Tesco Marketing Structured Portfolio: A Case Study of Dektron TV

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ASSIGNMENT 02: MARKETING INDIVIDUAL STRUCTURED
PORTFOLIO {LMPT}

Executive Summary
The report is focusing on creating marketing structured portfolio. The study is based on
preparation of structured portfolio for a reputed company of the United Kingdom. The
present report is based on Tesco. The report includes marketing mix and STP analysis
of a particular product of Tesco. The marketing strategy regarding selling of Dektron 24
inch, 60cm, DK2477HDR TV can be observed in this report. The price, promotional
strategy, place and detailed description of the particular products also provided. The
strategies related to further grow3th Tesco is also mentioned in the report. Specific and
innovative strategies regarding marketing campaign and advertisement are required to
be followed here.
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Table of Contents
Introduction...................................................................................................................... 4
Task 1: market place and marketing strategies................................................................4
Marketing mix............................................................................................................... 4
STP analysis.................................................................................................................6
Task 2: strategies for future growth..................................................................................8
Ansoff matrix and basic marketing audit.......................................................................8
Task 3: Marketing campaign formation for TESCO........................................................12
Aim and objectives of marketing campaign................................................................12
Formulation of marketing campaign............................................................................13
Implementation plan....................................................................................................16
Conclusion..................................................................................................................... 18
Reference list................................................................................................................. 20
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Introduction
The marketing structured portfolio is usually consists of typical bonds or type of
investment grade securities. This type of structured portfolio possesses lowered risk of
defaults. This structured portfolio of a company required to be rebalanced. In a different
perspective, the portfolio may be managed passively. Tesco is a well known retail
company which deals in general merchandise and grocery items. The company is a
multinational company mainly operating from Welwyn Garden City of the United
Kingdom. The assignment will emphasise on discussing marketing mix and innovative
strategies of the company in relevance to theories and models. The future growth of
Tesco will be measured through the Ansoff’s matrix analysis. The study also requires
generating an innovative and new marketing campaign.
Task 1: market place and marketing strategies
Marketing mix
The 4P marketing mix of Tesco covers product, price, promotion and place where the
particular product or services are targeted to be sold. As per Burns (2016), the
strategies include distribution, advertising and pricing strategies that are most
commonly used up by Tesco.
❏ Product:
The range of products or services that is offered at various stores around UK or in the
global level is huge. The products that are generally sold by the multinational retail
company are technological gadgets and electronic products along with several other
food and grocery items. Some necessary items that are under the marketing list of
Tesco are car and DIY (Do it yourself) Products, home electric products. The particular
product item that is being focused in this study is Dektron 24 inch, 60cm, DK2477HDR
TV (Tesco, 2019). These products are available in the offline and online shops of
Tesco.
❏ Price:
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The pricing strategy that is used up extensively by Tesco is cost leadership strategy.
Maintaining this particular strategy, Tesco can avail quality products at low and
reasonable prices to their valuable customers. Ryan (2016: 3), opines it also curtails
promotional costs to reduce the costs of the products. Newer food brands also have
been launched by Tesco which offers lower prices. The company has also introduced a
strategic programme for the customers who buy products from Tesco in regular basis.
They can avail special discount for future buying products. The price range of Dektron
24 inch, 60cm, DK2477HDR TV is £ 5999 (Tesco, 2019). A unique programme has
been introduced by the marketing sector of Tesco which includes facility of brand
guarantee. In this strategy, the buyers who will buy more than 10 products can get a
branded product in lowered price value. In order to provide better offers and schemes to
the consumers, Tesco has already restructured its team specialised for manufacturing
and selling products.
❏ Promotion:
The brand image of Tesco depicts its low prices ranges of products. This has been
made as a centred theme for their promotional activities. The promotional channels of
Tesco include hoardings, charitable events and television ads to promote their varied
range of technical products. Some additional offers and discounts are also availed to
the customers as an effective promotional strategy. Other important and notable
strategy that needs to be mentioned in this context is ‘Tesco Clubcard’. The card
permits the company to target and segment their customers (Dees et al. 2017: 37).
Discount facilities can be achieved by the regular use of these cards by earning points.
Online promotions are also being observed now-a-days by Tesco.
❏ Place:
Tesco is a famous retail company in about 11 countries establishing stores of an
amount of 6900 or more. The entire market of Tesco can be segregated into Tesco
Superstore, Tesco Extra, Tesco Express and Tesco Metro (Tesco, 2019). Tesco
superstores are specialised in selling non-food items and groceries. Tesco Extra offers
varied range of products within one shop. All the necessary items of Tesco can be
found under one roof and in one trip to the Tesco Extra. High margin and essential
products are sold in Tesco Express. On the other hand, Tesco metro can be found in
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city centres and towns like London and Clayton square. It is generally stretched with an
average area of 1000 square meters. There is also another branch name of Tesco
called as One Stop (Martino et al. 2017: 151). It is a separate store brand under Tesco.
The number of this types of Tesco store are relatively less. In addition to that, they
charge higher in comparison to other Tesco stores.
STP analysis
The STP analysis connects target market to methods through which a company
competes in the said market. The term STP is an abbreviation of Segmentation,
targeting and lastly positioning of a company.
Segmentation bases Tesco’s target customer section for Dektron
24 inch, 60cm, DK2477HDR TV
Geographic Region UK along with other 13 countries
Density Rural and urban
Demographic
Age All age categories
Gender Both male and females
Income Low, middle and high income category
Occupation Students, employees, professionals and
business person
Education High school, technical and Bachelors
Social status Working class, skilled working class, lower
middle class, middle class and higher class
Family size Single individuals, nuclear and extended
families
Psychographic Lifestyle Traditionalists, contented conformers
Personality Easy-going, determined
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Behavioural Occasions Regular
Benefits sought Cost advantage, variety, easy to access
User status Active user
Attitude Sceptical, positive
Table 1: STP analysis of Tesco
(Source: Created by the researcher)
Positioning of a particular product such as electronic gadgets like Dektron 24 inch,
60cm, DK2477HDR TV in this case basically deals with specified elements related to
marketing mix. It is done to attract target based customers in a swift manner.
Positioning:
● Functional positioning: Functional positioning mainly deals with the increased
quality and range of functionalities related to services and products. Tesco has been
observed to vend their finest quality and range of products by administering functional
positioning. The functional positioning acts as a point of advertisement or broadcast for
the targeted customer belt. As per Frösén et al. (2016: 97), the products or services that
are sold through functional positioning are typically of higher expanse. In comparison,
the other basic range products are not categorised to sell via functional positioning. The
reason is that it charges additional costs owing to higher quality products.
● Symbolic positioning:
The principal subjective is focused on aspirations, aims and values of targeted
customers. In case of grocery and food items, Tesco utilize this symbolic positioning so
that the range of products can be under fair trade. It is also an appreciative effort by
Tesco to refuse such cotton mills which promotes child labour for making cotton
garments. It is also an innovative strategy by Tesco to attract customers based on
emotional and psychological levels. In order to gain responsible buyer and also to
satisfy self-perception of customers Tesco uses some strategies. They usually sell their
fair trade range of products to a particular and narrow customer belt.
● Price positioning:
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The price positioning helps Tesco to attract those customer segments which are much
concerned for the price or value of the particular televisions or other services. These
types of customers are comparatively less concerned with the other features included in
the marketing mix.
● Experiential positioning:
The experimental positioning can be defined as provision of cognitive or sensory
stimulations offered to the respective customers. The beauty or health range of products
by Tesco generally targets customers through experiential positioning.
● Multi-segment positioning:
Multi segment positioning allows targeting several sections with various ranges of
products and services at similar times. The multi segment positioning is extensively
utilized by Tesco. Via this market positioning strategy, Tesco sells their higher quality
and priced range of Dektron 24 inch, 60cm, DK2477HDR TV to such customers who
are willing to spend sumptuous amount for the products and also for after selling
services (Hortaçsu et al. 2017: 199).
In addition to the aforementioned strategies there are also some additional positioning
strategies which are utilized by Tesco. Such additional positioning strategies are
Competitor positioning, product class positioning and user positioning.
Task 2: strategies for future growth
Ansoff matrix and basic marketing audit
The Ansoff matrix can be considered as strategic planning tool to provide specialised
framework in order to help marketers, senior managers and executives to devise
strategies relevant to future growth (Ivanov & Mayorova 2015: 38). The Ansoff matrix
was postulated by Igor Ansoff. The principal focus of this matrix is based on the firm’s
potential and current markets and products. It attempts to incorporate growth depending
on the type of products (New or existing) and the type of market or customers (New or
existing). The outcome of this Ansoff matrix analysis entails series of recommended
growth strategies. These growth strategies set the orientation of the particular business.
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There are four significant market-product combinations can be found such as
diversification, market development, product development and market penetration.
Figure 1: Ansoff matrix of Tesco
(Source: Created by the researcher)
❏ Market Penetration:
Market penetration is a type of growth strategy that a company wants in order to
achieve development and growth of the persisting products or services in the present
market segment (Dees et al. 2017: 37). It is acquired in order to enhance the market
share of the company. The strategy of market penetration considered as least risky by
nature. The reason is that it leverages most of the company's existing capabilities and
resources. In a market which is continuously growing, regulation of market share may
result in sustainable growth. Additionally, there can be existing opportunities to enhance
market share in case, the competitors of the particular company reach the capacity
limits. In spite of several advantages, there are some limitations of market penetration.
Ryan (2016: 3), opines once the existing market reaches to the point of saturation,
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some new and innovative strategies need to be pursued. It must be undertaken as soon
as possible to ensure growth of the firm.
In this study Tesco is focusing on market penetration as primary objective. The
electronic gadget products are already represented in the showrooms of Tesco in the
urban areas.
1. The primary focus of the company to enhance market share of the existing
gadgets and electronic products such as Dektron 24 inch, 60cm, DK2477HDR
TV. This are planned to achieve through restructuring advertising strategies in
the urban areas and metropolis (Husain et al. 2016: 27). Promotion of those
electronic gadgets can include keeping hoardings, advertising in the televisions,
primary and secondary media sources. In addition to that, resources allocated
for personal selling can also be hiked to get better responses from the existing
markets.
2. Dominance can be secured by Tesco in order to establish growth and
development in the existing market with existing range of electronic gadgets and
products.
3. Another critical yet effective strategy to establish stable position in the market of
UK is to drive out potential competitors of Tesco. Severely aggressive and tactful
promotional strategies must be designed so that most of the customers can be
attracted to Dektron 24 inch, 60cm, DK2477HDR TV products by Tesco only.
4. Loyalty schemes are another efficient strategy to emotionally and psychologically
attract customers.
The market penetration strategy is all about mediating business as usual. There is a
much advantage because; Tesco is stretching their reach within known products and
markets. The multinational retail company can gain advantage of understanding
requirements of the customers and need of the market. This can be disadvantage also
as there is nothing new to offer to the customers. Hence much investment by electronic
gadget sector of Tesco is required to conduct research for new market.
❏ Market development:
In case of market development strategy, the particular firm or company seeks
development through making target of existing products or services to a new market
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segment. Market development includes pursuit of new and additional geographical
regions or market segments. As per Malshe et al. (2017:156), it is considered as a good
strategy for development of additional market for an existing product. It is beneficial for
such firms whose core competencies are more relevant to specific products rather than
its experience related to typical market segment. In comparison to market penetration,
the market development strategy possesses greater risk as it is going to expand a new
market with new consumers. The secondary growth strategy that Tesco is focusing on
is the market development. The company wants to introduce their existing range of
Dektron 24 inch, 60cm, DK2477HDR TV items to the rural and suburban areas. There
are few inclusive strategies of Tesco that can mention below.
1. Tesco wishes to introduce their Dektron 24 inch, 60cm, DK2477HDR TV to all of
the suburban and rural areas of the United Kingdom (Kim & Min 2015: 38). In
order to attract customers from lower or middle income group, Tesco is
restructuring their promotional strategies. Intensive promotions have been
mediated not only through conservative media sources but also trendy online
sources.
2. Dimensions of the packaging and products also have been altered. A green
packaging has been introduced which is more eco-friendly.
3. Newer distribution channels also have been reintroduced in the suburban areas
of the United Kingdom. Tesco has also added e-commerce and mail version of
ordering. In this way, customers of distant areas can also be reached via online
access.
4. Alteration in the pricing policies may attract varied range of customers.
Comparatively low or middle income group people prefer economy friendly
televisions. Through curtailing in the price of the products consumers from rural
and suburban areas can also be gained.
The market development emphasises on targeting a new market with similar product.
Hence, it seems to be further risky strategy than market penetration.
❏ Product development:
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The strategies regarding product development creates new products in order to target
the existing market segment of the particular company. Product development is the
further risky strategy than market penetration and development (Naidoo & Gasparatos
2018: 12). Currently, there is no plan of Tesco to introduce a new electronic product or
technological gadget to the UK market. Development of new product requires much
innovation along with research and development. It also requires detailed insights of the
requirements of the customers. There is also an additional risk of being first in the
existing market. Due to greater risk factors, Tesco is not putting their valuable resources
in the product development currently.
❏ Diversification:
The strategies regarding diversification involves diversification of a new business
through the development of new products specialised for new market sections
(Ramanathan et al. 2017: 121). The diversification strategy is much more risky than any
other marketing strategy. The reason is that Tesco need to introduce new products in
the new market. Hence, Tesco is nullifying this particular strategy.
Task 3: Marketing campaign formation for TESCO
Aim and objectives of marketing campaign
In terms of TESCO and its marketing prospects, the marketing campaign would be
eligible for highlighting their goals regarding building up of brand image along with
introducing new products within their market and talking steps in order to reduce
negative rumours (Truong et al. 2016:355). The primary aim of TESCO is to have
increment of their customers and clients in regards to their awareness of their existing
products and services. Few objectives have been detailed out in terms of marketing
campaign formation;
● To produce information in front of consumers and to have ensured their
awareness regarding various available products
● To entertain consumer opinions regarding benefits and limitations of products
and proper remedial suggestions against such causes
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