Tesco Marketing Plan Report

This report presents a comprehensive marketing plan for Tesco, focusing on its international expansion. It begins with a strategic audit, encompassing macro (PESTEL) and micro-environmental analyses, along with an internal analysis and SWOT analysis to identify strengths, weaknesses, opport...Read More

Tesco marketing plan
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[Company name] [Company address]

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Contents
Introduction...............................................................................................................................................2
Strategic Audit...........................................................................................................................................2
1.1 MACRO...........................................................................................................................................2
1.2 MICRO.............................................................................................................................................3
1.3 INTERNAL......................................................................................................................................3
1.4 SWOT...............................................................................................................................................4
1.5 CONCLUSION................................................................................................................................5
Objectives...................................................................................................................................................6
2.1 MISSION/VISION...........................................................................................................................6
2.2 CORPORATE OBJECTIVE..........................................................................................................6
2.3 MARKETING OBJECTIVES........................................................................................................7
Strategic decisions.....................................................................................................................................7
3.1 MODELS..........................................................................................................................................7
3.2 OPTIONS.........................................................................................................................................8
3.3 STP...................................................................................................................................................8
3.4 BRANDING.....................................................................................................................................9
Tactics........................................................................................................................................................9
4.1 MARKETING MIX.........................................................................................................................9
Product...............................................................................................................................................9
Price..................................................................................................................................................11
Place..................................................................................................................................................12
Promotion.........................................................................................................................................13
Controls....................................................................................................................................................14
TOOLS TO CONTROL IMPLEMENTATION...............................................................................14
Budget......................................................................................................................................................17
8. References............................................................................................................................................18
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Introduction
Tesco is the largest food retailer in Britain. There are almost three lakh people working in it all
over the world (Cushman, 2014). Apart from the UK, the company also serves international
markets including the USA. The range of products and services that the company offers are very
broad. It spans across many sectors and industries. Also, there are many brands under which the
products of this company are sold like Cullens, Tesco Express, Clubcard, Harts, etc. (Ridolfo,
2015).The purpose of this report is to develop a marketing plan for marketing the food products
of this company in international markets. Various analyses will be done to develop an
international marketing plan for the company Tesco.
Strategic Audit
1.1 MACRO
In the macro analysis, the PESTEL analysis of the business of Tesco will be done. The company
operates in the global environment, and it has stores all over the world. So the political and
legislative condition of the respective countries affects the business of Tesco to a great extent.
The company has to take care of the economic factors as well because they influence the costs of
the company, demand for products, prices and profits of the company too. There has been the
shift in the shopping trends of customers of UK. Earlier they did ‘one-stop' shopping, but now
they shop in ‘bulk'. So this is due to the social factors. With technology advancements, there has
been development in the products of Tesco. This also has an impact on the customer satisfaction
because, with the latest technology, the goods can be made available to the customers in the short
period. The environmental issues threaten the food retailers the most, so they need to act in a
socially responsible way. This is done with the help of proper regulations and corporate
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governance. Finally, the legislation of governments and their policies affect the performance of
Tesco directly. For example, the FRC has the potential to ban the practices of the company that
is considered as inappropriate by them (Temperley, 2013).
These factors affect the decisions of marketing because the ultimate goal of marketing is that the
products should get sold in the market successfully. But if these factors are not considered so the
plan can fail too.
1.2 MICRO
The micro factors that affect the business of Tesco include competitors, customers, suppliers, and
employees. The marketing plan should be able to make the company move ahead of its
competitors. Competitors have an effect on the business as they copy the moves and then
introduce similar products in the market. The customers are most important stakeholders of the
company. If they feel satisfied with the products of the company then only they buy it .
Otherwise, they don’t buy the products. So the marketing plan has to be such that it is able to
attract more and more people. The suppliers of the company are important too as they determine
as per the market plan that how much business will the get from the marketing of the products.
The employees of the company are the ones who make every strategy possible by implementing
them successfully (Temperley, 2013).
Though this environment is micro and does not have any direct impact on the business still it is
an important consideration when the marketing plan of Tesco is made.
1.3 INTERNAL
Tesco has various strengths and weaknesses that it needs to focus and that can help if build a
successful marketing plan. By analyzing these strengths and weaknesses, the company can meet
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the needs of its target market. This analysis is important because this gives the company an
opportunity to determine that what it can do best and what it cannot do at its best. The company
has to strategies its marketing plan as per the market conditions and the needs of its customers.
So the internal analysis of the company will determine the available resources of the company
and its capabilities and strengths that can be deployed to build a successful marketing plan.
In the company Tesco, there are large numbers of people who work and they are the strength of
the company. These people are highly skilled, and they have excellent capability to implement
any plan. So Tesco will use its human resources for making that marketing plan a success
(Alkhatib. n.d.). Also, it will take inputs from these people to build the plan. Then the company
also has experienced people in the top management so they can be trusted upon to build a good
marketing plan.
1.4 SWOT
• Strengths: The Company Tesco holds large market share. In the UK, the market share of
the company is approximately 13%. Also, it has the ability to maintain continuous growth in the
food industry. There are no signs of the abatement of growth of the company in future and in the
ROI of the company. There is one company of Tesco that gives finance, and it has grown into the
fastest motor insurance provider. Tesco operates online too, and it emerged to be the largest
online supermarket. The sales that the company makes online are incomparable. The brand value
of Tesco is increasing continuously, and the goods of the company are trustworthy hence they
represent excellent value (source: Mintel Report, Datamonitor Reports, Tesco Case Studies).
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• Weaknesses: The Company relies too much on the market of UK. Though it has
operations in many other countries still it focuses more on the market of UK. There are many
times when the company has fallen into the trap of debt and in the future too it is not expected to
reduce its debt. There are many products that the company offers so it can acquire many
companies but it has a danger of becoming serial acquirer which is harmful to it.
• Opportunities: the footfall in the stores of Tesco is huge and also it has lower costs. So
the company can use this advantage to sell the now- food retail items also. Further international
growth will also benefit this company as it has huge potential to operate overseas.
• Threats: it faces tough competition from Walmart. The rank of Tesco may come down in
the retail market if the competitor adopts any move as the competitor of Tesco is very tough.
Also, there is a threat that the overseas returns of the company may fall in the future due to
movement of the countries past the critical mass (source: Mintel Report, Datamonitor Reports,
Tesco Case Studies).
This SWOT is useful in this marketing plan as the company can use its strengths to grab the
opportunities and counter the threats. The weakness can be taken care of, and they can be
managed timely when any potential threat comes.
1.5 CONCLUSION
The macro factors affect the decisions of marketing because the ultimate goal of marketing is
that the products should get sold in the market successfully. But if these factors are not
considered so the plan can fail too. The microenvironment of the company is not seen to have
any direct impact on the company, but it is an important consideration while making the
marketing plan for Tesco. With the internal analysis, Tesco will use its human resources for
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making that marketing plan a success. Also, it will take inputs from these people to build the
plan. Then the company also has experienced people in the top management so they can be
trusted upon to build a good marketing plan. SWOT is useful in this marketing plan as the
company can use its strengths to grab the opportunities and counter the threats. The weakness
can be taken care of, and they can be managed timely when any potential threat comes.
Hence the strategic audit has been successful in reviewing the business plan of the company, and
it has reviewed the strategies too. The weakness and shortcomings have been identified, and it
will ensure a successful development of the marketing plan for the company.
Objectives
2.1 MISSION/VISION
Vision describes that what sort of the company Tesco aspires to be. Tesco is wanted and needed
all over the world. It wants to grow continuously, and it wants to remain full of opportunities. It
aspires to be modern, full of ideas and innovative. It wants that the skills of the company are
applied globally. It also wants to remain inspiring; it wants to keep earning the trust of people
and gain loyalty from customers, colleagues, and communities. The mission of the company
states “We make what matters better, together” ((Brannen, 2013).
2.2 CORPORATE OBJECTIVE
Tesco aims to give its customers great value at such prices that are competitive. It aims to meet
the needs of its customers by communicating with them continuously. It also aims to develop the
employees of its company and make them more talented. The rewards of the company are aimed
to be distributed in a fair manner. Another objective of the company is to work with the suppliers
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so that the quality is kept high and the prices are kept low. It also aims to get involved in the
national discussions on the issues related to food safety and production and support such
communities (Brannen, 2013).
2.3 MARKETING OBJECTIVES
With marketing, the company Tesco introduces its product to the targeted customers in any
market. The goal of the company is to adopt a workable marketing plan for achieving the
competitive advantage over the competitors. This helps the company in generating more sales
and profits. The company wants to maximize its reach to the target market. Another objective of
the company is to become and sustain the position of leading retailer in the UK. It wants to
invest in the market development of its products. The last marketing objective of the company
Tesco is to grow larger than its biggest competitor Walmart and to capture the market share
(Malik, 2015).
Strategic decisions
3.1 MODELS
There are many models that the company has used for it marketing like it has used the Ansoff
matrix to determine its current position and future possibilities. It has also used porter's five
forces model to determine its industry competitiveness. But now the company will use Porter's
generic strategy model where it will determine that what strategy it will adopt to gain market
share. Whether it will focus on its cost and differentiation or it will gain cost and differentiation
leadership. The company has already able to lower down its level of cost so the company should
focus on its differentiation and gain leadership in differentiation (Peck, 2013). This strategy will
help the company to acquire the share in all the markets.
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3.2 OPTIONS
The company has the option to expand its operation in international markets especially in the
market of Switzerland. This will enable the company in serving the broad range of customers.
This will also give the benefit of becoming a leader in the retail business internationally. There is
the huge potential of earning higher revenues in the international markets. Then another option
with the company is that it can open the variety of stores (Rundh, 2015). Like it can open food
and as well as non-food retail stores because the footfall of the stores is good so the company can
use this to their advantage. Alliances can be formed with other retailers of international markets
ad they can jointly develop new stores. This will help in building the brand of the company as
well as the expansion of the operations of the company could be done. In the international
markets, the people create their own brands of food like in Switzerland this practice is followed.
So the company can develop new product and add differentiation in it. The product should be
unique in quality and taste from the others in the competition and by delivering greater
satisfaction, it can guarantee more sales.
3.3 STP
STP refers to Strategic Targeting Positioning Strategies. Here the company should go with the
segmentation strategy. This strategy determines that whether the company will fail or it will
succeed in the long run. The company should target few international markets first and then it
should expand further. The specific features of the brand and the product will be focussed to
position it in the new markets. The perishable goods should be particularly taken care of because
they are likely to be sold before other products (Palmer, 2014). So the marketing should tell the
customers about these products and their need in the market. Also, the company will target
people of all age groups so that the needs of all people are taken care of.
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3.4 BRANDING
The company believes that brand experience is everything. The company builds its brand by
managing the relations with its customers successfully. The company should introduce a card
where all the information of the customers purchase is recorded. When the customers swipe the
card, the information gets displayed, and the company is able to determine that what are the
purchasing decisions of the customers and accordingly those things that are less sold can be
developed and promoted.
Tactics
4.1 MARKETING MIX
The marketing mix can be utilized as a tool for influencing the demand of the marketers. The
marketing mix is usually combined with the four elements namely- product, price, place and
promotion. The marketing mix of Tesco is manipulated by the marketing as well the senior
management for offering them competitive benefits so as to target the customer segment along
with the positive effects on the bottom line.
Product
A comprehensive range of products has been offered by Tesco. Tesco along with the grocery and
food further offers the following products that can easily be purchased from the supermarket
chain:
 Health and beauty
 Clothing and jewelry
 Home electrical
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 Technology and gaming
 Entertainment & Books
 Garden
 Toys
 DIY & Car Accessories
 Home appliances
 Baby & toddler
The product categories of Tesco stores also depend on the store and their types along with the
Express stores having less variety of products and the Extra stores that help in offering
highest choice. Furthermore, Tesco Bank also helps in offering a range of banking products
that are widely accepted like credit cards, mortgages, savings and personal loans.
The Tesco’s product line is highly vast and helps in catering various customers who have
varying tastes and preferences.
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Price
The pricing strategy of Tesco can be considered as the case of cost leadership. Tesco has
developed its pricing strategy as per its business strategy, and it has helped in contributing
towards the company to provide the competitive advantage. The pricing strategy of Tesco is
therefore strategized on the basis of the marketing message called ‘Every Little Help.' The
management of Tesco has aimed towards the reduction of the cost of purchase along with their
operational costs via the economies of the scale along with which various sets of measures are
set for passing the cost advantage towards their customers so as to gain main brand value. The
company further utilizes all the psychological pricing, economy pricing, geographic pricing
strategies and product line pricing. Furthermore, the pricing strategy is the best method for
determining the demand for the good or products. These pricing strategies will help in setting a
price for the product so as to help Tesco to develop a standard cost and quality that would be
beneficial for finalizing the actual price of any product.
Tesco believes that the product must be priced depending upon the consumer perception
regarding their product as the perception of the consumer is highly important for setting up the
price of the product. The company also utilizes pricing strategy where they identify a unique
product and then develop a suitable strategy for the setup of that product giving them a
competitive edge. Tesco believes in charging the high price to luxurious products only.
On focusing on the grocery charges, we can identify the fact that Tesco charges lower prices as
compared to the other grocery stores. Product pricing is highly considered in Tesco helping them
to attain a high position in the competitive market. Furthermore, Tesco further enjoys decreasing
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their product prices and also do not to compromise their quality helping them to become the
leader of the market.
Place
This element of the marketing mix is related to the locations and places where the customers can
buy products and purchase services and further the distributions of these products can be done to
these places. Tesco has been seen to utilize two important channels for selling all the products
and services namely, online and offline.
The figure given below describes that the number of Tesco stores has been increasing from the
past eight years despite all the global financial as well as economic crisis, especially during
2007-2009. By the end of 2015, Tesco had 7817 stores in overall 11 countries. It has further been
seen that the two-thirds of the total Tesco sales are prepared in the United Kingdom. Tesco stores
are seen to be operated in the following format:
1. Express
2. Metro
3. Superstore
4. Extra
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Source: Statista (2016)
Tesco calls have the online sales channel of the supermarket chain known as Tesco Direct, which
is based on its website of the company- www.tesco.com. For the last few years, it has been seen
that the online sales channel are highly popular as compared to the offline sales channel. During
the year of 2014-15, it was seen that despite the loss of GBP of around 6.7 billion, the online
grocery business of Tesco grew ahead at the rate of 20 percent. (McDonald, C., 2015)
Promotion
Promotion is one of the most important marketing strategies of any organization.
Promotion helps to reach out to the small groups along with the target audience using the print
advertisement, magazines, television advertisement for helping them reach out to the target
audience at one particular time.
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One of the most promotional strategies that Tesco widely uses helps in evaluating the
public attitudes, then identify the critical areas within the organization and finally a program of
action is executed for earning the public acceptance and their understanding. The public relations
can be helpful for the Tesco in communication with all the customers, stockholders, employees,
suppliers, communities, etc. the public relations are further used for maintaining the positive
image of the company. Tesco has now moved to the MPR (Marketing Public Relations) for
building the brand knowledge as well as awareness for new products and current. MPR is highly
useful in reaching to the local communities. Tesco does not pay does not pay for the space
obtained and for the time in the field of media exposure.
Controls
Tesco needs to place the financial and strategies controls in place. The following measures
must be taken for formulated strategy.
TOOLS TO CONTROL IMPLEMENTATION
i.) Improve customer service
Implement: This can be done by listening to customers by engaging with them with the help
of focus groups and online trackers. Tesco can engage in social media to listen to their
customers and respond to their customers using Facebook, Twitter, webchats, etc. in one go.
The loyalty cards provided by Tesco can also be beneficial in this method.
Control: The marketing insight business is responsible for providing analysis which must be
provided as a feedback for the business model which can help to shape the product and him
development of the range enabling Tesco to offer best products to the customers. (Jung, J. &
Yoo, J., 2016)
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ii.) Promotion of right products at the right time.
Implement: The network of the distribution centers (DCs) and using the advanced
technology supporting the modern and cost-effective as well as efficient supply chain. Tesco
needs to understand their DC regarding the products present in the stores. Therefore, Tesco
should forecast the needs of the customers and then auto-update their ordering systems on the
basis of the product brought by the customers.
Control: The DCs must be planned along with the systems, the network for maximizing the
efficiency. The transport planning and the labor scheduling should be made available for
operating high effectively this will further minimize the mileage which is needed or getting
the products in a perfect condition towards the store (Stone, 2003).
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iii.) Best shopping trip
Implement: A multi-format approach must be applied for meeting the needs of the customers for
the various types of the shopping experiences, be it from the large or small. The Extra Stores
must provide a full range of merchandise, foods, and services, to all the stores.
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Control: Tesco must operate franchise chains for their own stores. One of the most famous
franchise models of Tesco is the F&F model for the clothing brand in Saudi Arabia.
Budget
For accomplishing the objectives, the company should develop various strategies which are
accessible within the stipulated amount of time. The plan has been estimated to cost around
$5000. Tesco should hire people who are able to listen to the customers very carefully and
understand their needs and wants. These people must be able to solve these issues. In order to
make sure that the actualization of these objectives must be developed so as to make sure that the
delivery of the correct type of message must be provided to the right person in the right manner.
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8. References
Alkhatib, B., Business Strategy-A case Study of TESCO.
Brannen, M., Moore, F.I.O.N.A. and Mughan, T.E.R.R.Y., 2013. Strategic ethnography and
reinvigorating Tesco PLC: leveraging multicultural teams using ethnographic
method. Ethnographic Praxis in Industry, pp.282-99.
Cushman, D. and Burke, J., 2014. Introduction: Tesco PLC—an Open Business. In The 10
Principles of Open Business (pp. 10-23). Palgrave Macmillan UK.
Ho, C. and Temperley, J., 2013. Consumers’ Reactions to Tesco’s Market Entry in Taiwan: A
Comparison with the UK Experience. Marketing Management in Asia, Routledge, pp.101-119.
Malik, S.A., 2015. Optimising supermarket promotions of fast moving consumer goods using
disaggregated sales data: A case study of Tesco and their small and medium sized
suppliers (Doctoral dissertation, University of Kent, United Kingdom).
Palmer, M., Simmons, G. and Mason, K., 2014. Web-based social movements contesting
marketing strategy: The mobilisation of multiple actors and rhetorical strategies. Journal of
Marketing Management, 30(3-4), pp.383-408.
Peck, H., Christopher, M., Clark, M. and Payne, A., 2013. Relationship marketing. Taylor &
Francis.
Ridolfo, M., Lu, L., Toth, J. and McCarthy, D., 2015. Faculty of Management Assignment 1:
INDIVIDUAL REPORT.
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Rundh, B., 2013. Linking packaging to marketing: how packaging is influencing the marketing
strategy. British Food Journal, 115(11), pp.1547-1563.
Mintel Report, Datamonitor Reports, Tesco Case Studies).
McDonald, C. (2015) “Tesco’s online sales increase despite £6.37bn loss” Computer
Weekly,Available at: http://www.computerweekly.com/news/4500244817/Increase-in-Tescos-
online-sales-mitigates-yearly-637m-loss
Statista (2016) Available at: http://www.statista.com/statistics/238667/tesco-plc-number-of-
outlets-worldwide/
Jung, J. & Yoo, J. (2016). Customer-to-customer interactions on customer citizenship behavior. Serv Bus.
http://dx.doi.org/10.1007/s11628-016-0304-7
Stone, M. (2003). Scoring Points: How Tesco is Winning Customer Loyalty. Journal Of Database
Marketing & Customer Strategy Management, 11(2), 185-187.
http://dx.doi.org/10.1057/palgrave.dbm.3240219
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