Strategic Marketing Planning Report: TESCO PLC - Industry Analysis

This report presents a strategic marketing plan for TESCO PLC, a leading British multinational retailer. It begins with an introduction to strategic market planning and the company's overview, including its industry position and the impact of Brexit. The report includes a SWOT analysis, environmental analysis, and marketing objectives. It then explores marketing strategy selection, focusing on social media marketing, and discusses marketing targeting and positioning. The analysis extends to the 7Ps of the marketing mix and implementation, control, and evaluation. The report concludes with an assessment of corporate and marketing strategy effectiveness, including market entry, growth, and retrenchment strategies for TESCO PLC. References are provided at the end.

Strategic Marketing
Planning

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Overview of the Company and Industry to which the organisation belongs.........................1
Current position of Retail industry.........................................................................................2
Environmental Analysis.........................................................................................................2
Marketing Objectives.............................................................................................................3
Marketing Strategy Selection along with Rationale and usage..............................................4
Marketing Targeting and Positioning.....................................................................................5
Assessment of the 7P’s...........................................................................................................6
Implementation, Control and Evaluation...............................................................................7
TASK 2............................................................................................................................................8
Effectiveness of corporate strategy........................................................................................8
Marketing strategy for TESCO PLC......................................................................................9
Appropriate strategy related to market entry, substantive growth and retrenchment for TESCO
PLC.........................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic market planning is defined a continuous process through the use of which a
company creates and develop marketing strategies and other plans and it also facilitates effective
implementation of these strategies to achieves the desired goals in target market. This process
takes into account the current position of the organisation and further also helps in identifying
the promotional and existing opportunities so that best polices and strategies can be adopted to
evaluate and grab these existing opportunities for better growth and development of organisation.
Management and operations teams of a firm keeps on striving to come up with and implement
practical marketing strategies to ensure a stable and continuous flow of business operations for
an organisation.
For this assignment on Strategic market planning the selected organisation is TESCO
PLC which is a well known British multinational groceries and general merchandise retailer,
having its headquarters situated within the confines of Hertfordshire, England, United Kingdom.
This report includes a description about environmental analysis to understand the current local
economic conditions and also includes the marketing objectives. Beside this selection of most
suitable marketing strategy and marketing targeting and positioning also forms a part of this
report. Along with this an assessment of 7P’s (marketing mix) and implementations control and
evaluation is also included. At last, this project also consists of effectiveness of corporate and
marketing strategy.
TASK 1
Overview of the Company and Industry to which the organisation belongs
TESCO PLC is the leading supermarket chain operating by way of its large number of
outlets across the global periphery. It stands at Number 1 position in the retail sector of United
Kingdom which is its domestic market. Owing to this, this firm has a strong brand image across
the confines of UK. Its customer base is not willing to shift to other alternate brands looking
upon the quality of product as well as services offered by entity at market place. The core
product line of TESCO PLC is food segment but the entity is focussing upon expanding its non-
food segment to appeal to the people at global scale.
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Current position of Retail industry
The current state of retail sector is affected by the exit of Britain from EU, referred to as
BREXIT. The sale of companies pertaining to this industry has been affected to a significant
extent as a result of this national decision. Thus, it is required for corporations belonging to retail
sector to take effective measures through which they can retain their position at market place and
ensure their long term sustainability amidst adverse economic situations.
Environmental Analysis
SWOT Analysis of Tesco PLC
SWOT is one of the most effective business tools which are required to analyze internal
environment & forces that exert influence upon the operations of a firm. The major purpose of
SWOT analysis is to accumulate positives such as strength & opportunities and negatives such as
threats & weakness to pursue action in accordance with same. TESCO PLC which is the leading
retailer is under relevancy to discuss such analysis to gather all possible competencies of the firm
to get solution accordingly. SWOT analysis of TESCO PLC is as under:-
Strengths Weaknesses
The main strength of TESCO PLC is
reputation of being tagged as the most trusted
brand in sector of grocery and other shopping.
Alone Tesco holds out 34 percent of the
market share in the UK. They have unique
strength in gross development of sales and
revenue. It has approx. 3751 stores separate in
UK and total 6800 stores in the worldwide.
The most unique strength is diversified
visibility to their customers in the form of
home plus, Tesco extra and express. TESCO
PLC also believes in the superior usage of
technology such as advance checking and
payment system to their grocery stores. Also,
brand loyalty of the Tesco Plc is high, as it
believes in customer acquisition with getting
In 2017, Tesco was accused with
penalties due to an illegal accounting
declaration and misrepresentation to their
profits. Also, decrease in their operating
profits has caused decrease in the share prices
of Tesco after the declaration of the BREXIT
Referendum. In past time, TESCO PLC has
struggled with breakdown of their financial
performance due to low cost strategy and poor
financial estimation. Due to BREXIT,
prediction has been made on side of further
business losses that would be encountered by
the retailer firm, TESCO.
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their trust on the higher basis. Lastly, they
have strong brand awareness, as their
customer recalls on frequent basis.
Opportunities Threats
There are numerous opportunities for joint
ventures on the part of which Tesco stores are
failing. Also, TESCO PLC can execute
profound market research which can help in
improving performance in least-revenue
generating regions for the company.
Development of the strategic partnerships
with well-known companies such as
Sainsbury, Marks & Spencer etc. may have
excellent opportunity for TESCO PLC to
grow and expand their business. It would
enable Tesco to give more products to their
customer along with pure customer
satisfaction.
TESCO PLC is having threats in the form of
legal cases at the event of Christmas and New
Year eve by offering false and defective
products at higher prices to make false
revenue. CEO of the Tesco has made false
statement on behalf of the Brexit which has
made controversies. Moreover, stiff
competition from Sainsbury, Marks &
Spencer etc. are having pressure on Tesco plc
to put down further investment to upgrade
their performance to survive in the market. In
UK, where low cost strategy is applied by
other firms to beat Tesco Plc, it is essential
for the respective supermarket company to
adopt a cost effective strategy.
Marketing Objectives
This is an effective part of the strategic marketing plan whereby the entity stipulates the
target to be achieved as a result of the execution of plan. In this regard, the management of
TESCO PLC has stipulated the following marketing objectives:-
“To increase the share within global market by 4.25% by the end of next 6 months
through usage of social media marketing”
“To inflate the sale figures of organisation by 12.5% by next 1 year through execution of
effective marketing techniques”
“To enhance the profitability of corporation by 5% before the end of next 1 year by
launching promotional campaigns”
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Marketing Strategy Selection along with Rationale and usage
TESCO PLC is a globally renowned brand which has extensive base of audience to serve.
This tends to inflate the expectations of people from the respective retailer. Thus, the
management of this retail firm is keen on making use of effective marketing strategy in order to
drive the attention of large base of people and enhance the existing level of revenues. In this
regard, the marketing strategy that has been finalised by the top management of TESCO PLC is
social media marketing. The rationale and the way in which this strategy would provide aid to
the retailer is given underneath:-
Social media is a wide platform that a company can use for marketing. Social media
marketing is one of the most cost effective and versatile strategies that a firm can use to reach to
their target audience and boost their sales. Some reasons and ways for TESCO PLC to make use
of social media for marketing are explained below:-
Number of people using social media: As per a study of statista, number of social
media users is expected to reach almost 3 billion by the year 2021. With so many people using
social media that too almost every day, it gives a great opportunity to TESCO PLC to reach its
online audience in an effective manner. The entity can promote its wide array of products, make
social media accounts on various platforms and thereby use proper hashtags so that the
organisation and its offerings can get required attention from people.
Marketing through social media can help increasing brand visibility: Social media
marketing can improve brand visibility and hence can increase brand recognition. For this,
TESCO PLC can create their business profile and post as well as promote their content which
can get the respective retail company the eyes of so many customers at a single point of time.
Social media marketing can increase inbound traffic: An organisation can add its
website to their business profile on social media networks which can increase the number of
users on their website. This will enable TESCO PLC to convert its traffic to leads and finally
sales. For this, the retail firm needs to post more engaging and quality content on their social
media profile and appeal to a large base of audience to enhance its existing level of revenues as
well as profits.
Ease of targeting and retargeting the ideal customers: Advertisements on social media
can give a company an opportunity to reach the audience which is looking for such kind of
content only. In this regard, TESCO PLC can decide the age group, countries and segment of
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market which are very helpful in getting a good response for the offerings of retail firm. The
respective firm will get audience according to the options they select while advertising their
products over online channels. In this manner, TESCO can target their ideal customers and
retarget them once the promotion is finished to inflate its revenues as well as profits in long run.
Social media marketing is cost effective: One of the most lucrative advantages of social
media marketing is that it cuts marketing cost without compromising with the results. A
company always look for the ways where they can invest less and get more results and social
media marketing could be an appropriate option in this regard. Thus, TESCO PLC will leverage
this marketing strategy to gain the attention of large number of people and thereby promote its
organisational offerings among them.
Conversion rate through social media marketing is high: According to a study, social
media has a much higher conversation rate than the other outbound marketing strategies. The
queries a company gets on social media platforms can be easily converted into a sale opportunity
and every interested person can be converted into a happy customer. In this manner, by making
good posts and giving customers a good service, the respective retail firm can gain the trust of
people and increase its brand value within global market place.
Marketing Targeting and Positioning
STP can be referred to as a comprehensive framework that is applied by organisation
across the globe with a view to identify the target audience and to place the products and services
offered by entity among them. This model has been applied by the top management of TESCO
PLC as mentioned below:-
Segmentation: This can be referred to as the process whereby division of marketplace is
executed in accordance with some elements, with the sole motive of determining the target
market for company. In this regard, the marketing manager of TESCO PLC has segmented the
market on the basis of demographics.
Targeting: Hereby, the segmented market is targeted by the firm to enhance its sales as
well as profits in the long run. With respect to this, the demographical aspects that have been
selected by the respective retail firm to target people are income level and age group. In this
relation, the marketing manager has decided that the firm would be targeting people belonging to
lower, middle and higher class sections of society, belonging to age group of 22 to 45 years.
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Such segment has been selected looking upon the purchase as well as consumption pattern of
offerings of TESCO PLC in past by people of different age groups.
Positioning: This component of STP model informs the manner in which offerings of a
company are positioned among the customers. This is done by way of making use of a number of
communication strategies as well as techniques. In this relation, the marketing manager of
TESCO PLC would make use of social media, promotions, gift vouchers and lucrative discounts
to appeal to people. Social media handles of the retailer such as Instagram and Facebook would
provide aid to the organisation in attracting a large base of customers at a rapid pace.
Assessment of the 7P’s
This is an important part of the marketing plan as it lays down the marketing strategy
adopted by firm to gain a competitive edge at market place. In this relation, the marketing mix of
TESCO PLC is presented as follows:-
ELEMENT DESCRIPTION
Product The offerings of TESCO PLC include food, clothing, electronics,
financial services etc. These products are able to cater to the needs and
preferences of customers in an effective manner.
Price TESCO PLC makes use of penetrative pricing in order to significantly
gain the attention of a large base of audience.
Place It is seen that TESCO PLC operates via online and offline modes within a
number of countries across the globe.
Promotion Social media marketing as well as broadcast media would be the key to
setting effective relations with customers.
Process The production processes of TESCO PLC take place while ensuring the
compliance with highest standards of quality.
People The respective retail firm provides training and developing opportunities
to its staff members so that they can carry out professional development in
a timely manner.
Physical
evidence
The entailment of extensive customer satisfaction from people at global
market place would serve as the physical evidence for TESCO PLC.
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Implementation, Control and Evaluation
Implementation: The success of marketing plan cannot be achieved if the pre-determined plans
should not be implemented properly due to which it is important to take corrective actions
related with implementation without wastage of any resources. Here are the proposal investment
and allocation of funds to different promotional activities:
The financial budget for implementing the respective marketing plan of TESCO PLC is
given as below: -
PARTICULARS 1st Year
(£)
2nd Year
(£)
3rd Year
(£)
Initial investment 15000 16000 19000
Borrowings (Bank loans, credits) 13000 10000 14000
Retaining Earnings 8000 11000 12000
TOTAL 36000 37000 45000
MARKETING OUTLAY
Promotion Activities 12000 12000 17000
Sales Publicity 10000 12000 15000
Distribution and supply expenses 6000 12000 14000
TOTAL 28000 36000 35000
Interpretation: From the above table, it is clearly identified that marketing manager of
Tesco Plc makes £15000 as investment, £13000 as borrowings and £8000 as retained earnings
for 1st year of launching new product which goes up to next years. On the other hand, the
marketing manager mainly focuses on using promotional channels such as TV advertisement,
social media channels etc. due to which they invest £12000 for its first years which goes up in
upcoming years. This will ensure them to get huge success of their new product in competitive
market.
Controls
After the formulation of marketing budget, it is necessary to control the activities in
accordance with marketing plan. This makes sure that all activities are carried out correctly and
fairly. TESCO PLC would also implement a control plan to ensure that all the activities get
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executed as per the pre-decided planning and the deviation from desired target is low. This will
enable the retail firm to gain the attention of people and thereby enhance the existing level of
sale of organisation by a fair margin.
Evaluation
The evaluation of targets stipulated by marketing management of TESCO PLC would be
done by making use of benchmarking as well as Key Performance Indicators. These will provide
company with the information regarding deviation lying between actual and desired
performance. As a result of this, TESCO PLC will be able to devise corrective measures through
which such deviations can be effective managed and assure to deliver effective results in the
favour of respective retail firm.
TASK 2
Effectiveness of corporate strategy
Corporate strategy basically define as a firm’s corporate action which are mainly aim at
achievement of companies objectives through increasing its competitive strength and efficiency
of other resources and operations. Corporate strategy is a continuous process that requires
constant effort of an organisation to engage its investors, customers and other stakeholders to
increase their trust and loyalty towards organisations, thus increasing the company’s overall
equity and profitability. Use of corporate strategy is also made by TESCO PLC to deal with
Brexit issue which has created a situation of slowdown in economy of UK and adversely
affecting the operations of all retail and other sector organisations. Use of corporate strategy
provides a more clear long term vision to TESCO PLC which is useful in creating corporate
value and motivate the workforce to implement the proper actions to achieve customer
satisfaction. Use of following types of corporate strategy can be made TESCO PLC to have
better growth and acquire more competitive advantage:
Cost leadership- it is a strategy that is focused on providing product and services of an
organisations at a lowest prices as compared to its competitors and which customers are willing
to pay. Thus, it provides a better competitive strength and realizing a volume of sales that makes
them leaders in their industry. Use of Cost leadership strategy can be made by TESCO PLC as it
is very effective in increasing the sales volume and productivity of an organisation thus, yield
high profit margin (What is Corporate Strategy?, 2019).
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Product differentiation- this corporate strategy is mainly related with offering a product
that is different and unique from its competitors thus, more numbers of customers can be
attracted for exclusive features of product of an organisation. Use of this strategy will realise
higher profit for TESCO PLC through providing more competitive edge and higher customer
satisfaction through a good quality and unique product. Product differentiation strategy is
effective in creating better brand image and also increase loyalty of customers through providing
better product thus, lead to achievement of companies target of increase customers base and
profitability.
Horizontal integration- this is a growth strategy which is helpful in accruing new
business operations at same part or level of supply chain. Acquisition could be made through an
organisation through a merger or through its own new rollout of a new product. TESCO PLC can
adopt this corporate strategy as it is more effective in capturing a vast market share through
creating a monopoly and integrating the resources.
Vertical integration- this corporate strategy is focused on accruing focuses greater
control of an operations process by integrating a key segment. Use of this strategy can be made
by TESCO PLC as it ensures quality control and better planning.
From the above corporate strategy, use of cost leadership is most suitable for TESCO
PLC as it is very effective in attracting more customers thus, in current market conditions of UK
and to meet the consequences of Brexit issues, cost leadership is useful as it is focused on
offering product at reasonable prices so that every consumer can afford and purchase it. Thus, it
is effective corporate strategy for TESCO PLC to increase its competitive strength and earn
better profits.
Marketing strategy for TESCO PLC
Marketing strategy exists as a procedure which undertakes all organisational goals and
objectives that are combined together and converted into a plan. Business executive draws a
successful marketing strategy by conducting a successful market research. In the context of
TESCO PLC, the main motive of organisation is to select an effective product mix. So
organisation enhances their profits by utilising an appropriate strategy for all their products and
services.
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Appropriate strategy related to market entry, substantive growth and retrenchment for TESCO
PLC
There are various strategies related with market are mention which helps the management
of TESCO PLC to increase their market size. Some of them are mention as follow:-
Product market mix- According to the market growth and product market mix strategy,
the growth of business depends on the sale of innovative and existing products in the market.
This determines it is the combination of various strategy through which business enhances their
performance as well as productivity of business. Moreover, it undertakes several factors which
are area, size, mode, innovation and many more that all are related with business growth and
income of business. Therefore, TESCO PLC’s manager focus and implement product market
mix due to which it is easy for them to grow business as per existing market conditions.
Synergy strategy- An organisation gathers various resources to manufacture their
products which leads manager of TESCO PLC to achieve their goals and objectives in short
intervals. According to the present conditions it is difficult for the all companies to perform their
work on single based resources. So with the implement of Synergy strategy TESCO PLC and
other corporation arrange various resources due to which that produce better results and enhance
the productivity of organisation.
Divestment strategy- With the implement of divestment strategy it is easy for
organisation under which a single part of business is sold to the other market area. Similarly in
context of TESCO PLC this strategy is beneficial for organisation as it leads business to perform
their work as per profit basis. Like products which reduces the profit for TESCO PLC are pulled
from market. This results that small organisation face liquidation so merger and acquisition are
effective strategy which leads to achieve more success in market by focusing on core business
strength of organisation.
The market of UK is too wide and there are large number of organisations that are
performing their work in an appropriate manner. Similarly due to the wide customer’s base the
needs and demand of customer’s is also dynamic. Therefore, it is mandatory for TESCO PLC to
implement Product market mix strategy in organisation. Due to which it is easy for management
to focus on their retail business, it results in increasing the customer base for TESCO PLC’s
products that also enhances market size as well as revenue for firms.
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