Detailed Analysis of Tesco's Marketing Management Report

This report provides a comprehensive analysis of Tesco's marketing management. It begins with an introduction to marketing management and its importance, followed by an overview of Tesco's background, market positioning, and unique selling proposition (USP). The main body of the report delves into internal and external factors affecting Tesco, including a SWOT analysis and a PESTLE analysis, assessing political, economic, social, technological, legal, and environmental factors. The report further examines the 4 Ps of marketing (Product, Price, Place, and Promotion) as applied to Tesco, providing insights into its marketing strategies. The report concludes with a summary of findings and references used.

MARKETING
MANAGEMENT

Table of Contents
INTRODUCTION.......................................................................................................................4
MAIN BODY...............................................................................................................................4
Background of the company, positioning of market and USP of the company.................4
Internal and external factors...............................................................................................6
4 P's of Marketing ............................................................................................................11
CONCLUSION..........................................................................................................................13
REFERENCES..........................................................................................................................14

INTRODUCTION
Marketing management is the systematic process of understanding business activities
to formulate effective strategies to increase sales of business organization. Marketing focuses
on customers their needs and wants so that business can increase their satisfaction and increase
the productivity in market to achieve their objectives. Marketing management help business to
operate all the activities and analyse strategies of competitors to understand market trends and
attract the customer to increase consumer base. This also emphasis on the pricing strategies of
the products and services to increase the customer satisfaction. Marketing management also
ensures creativity and innovative ideas to increase the efficiency of products and services
which help to increase the sales and also increase the customer base. With the help of different
strategies customers are divided into various segments. This will help to target and position
the products in the market with effective penetration. These strategies will also help to expand
business and increase their opportunity to be more effective in market and achieve objectives
of company which is increasing sales, profit margins and customer satisfaction.
This report has highlighted marketing strategies of Tesco which also helped to resolve
the challenges to increase their market share. Tesco is a retail giant which provides groceries
and household goods to its customers. The company was established in 1919 in London, UK
and it is third largest retail company in the world. The main objective of this report is to
identify all the factors to determine organic food products which is new product of Tesco In
the retail industry which will increase the marketing efficiency of the company, so that it can
improve customer satisfaction and make more loyal customers.
MAIN BODY
Background of the company, positioning of market and USP of the company
Background of the company-
Tesco is a multinational company which is a British originated trade company. It deals
in consumer goods such as groceries and merchandise goods. Headquarters of the company is
situated in Welwyn garden city, Hertfordshire, England UK. It is the third largest retailer in
the world according to their gross revenues and they are on the ninth position if the position is
evaluated is on the basis of revenues which are gross. They have established their market
across seven countries across the world which also covers a vast area of Asia and Europe. The

company is considered as the leader in the market among the sector they deal in, and
approximately have more than 28 per cent of share in market. The company was founded 101
years ago by Jack Cohen who started it at a small level in the form of stalls. Till 1939,
company captured a good share in market and they expanded their operations by opening 100
shops over the country. The company is also listed under the stock exchange of London. Tesco
had capitalization of market and the value of that capitalization was around 18 billion Euros
which gave the company the rank of 28th position on stock exchange. Also they are a
constituent of FTSE 100 (Johnsen, 2018).
The retail industry includes shops, department stores, supermarkets, market stalls,
door-to-door sales people and internet retailers. Overall this industry has contributed 381
billion Euros in the economy (Chonko and Hunt, 2018)..
Positioning of Tesco-
Positioning helps the company to attract the right audience and target them after
evaluating the forces of market in an efficient way and target the right segment of customers.
Company uses a wide varieties of strategy for positioning such as
Competitor Analysis-
Basis Tesco Morrison
Share Price Share price of Tesco is
powerful but they faced some
scandals which has reduced it
from 3.6 p which has affected
the market value of the
company by 300 million
pounds (Järvinen and
Taiminen, 2016).
Morrison offers a less variety
of products to their consumers
which did not give the
customers the experience that
they get from Tesco. Apart
from this company does not
offer their products online
because of which the their
ratio of earning is 9.73 as
compared to Tesco whose rate
of earning is 10.89 (Foroudi
and et.al., 2017). .

This table helps to understand that investors in the market are ready to invest more in Tesco as
compared to Morrison.
Tesco implements experiential positioning for the products which are related to health and
beauty. Apart from this they also use multi segment positioning as it helps to target their
audience with different products at the same time. (Tesco segmentation, targeting and
positioning 2016)
Unique selling preposition of Tesco-
USP of Tesco is to crate and offer value to their customers. They treat their consumers
the way they want to be treated. Customers prefer Tesco because they serve with exceptional
experience in any condition. Tesco is known for gaining the position of becoming the largest
retailer in UK. Company has gained some serious presence of brand in the market. They
company gained the reputation in the market not because of their diversified portfolio or less
prices but instead they earned it by focusing on creating the value for the customers.
(Gummesson, 2017).
Internal and external factors
SWOT Analysis
Strength-
The biggest strength of Tesco is that they have earned the position of leading retailer
which deals in grocery and is number one supermarket in the country. Overall sales and
revenue of the company is higher in Britain as compared to other chains of supermarket which
are dealing in the same industry. They have more than 28 per cent share in the market which is
most and more than their competitors in the market (Tesco SWOT Analysis 2019). Recently
the company has gained the position of becoming the most popular among other business in
Ireland. The company has established their presence in the market globally and they have
more than 6800 stores which is situated in 14 countries. Earlier the company had huge amount
of market share in Europe and North America and now they have extended their share in
Asian markets as well. A decade ago company had 3751 stores in the market and now they
have 6966 stores all over the world which has shown how much progress they have made over
time. This is also helping them to generate more amount of revenue because they are adding
more stores every year which is increasing their overall strength. Company has opened

different types of stores for different type of consumers and products such as Tesco home plus,
Tesco metro, Tesco Extra, Tesco Express, One stop and Tesco superstores. This has made
their portfolio diversified . Tesco is a established brand in the market which states that they
have the potential to achieve market growth.
Weakness-
. After Brexit performance of the company is adversely affected. The financial profits
of the company have also been affected due to their high debts and liability they have on credit
card. The pricing strategy of the company has made themselves the leader in the market but it
is also the cause of reduction in margin of profit. According to less profit margin there is no
potential market growth in which company can enter or expand. This is the reason for lack of
market attractiveness for Tesco.
Some of the stores that the company has in different markets are not performing up to
the mark and the reason behind that is they didn't conduct a research of market so that they can
figure out that if the market they are entering is viable or not (Pasquier and Villeneuve, 2017).
Company got into a controversy as they suddenly stopped their scheme of club card without
giving any kind of notice to their customers which made the customers very angry and the
company lost many loyal customers because of that (Kotabe and Helsen, 2020). If company
continues their strategy of pricing then it is difficult for them to maintain potential growth in
market
Opportunities-
Tesco has come up with a new brand which goes by the name Jack's which is also a
new discounted store and it has achieved rapid growth in the market. They have the scope to
achieve more growth in market through this brand and compete with their rivals such as Aldi
and Lidi. Company can come into partnership with reputed companies so that they can
improve their image in market. It will be a benefit for the company as it will add more
products into their portfolio and get more sales. Company has potential market attractiveness
to enter into new markets such as Indonesia, South Africa so that they can achieve growth in
the market. Company can upgrade their method of selling goods and that is to take their
operations online with that they must offer them the benefit or service of home delivery of
products. Company has many stores in different countries but they have the scope to expand

their business which are emerging such as Turkey, Indonesia and Turkey and company has
high potential market growth (Ellram and Murfield, 2019).
Threats-
The company was accused of offering products to consumers under a fake name of
farm of which was Wood side Farms to be exact. They were also marketing their products
because of which they had to face lawsuit which is a threat for the company. The situation of
Brexit is another threat for the company because it will affect all the factors such as political,
economic which will affect the business of the company. Apart from this position of the
company is also under threat because of their competitors such as Aldi and acquisition of
ASDA with Walmart. Factors such as regulations of government, matters regarding tax and
legal aspects and credit factors can put the company under threat (Quelch, 2017).
Pestle Analysis
Political Factors-
 These factors are concerned with the forces imposed by the government and the
barriers that may affect the business of the company.
 It includes rate of taxes, stability of the country in which they deal in. if country
government support in trading with companies then it enables in business to expand in
other countries.
 In order to assess the potential of market, factors such as the forces imposed by
government needs to be considered. After the referendum of Brexit it has been difficult
for Tesco to trade in EU countries (Shiu, 2017).
 The situation of Brexit is risky for the company as it will bring instability of political
factors in the country and decisions which will affect the growth of business.
Economic Factors-
 These factors are concerned with rate of inflation, level of employment and rate
of interest in the country. These are one of the most important factors that the
company needs to keep in mind because the growth of business depends on
these factors. The company must be aware of the factors which can affect the
business such as changes made in policies, changes in the rate of tax.
 These factors will leave an impact on availability of finance and may reduce
the sales of the company. It has been observed that even after expanding their

operations into international markets most of the income they generate is from
the market of UK where company has share of around 30 per cent.
 More than 50 per cent of exports of the country goes to EU and due to Brexit
there has been changes in the barrier of trade which will affect Tesco to work
up to their potential so that they can achieve market growth. Increase in rate of
taxes will increase the revenue of the company but it will decrease the level of
profits for the company.
 The hit on economy has affected the level of income of people residing in the
country which has made the company to shift their focus on advertising those
brands which are valuable for the consumers rather than those which gives
luxurious fell to the people.
 Due to Brexit the potential market growth in the retail industry is not possible
because of the change in policies between EU and UK which can affect the
market growth of the company in long run (Zimmerman and Blythe, 2017).
Social Factors-
 These factors are concerned with values, culture and belief of people. In order to
satisfy the needs of people consumers Tesco needs to offer them the products which
are updated according to the trends. Trends change constantly as people want
something new every time they go for shopping. Nowadays people are busy and they
don't have a free schedule to spend time on these things which is the reason that Tesco
has a return policy for their buyers so that they can shop with having a sense of
flexibility. This will help them to achieve growth in market.
 Company needs to offer goods and services which does not offend the value, culture
and beliefs of people of the country they are serving in. otherwise it will create another
controversy for the company.
 Many people are shifting towards healthy food which is important for the company to
keep in mind so that they can notice and cope up with the need of providing more
organic food into the market.
 Positive impact of this aspect will be that company will provide them with healthy
food products.

 There are still many people in UK who prefers unhealthy food over organic food which
may affect the growth of the company.
 It has been observed that the consumers of UK are loyal to one brand which is a
benefit for the company and to achieve growth they need to respect the culture of
people. If the level of income in the country increases then they will be able to comply
the trends in the market which will help the company to attract more customers in
market. (Moutinho and Vargas-Sanchez, 2018).
Technological Factors-
 These factors has helped the company to improve the level of experience for
customers and provide them with better service. These factors have created new ways
and opportunities for the company. Company has taken the help of RFID in order to
increase the experience of consumers while they are looking for products in the
store. . Apart from this they have developed an application to accept quick payments
from their customers which is known as PayQwid. Till now there are more than 500
stores of Tesco who are offering this service.
 The positive impact of these services is that they can be enabled in other countries
which will help them to increase the overall growth of market.
 On the other hand there are other companies in the industry which offers the same
services which may affect the growth of the company.
 Customer can link this with the club card of the company so that they can gain more
points of loyalty and redeem them at the time of making a purchase by the company.
Some of the people prefer shopping more conveniently and for that the company has
come up with the feature of scan as you shop check points. It helps in saving time and
the cost of labour as it is the customer who have to tag the products while shopping
(Olson and et.al., 2018). These factors will help the company to attract more no of
consumers in the market so that company can serve up to their potential and achieve
growth.
Environmental Factors-
 These factors are concerned with taking some steps or initiatives for the betterment of
society. Tesco encourages their consumers to shop from their online portal.

 The company has taken initiative that the people who deliver the goods will take small
routes in order to save fuel and while they are on the way they will recycle plastic bags
which are unwanted.
 Positive impact of this factor is that it will help to cope up with the needs of
environment and helps to improve the image in the eyes of people which will help
them to attract more people. By taking the help of CSR and other initiatives company
can enter into new markets.
 These factors will require a lot of cost and resources to change the methods which may
affect the growth of the company into the market.
 Apart from this company is also going to take help of renewable sources so that by
2030 they can rely on them to generate all of the electricity they consume by that. With
this they have also announced that they will reduce the use of carbon by 50 per cent. If
they are able to accomplish what they promised then they will be able to attract the
forces of market and these factors will help the company to survive with profitably
with which they can achieve market growth.(Chernev, 2018).
Legal Factors-
 These aspects are concerned with factors which is imposed by the government and if
the company does not follow the rules and regulations of the country then they won't
be allowed to serve in the country.
 Workers of the company has filed for a case against the company on the subject of
discrimination on the basis of age and gender.
 Apart from this workers of the company are not satisfied with the level of pay for
overtime. To settle the case of fraud of accounting the company had to pay 12 million
Euros. They need to work under the code of conduct for their food products so that
they can survive in the market and achieve growth (Haider and et.al., 2017).
 Due to these factors and the situation of Brexit policies of the country is changing
which may affect the potential market attractiveness.
 If the organic food offered by company matches the requirement of healthy standards
then it will be able to attract more no. of people in the market.

 If the company does not follow the guidance of health and safety Act then the product
will loose its sales in the brand and there will be no scope left for achieving growth.
4 P's of Marketing
Product-
Tesco is coming up with organic food. This is because of change in needs of people as
they are shifting to healthy food because they are more concerned for their health and
becoming health conscious. This will help the company to target new segment of people and
generate more revenue. Organic food which is going to be offered by the company will
include high quality and healthy ingredients so that people can notice it will they are
consuming the product. It will be beneficial for the people as it will help the people to
maintain a healthy diet. It will be easy for the company to market this product as they already
deal in the line of groceries which is an aspect of FMCG. If the quality of the product is good,
then they will appreciate it which will generate more sales of the product. The product will
have the benefit of the brand name and goodwill of the company. Product offered by the
company is going to be reliable. In order to acquire more share in market company has come
up with this idea to offer a product which is most valuable for them today and apart from this
company has all of the other items in their portfolio so they decided to execute this decision
and work on it to acquire more share and achieve growth in market. If this aspect works this
will help the company to improve their name and reputation in market and increase the level
of operating profit so that they can satisfy their shareholders (Deepak and Jeyakumar, 2019).
Price-
Although organic food is a bit expensive but Tesco offers their products at fair prices
and for the people who are price sensitive. It is considered as the most important aspect of
marketing mix because this aspect is the one which helps to generate revenue for the company.
Pricing of the product must be set in a way so that they can earn high profits as well as satisfy
the consumers. Tesco is not in a position to implement premium pricing strategy for their
newly launched product because according to the current situation their image in the market
has been affected which will affect people to buy out the product. Apart from this the strategy
of the company is to charge less price for their products which has made them the leader of the
market. Main aim of the company is to offer them valuable service which they are going to do
with this product. They even have a system of club card which will provide the consumers

with points which can be redeemed by them. This strategy will give them the boost to increase
their sale in the market (Shaw, 2016).
Place-
Company has many stores all over the world and one of the longest and effective
channel of distribution which helps the company to deliver their products on time. Product has
one more benefit and that is it will be delivered all the places where company deals which will
cover a vast area (Keegan, 2017). Another way that the company can sell their products is
through the medium of online channel. This channel will help them to offer their products at
low price and deliver their product more conveniently as it will be delivered to them at their
home. These are two mediums through which the company can sell their new products just
like their existing ones. Consumers can buy the products of Tesco from their stores as well as
through online.
Promotion-
There are many effective strategies that the company can use to promote their new
product such as offer a small sample with their groceries, sponsor events, conduct campaigns
of marketing, gives offer such as buy 1 get 1. All of these strategies will help the company to
gain the attention of people (Kotler and et.al., 2018). Strategies used by the company will be
sales promotion, advertising, discounted pricing etc. Consumers of the company already know
that they get their products at less prices and that also which is of the same quality which will
help the company to make the product successful. USP of the company is to offer products at
low price as compare to its rivals.
This product will help the company to be their strength in a way in which other
products cannot as it is going to live up the trend and if they follow all the safety and legal
measures of quality then the company will achieve growth in market. Weakness of the product
will be there are already a lot of companies which are offering this product and they have
established their market well enough in this sector. This product will create the scope for the
company to hit all the untapped market and target a new segment of people who want healthy
food. If the company is not able to make this product successful, then it will be difficult for the
company to maintain their operations and it will be a threat for them.