Comprehensive Marketing Fundamentals Report on TESCO Company

This report provides a comprehensive analysis of TESCO's marketing fundamentals, beginning with a company background and moving into internal and external analyses. The internal analysis includes a SWOT analysis, identifying TESCO's strengths, weaknesses, opportunities, and threats, as well as a VRIO analysis, evaluating the company's resources for competitive advantage. The external analysis employs Porter's Five Forces and PESTLE frameworks to assess the broader market environment. Additionally, the report touches upon STP analysis and product mix considerations. The impact of the COVID-19 pandemic on TESCO is also discussed, highlighting challenges and adaptations. Ultimately, the report aims to provide a detailed overview of TESCO's strategic marketing position and the factors influencing its performance.

Marketing Fundamentals

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Company Background.....................................................................................................................4
Internal analysis ..............................................................................................................................5
SWOT Analysis of TESCO company.........................................................................................5
VRIO Analysis............................................................................................................................6
External Analysis ............................................................................................................................8
Porter's five forces:......................................................................................................................9
STP Analysis and product Mix .....................................................................................................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing fundamentals refers to the description about fundamentals of traditional marketing
and also explains that what exactly marketing is. Marketing basically revolves around four
things i.e. product, place, price and promotion. There are three main approaches under
marketing which includes production, sales and marketing(Al-Msallam., 2015). On the basis of
these approaches, any organisation does marketing in order to attract large number of customers
and maintain a brand image into the market. Tactics and channels change but these are the
concepts around which everything revolves around and these are the principles that never get
change. TESCO is taken into consideration in the present report. TESCO is a general
merchandise retailer and British multinational groceries that is headquartered in Welwyn
Garden City, England. It is company which was founded in the year of 1919 by Jack Cohen as
group of stalls in Hackney, London. The report will cover discussion about internal and external
analysis of the TESCO company. In addition to this, it also covers discussion about the impact
that COVID-19 pandemic had on the chosen organisation. Moreover the report will cover
analysis about different frameworks with support of industry examples in order to identify
strengths and weak points of an organisation.
MAIN BODY
Company Background
TESCO is a retailer of multinational level and also leading in its stream which has more than
360,000 colleagues and focused towards serving consumers on the basis of routine level with
affordable, sustainable and healthy food. Company also support in terms of easier way of living
and enjoying a better quality of life as well(Appiah-Adu and Amoako., 2016). TESCO is
commercial store chain and the first European grocery and which has released its club card
system which means that shoppers get each point after every transaction. It is basically the third
largest retailer on the world wide basis measured according to gross revenues and the ninth
largest measured according to revenues. TESCO has expanded itself on the basis of worldwide
with its operations in eleven countries since the early 1990s. The company has many fields
where they provide their services such as such as retailing of books, clothes electronics,
furniture, toys, petrol, financial services, software, internet services and telecoms as well.

Internal analysis
An internal analysis refers to the detailed examination of company's internal components which
includes tangible and intangible resources, processes and assets as well(Baniya and Paudel.,
2016). (Cohen and et.al., 2019). This kind of analysis help the company's decision-makers in
order to identify accurately about the areas for growth and development as well.
SWOT Analysis of TESCO company
STRENGTHS: TESCO is the biggest grocery store in Britain and also have efficient
network of suppliers. It has also highest market share and dominates the UK market through
holding share of around 27%. The company has also hold multiple awards and also a largest
private employer in the continent of Europe. In the case of pandemic situation, it has to shift their
offline stores on the online basis and need to create strategies in order to attract large number of
customers on online basis.
WEAKNESS: TESCO has to face failure in the US and Japanese market and also
suddenly changed the club card without informing to their customers. Company's profit also get
seriously affected through high credit card debt. TESCO'S operational performance of certain
stores in some countries also get affected through the BREXIT and pandemic situation. When
company has adopted the low-cost strategy then this strategy is not beneficial for the company in
terms of earning profits on large scale.
OPORTUNITIES: TESCO has launched a new discount store by the name of Jacks and
it has been performing in a well mannered way. Company has also expanded itself in many new
emerging markets and it has business operations in fourteen countries. The new emerging
markets are Turkey, South Korea and Indonesia. In terms of growth, it has partnered with other
brands as well(Cortez and Johnston., 2017). The purpose of this kind of partnership is that they
can come up with better products and services in order to facilitate customers in a better manner.
Company has also provided a mobile app for the online shoppers which will give the facility of
home delivery due to which they can attract large number of customers on online basis. In this
pandemic situation, the new stores which has been launched and relationship with new emerging
markets in terms of business have to face downfall due to which they can't earn large amount of
profits.

THREATS: TESCO has to face threats in terms of certain scandals due to which its
performance and profits also get affected. Company has to face national economic crisis in terms
of their factors like credit, taxations, government rules and regulations as well. With effect of
BREXIT deal and pandemic situation as well has also affected company's performance in terms
of further growth and development. TESCO has its tough competitors so they have to come up
with new ideas and innovation in order to stand competitively into the international market.
So in the pandemic situation, TESCO has to face challenges and problems as well due to which
its profits and annual performance has also get affected on large scale(Dzwigol., 2020). Majorly
their offline stores have to face struggles and shifted themselves in on online basis in order to
maintain its position into the market.
VRIO Analysis
This analysis help in terms of organising business resources into appropriate manner and
also ideal categorising and assessing the company's resources.
Valuable: According to this analysis, it has been observed that resources of financial
field are most valuable because they act as support system in terms of investing into external
opportunities that has arises. Company's local food products are also valuable as they are highly
differentiated. Company's employees are also valuable because the employees are highly trained
and they have enough skills to do their work efficiently and this will lead towards more
productive output of an organisation. Company's patents are also valuable which will allow the
firm to sell its products without any competitive interference.
Rare: According to this analysis, it has been observed that resources of financial field
are mostly rare as these resources only possessed through particular companies in this industry.
Company's employees are also rare because the employees are highly trained and they have
enough skills to do their work efficiently and this will lead towards more productive output of an
organisation. Company's patents are also rare because of the reason that these are not available
in easier form and also not available with their competitors. (Kacmarek and et.al., 2019). The
company's distribution network also found to be rare according to this analysis because it is
required by their competitors that they need large amount of investment and only available with
few firms in the industry.

Resources Value able Rare Imitation Organisation Competitive
Advantage
Financial
Resources
Yes No Financial
instruments
and market
liquidity are
available to all
the nearest
competitors
Company has
sustainable
financial
position
Temporary
Competitive
Advantage
Pricing
Strategies
Yes No Pricing
strategies are
regularly
imitated in the
industry
Yes, firm has
a pricing
analytics
engine
Temporary
Competitive
Advantage
Brand
Positioning
Yes No Can be
imitated by
competitors
but it will
require big
marketing
budget
Yes, the firm
has positioned
its brands
based on
consumer
behaviour
Temporary
Competitive
Advantage
Global and
local presence
Yes Yes Can be
imitated by
competitors
Yes, it is one
of the most
diversified
companies in
its industry
Providing
Strong
Competitive
Advantage
Loyalty and
customer
network
Yes Yes Tried by
competitors
but none of
Company is
leveraging the
customer
Provide
medium term
competitive

them are
successful
loyalty to
good effect
advantage
Imitable: According to this analysis, financial resources found to be costly to imitate and
resources have been acquired through the company by prolonged profits(Lee and Sohn., 2015).
Company's patents are difficult to imitate because it has been observed that it is not allowed in
legal terms to imitate the patented product. The costly process for the company is that to get
resources of similar level and these need to be developed into positive manner. Distribution
network of the company are also costly to imitate which is identified by analysis of company's
VRIO. Competitors would have to invest an important amount if they are to imitate a similar
distribution system.
Organisation: It has been identified by the VRIO analysis of TESCO that financial
resources of the company are organised to capture value. In order to invest in the right places
These resources have been used in strategic form. Therefore, the resources proved to be the
source of sustained competitive advantage for TESCO. According to this analysis, the
distribution network of the company found to be organised. By ensuring that products are
available on all its outlets company has used this network to reach out to the customers. These
resources act as competitive advantage for the company.
With the pandemic situation effect, it has been observed that financial and local food
products were not found to be valuable because customers were focusing towards healthy food
products and due to this effect company can't perform up to the mark level. Resources which are
found to be rare are also affected by the pandemic situation because at that period of time
company is focusing towards cutting the cost that's why TESCO has fired certain employees in
order to save their cost. In this pandemic situation, distribution network and patents also get
affected up to certain extent because now consumers have various options to shop on online
basis. It was very challenging for TESCO company to organise financial and distribution
network resources in a well mannered way.
External Analysis
External analysis refers to the examining of industry environment of a company which includes
certain factors such as competitive structure, dynamics, competitive position and history as
well(Lussier., 2017). External analysis basically includes macroeconomic factors such as

political, social, economic, technological, legal and environment.
PESTLE analysis of TESCO
Political Factors: TESCO operates in various countries and it is one of largest retailer in
the world so company has to follow certain rules and regulations which ensures about the
compliance and safety of its products as well(Mohd Salahudin and Matsam., 2017). As company
operates in various countries so they have to keep an eye on the changing political circumstances
in all the countries it operates in. As UK is a very politically strong country but they have to face
BREXIT and US China trade war situations as well due to which it affects the country's political
situation up to a certain extent.
Economic Factors: It is necessary that TESCO has to keep an eye on the economic
changes that occurs in countries and these factors will affect its sales, revenue, distribution, profit
. It is important for TESCO company that to have awareness about the various taxation policies
in order to leverage the same for their own benefits. They have to also keep in mind that pricing
of the product also influence the sales. When economy is under pressure or in the influence of
inflation so they have to priced accordingly.
Social Factors: With changing period of time, people prefer buying in one go and gives
preference to the bulk buying. Products which are demanded by various kinds of customers also
depends on the social influence or societal influence. Choice of products also depend on various
cultural factors and these changes in trends of culture and societal influence among the upcoming
generations need to be assessed by the company and consumers need to be provided with
sufficient products to choose from.
Technological Factors: With changing period of time and to stay relevant into the
market, the company has paired up with Amazon Go to create technology for cashier less billing
in order to renationalise the way retail shopping is undertaken. With the effect of pandemic
situation, TESCO has make certain changes in their way of working and they have shifted their
offline stores on online basis. They have used certain apps and upgrade their website in terms of
technical manner so that they can provide their services into effective manner to their customers.
Legal Factors: The change in government policies directly affects the operations of the
company. In order to continue their smooth operations they have to follow local as well as
international market laws so that work can be executed into effective manner(Mohd Salahudin

and Matsam., 2017). Due to pandemic situation, TESCO has to amend certain rules and
regulations in term of operational performance of the company. For maintaining its reputation
into the international market, the legalities should be considered and followed into religious
manner. It is very quite expensive for the company to maintain its position when the company
has lost its credibility.
Environmental Factors: TESCO has taken various steps in order to improve the environmental
conditions and create a sustainable society as well. The company has recently launched its
phase to remove, reduce, reuse and recycle the plan. TESCO has also undertaken various
initiatives to remove and reduce all non-recyclable plastic to the minimal level(Newman and
et.al., 2015). In the overall manner due to pandemic situation, it has affected all the factors of
macro analysis due to which company has to face certain challenges and difficulties in order to
stand competitively into the market.
Porter's five forces:
This is a model which analyses and identifies the five competitive forces that shapes
every industry and help in terms of determining strengths(Ouedraogo and et.al., 2021). Porter's
five forces analysis has been frequently used to identify an industry's structure in order to
determine the corporate strategy. This model basically includes five forces of competitive nature
and it has been defined into following manner:
 Threat of new entrants: There are potential entrant in the market which are the major
source of competition in the industry. The size of major entrant plays a very important
role in terms of giving tough competition to others. Due to threat of new entrants prices
got slashed down and the overall profitability of existing players also get affected. New
entrants threat into the UK supermarket industry is very low because of its capital
requirements. TESCO need not to worry about the new entrants as it enjoys the new
economies of scale and also has its own core competencies.
 Bargaining power of buyers: This force not only influences the product's cost and
investment in certain circumstances but also affects the prices as well. It has been
observed that powerful buyers affect the producers to offer better quality that involves
investment and cost. The bargaining power of buyers in country of UK is low as they are
not organised into proper way and it is unlikely that they can be better off if they
switched to competitors such as Sainsburry's and Asda.

 Bargaining power of suppliers: Suppliers also have some influence on the bargaining
power over the firms through threatening to increase price or degrade quality as well.
TESCO approximately works with 2500 suppliers in UK country and many more with
another countries as well(Pröllochs and Feuerriegel., 2020). The company basically
negotiates in a very hard manner with suppliers to increase its profit margins.
 Threat of products and services substitutes: Threat of substitutes plays a very
important role in terms of creating tough competition. Substitute products are those
products which are offered at reasonable price along with its high quality. Company
basically offers wide range of products to its customers and it also sells majority of the
products. It can be understood through an example they have sell out both butter and
margarine so its easier to argue that threat of substitute products and services for the
company is mostly irrelevant.
 Rivalry amongst competitors: Rivalry amongst competitors plays a very important role
in terms of creating competition. It can be shown in number of ways such as price
competition, new introductions, advertising quality, increasing consumer warranties etc.
TESCO has various number of powerful customers in the UK country. These competitors
spends heavily on advertising and other marketing techniques(Scroggins., 2015). As
TESCO is market leader in its sector so it feels intense pressure from their nearest rivals.
Price-wars launched by the companies are affecting company's profit margins.
With support of porter's five forces model, the company has enhanced its performance by
identifying where the power lies in a business situation. It is also helpful in terms of identifying
its strength points and also about competitive position into the market. In this way, organisation
performance can be enhanced.
STP Analysis and product Mix
STP analysis: Segmentation: TESCO has segmented the market on certain bases which include
geographic, demographic, psychographic and behavioural aspect as well. Geographic basis
division basically includes region and density as well. Demographic basis division basically
includes age, gender, income, occupation, education and social status as well. Psychographic
division includes lifestyle and personality. Behavioural division basically includes occasions,
user status and attitude as well.
Targeting: There are certain customer segments which have been targeted by TESCO company.

They have targeted around thirteen countries along with rural and urban areas of all age
categories (van den Berg and Visser., 2019). They have basically aim for low and middle
income category people so that customers can easily afford products and services of TESCO
company.
Positioning: TESCO has used wide range of positioning strategies in order to attract target
customer segment. It includes functional positioning, symbolic positioning, price positioning,
experiential positioning and multi segment positioning. There are also other positioning
strategies which has been used by TESCO company such as user positioning, product class
positioning, competitor positioning etc.
With respect to pandemic situation, company has to made certain changes in terms of
positioning, targeting and segmentation as well up to a certain extent.
Product Mix: This is a model which is centred around product, place, price and promotion
within the business.
Product: TESCO has provided wide range of products which include food, clothing,
electronics, financial services etc. Company also provides wide variety of choice which ranges
from brand, regional produce, type, international cuisine and other choices as well. In context to
pandemic situation, they have included new variety of product line in their wide range of
products. The new product line basically focused towards healthy food products which help
consumers in terms of maintaining their health into appropriate manner.
Place: TESCO stores has been wide spread in all over the world and it employs two main
channels of distribution for its products and services-offline and online. Their offline forum
stores has stores of different kinds- TESCO express, TESCO Extra, TESCO Metro, TESCO
Compact, TESCO home plus and TESCO Superstore(Visser and et.al., 2021). In context to
pandemic situation, they have focused towards their online stores and aims to create strategies in
order to attract large number of customers.
Price: TESCO has maintained its low pricing strategy without reducing the quality of its
products or running itself in loss. In order to achieve cost advantage to its customers and keep
them satisfied they uses a number of measures which includes economies of scale. TESCO uses
the club card system to allow its customers to gather points for its purchases which can be
converted into money at a later stage. This act as an excellent price promotional strategy of
providing loyal customers with extra discounts.

Promotion: The company has the biggest advantage that is its low prices and it sets apart
from supermarket chains. The major objective is always been towards to improve its brand
image by reducing costs while maximising its profits. Company has used television
advertisements in order to offer promotional discounts, sponsors charitable events, uses point of
sale strategies and so on(Winegar and Bistline., 2020). With context to pandemic situation, in
order to maintain its strong image into the market they have used certain social media platforms
and take support of different technologies and apps to attract large number of customers.
CONCLUSION
The above stated report concludes that marketing fundamentals plays a very important
role in terms of promoting its products and services of an organisation. It has been concluded
that it is necessary for an organisation to conduct internal and eternal analysis so that decisions
can be taken on a faster pace manner. Internal analysis includes certain frameworks such as
SWOT aalysis, Vrio framework etc. While external analysis also include certain frameworks
such as PESTLE analysis and porter’s five forces analysis etc. These frameworks help in terms
of identifying strengths, weaknesses and futuristic approach for an organisation. It has been
determined that specially in the pandemic situation there are many businesses who got affected
and have to face negative trends into the international market. There were companies who have
to face challenges, problems in order to stand competitively into the market. So these
frameworks act as support system in order to identify the loop holes of an organisation so that
they can stand differently and strongly into the market.