Tesco's Marketing Strategy: A Comprehensive Report and Analysis

This report delves into the marketing strategies of Tesco, a leading multinational grocery retailer. It begins by defining marketing and its crucial role in an organization, emphasizing its interrelation with other departments like finance, human resources, and production. The report then explores the marketing environment, utilizing SWOT and PESTLE analyses to assess both internal and external factors impacting Tesco. A significant portion is dedicated to comparing how organizations use the 7Ps of the marketing mix to achieve business objectives. Finally, the report culminates in the development and evaluation of a basic marketing plan, highlighting its importance for achieving business goals. The analysis provides insights into Tesco's approach to customer satisfaction, market share, and overall business success, drawing on the company's mission, business strategy, and marketing tactics like club cards and promotional offers.

Contents
Introduction....................................................................................................................... 3
Explain the role of marketing and how it interrelates with other functional units of
an organisation................................................................................................................. 4
Definition of marketing.................................................................................................4
Marketing functions......................................................................................................4
Marketing process.........................................................................................................5
Relation between marketing department and other units of an organization..........7
Marketing environment.................................................................................................8
SWOT analysis.............................................................................................................. 8
PESTLE analysis.........................................................................................................10
Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives.............................................................................13
Marketing mix.............................................................................................................. 13
Develop and evaluate a basic marketing plan..............................................................17
The importance of having a marketing plan..............................................................18
Conclusions.................................................................................................................... 22
References...................................................................................................................... 23
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Introduction
Marketing department is one of the departments of a business. The managers
of marketing department will implement a marketing plan to follow the business
objectives. If the business objectives are achieved, the company will increase their
profit.
This report is about the marketing department of an organization. Marketing
department is very important for every business. This department is linked to other
departments of the business to ensure the well running of the organization.
The environment of a business has an impact over this business. To analyze
the micro environment a business can use SWOT analysis and for analyzing the
macro environment, a PESTLE analysis can be used.
Next, are analyzed the differences between two organizations using the 7Ps.
After this comparison, it is developed a marketing plan for an organization.
Tesco is the largest British multinational grocery with headquarters in
Hertfordshire. Tesco is the market leader of groceries in UK and also the third
retailer in the world. Was founded by Jack Cohen in 1919. Even if the original
country is UK, Tesco operates in 11 other countries around the world except UK and
has around 7817 shops with approximate 530,000 employees. The mission of Tesco
is to be the best shop for their customers. Tesco wants to help the people who shops
with them with a better quality of products and also to help people on having a easy
life. The business strategy is a plan with seven parts which will help the company to be
valued by customers and also to have a long-term growth ( Tesco, 2020).
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Explain the role of marketing and how it interrelates with other
functional units of an organisation
Definition of marketing
In one of his book, Kotler (2003) said that “marketing as a managerial task
that contain creating, communicating and delivering importance for customers and
for handling and preserving customer relationships that profits the organization and
its stakeholder.”
Another definition of marketing is offered by Cant et al (2007) who said that
“marketing is a combination of management tasks and decisions aimed at meeting
opportunities and threats in a dynamic environment in such a way that its market
offerings leads to the satisfaction of customer’s needs and wants in such a way that
the objectives of the enterprise, the customer and society are achieved.”
Marketing is defined by the American Marketing Association (2017) as "the
activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and
society at large".
Marketing includes all the activities in a business that are connected with
buying and selling a product or service. These activities includes a research on what
the customers want and after they must decide if they can produce it and what will
be the price of the product. After all these activities the business will make the
product and will sell it.
Marketing can present new products and services to customers in a market.
Every business over the world need to have a good marketing strategy to gain
advantages and to be all the time over their competitors.
Marketing functions
The main function of marketing is to satisfy customers, so the business needs
to buy and sell goods to satisfy the needs of customers. Through the roles and
functions of marketing Lidstone and MacLennan (2017) includes the transport of
goods to market share, the storage of products, making a research to collect the
information that can satisfy the customers. Also, Ahmed Zebal and Goodwin (2012)
includes other roles to marketing functions like “identifying the requirements of the
customers, anticipating customers’ demands and identifying the ways in which the
profit can be maximize”.
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Some of the important roles of marketing function are:
● Identify the needs of customers : the main role of marketing function is to
identify the needs of customers. The customers al the time are changing the
needs, habits, desires and the company must analyse the data and provide
what people want (Balaji, 2014).
● Anticipate customer needs : in a company is the marketing department who
has the role to anticipate what customers want. If the marketing department
anticipate the customers requirements, the company will have the advantage
in front of competitors (Bansal & Taylor, 2015).
● Satisfy the needs of customers : another important role of marketing
function is to satisfy the customers. After the company collects the data with
customer’s needs, the marketing department will identify the products that can
satisfy the customers (Chaffey & Ellis-Chadwick, 2016).
● Make profit : After the company has the products that can satisfy the needs
of customers, the marketing department has another role, to make profit. The
company has to find a new and innovative way to sell the products that
customers want at the right price for clients but also for company, for making
profit and increase the sales (Chikweche & Fletcher, 2013).
The marketing team from Tesco made a plan in which they are using the club
card, some discount for different products or more offers like buy one get one free to
have more customers and gain more advantages (Varadarajan, 2010). The objective
of Tesco marketing strategy is to offer to clients the products and the services on a
good price so the demands and expectations of customers are achieved. Using a
good marketing plan Tesco had become one of the world’s biggest retailers.
Marketing process
A number of various activities and processes are linked together and are
forming the marketing process. These activities include the journey of product from
production to market share. One of the important role of marketing function is to link
the producers and customers. Marketing process develop a good strategy for 4 Ps
and also an effective strategy to keep the old clients and to attract the new ones
(Smith, 2016). In Figure 1 are represented the four Ps.
The four Ps are:
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● Product: marketing department can project a product which brings together
the customer needs. Tesco can offer a variety of products that include food,
electronics, clothing or financial services (Tesco, 2020).
● Place : marketing department needs to place the product in the right place to
market so the customers can find it very easy. At Tesco, the marketing
department is using the market analytical research to give informations about
the position of products in stores.
● Promotion: is a tool that marketing department is using to attract new
customers. Tesco marketing department is very focused on promotion of
products. The biggest advantage of Tesco is the low price of products. Tesco
is also using promotion like half price or Tesco club card to attract new
customers.
● Price: the marketing process include finding the right price of products. The
price must be suitable for customers and in the same time must be a good
price for company to make profit (Miller, 2017). Tesco is trying al the time to
keep the low price on products. The company is keeping the low price without
reducing the quality of products. They are using promotion and club card to
keep the price cheap (Tesco, 2020).
.
Figure 1. Four Ps
Your free templates (2020)
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Relation between marketing department and other units of an
organization
The market department is linked with other functional units like finance
department, human resource department, production department and other
departments.
● Marketing department and finance department: the role of finance
department is to make a plan regarding the budget of company. The finance
department of Tesco needs to provide to marketing department the budget of
marketing campaign of the products and services. Also, another role of
finance department of Tesco is to provide to marketing department
information regarding the cost of the marketing campaign. Marketing
department of Tesco is al the time linked to finance department of Tesco
because this department needs to know the financial position of company so
they can continue the marketing campaign.
● Marketing department and Human Resource department: Human
resource department must ensure the company with good employers, people
which are suitable for a specific job. The marketing department from Tesco is
keeping in touch with human resource department to find the right candidates
for a specific job in marketing department. After they find the right candidate,
the human resource department must keep the relation with marketing
department from Tesco, because they must ensure that the candidate is
training sufficient and he/she is satisfact with the conditions (De Vries, et al.,
2012).
● Marketing department and production department: the main role of
production department is to develop new products. The marketing department
and the production department from Tesco are linked together. These two
departments work together to develop new products to satisfy the customers
needs. Other role of these two departments is to ensure good materials for
products and also to ensure that the organization’s functions are the same
with business goals.
● Marketing department and the customer service department: these two
departments are working together to ensure that the products developed
satisfy the customers needs. At Tesco, the customer service department
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provides to marketing department informations from customers, informations
that are helping the company to develop new product.
● Marketing department and IT department: the marketing department and
the IT department from Tesco work together to maintain the business
objectives achievable. The IT department must ensure that Tesco has a good
and recent technology to maintain the needs of customers (Hayrynen, 2014).
Marketing environment
Marketing environment of a business include all the factors and forces
which ensure the company success and also a good relation with customers.
According to Duncan (1972), the business environment link together the physical
and social factors which are taken in consideration to make a decision for the future
of business. The marketing environment has three levels: internal environment,
external micro environment and external macro environment. Micro environment
includes all the people which take part to the business: suppliers, competitors,
customers. Macro environment include factors that can affect the business such as
political factors, technological or economic factors (Greg et. al., 2017). In Figure 2
are presented different types of environment.
Figure 2. Types of environments
Slide player (2020)
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SWOT analysis
For analysing the impact of internal environment, the marketing department
from Tesco is using SWOT analysis. The SWOT analysis is represented in Figure 3.
1. Strengths of Tesco:
● Tesco is the biggest retailer in United Knighton. The sales of Tesco are
the higher in comparison with other retailer from UK.
● Tesco is the leader of market share: according to Tesco’s annual
report, Tesco is the leader in UK with 27% of market share.
● Tesco is diversified al other the world: has stores in 14 countries in
Europe, America and Asia.
2. Weaknesses of Tesco:
 Operations failed in US and Japan: in 2012 Tesco had some problems
in America and Japan, and they had to close the stores.
 Profit is declining: in oct 2018, Tesco had a decline with 9% of profit,
this is the worst period for Tesco since Brexit.
3. Opportunities of Tesco:
● Opportunity for joint ventures: Tesco can use joint venture to have
success on markets where the business is less present.
● Make online shopping: Tesco is using online shopping and home
delivery to grow and to obtain more profit.
4. Threats of Tesco:
● Brexit situation: Brexit is a threat for Tesco, when UK will leave the
Europe the cost of production will grow.
● Competition with other supermarkets: In UK is a growing competition of
Tesco, supermarkets like Asda, Aldi are big competitors for Tesco
(Tesco, 2020).
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Figure 3. SWOT analysis of Tesco
Business strategy hub (2020)
PESTLE analysis
The external environment from Tesco can be analysed using PESTLE
analysis. A scheme of PESTLE analysis is represented in figure 4.
Figure 4. PESTLE analysis
Business to you (2020)
By using Pestle analysis, Tesco can identify the factors that can affect the
business.
1. Political factors:
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● Impact of Brexit: Brexit is one of the political factors which are
influencing al the supermarkets chain, not only Tesco. Since Brexit
appeared in UK, the price of products, food and other materials grew.
2. Economic factors:
● Brexit is having economic consequence as well. The price of products
grew and the consumers spend less money to buy other things.
● Another economic factor which will affect Tesco can be the merge of
Sainsbury’s with Asda which can become the biggest supermarket
chain in UK (Elley, 2018).
3. Social factors:
● health trends: UK people are concerned about sugar and Tesco had
stopped producing some products which have a high level of sugar.
● grow the size on clothes: according to some studies, the people of UK
will be obese by 2050, so Tesco is changing the size of clothing F&F.
4. Technological factors:
● speed the time of delivery: Some supermarkets, including Tesco had
lunch the program by which the order of customer is delivered in one
hour.
● developing Apps for shopping: Customers will have an app for
shopping and they will can add products by comand voice.
5. Environmental factors:
● people are concern about the pollution and Tesco is starting using
recycled materials.
6. Legal factors:
● rules banning salt, sugar or fast-food, which can be restricted to
children under 16.
Marketing department is linked to other departments from a business, and by
this way, the marketing functions are linked to other functions of departments. For
example, the marketing department is linked to financial department. For ensure the
planning and researching for a marketing plan, the marketing department need
economic resource. To ensure that the business is achieving the objectives, all
departments are working together. Marketing department is also working with human
resource department to find the rights candidates for the rights jobs. If the company
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has goods employers, the goals are achieved and the business will have profit.
Another department which works with marketing department is the production
department. After the marketing department find out the customer needs, they can
communicate with production department who will create the right product for
customers.
In conclusion, the marketing functions are link with other departments of the
business to ensure that the company will achieve the objectives and will have profit.
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Compare ways in which organisations use elements of the
marketing mix (7Ps) to achieve overall business objectives
Every business has objectives to achieve. In this section the objectives of
Tesco will be compared with objectives of Marks & Spencer.
The objectives of Tesco are:
 To mantain low prices and a good quality on their products.
 To grow their profit.
 To have a large varity of products.
 To become the first hypermarket in UK on delivery their products.
 To diversify their products based on customer needs.
The objectives of M&S are:
 To have an unique relationship with their customers.
 To encourage their employees.
 To reduce pollution and helping the environment.
 To create a great environment on M&S organization.
Marketing mix
Marketing mix is used to analyze the company situation on the market and
also to develop a marketing plan. Initially, the companies were using only four Ps to
analyze the situation of the company. The four Ps are: price, place, product and
promotion. During the time, the marketing mix was changing to ensure that the long
term goals of business are achieved. For these objectives to become real, other
three Ps are added. The three Ps added are: process, people and physical evidence.
The three Ps added contributed on maintaining an advantage on the market.
After a comparison, based on marketing mix 7P’s, between Tesco and M&S,
there are similarities and differences between the two organizations. The two
business are compared in Table 1.
Marketing Mix 7Ps Tesco M&S
Product: To enter to
market share every
business must have an
item, product or service.
Tesco is the biggest
British retailer. Tesco has
a large variety of products.
The business has around
40000 products which
M&S includes a large
combination of products
and services, this help the
customer on selecting the
right products. The
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