Marketing Plan for Tesco: A Comparative Analysis with Sainsbury's

Desklib provides past papers and solved assignments. This report analyzes Tesco's marketing plan and compares it with Sainsbury's.

MARKETING ESSENTIALS
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Table of Contents
Introduction...................................................................................................................... 3
LO1 Explanation of the fundamental roles of marketing and it interrelation with other
functional units of chosen organization............................................................................4
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives.................................................................................7
LO3 Development and evaluation of a basic marketing plan.........................................11
Conclusion..................................................................................................................... 17
Reference list................................................................................................................. 18
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Introduction
Marketing plan is a business presentation that aids in getting a view of strategies and
tactics based on the organizational goals and objectives. It mainly covers the points
such as action steps, market analysis, comparison of marketing mix and others in order
to enhance the market growth of the organization. Junior Marketing Manager of Tesco
has been provided responsibility for developing a marketing plan for Tesco. It has been
found that Tesco is a well-known multinational organization headquartered at London,
with more than 476000 employees working in over 34000 stores of Tesco
(tescoplc.com, 2019). This assignment has an aim of producing a marketing plan for
Tesco by comparing 7p’s marketing mix with another retail organization of UK,
Sainsbury. Along with this, details of relationship among marketing and different
functional units of Tesco have been explained in the study. Hence, this study would help
in gaining a scope for fulfilling the goals of Tesco and would aid in gaining a competitive
strategy in the UK market.
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LO1 Explanation of the fundamental roles of marketing and it interrelation with
other functional units of chosen organization
P1 Explanation of the main roles and responsibilities of the marketing function
Marketing function is defined as the responsibility of the business organization for
advertising and promoting specific products and services. In Tesco, it has been
observed that there are several units that take care of the marketing functions. As
stated by Ingenbleek et al. (2015), marketing department of organization is responsible
for understanding the economic and competitive features of a market. Moreover, it is
responsible for identifying the target market as well as depicts the appropriate strategies
for promoting the product to the target segment.
Roles of marketing functions for Tesco
Role of marketing is to analyse the needs of customers and influence the business
decision for meeting these needs. Marketing department is found to consist with several
numbers of areas. In Tesco, it is found that marketing departments of Tesco Product
advertisement carry out the following marketing functions:
Figure 1: Marketing functional units of Tesco
(Source: Created by Learner)
Conduction of campaign management: It is found that this is a special functional unit,
which is only present in few organisations. For example, in Tesco, innovative
campaigning strategies are held for gaining customers attention at a huge rate. Tesco
marketing department for gaining the ideas of the customers conducts data-
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CampaignmanagementunitPriceandpromotionteamMediamanagementandmonitoringProductdistribuionteamCommunicationandmarketresearchteam

driven campaigns. The company creates new product lines where by developing new
product lines. As per the report, the company has spent about £110 million on
developing marketing campaigns in 2013 (smartinsights.com, 2019). It has been found
that the company is currently spending 30% of the marketing revenue on development
of digital marketing strategy and campaigns. Moreover, based on the evaluation, it is
found that this functional unit has recently shifted toward the digital marketing from
traditional marketing efforts for popularizing its brand to a great extent.
Price and promotion team: As commented by Baker (2016), this functional unit,
product-selling team is responsible for analysing the products of its competitions and
based on that analysis, this team design the selling strategy. This price and promotional
team of Tesco business is responsible for setting pricing strategy for the firm that helps
in tracking the price performance based on the competitors. For example, Tesco price
team has launched big price drop campaign for its 3000 products in the year 2011
(Cimaglobal.com, 2019). Moreover, it has been figured out that Tesco follows cost
leadership in their pricing strategy. It helps in providing low price goods also by
maintaining the quality in its product.
Monitoring and management of media: marketing team of Tesco is found to spend
time on renovation of strategies where new marketing ideas are implemented and
monitored to check the reaction and change in the customer behaviour. Tesco is able to
manage the media by examining the decisions of customer purchase. For example, this
team routinely studies the customer attitude by examining the collected data by the
Club card. This data is finally used for understanding the trends of customers and
allows Tesco in developing innovated products as well as advertisement strategies
based on their taste and preferences. Moreover, tip such as “Word of mouth” and
“conventional reward policy” are used for cultivating the brand loyalty of Tesco
products.
Distribution of products: Product distribution is the key responsibility of marketing
department where products launched are distributed in different supermarkets and local
stores in order to raise the revenue amount. In Tesco, it has been analysed that
products are distributed from the factories to supply them on the stores in right time.
Distribution is concerned with the supplier goods in the depots of Tesco. Distribution
team of Tesco is responsible for ensuring that the business marketing operation
remains simpler, better and cheap and stores receive the products in the stores in right
condition. Distribution team provides support to the operators in the entire marketing
process.
Communication team: Tesco is found to conduct direct communication with the
customers using Tesco Advertisement campaigns in order to build trust and faith for the
brand and gain customer loyalty. For example, Tesco uses “Club card” for conveying
special thanks to the customers. Hence, it can be said that Tesco uses this key tool for
enhancing the customer Insight for gaining guidance in the business decision. This
helps in the measurement of the business performance and gain to achieve customer’s
viewpoint towards the product.
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Market research team: The Company performs market research to understand the
benefits of the products and the purchasing nature by the customers. In Tesco, it has
been observed that the marketing team does primary market research in order to
analyse the updated information that can affects the business directly. Moreover,
marketing research team is appointed for checking the types of products that are sold
by other competition firms such as Asda, Sainsbury and others.
P2 Explanation on the roles and responsibilities of marketing related with wider
organizational context
The major roles and responsibilities of marketing in context of wider organizations and
stores of Tesco are mentioned below:
Market strategies: Wagner and Eggert (2016) presented that the primary role of
marketing depicts the development of strategies and planning in business organization.
The managers of Tesco Organization are found to involve in joint venture strategy with
companies of other countries in order to build mutual relationship and strengthen the
bond in marketing. Developing joint venture is found to be ideal for Tesco Plc that helps
in the mitigating the risks of conducting business in a foreign country.
Conservative strategy: Tesco brand is found to be historically stable and engage in
the developing of social media campaigns that helps to create awareness among the
customers of other international countries. Using conservative strategy, the company is
able to control the interest levels of the customers. Moreover, the company is using
transactional cost theory for minimising the costs which are directly associated with the
external environment of the business. This helps the firm in expanding its business and
performs the business operations in other countries fruitfully. For example, in the
expansion of its business in California, it is found that it has focused on concentrating
on geographic regions effectively (Cimaglobal.com 2019). This has helped in the
gaining of effective suppliers for the Tesco supermarkets of foreign countries.
Foreign acquisitions: Local firms and vendors are directly connected with the Tesco
supermarket in order to analyse the business market. Based on the analysis, it is found
that Tesco has spent £1bn for boosting the business in South Korea region. The
company has developed Carrefour plan for enhancing the buying power of Tesco.
Information technology strategy: Marketing system of Tesco is found to manage
every application centrally to monitor the functions in every country. The company has
planned to implement oracle financials software for measuring the budgetary targets of
the firm. The company has developed a common technology platform where cables and
wireless networks are connected with 1800 sites of Tesco. Moreover, it has connected
now with the stores of 14 countries together along with 440000 employees working in
wider stores of Tesco.
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LO2 Compare ways in which organisations use elements of the marketing mix
(7Ps) to achieve overall business objectives
P3 Compare the ways in which different organisations apply the marketing mix to
the marketing planning process to achieve business objectives.
Application of 7ps in Tesco and Sainsbury and their comparison
7ps Tesco Sainsbury
Price Market penetration
pricing- Tesco follows
market penetration strategy
so that they can hold
customers towards the
venture. Their main motto is
to reduce the operational
cost so that they can offer
products to customers in a
cheap rate. For instance,
the rate of full chicken is £6
(tescoplc.com, 2019)
Value for money-
In case of Sainsbury, they
try to focus on the demand
of customers and give
quality product. It helps
them to maintain their price
rate as they try to give best
quality. They also cut their
price based on the
competition. For example,
the rate of full chicken is
£3.65 (sainsburys.co.uk,
2019).
Product Clothing, gift item, toys,
home products, electrical
gadgets and many others
Tesco bank gives financial
services also such as
loans, insurance and
savings account.
It offers around 30000
products of its own brand
such as ready to eat meals,
clothing line and many
more.
Promotion Tesco uses internet,
television and conducts
charitable activities for
promoting their products. In
addition to this, they use
Tesco Clubcard for
targeting customers
towards the venture and
give discount to users.
BTL (below the line) and
ATL (Above the line)
promotional strategies have
been followed. Under the
ATL, it includes radio,
internet and television as
communication process. On
the other hand, in BTL, it
incorporates packaging and
customer review.
Place It is found out that Tesco
has around 7000 stores
within 11 countries such as
Ireland, UK, Malaysia, India
and many others.
In case of Sainsbury, it has
714 convenience stores
and 598 supermarkets. It
also has 2 national
Distribution Centres and 13
regional distribution
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centres. Around 45 stores
give 24*7 hours services to
the customers in the
market.
Physical evidence The logo of Tesco and
colour can be considered
as its physical evidence. In
addition to this, customer
loyalty and brand name is
enough for selling product
in market.
They design their products
and layout in an effective
manner so that they can
attract the customers
towards venture. In addition
to this, quality of trolleys
and baskets are very good,
which can provide best
shopping experience to
their consumers.
People All employees are their
strength and it is noticed
that they have around
480000 workers within 11
markets.
Well-trained experts are
there, who help to
understand the behaviour
of consumers. Leadership
training is also provided to
the managers so that they
can run their stores in an
efficient manner.
Process Online shopping,
production level, service
features and ,many others
Online shopping process
for increasing their sale
Table 1: Comparison between Tesco and Sainsbury
(Source: created by learner)
Evaluation of different tactics
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Figure 2: Market share of Tesco and Sainsbury
(Source: Lee et al. 2015)
It has been found out that, organisations under retail industry have followed various
tactics so that they can increase their number of customers in the contemporary
merchandise market. As mentioned by Lee et al. (2015), few organisations are there,
who try to reduce their operational cost for decreasing their price rate of products or
services. On the other hand, Kajalo and Lindblom (2015) stated that many organisations
follow the price cut policy so that they can increase their sale in market. For example,
in case of Tesco, they focus on the reduction of operational cost and Sainsbury follows
price cut policy. Following these strategy, it is quite evident that Tesco is successful for
running their business in market, as their market share is 29.1%, whereas in case of
Sainsbury, it is quite low.
In time of focusing on the products, it is noticed that Tesco provides various types of
products such as home appliances, financial services and many others. On the
contrary, in case of Sainsbury, they give more stress on their food items for increasing
profit market. It is evident that around 1.5% sale is increased in food department
(retailgazette.co.uk 2018). Therefore, it can be stated that as the motto of ventures is to
develop their position in market, Sainsbury tries to give focus on the specific
department such as food department. In case of Tesco, they have focused on various
aspects such as financial services, home appliances and many more for meeting
organisational objectives in an efficient manner.
For promotional purpose, organisations uses the social media as it helps to save the
expenditure of venture. In case of Sainsbury, they provide online service to customers,
which increase their sale in the contemporary competitive market. In case of Tesco, for
promotion, they use their brand for getting faith of the customers. Thus, both
organisations are able to get fruitful outcome in the contemporary market. As mentioned
by Frösén et al. (2016), innovation and variety in products or services is another
strategy for holding organisational position in the market. In case of Sainsbury, it is
found out that organisations follow development in their food sector so that they can
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achieve their aim. On the contrary, in case of Tesco, they try to focus on the
improvement of the skills of employees for attracting huge number of customers
towards the venture.
Therefore, in time of drawing the final statement, it can be deduced that every
organisation tries to maintain their uniqueness so that they can develop their position in
market. However, Tesco and Sainsbury follow various strategies, it is monitored that
Tesco’s strategy is better. As a result, their position is better than Sainsbury in
competitive market. As a junior marketing manager, it can be stated that organisations
need to follow the demand of customers in time of preparing new products or services
so that they can hold get effective outcome. It is also found out that Tesco’s brand name
is enough to attract customers, whereas, Sainsbury provides free sample to their target
customer in time of launching new item. This strategy is also effective for the ventures.
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LO3 Development and evaluation of a basic marketing plan
P4 Production and evaluate a basic marketing plan for an organization
Introduction
Marketing plan is a process of analysing the current strategies and propose new tactics
that can help in the development of market base. Here, a marketing plan for Tesco has
been presented based on the vision, mission, and objectives of the company.
Vision and mission statement To become high valued business and serve the customers effectively
 To gain loyal and committed customers in order to enhance the sustainability of
business
Goals and objectives of Tesco
 To gain customer satisfaction and attain financial goals set by the company
 To expand the locations of business franchises in the entire world
Marketing objectives
Specific
 To increase the profits by 30% by
the end of 2020
 To enhance the customer base
by 25% in the developing
countries
 To develop more branch in the
emerging countries such as
Algeria and Roman
Measurable  The first objective can be fulfilled by
measuring the attitude of new
customers
 The second marketing objective can
be measured by conducting
interviews on the managers and
customers
 The third objective can be checked
by financial status of the firm
Attainable  This objective can be attained if
they are able to meet the demands
of the customers such as improving
quality of food products and
electronic system
 This can be achieved by creating
trust among loyal customers
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 This can be obtained by increasing
the number of local suppliers
 Every objectives are relevant in
order to gain marketing position in
UK and other international countries
 11 months
Table 2: Smart marketing objectives
(Source: Created by learner)
STP situational analysis (segmentation, targeting, and positioning)
Market segmentation: Segmentation is divided based on the geographic,
demographic, and behavioural context. In Tesco, the company requires to focus more
on middle-income groups in order to raise the profitability ratio. Consumers those who
are aged between 25-45 years can be most profitable segments. It has been analysed
that Tesco Plc is suitable to serve customers with its diverse variety of products.
Target market: The target customers of Tesco Plc products are cost-conscious
persons those whose bargaining powers are high. Moreover, it can focus on other
customer segments in UK, for example, high-income people those who are in demand
of high quality products. Gummesson (2017) mentioned that buyer behaviour is having
direct implications on every marketing activity. For example, the buying perceptions of
customers need to be analysed. Moreover, the current global and economic crisis due
to Brexit issue in UK can have direct impact on behaviours of the customers. Hence, it
can be said that the middle-income people are the mostly targeted customers for Tesco
Plc organization.
30%
60%
10%
Target Market segmentation
High income group Middle income group Low income group
Figure 3: Target marketing segmentation
(Source: Created by learner)
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