Marketing Report: Tesco's Strategies and Environmental Analysis

This report provides a comprehensive analysis of Tesco's marketing management, focusing on key concepts, theories, and models to guide the execution and development of its marketing strategies. It delves into Tesco's use of the marketing mix (7Ps), including product, price, place, promotion, people, packaging, and placement, and how these elements are applied to cater to customer needs and drive revenue. The report further examines Tesco's internal strengths and weaknesses through a SWOT analysis, highlighting its market share, diversified offerings, and supplier relationships, alongside weaknesses like lower operational profits and low-cost strategies. The external environment is assessed using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors that impact Tesco's operations. The report also includes recommendations for actionable marketing strategies and tactics to improve Tesco's market position, addressing challenges such as competition and changing consumer preferences. The analysis provides a detailed understanding of Tesco's market situation and its approach to adapting to a dynamic business environment.

Marketing
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Understanding of key concepts, theories and models in marketing in order to guide the
execution and development of marketing strategies...................................................................3
TASK 2............................................................................................................................................7
Understanding external environment and its impact on the marketing strategies in an
organisation.................................................................................................................................7
TASK 3............................................................................................................................................9
Understand the market situation which is faced by an organisation...........................................9
TASK 4..........................................................................................................................................12
Recommend and justify actionable marketing strategies and tactics for an organisation.........12
CONCLUSION..............................................................................................................................14
REFERENCES:.............................................................................................................................15
Books and Journals...................................................................................................................15

INTRODUCTION
Marketing management is the strategy which organisations use in order to focus on their
applications of marketing activities, methods and techniques. It assist organisation in finding
various opportunities so that they can increase their profit profitability by satisfying their
customers. It involves a study of market areas so that demands and needs of targeted audience
can be analysed in effective manner (Marinchak, Forrest and Hoanca, 2018). This report is based
on Tesco which is British retail company. It was founded by Jack Cohen in 1919 and
headquartered in England, UK. It offers various products like software, furniture, food, clothes
and nutrition to their customers and covered large market area. This report will include concept,
theories and models in marketing in order to guide the execution of marketing strategies.
Complexity of competitive environment is analysed and its impact on developing effective
marketing decisions and strategies in organisation is included in this report. skills are mentioned
to analyse marketing situations and problems and recommendations to improve their current
situation.
MAIN BODY
Understanding of key concepts, theories and models in marketing in order to guide the execution
and development of marketing strategies.
Organisations uses various types marketing strategies so that they can distribute their
products and services in different regions of market. Different strategies assist in increasing their
brand awareness in their targeted market which assist in higher revenue generation (Kim and
Moon, 2021). Tesco uses marketing mix which is a business model formulated for focus on
comprehensive marketing plan. This marketing tool assist organisations in achievement of their
objectives in effective manner. Marketing mix involves 7 P's which focus on product, price,
place, promotion, people, packaging and placement. These can be discussed as follows in context
to Tesco:
Product: This refers to the elements which company offer to their targeted customers so
that they can satisfy their needs and wants. It can be tangible or intangible including products,
ideas, services or experiences. Tesco analyse the market environment so that they can identify

the requirements and needs of customers so that they can offer products in customized manner.
This will increase the engagement of customers in an organisations which results in higher
revenue generation. They involve innovative and creative ideas in their products so that they can
attract large number of customers in cost effective manner. Tesco maintain the quality and
standard of their products so that they can establish their good brand image in market.
Price: This element of marketing mix refers to the value and amount which customers
willingly pay against the products and services. Organisations generate their profits by setting
prices of their products and services (Gigauri and Djakeli, 2021). Tesco ensures that they offer
affordable prices to their targeted customers so that they can engage them for longer period of
time. Offering lower prices can help them in increasing the value of their organisation. Tesco can
easily compete with their competitors by setting prices of their goods and services which justify
their quality. They uses economies of scale in their production and manufacturing process so that
they can reduce the cost which directly increase their profitability.
Promotion: Organisations use marketing communications so that they can promote their
products in the market. It is important to communicate with targeted audience so that they can
share features and benefits with their customers which develop their interest towards
organisation. Tesco uses various methods for promoting their products including direct
marketing, advertising, sales promotion, etc. brand awareness can be easily in creased with the
help of best appropriate promotional tool. It enhances the sales and profitability of an
organisation which is positive factor for an organisation. Tesco also uses online promotions with
the help of digital platforms like Facebook, Instagram, YouTube and Twitter. It engages
customers by presenting products and services in more attractive manner.
Place: This marketing mix factor suggest where organisation offer their products and
services. It is essential to select the place which is highly accessible to the targeted customers.
Market coverage plays important role in revenue generation of an organisation which should be
majorly focused by the managers of organisation. Tesco formulate strategic decisions for
establishing their locations so that it become easily reachable to their targeted audience.
Warehousing, transportation, logistics and inventory management are the part of place which
should be properly managed. Purchasing pattern should be analysed by the Tesco so that they
can decide whether they have to offer products in offline market or through online market.

People: It includes the related people of an organisation which includes their employees,
suppliers, customers and other stakeholders. It is essential to formulate strategies which provide
benefits to all the stakeholders of business (Cornwell and Kwon, 2020). Tesco ensures that they
hire and select talented and skilled employees for their organisation so that they can improve
their offerings. Right people can increase the revenue generation in effective and efficient
manner. They can reduce wastage in the organisation by carrying out correct operations which
are best suitable for their organisation. Managers of Tesco provide trainings to their employees
so that they can gain abilities, talents and experiences.
Packaging: This element plays major role in sale of products as it creates first impression
on the mind of customers. Packaging of products should be carry out in effective manner which
include labelling and branding in appropriate manner. Tesco ensure that their packaging include
all the relevant information by maintaining the attractiveness of that they can develop the interest
of their customers. Improvement and up gradation in the packaging assist organisations in
increasing their profitability in cost effective manner.
SWOT analysis
This refers to the strategic management technique which assist organisations in
identification of their internal factors. It includes their strength, weaknesses, opportunities and
threats. Tesco can effectively compete with their competitors by understanding their internal
factors in appropriate manner. The SWOT analysis of Tesco is mentioned below:
Strength Weaknesses
Market share: They have captured large
market share in all over world which is their
biggest strength. Tesco is one of the largest
retail and grocery organisation which is the
priority of large number of customers (Spais
and Paul, 2021). They offer products through
online and offline methods which assist them
in enhancing their reachability and
accessibility among the customers.
Diversified offerings: Tesco offers wide
variety of products to their customers including
Less operational profits: In order to offer
services and products in lower prices Tesco
faces challenges in making higher profits. They
offer products on lower margin of profits
which affect the rate of revenue generation.
Due to lower operational profits they may
sometime faces issues in capturing large
market share which is disturbed due to lower
profitability.
Low cost techniques: It is analysed that Tesco
opt for lower cost strategy business model

food, clothes, furniture, financial services and
many more. It help them in acquiring large
market place which assist in higher revenue
generation and profitability. They can
effectively satisfy the requirements of their
targeted customers by analysing their demands
and needs which is their strength.
Huge network with suppliers: Raw material,
equipments and other resources can be
gathered with the help of suppliers in an
organisation. Tesco maintains good and
healthy relationship with their suppliers which
help them in providing resources in best
possible manner. It can save their lot of money
and cost which increase their budget for
production and manufacturing of higher quality
products.
which affect their operations. They have to
formulate strategies which can improve the
cost of products and services along with
improving their rate of profits. Proper policies
and guidelines should be followed by an
organisation so that they can maintain
uniformity in their revenue generation.
Weak operating performances: It is
important for an organisation that they
regularly track their performances which assist
in maintaining quality and standard of products
and goods. Tesco sometime do not focus on
operating performances in some of their stores
which results in negative outcomes. They
should analyse the business environment and
performance of their employees side by side so
that they can establish good brand image in
market.
Opportunities Threats
Joint venture: Tesco have established their
goodwill and positive image in market which
assist them in attracting various organisations
for joint venture. Local businesses can
effectively promote their products and business
in market without involving large capital
investments. It also reduces competition level
from the industry which is one of the best
opportunity for Tesco.
Online presence: Tesco started to offer
products and services through online websites
Competition: New emerging competitors on
regular basis is a threat for Tesco which affect
their sales and profitability. Supermarkets like
Aldi, Carrefour and Walmart are the large
competitors of the Tesco (Labanauskaitė, Fiore
and Stašys, 2020). They offer relatedly same
products which is negative factor for the
company.
Changes in preferences: Regular fluctuations
of taste and preferences of the customers
results in lower sales of products and goods. It

and applications so that customers can shop
according to their preferences. They also offer
services of home deliveries which is more
convenient for their customers. It increases the
engagement of their targeted audience which is
beneficial for an organisation.
Expansion in new boundaries: Tesco is
planning to expand their business in new
boundaries which help in coving large market
area (Heggde and Shainesh, eds., 2018).
Expansion of operations results in better
growth and development.
becomes challenge for Tesco to adapt changes
in short period of time because it involve
planning and capital investment. It is essential
to offer products according to demands and
requirements as it assist in enhancement of
engagement rate of customers.
Government policies: Some of the policies of
government results in lower profitability of
Tesco which is threat factor. Taxation policies
of some the countries affect the operations
which results in issues and challenges.
TASK 2
Understanding external environment and its impact on the marketing strategies in an
organisation.
In order to capture the large market share in effective manner it is important to analyse
the external environment of particular place. Managers of Tesco perform environmental scanning
so that they can formulate strategies for overcome the challenges and threats. It is essential that
organisation research the elements of market so that they can improve their performance and
productivity. Tesco use PESTLE analysis so that they can understand the situation of external
market area which is as follows:
Political factors: This involves factors like trade restrictions, labour laws, environmental
laws and tariffs. All these factors collectively affect the operations of an organisation which
should be analysed before offering products and services (Mehrabi, Coviello and Ranaweera,
2019). Tesco is headquartered in UK which is positive factor for them as they can enjoy political
stability over there. The governmental policies of UK are very business friendly which assist
them in performing their market strategies in effective manner. Stable political business
environment provides various opportunities which assist in attracting large number of customers
in best possible manner.

Economic factors: Operations of organisation are highly affected by economic factors
which include employment rates, exchange rates, interest rates, inflation, etc. Tesco have to set
their prices according to the income level of their customers so that they can afford to buy their
products and services. Inflation rate and employment rate of UK is acceptable which help Tesco
in capturing the large market area in effective manner. Business can grow effectively because
large number of customers are located in Tesco which is beneficial for Tesco. They can easily
diversify and internationalise their business because of the supporting economic factors.
Social factors: Trends and social changes in the market affect the profitability and sales
of an organisation. Social factors such as lifestyle trends, demographic considerations, attitude of
customers and consumer beliefs should be analysed by Tesco on regular basis (D'Attoma and
Ieva, 2020). It is important to provide goods and services according to the social considerations
so that organisation can generate higher revenues. Tesco maintain quality and standard of their
products so that they can engage their customers in effective and efficient manner. Current
market trends should be evaluated with the help of different market research so that products can
be offered in desired manner.
Technological factors: It is essential to upgrade and alter the operations of organisation
so that they can increase their brand value in market. Various factors like technological
infrastructure, automation, cyber security and research & development are major part of an
organisation (Salwa and Sudarsan, 2018). It is essential to adapt necessary changes according to
the advanced technology so that competitive advantages can be achieved in appropriate manner.
Tesco should use advanced tools and techniques in their production and manufacturing processes
so that they can acquire large market area appropriately. They modify the pattern of shopping by
establishing online presence with the help of technology. It helps them in increasing the
profitability to great extent by providing ease to their customers.
Legal factors: Factors such as industry regulations, customer protection law, permits and
licences, health and safety laws comes under legal factors (Pedersen, Ellegaard and Kragh,
2020). The demand of products and goods are based on the legal factors of the country where
business is operating. Business policies of Tesco are formulated according to the legal laws
which help them in eliminating challenges and increasing the sales. All the legal formalities
should be effectively fulfilled by Tesco so that they can carry out smooth operations. They pay

salaries and wages to their employees according to the prescribed law of government so that they
can enhance their brand value in required manner.
Environmental factors: Different factors such as climate changes, carbon footprints,
natural resources and weather create impact on the operations. It is important to analyse the
environment so that fluctuations can be minimized in appropriate manner. Tesco follow all the
rules and regulations which are mandatory to maintain the quality of environment so that they
can maintain profitability in effective manner. They use advanced techniques and tools which
reduces wastage during production process. It assist them in eliminating the impact of carbon
footprint which essential for making the environment positive for all. They involve recycle and
reuse methods so that they can effectively save resources.
TASK 3
Understand the market situation which is faced by an organisation
It is essential to analyse and understand the market environment so that organisation can
gain competitive advantages. In order to increase the sales in best possible manner businesses
have to carry out survey so that they can understand the target market and audience. Marketing
strategy which is used by Tesco to understand to whom to offer the products and services, they
use STP analysis. It stands for segmentation, targeting and positioning which assist in
personalization of services. STP analysis which Tesco uses in their operations is mentioned
below:
Segmentation: This factor helps organisations in separating their customer base
according to different criteria (Izzudin, Suja’i and Salim, 2022). Different characteristics and
traits of customers should be analysed by the managers of Tesco so that they can different them.
It helps organisation in maintaining their budget of production and manufacturing of products
and goods. Different factors which Tesco use for segment their market are discussed as follows:
 Demographics segmentation: it includes various factors such as region, province,
country, state, etc. Tesco manufacture products according to the demographic factors so
that they can satisfy the needs of their audience in best possible manner.
 Demographic segmentation: It segment the potential customers according to their
gender, age and educational level. Tesco offer products for all the demographics as they
manufacture large number of variety products and services.

 Behavioural segmentation: This factor includes that organisations should divide
customers according to the rate of interaction between them. Tesco interact and
communicate with their customers so that they can understand their taste and preferences.
 Psychographic segmentation: Potential customers are divided on the basis of their
activities, lifestyle, opinions and hobbies. It assist Tesco in offering customized products
which are necessary for capturing large market area.
Targeting: This is the next step in the identification of market which analyse the
segments which have classified by an organisation. Evaluation of customer attractiveness should
be evaluated by Tesco so that they can find their targeted audience. This can enhance their
profitability in best possible manner which results in growth and development of an organisation.
Most profitable segment should be targeted by an organisation so that they can generate higher
revenue. Tesco can identify most appropriate segment for their offerings on the basis of different
factors which are mentioned below:
 Profitability: Managers of organisations should calculate customer lifetime value so that
they can understand the rate of profitability. It may be a critical task but helps business in
generating higher revenues (Wongkitrungrueng, Dehouche and Assarut, 2020). Tesco
should evaluate their profitability ratio so that they can offer products in more effective
manner.
 Reachability: It is important to identify the customer acquisition cost so that organisation
can understand how can customers access to their products and services. Tesco should
establish their stores in most convenient locations so that they can increase the number of
customers on regular basis.
 Size: Future growth of an organisation is based on the size of segment which is classified.
Tesco manufacture and offer their products to larger group of potential customers so that
they can enhance their sales.
Positioning: This is the last step in researching target market and audience which allows
organisation in offering their products and services to the segmented and targeted customers.
According to this organisation have to differentiate their products from their competitors by
adding unique features and values to them (Johnston and Cortez, 2018). Tesco can attract large
number of customers by positioning their products at right place in the targeted market. There are
three types of positioning which organisations can use in their operations are as follows:

 Symbolic positioning: This type of positioning can be defined as lifestyle positioning
which includes customers who prefer luxury products. It can enhance and improve the
self image, ego and belongingness of customers.
 Functional positioning: It suggest that organisation have to focus on the problems and
issues of their customers. Tesco have their separate department of customer care which
resolve doubts and issues so that they can improve the experience of their customers.
 Experimental positioning: This type of positioning describe the emotional connection
between products and customers. Tesco try to maintain emotional connection with their
customers by offering customized products to them.
Marketing strategies of Tesco
In order to increase the number of customers, Tesco uses low prices strategy which
results in enhancement of sales. It is important to maintain the quality and set prices according to
that which help in higher profitability (Suh and Chow, 2021). They also uses various types of
print media to advertise their products and services which increase the brand awareness in
targeted market. Promotional tools should be used by them which is most appropriate for the
business environment. Tesco uses various social media platforms which attract customers in
desired manner. Promotional activities helped a lot Tesco in enhancing their operations
throughout the country. The well positioned image of Tesco help the in retaining customers
which assist in better growth and development. They provides discounts to their regular
customers so that they can increase the engagement of customers. Various types of offers which
Tesco provide are buy one get one free, club cards and occasional discounts. It assist in
achievement of competitive advantages so that organisation can increase their market share in
required manner. Healthy relationships are maintained b y Tesco so that they can give priority to
the organisation which is positive factor for them.
Recommendations
 Tesco should modify their promotional techniques according to the market environment
so that they can grow their business. Potential and targeted audience can be attracted by
sharing benefits and positive factors of the products and services. It is essential to use the
best suitable promotional technique which is cost effective in nature.

 They should select the pricing strategies according to the economical factors of country
in which products are offered (Yan and Hyman, 2018). Prices play important role in
attracting the customers so that company can develop in appropriate manner.
 More attractive ways of advertisements should be used by Tesco so that they can develop
the interest of customers. They can hire bloggers and influencers who can promote their
products and goods in better manner.
TASK 4
Recommend and justify actionable marketing strategies and tactics for an organisation.
Organisations have to use effective marketing strategies so that they can acquire large
market area in effective and efficient manner. In order to increase the revenue generation of
Tesco, they use various marketing strategies in their operation which increase their sales. There
are various recommendations which assist managers of Tesco in improving their marketing
strategies so that they can engage their customer in better manner. The recommendations are
mentioned below:
 Analyse target market: Organisations should identify who they have to sell their
products so that they can implement marketing is strategies in appropriate manner. It is
important to understand the market environment and requirements of targeted audience
so that organisation can offer customised products which increase their sales (Parsons and
Lepkowska-White, 2018). Tesco should gather demographic and quantitative information
which includes location, income, age and interest of their customers so that they can
manufacture and produce products according to that information.
 Identify appropriate digital marketing tools: It is essential to use appropriate and best
suitable marketing tools for promotion and advertising of products and services. Tesco
should use marketing tools which can engage their customers in best possible manner
without affecting their operations and budget. They should use Facebook, Instagram and
YouTube which can attract large number of customers in short period of time.
 Organise events and webinars: It should be noted that organisations can arrange
different events for their customers which increase their brand awareness and market. It
can easily educate customers and shared benefits and features of their product and

services which Tesco should use on regular basis (Shemyatikhina, Shipitsyna and
Usheva, 2020). Representatives and employees of Tesco can communicate with other
businesses and customers so that they can engage them in effective manner which results
in higher revenue generation. Webinars can increase the interest of customers towards
organisation which is positive factor for them.

CONCLUSION
From the above report it can be concluded that marketing of an organisation should be
conducted in proper manner. The profitability of business is based on the rate of marketing
which is carried out by marketing professionals. Marketing management is focused area for
organisations as it assist in increasing the brand awareness among the customers. It is essential to
make relations which customers and suppliers so that customers prefer products of particular
brand. It assist in understanding the demand and current market trends so that organisation can
offer products according to that. This report included about concepts and models of marketing
strategies like marketing mix. It involves about analysis of internal and external environment of
business so that operations can be carried out in effective manner. Marketing strategies are
discussed in this report which organisations should use along with justification and
recommendations.

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