Marketing Management Strategies of Tesco: A Detailed Analysis

This report provides a comprehensive analysis of Tesco's marketing management strategies. It begins with an introduction to marketing management and the company profile, followed by an in-depth examination of Tesco's STP (Segmentation, Targeting, and Positioning) strategy, including demographic, geographic, and behavioral segmentation. The report then delves into the marketing mix, covering product, price, promotion, place, process, people, and physical evidence, and how Tesco utilizes each element. Furthermore, it explores Tesco's relationship marketing strategies, emphasizing current tactics such as branding, customer feedback, and loyalty programs. Finally, the report concludes with recommendations to improve Tesco's marketing strategy, offering insights for future development in the competitive retail market.

Marketing
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Analysing STP strategy...............................................................................................................3
Marketing mix.............................................................................................................................5
Relationship marketing strategy with an emphasis on current tactics.........................................7
Recommendations to improve marketing strategy......................................................................8
CONCLUSION................................................................................................................................9
REFERENCE................................................................................................................................11

INTRODUCTION
Marketing management performs all the managerial function and activities in the area of
marketing of an organisation. They identify all the market opportunities where they can apply
various strategies for increasing the profitability. Marketing is refers to the promotion of
products and services for increasing the profitability of the organisation whereas management is
the process of getting things done in an effective manner for achieving the goals and objectives
of the organisation. Tesco is taken as base company. Tesco is a multinational groceries and
merchandise retailer which is found by Jack Cohen in1919. Its headquarter is in London, UK
which specials in selling of cloths, home products, food products and many more. They have
more than 7000 stores across the globe and more than 4,50,000 employees under them with
catering different of markets. Tesco also provide services such as financial services, electronics
and so on with their own brands namely as Tesco Banks, Tesco Mobile, Tesco Family Dining
Ltd and many more. In this report, it includes the analysis of segmentation, targeting and
positioning that are applied by an organisation for creating and developing their brand image in
the market. In addition to this, it also includes marketing mix which helps in creating awareness
about the different products and services offered by an organisation. It includes 7 Ps of
marketing mix in which the first 4 Ps are for product focused and remaining 3 Ps are focused on
the services provided by the organisation. Furthermore, the relationship marketing strategies for
the organisation which emphasis on current tactics is explained. And at last, recommendation for
improving the marketing strategies is included. In context to the selected company, analysis of
stp is mentioned below-
Analysing STP strategy
STP is an acronym for segmentation, targeting and positioning which is a three step
model that helps in communicating the products and services in the market (Balducci and
Marinova, 2018). It focused more on audience rather than product focused. This model is used to
segment the market, target the customer with the help of market campaigns and then positioning
themselves in the market according to the needs and expectation. In context to the selected
company, analysis of stp is considered to be the most effective as it allows for breaking the
customer into smaller groups which helps in creating and developing marketing strategies in

which the organisation can easily target and positioned its self in the market and they are
mentioned below-
Segmentation:
Segmentation refers to the division of audience into various small groups so that
communication can be done for the product about the relevant information and details. In
reference to the selected organisation, they try to separate the group of people with their
requirements and believe that they will act quickly in order to purchase t6he commodities.
Segmentation can be divided into demographic, geographic and behavioural and they are
explained below-
Demographic: In context to Tesco, they categories their customers according to different
factors such as gender, age, education and so on. They distribute loyalty card members which
help them in collecting the profile of their customers and market their products and services
accordingly and also help in developing different marketing strategies (Dixit, 2020).
Geographical: Tesco is catering wide area for marketing such as having more than 7000
stores across the globe. They are also providing halal meat for their Muslim customers
keep in mind the values and beliefs of them. In addition to this, they have also launched
their own labelled halal meet for the same.
Behavioural: Behavioural segmentation means dividing the market on the basis of
attitude, knowledge, loyalty and more. Tesco have the pricing strategy which the
products are available on cheaper prices which makes the customer loyal them and they
also make sure that all products are available of customer according to their taste and
preferences.
Targeting:
Targeting is the process of evaluating the different segments and make sure which
segment is best to targe. Tesco target their customers on the basis of various segment such as size
of the market, the profitability to the company by searching the potential customer who can
spend on their products and services and the reachability of the organisation to the customers
(Dobscha, 2019). They also create different tag line associated with different products such
organic, healthy living, value and many more which attracts the customers. Furthermore, Tesco
also provides financial services and technological products which leads customer to stop and
shop all the products from their stores.

Positioning:
Positioning is a framework which refers to the act of designing products and services in
such a way that it creates impact on customer’s mind for increasing the profitability to the
organisation. In reference to Tesco, they have positioned themselves as cheapest product stores
which help in attracting number of customers. With this, it creates impact of cheap or low price
product on customers mind. They have also offers loyalty programs in which with every
purchase, the customer will gain some points and later these points can be used in future for
purchasing. This strategy help Tesco in positioned itself in the market as they care for their
customers. In addition to this, there are various types of positioning which are mentioned below-
Symbolic positioning: Tesco creates their brand image by using various methods such
social connection which allows customers to easily link with the company. They sell product
such as clothes and grocery under this positioning and provide it to narrow customer segment at
higher prices (Dreyer and Krüger, 2018).
Functional positioning: In context to Tesco, they sell their product with the help of
functional positioning. With the help of advertisements they sell their most popular and trendy
product to a specific category of customer. Also products under this category are costly as
compared to other category of positioning.
Experiential positioning: Tesco used experiential positioning to sell health and beauty
products to the targeted customers. In addition to this, they also run loyalty program for customer
in which the customer get points on the basis of their purchase. This encourages customers to
purchase more from the store and also represents loyalty to the company.
Marketing mix
Marketing mix is a tool which is used in promotion of products and services. This tool
consists of 7ps in which 4 first ps are used for product and it is given by E. Jerome McCarthy
and Booms and Bitner give the last3 ps for services. In context to Tesco, they create awareness
about their products and services with the help of marketing mix tool which is mentioned below-
Product: Product is the item that is manufactured by the company in order to fulfil the
requirements of customers keeping in mind the taste and preferences of them. Tesco is selling
variety of products which can cater all the segments of the market (Gummesson, 2017). They sell
products such clothing, food products, home products and many more. Moreover, they are also
producing their own labelling products such as finest, everyday value, Tesco loves baby and so

on. Also in addition to this, they are also have their own website which the customers can easily
order the product online.
Price: Price is considered as the amount of money the customer is willing to pay for
buying the product it is important for the company. Tesco follows cost leadership pricing
strategy in which they offer products at lower price with compromising in the quality of product.
They also offers their customer club card syst5em in which the customer gain points with
purchase and these points can be converted into cash in future purchasing. This type of pricing
strategy helps the company in gaining trust of the customers and also helps in increasing sales
without affecting the profitability of the organisation.
Promotion: It refers to the advertising of the product which the company is producing for
the people. Tesco is selling their products in low prices which is the biggest advantage to them.
They uses different medium for promoting their products such as televisions, charitable events ,
promotional discounts offers and many more (Homburg, Jozić and Kuehnl, 2017). It helps in
enhancing their brand image by reducing cost for maximising the profit. Due to their low pricing
strategy, it helps in attracting number of customers all year around and also offers various
promotional activities such as half price days, buy one get one free and so on. Tesco have the
easy accessibility and availability of online stores and their payments which helps in acquiring
the loyal customers.
Place: Place refers to the location where the distribution of products is done which is
accessible to the audiences easily. In context to the selected company, they have more than 7000
stores across the globe in which they are catering different market with the help of their own
brands such as Tesco Metro, Tesco Express, Tesco Extra and so on. Tesco Express are the small
stores having essential and high margin products as compared to Tesco stores. They are also
providing products online for their customers which can be easily accessible by the people.
Process: Process refers to the set of all functions and activities in order to operate the
organisation smoothly. Tesco offers speedy billing services for their customers in both offline
and online stores. The customers can easily pick up their products from the store and go to
assistants for paying as well as use self service machines to make their payments.
People: People represents the organisation which includes staff members, salespeople,
customer service team and many more which are working behind the organisation for smooth
running of the firm (Hunt, 2021). Tesco is employing a lot of people which is trained for giving

services to the customers. They have more than 4,50,000 employees in different markets across
the globe for assisting the customers. In addition to this, they uses different programs such as
Colleague Privilege card, Save As You Earn, and Buy As You Earn to gain the loyalty of their
employees.
Physical evidence: Physical evidence is all the tangible and intangible services which is
the customer is paying for it. Tangible are the products and intangibles are the service that are
experienced by the customers. In context to the selected organisation, tangible items such as
clothing, home product, food product and many more are used by the customers whereas the
services such as customer care services are intangible which the customer experiences (Kotler,
2017). The customers can have feedbacks, complaints which act as physical evidence of the
company. In addition to this, they also have their own website for shopping online.
Relationship marketing strategy with an emphasis on current tactics.
Relationship marketing refers to all the functions and activities which have an aim of
creating and developing long term relationship with their customers and increasing the
profitability of the organisation. It is different from traditional marketing as relationship
marketing is rely on customer satisfaction and customer retention that gives output for
maintaining the long term relationship with customers. It also recognizes the value of a customer
and helps in keeping good relations with them. The relationships can be maintained with new
and existing customers with the help of emerging technologies that can shows that the
organisation acre of their customers. In reference to Tesco, they have adopted customised
marketing strategies which helps in maintain a proper communication with their customers with
the help of various methods such as using social media for getting feedbacks about the product
and services that leads to increase in the level of customer satisfaction. They uses various
strategies for maintaining relationship marketing which is mentioned below-
Branding: Tesco is a powerful brand by maintaining its reputation by their values,
offering low prices product and focused on their customers (Lim, 2018). They have a strong
public relations and advertising which helps in promoting their products and services that can
easily attract customers to buy from them. In addition to this, Tesco has a variety of products that
customers can choose from and also provides their own labelled products keeping in mind about
the values and beliefs such as halal meat for Muslim customers. Moreover, they also offers
separate counters for people who consumes vegetarian, vegan and meat (Mensah, 2017).

Furthermore, they make sure that they provide best customer services and also maintain their
level of customer satisfaction. This makes the customer attracts which helps in increasing their
sales and productivity of the organisation. Tesco has also entered in the markets of electronics,
clothing and banking services which provide people to buy everything from them. The expansion
of their services in various markets is the best strategy for maintaining the relationship with the
customers and helps in increasing the profitability of the firm.
Growth strategies: Tesco has adopted different strategies which help in targeting
different segments. They have focused on growing their market in UK which will helps in
catering the international markets. Tesco has positioned themselves in both the sections of food
and non-food items (Purwanto and et. al., 2019). They have also introduced their loyalty card
programs which give benefits to the customers by every purchase, the customer gets points
which can be used in future purchasing. Also with the offering of online websites, the customers
have the access to purchase then product online. Furthermore, with the offering of various
services such as financial services, electronics services they have capture the several segments of
the markets.
Advertising: Advertising plays a vital role in growth of an organisation. Tesco uses
different methods of advertising of their products and services such as print media, digital media,
public relations and so on. They are using social media heavily for advertisement which helps in
improving their facilities by the helps of customer feedbacks. This strategy helps in improving
the customer experience and customer retention.
Sales Promotions: Sales promotions help Tesco in executing the strategies for
maintaining the customer relationships such as offering of clubcards which helps in collecting
points with every purchase that customer made and it can be used in future purchasing, free gifts
provides customers with various offers such as buy one get one free where the customer gets one
free item with every purchase. And point of sales materials allows the company to get posters,
display stands and other promotional materials from the manufacturers for promoting the
products and services of the firm.
Recommendations to improve marketing strategy
Marketing strategies helps in creating planning for organisation that leads in selling of
commodities (Rumpf, Boronczyk and Breuer, 2020). Tesco uses various marketing strategies to
capture different markets and customers. They make sure that each and every strategy they use

provides a positive impact on their organisation (Sigala and Robinson, 2018). For improving
more on making strategies, they can use various strategies which are mentioned below-
Social media: Tesco is already using social media heavily for catering pool of people for
creating awareness about their products offered. They can use social media elements such as
youtube for posting videos about the experiences of customers about their products and services
which will help other people in knowing about the product and also creates impact for buying the
products. They can also advertise their offerings with the help of social media influencers as
influencers have large number of followers which helps Tesco in catering large number of
people. Tesco can post daily updates on social media about their new product launch with its
details.
Consistent and Persistent: In context to the selected organisation, Consistence and
persistent information about an organisation and their offerings are must which helps in creating
impact and image in minds of customer. With the help of consistent posting on different
platforms such as televisions, billboards, social media and many more helps customer in
knowing about the new launch and the most popular product of the organisation (Tadajewski and
et, al., 2018). This strategy use by Tesco helps in gaining more number of customers which leads
in increasing of sales. As they are already attracting customers by offering low pricing strategy
for products and promotional activities such as buy one get one free in which when a customer
buys a product, a free product will be given to them and providing clubcards to the customer for
future purchasing. This will be an advantage for them for increasing the profitability of the
organisation.
CONCLUSION
From the above, discussion, it can be concluded that marketing strategies is important for
an organisation as it helps in planning of different strategies for converting a prospect to
customer by selling of products and services to them. This also helps in creating brand image,
value among the people that leads to customer retention and their satisfaction and also helps in
increasing the sales of the company. In this report, it includes the theoretical concepts of
marketing strategy such as segmentation, targeting and positioning which helps in marketing of
products and services. Segmentation includes three types of dividing the people on the basis of
demographical, geographical and behavioural whereas positioning helps in creating brand image

in the market on the basis of symbolic positioning, functional positioning and experiential
positioning. Marketing mix plays an essential part in the organisation for promoting the products
and services which helps in catering different markets. It includes all the 7 Ps of marketing mix
such as product, price, promotion, place, people, process and physical evidence. Moreover, the
relationship marketing strategies such as branding, growth strategies, advertising and sales
Promotions helps in maintaining the connecting with the customers that leads to customer
retention and satisfaction is also explained in this report. In addition to this, it also includes
recommendations for improving the marketing strategies of the organisation.

REFERENCE
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