market share of the
company to determine the target market. It helps the managers of the company to
compare the financial records and information of more than two periods. By applying the
new plan, the market share of the company will increase by 10% (Tesco plc, 2018).
 Efficiency Ratio- Tesco uses the efficiency ratio to understand the capability of the
corporation to make use of its assets for earning profits (Tesco plc, 2018). The company
can use working capital ratio to find out the capability of the business to utilise its
possessions to disburse back its amount overdue. The total assets ratio helps Tesco to
measure the quantity of possessions of the corporation in respect of the yield of the
company.
 Cost-profitability ratio- Tesco will use this scheme to monitor the financial plan of the
company. The company uses the net profit and gross profit ratios which helps the
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company to compare the productivity and the earnings of the corporation over more than
two periods.
Conclusion
The marketing mix strategy of the Tesco has helped the company to meet the demands of the
consumers successfully. The company should overcome their shortcomings to compete with its
competitors in the market. The issues faced by the company have been solved effectively by
using the 7P’s of marketing and by comparing with Sainsbury. The marketing plan devised by
the company and its constant monitoring will help the company to perform well in the
competitive marketing scenario. The new product launched by the company will be successful if
the shortcomings faced by the company during such process are overcome soon. The problems if
removed by the company will help the company to succeed in the market.
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