Strategic Marketing Management Analysis of Tesco PLC Report

This report provides a comprehensive analysis of Tesco PLC's strategic marketing management. It begins with an introduction to Tesco and the role of strategic marketing, including its processes and relationship with corporate strategy. The report then explores various strategic marketing planning models, such as SWOT and Porter's Five Forces, and examines the link between strategic positioning and marketing techniques. Furthermore, it delves into the merits of relationship marketing in Tesco's strategy. The analysis continues with a discussion of marketing techniques used to ascertain growth opportunities, marketing strategy options, and strategic objectives. Finally, the report addresses the impact of external environment changes on marketing strategy, internal analysis of current strategies and weaknesses, and strategic responses to key emerging themes. The report utilizes a variety of sources to support its findings, providing a thorough examination of Tesco's marketing approach and its effectiveness.

TESCO PLC
Strategic Marketing
Management

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Table of Contents
Introduction ..................................................................................................................................... 2
TASK 1 ........................................................................................................................................... 3
1.1 The role of strategic marketing ........................................................................................ 3
1.2 The processes involved in strategic marketing ................................................................ 3
1.3 Relationship between strategic marketing and corporate strategy ................................... 5
TASK 2 ........................................................................................................................................... 5
2.1 Models used in strategic marketing planning ........................................................................ 5
2.2 Link between strategic positioning and marketing techniques ............................................. 6
2.3 Analyzing the merits of relationship marketing in a given strategic marketing strategy. ..... 7
TASK 3 ........................................................................................................................................... 8
3.1 marketing techniques to ascertain growth opportunities in a market .................................... 8
3.2 How to use marketing strategy options in a market .............................................................. 8
3.3 Strategic marketing objectives for a market .......................................................................... 9
TASK 4 ......................................................................................................................................... 10
4.1 The impact of changes in the external environment on a marketing strategy. .................... 10
4.2 Internal analysis to identify the current strategies and weaknesses .................................... 11
4.3 Strategic marketing responses to key emerging themes in a marketing strategy ................ 12
Conclusion .................................................................................................................................... 13
REFERENCES ............................................................................................................................. 14

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Introduction
This assignment provides a study on the strategic marketing management of Tesco Plc. Further
this report helps to understand the principles of strategic marketing management, the tools used
to develop a strategic marketing strategy, how to use strategic marketing techniques and the
responses to the changes in the marketing environment. According to Tesco Plc (2012) this is a
British multi national grocery and a general commodities retailer. This company is headquartered
in Cheshunt, Hertfordshire, United Kingdom. When measured in profits it is known to be the
second largest retailer globally. At the beginning this company was just a group of market stalls.
The name Tesco was originated after Cohen, the founder of the company bought a tea shipment
from T.E. Stockwell. He combined the initials of this group and the first two letters of his name
and the first Tesco store was opened in 1929. The Tesco Company’s business expanded swiftly
and by 1939 there were more than hundred Tesco stores around the country. They sell books,
clothing, furniture, electronics, petrol, software’s, financial services, telecoms and internet
services. The motto of jack Cohen was “pile it high and sell it cheap”. He used to motivate his
sales forces using such mottos too. By 2011 this company had launched a wide range of Tesco
venture brands. The company’s profits were around £ 1.9 billion on the first six months of 2011
but as the sales growth in UK was low they re-launched their own brand with new packing
methods and recipes by April 2012. They have a very good brand image and is known for
providing the best services for their customers.

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TASK 1
1.1 The role of strategic marketing
According to the Guardian (2008) the major role of strategic marketing in an organization is to
supply their customers with opportunities that will help them to create a personal value by
participating in their brand. Due to the customer relationship, it helps to increase the profit level
of the Tesco organization. Strategic marketing helps towards the prosperity of the business. With
the assistance of strategic marketing the relationship with the external business factors,
competitiveness occurring in the industry, developing the sales targets, quality, price and
distribution can be maintained in a high perspective (Nag et al, 2007). In order to maintain the
role of strategic marketing quite well the business management should be able to understand the
importance of planning the strategic marketing process. Strategic marketing is offering security
and guidance to the individuals and the companies through good and difficult times. It gives the
power for the management to control the future of the organization according to Strickland
(2005). According to Aaker (2008) strategic marketing is a vital element that can be used by
companies so as to obtain their targets and goals. Finally in conclusion we can say that the role
of strategic marketing in an organization is to see to the fact that the companies reaches their
goals, develop the business, future implementations and innovations that could be used to
develop the business, developing the relationship among the internal and external factors of the
business, its competitiveness, quality of the products, deciding the prices and distribution.
1.2 The processes involved in strategic marketing
According to Kerin et al. (2007) there are many processes such as understanding the customers,
analyzing the market, analyzing the competition, researching the distribution, defining the
marketing mix, financial analysis and review and revise involved in strategic marketing of a
company such as the Tesco Plc.

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Understanding the customers analyzing the market analyzing the competition
Marketing Strategic Process
Review and revise researching the distribution
Financial analysis defining the marketing mix
Figure 1: Processes involved in strategic marketing
Let us see the processes involved in the strategic marketing of Tesco Plc. In order to understand
the customer Tesco Plc has being developing a clear picture of their targeted customers by using
market researches and analyses. This helps to develop their pain points and benefits. By
analyzing the market Tesco Plc is able to find out the market data such as the total available
market, trends in the market and the market growth. The next process is analyzing the
competition. The Tesco Company, in order to analyze the competition, carries out researches and
assesses the strengths and weaknesses of each. The next process involved in the strategic
marketing process is the research of distribution channels. By conducting these researches they
try to figure out what is the best method which could be used to deliver their products and
services to their targeted customers. Next process is the defining of the marketing mix. The sixth
process is the analyzing of the financials. For example the Tesco Company put the marketing
budgets together and evaluates the projected marketing ROI and customer acquisition costs. The
final process is the review and revises. Here the effectiveness of their marketing strategy and
revise is extended as necessary. By having a strong strategic marketing process the Tesco Plc has
being able to ensure their marketing activities aligned with their goals and targets maximizing
the business return from their marketing efforts.

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1.3 Relationship between strategic marketing and corporate strategy
According to Shaw (2012) strategic marketing is used by organizations such as Tesco Plc in
order to gain customers from their competitors using research results gained by conducting
researches and analyses on customer needs and product qualities. Corporate strategy is involved
in working in an industry and trying to gain more income through new customers. As Kotler and
Keller (2009) mentions the concept of corporate strategy is setup with overall business concepts
while the strategic marketing is an operational strategy which includes the identification of the
goods, selling and advertising. Corporate strategy is concerned not only with making objectives
for the marketing section but also for the interior sections within the department. Corporate
strategy must be planned and carried out before the strategic marketing plans are implemented.
Corporate strategies and strategic marketing do have a link between them. On the contrary,
focusing on marketing involving in the strategic plans of developing the product, price setting
and distribution is a very famous belief. Corporate strategy differs from the strategic marketing
when corporate strategy is involved less in a product or the development of sales and involved a
lot more in profitability. This means that the main focus of corporate strategy is profitability
where the strategic marketing focuses on the sales, promotions, developments and quality of the
product. These are the relationships between strategic marketing and corporate strategy.
TASK 2
2.1 Models used in strategic marketing planning
As Baker (2008) mentions there are many models used in strategic marketing planning. They are
the SWOT model, PESTEL model, Porter’s Five Forces model, BCG Matrix, Product life cycle
model and Ansoff Matrix. Let us now take some of these models into consideration. The SWOT
model helps to identify the strengths, weaknesses, opportunities and threats of that particular
organization. This is the easiest tool which can be used to develop the overview of an
organization’s strategic situation. The Porter’s Five Forces model helps an organization to
identify the environmental forces which impact on the company’s ability to compete in its
current market and to diagnose the principle competitive pressures in the market and to assess

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how strong and important each of these is. Let us now see a diagram of the Porter’s Five Forces
model.
Threats of New Entrants
Bargaining power of Rivalry among the competitors Bargaining power of the
the suppliers buyers
Threats of substitute products
Figure 2: Porter’s Five Force Model
This framework can be used for a particular industry and all the businesses included in it. Next is
the product life cycle model. This consists of five stages such as product development,
introduction, growth, maturity and decline. This model can be applied to a product class, product
form and product brand. Ansoff Matrix helps an organization to identify existing markets and
new markets. The PESTEL model is used to identify the impacts of macro environmental factors
on a brand or a product. It includes political, ecological, social, technological, environmental and
legal factors. All these are models that are used in strategic marketing planning. Each company
can choose the best suiting model for their company in that particular industry. Many
organizations such as Tesco Plc choose all of these models for various kinds of situations.
2.2 Link between strategic positioning and marketing techniques
Strategic positioning complies with the developing of products and services and marketing mix
in order to obtain a specific place in the targeted customers minds (Aaker, 2008). Positioning is
necessary for the perceptual processes of the customers, high competition and the growth of
commercial messages. It is allowing the company to gain more information, to share more

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customers and to promote the clutter. Marketing techniques are the measurable targets that a
company tries to achieve for their target market within a certain time period. The most famous
techniques used for strategic positioning are the 5 D’s of positioning. They are Documenting,
Deciding, Differentiating, Designing and Delivering. Some organizations such as the Tesco Plc
develop their strategy in such a way that it will position them closer to their competitors so that
the customers could make a direct comparison when they are purchasing the products. And some
companies use marketing techniques such as offering superior benefits depending on its
marketing mix strategy. These are the links between strategic positioning and marketing
techniques.
2.3 Analyzing the merits of relationship marketing in a given strategic marketing
strategy.
The spirit of relationship marketing is an individual or an emotional connection too the brand.
This relationship is centered on the trust which is created through the reliable delivery of a
product or a service which exceeds the customers’ expectations. The goal of this relationship
marketing is to develop the loyalty between a specific brand or an organization and a targeted
consumer base. The merits of the relationship marketing are given below.
 Helps an organization such as the Tesco plc to recognize their long term customers
 To understand the customer characteristics
 Distribution and meeting expectations
 Repeat business
 Avoids negative transition
 Word of mouth marketing
 Increasing the customer base
 Reduces the marketing cost
 Minimize the customers price sensitivity
 Product market expansion

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Relationship marketing can be formed with the insights gathered from data. Insights expose the
opportunities and challenges. So as Homburg et al. (2009) mentions, with the proper
collaboration relationship marketing maximizes the values and drives up the profitability in an
organization.
TASK 3
3.1 marketing techniques to ascertain growth opportunities in a market
Businesses should respond to the changes in order to remain competitive. Tesco plc is a British
multi national grocer and a general commodities retailer. This company was a subject of the
letter bomb campaign in August 2000 till February 2001. In July 2001, the company involved
themselves in online grocery retailing in USA when they obtained a 35% wager in grocery woks.
By 2007 Tesco plc was placed under the investigation by UK office of fair trading. Due to the
sales growth in UK becoming low the company announced re-launches of many of their products
to the market. The marketing objectives of the Tesco Company are to obtain growth, increase
their sales, to be the outstanding international retailers in stores and online and to maintain the
market share. According to Kerin (2012) in order to accelerate growth the company has to adopt
marketing techniques. Some of the marketing techniques that could be used by the Tesco
Company are innovation and implementation, becoming a valuable resource, separating the
organization from its competition, positioning, promoting and anticipating changes. The re-
launches made by Tesco plc made people buy their products more. This gave the Tesco plc to
grow with innovation. These are the marketing techniques used to ascertain growth opportunities
in the market.
3.2 How to use marketing strategy options in a market
In order to be an efficient and an effective business, Tesco plc seeks out targeted customers from
different groups. There are four strategic marketing options which should be used in a market.
They are selling the existing products to the already existing customers, developing new products
to sell to the existing groups of customers, expanding the existing products to new market

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segments and development of new products for new market segments. In order to use these
marketing strategy options in the market a marketing strategy should be developed. Let us now
see how it is done. The first step is to define the products or the services that the Tesco Company
offers as well as its intentions determining how beneficial they are to the customer base.
According to Stolley (2013) the next step is the establishment of a marketing plan of action in
order to position the products and the services of Tesco plc in the market place. The third step is
to develop a study on the market in order to determine the type of customer the company is
targeting with their products and services. The fourth step is to know who the competitors are so
that various options available for the targeted customers can be determined. The next step is to
find what is setting the particular product apart from the competition. Next decide a budget and
make sure that this plan fits into it. Then determine various marketing methods which can be
used to implement to promote that particular product. The final step is to be prepared to response
to the changes occurring in the industry. By creating a good strategic marketing plan marketing
strategic options could be used in the market.
3.3 Strategic marketing objectives for a market
According to Leroux (2010) strategic marketing objectives of any organization would be to
maintain or increase the market share, develop new products, meeting customers’ needs, market
positioning and gaining competitive advantage. Product life cycle management is a strategic
business approach which is applied by the Tesco plc in order to achieve their strategic marketing
objectives. Here the products enter to the life cycle when they enter the market. Profits grow
when the product is popular. Competitors’ threats are directed towards the brand image. As the
sales saturate the sales declines. For example, the decisions change from maturity to decline.
This is how the product life cycle management is done in order to achieve the strategic marketing
objectives by the Tesco plc. For example, Tesco’s best grated cheese is in growth phase as the
prices at this phase is low.

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TASK 4
4.1 The impact of changes in the external environment on a marketing strategy.
Each and every business has impacts made by the external environment. These external
environmental factors which influence the business can be identified by the conduction of a
PESTEL analysis. Let us find out the impacts of changes in the external environment on a
marketing strategy by conducting a PESTEL analysis.
POLITICAL FACTORS These factors which affect the business are
beyond the company’s control. Tesco’s
financial division during the resection showed
how the government inspects over the business
and the customers’ reaction for this.
ECONOMICAL FACTORS Affects the performance of the business. When
the demands fell, it lead to the low income and
employment Tesco responded by reducing
their food costs as it is an essential need to
everyone.
SOCIAL FACTORS Help Tesco to target their business products
and services. The company has a wide
spectrum of services.
TECHNOLOGICAL FACTORS The internet and consumer behaviors changing
towards the e-world affected Tesco Plc
negatively as there was a decrease in the sales
in the section of books. On the contrary the
launching of online shopping made Tesco
expand because they had all their products in
one place. This allowed Tesco to gain
customers as they never expected before.
ENVIRONMENTAL FACTORS Relates to social, political and legal factors

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which affect the business. For example Tesco
uses recyclable packing in order to protect the
environment.
LEGAL FACTORS Tesco makes sure to keep all the legislations in
order to avoid them from going to the court
Table 1: PESTEL analysis of Tesco Plc
Therefore, these are the impacts of changes in the external environment on a marketing strategy.
4.2 Internal analysis to identify the current strategies and weaknesses
According to Humphrey (2005) a SWOT analysis could be used to identify the current strategies
and weaknesses of an organization. An internal analysis means the strengths and the weaknesses
of an organization. These factors demonstrate the advantages and disadvantages of a company to
meeting the necessities of focused market. Strengths are the core competencies which promote
benefits which gives an advantage relating to its competitors when meeting the customers’ needs
and the target market. Weaknesses are the limitations of an organization which creates
disadvantages when meeting the needs of the customers. The current strategies and weaknesses
of Tesco plc are as follows. STRENGTHS: Tesco possesses a strong brand name and image in
the UK market so that the other parts of the world too believe in its brand quality. Tesco is
offering the best online services to their customers. Tesco is recognized as the leader in the UK
market. The market shares of Tesco are improving all around the world. WEAKNESSES: One
of the main weaknesses of Tesco is they completely depend on the UK market. Serial
acquisitions and debt reduction are weaknesses of Tesco too. These are the results obtained by
carrying out an internal analysis on Tesco plc.