Detailed Marketing Report: Tesco's Strategies and Analysis

This report provides a comprehensive analysis of Tesco, a leading UK supermarket, focusing on its marketing strategies and operational aspects. The introduction highlights Tesco's growth from a small supermarket to a diversified retailer offering various services, including customer insurance, electrical items, and mobile phones, along with a customer reward system. The report discusses Tesco's competitive market, major competitors like Asda, Sainsbury's, and Morrison's, and the impact of financial crises on its market share. It explores Tesco's integration of marketing and operations, including the use of input-transformation-output diagrams to illustrate the company's processing systems and supply chain management. The report further examines Tesco's marketing strategy, including internal and external analysis, goal setting, and strategy formulation, along with a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report also discusses the PEST analysis, highlighting political, economic, social, and technological factors affecting Tesco's operations. Finally, it emphasizes Tesco's focus on quality management and customer satisfaction. This report is designed to provide students with a detailed understanding of Tesco's business model and marketing practices.

RUNNING HEAD: MARKETING MANAGEMENT 1
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Student Name
Institute Name

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Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
Integration..................................................................................................................................4
Marketing...................................................................................................................................7
Operations................................................................................................................................10
Conclusion................................................................................................................................12
Reference..................................................................................................................................13

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Introduction
The report will discuss in detail about one of the leading supermarket of UK, Tesco which is
offering wide variety of products for the people. It was started as a small supermarket and
now it has grown into varying services like customer insurance, electrical items and mobile
phones. The company also provide the consumers with a reward system where consumer is
able to get a return of 1% on every purchase. It is a big organization in the country and
consist of different kinds of systems which are further assisted by the organization in
operations at some levels that ranges from operational level to manager level (Donnelly et al.,
2012). It is also based on structure of varied systems which permit the business to function in
an effective manner and also make sure that the right decision is formed. The company is one
of the largest seller in UK and have a third position in retail sector after Wal-Mart and
Carrefour. The organization sells more than four thousand food based products. The company
initiated with the business in grocery based retailing, however now it also ventured into
stationary, beauty, healthcare, utensils, entertainment, clothing, electrical items and various
seasonal products. Yearly profits of the company in year 2005 was also announced as two
billion pounds and in the year 2006 it was further announced that it was going to start the
international stores in near future. The company functions in more than thirteen nations with
three thousand two hundred and seventy-five stores of which more than two thousand
functions in UK (Peck et al., 2013). It functions through multiple stores based formats which
consists of elements like express, metro, hypermarket as well as superstore. The company has
its own set of products which ranges from value, finest diversified income group of
customers.

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Discussion
Integration
The market where Tesco functions is very competitive market and this company happen to
hold a lot of power, as well.The company has three important competitors in the market
which are Asda, Sainsbury and Morrison. All these supermarket giants have many chain as
well as collective mass that can impact the market and food as a whole. But the financial
crisis in the recent time has put the company under immense pressure when the consumers by
seeking decrease the level of expenses to relatively cheaper for other supermarkets as Aldi
and many more (Donnelly et al., 2012). As per the data in latest TND Data, companies like
Waitrose, Tesco and Sainsbury are in loss in terms of market share of UK grocery sector. The
sales of Tesco just increased by 5.5% whereas sales of Sainsbury went up by just 5.6%. This
percentage is much less in comparison to hard discount retailers as Aldi where sales jump up
to 22% over three months of time period. In order to maintain the market share, the
organization has dealt with issue by releasing four hundred low cost as well as ranges of
products and food on the stores. In the current time, the company has more than two lakhs
seventy-three thousand employees and domestic level market share. In the year 2008, the
company get the position of fourth largest retailer all across the world (Christopher and Peck,
2012).
Experience vs. expectation diagram

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Input-Transformation-Output diagram
The company has gained advantage from the transformation processing systems in so many
methods and such systems will collect as well as hold data that consumer buys, specifically
those who carries the loyalty card. It will further help in being able to aim at other products at
such consumer to rise the amount the sales. There are number of automatic links exists with
the suppliers that will help in improving the stock so that it can be ordered again as soon as it
has been out of stock (Chaffey et al., 2013). It immensely decreases the effort on physical
level of stock ordering and also reducing the mistakes that are part of manual ordering. There
Describe shopping experience at Tesco

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is high level of effectiveness at services since prices can be changed without any disruption
with greater choices of products that can be taken with low level prices to the consumer.
The company also utilises this system in their electronic point of sales systems as well as scan
the barcode and interact with so many in-house systems. This in-house system will also
record all kind of data level stock and transaction which require one to re-ordered since in
some batches which can be moved toward the mainframe at the end of every day. This data
can be easily accessed with high level management to generate report and will also give the
distribution centre with order in the coming time. This data will also give order based data for
third party suppliers (Mollah, 2014).
Relationship between operation and marketing functions
Foundation for strategy based marketing functions as well as structure based tools are the
main key to assess the current business case. There are so many risk as well as value based
trade-offs are made explicit that lead to some solid and concrete proposals. It is mainly to add
some relevant value and also reduce the level of risk. There are number of explicit plans,
consisting effective base for planning and need to grow by Tesco as the strategy related
option (Palmer et al., 2014). Tesco can employ two strategic level alternative that are most
likely to be the main market goal of attention on market growth via partnership as well as
diversification with the help of new product growth.
Market growth strategy comes with joint growth as well as strategic level alliances by
entering in new market place like China and Japan since it can help in serving as main
development driver of the revenue of the company as well as expansion strategy. The
company also show interest in Japan that will likely to grow further in a meanwhile since the
market of Asia are showing rapid rise in spending by customer and rise in trend especially in
retailing (Felgate and Fearne, 2015). As far as operation of the company are concerned,

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Tesco is one of the leading company when it comes to supply chain as per surveys of global
food and grocery specialists like IGD. The senior management from fifty global organization
in a survey show that the features of leading retailer consist sales and profit development with
a strong consumer attention with an integrated supply chain as well as a unique business
model with collaborative associations.
Marketing
Enhanced competitive advantage
Growing marketing strategy is very crucial work for every company since it need a highly
detailed analysis of every feature related with business. Following is the detailed discussion
of some crucial steps that the company Tesco needs while developing an effective marketing
strategy:
1. Internal analysis: this consist of evaluation of company’s internal weaknesses and
strength. It further consists of many structure, policies, culture, available resources,
workforce and the financial strength of the company that help in making sure the
efficient in the execution of marketing strategy (Neupane, 2012).
2. External analysis: this feature consists of evaluating all kind of factors that are present
in external environment for companies and directly or indirectly impact the business
level operation. It initiates with knowing the present popular trends and requirement
of the present customers. What are there expectation and needs is one important
question which management of Tesco need to focus upon. Second factor is
competitors wherein the potential strength and threats of competitor can be identified
with an opinion to completely offset them in optimal manner (Neupane, 2012).
3. Establishing goals: after evaluating the business environment it is important for the
company to establish goals that can be evaluated or measured. For this, it need to be

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clear and specific as all the operations in future can be directed to accomplish these
goals and objectives.
4. Formulation of strategy: at the time of setting goals and objective that are specified,
different strategies are formed as per set goals. Different marketing strategies are
developed properly that helps in defining product, place, prices as well as distribution
channels and many promotions based activities to be utilised. The set of strategies
must be able to completely overcome the threat and also avail the development
opportunities right before the competitor’s functions (Neupane, 2012).
A unique product or service offering for Tesco
Organization in general these days are immensely leveraging their signal based reading
capacities to make intervention at operation level in real time and also completely ignoring
the slow process of decision based hierarchies. Tesco needs to perform a detailed analysis of
the purchase based patterns of the thirteen million customers of its loyalty program. The
overall finding ensure that Tesco can change the offering for every store and every customer
segment give early warning to move the consumer attitude. They have also supported the
growth of Tesco online operation which are successful so far and has extended the business
model of the company (Czinkota and Ronkainen, 2013). It will automatically ensure that the
company can store without the need of any walls and also manage to provide wide range of
products as well as services consisting financial based services and media. On top of that,
despite of purely a cost centre, the company can make use of rich database as well as their
effective analytical capacities to produce a strong stream of direct revenue. Further, Tesco
can permit other companies to use their insights and technologies for a specific amount.
SWOT
Strength Weaknesses

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1. Strong product offering with wide
range of prices.
2. Development in supermarket space
because of growth in population and
consumers demand for many
products.
3. Strong brand image because of
market dominance. Market
dominance is supported by high
quality product and trust.
4. Online operation and marketing has
a large impact on the growth of
many products of Tesco and these
advantages has helped the company
and its consumer immensely (Coe
and Lee, 2013).
1. Prices: the price of good pose so
many issued for the company since
the company tries to cut prices to
satisfy consumers which led to
reduced profit margin.
2. High dependency on UK market will
impact company in long run since
any economic challenge on the
country will impact its performance.
Opportunities
1. The success in online space is one of
the huge opportunities for the
company.
2. Market expansion in Asian market
will help in making positive
implication in the development on
global level (Coe and Lee, 2013).
3. Development of non-food sales
Threats
1. Economic instability
2. High competition
3. Rise in price of raw material

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which will help in cutting cost based
structure that can start same kind of
strategy for many non-food retails.
PEST
Political: after the policies like European Integration and Free trade agreement, the current
market has risen for many British based organization to invest in places like Eastern
Europe. The company has already dominating with sixty hypermarket stores in places like
Hungary.
Economic: the present retail sector is sensitive because of recession and also highly
sensitive to any change in financial status like interest rates (Coe and Lee, 2013).
Social: transformation in taste of customers as well as lifestyles shows so many options and
threats for the sector. Opportunities in new market and consumer comes with added threats
in term of options settled in many Swedish national retailers.
Technical: transformation in methods of retailing like sales through internet is now
common practice in retailing. There are many paperless function with the administration
and the management of the company that are part of the IT system. This can be accessed
via many secure servers (Coe and Lee, 2013).
Operations
Quality management
Tesco is known for its high-quality product and company give high emphasis of the quality
management. The moto of the company is hundred percent customer satisfaction without any
error or defect in product. Every possible product offered by the company comes under
quality check since it has to become the part of qualified product as well as value for the

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money of consumers (NiTZBerg, 2012). Quality is evaluated with the help of supply chain.
The concept of total quality management is the main concept which has to be managed by
Tesco and it never deal with assurance from quality perspective but it definitely tells about
the methods in which business can be done. It also deals with management of people as well
as processes of business so that the level of customer satisfaction can be accomplished.
Customer satisfaction is of high importance in the company. TQM is primarily related to the
performing the right things in right manner (NiTZBerg, 2012. Consumer can be internal at
the same time external. At the time when Tesco purchased food products with the help of
supplier then it functions like a consumer and at the time selling the product, the company
functions as if they are serving the consumers. The company also manages its total quality
concept in some ways discussed below:
1. Prevention: the company believes in prevention to ignore production of so many
defected products.
2. No defect: the main aim of the company is to manufacture the defect free products
and reduce the level of defect in case of complicated product.
3. Quality covers every individual: the company applies the concept not just on the
manufacturing and operation section but it consists of other units as well like human
resources, marketing and finance (NiTZBerg, 2012.
4. Constant improvement: it seems for the improvement in the processes and product
and to do that it can be applied on the lean management.
5. Involvement of employee: it consists of the employees that are part of the production
and operation process to take the feedback. This is why it needs improvement.
Practising TQM in a business in company like Tesco, where the level of consumer
satisfaction is very crucial and is not an easy function. The company provide the chance to

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the workforce to be part in the manufacturing process as they are actually part of production
products (NiTZBerg, 2012.
Conclusion
The success of the company clearly shows the concept of branding as well as effective
service based delivery, can come in swift moving, which also goes beyond splashing the logo
at various places. It has focused on coming up with powerful identities by making the concept
of retailing into a virus and spending it on the culture through channels (NiTZBerg, 2012). In
the present fast changing market condition with high amount of pressure from competition,
Tesco have to take up new expansion strategies or diversify the present structure to sustain its
market position in the already settled retail market.