Marketing Principles: Tesco's Segmented Marketing Approach

This report provides a comprehensive analysis of Tesco's marketing strategies, focusing on its application of the marketing mix (product, price, place, and promotion) to different market segments. The report examines the marketing mix for shower gel, tailored for both men and women, considering factors like product features, pricing strategies, distribution channels, and promotional activities. It contrasts international and domestic marketing, highlighting key differences in market size, competition, cultural nuances, government regulations, and financial resource allocation. Furthermore, the report discusses the advantages and disadvantages of segmentation criteria, and the feasibility of expanding into new markets. The analysis emphasizes the importance of adapting marketing strategies to specific market conditions and customer preferences to achieve optimal business performance.

MARKETING
PRINCIPLES

Table of Contents
INTRODUCTION...........................................................................................................................1
Marketing mix for two different segments..................................................................................1
How and why international marketing differs from domestic one..............................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Marketing plays most significant role in the modern era as it allows company to develop
awareness in the market and in turn enhances sales volume of the enterprise. Different principles
of marketing are present which organization applies in its operations so that need and
requirement of target market can be satisfied in efficient manner. Further, marketing differs from
one market to another such as international and domestic one (Gainer and Padanyi, 2002).
Therefore, large numbers of efforts are applied by business so as to deliver best product to the
customers and it enhances overall performance of enterprise in the market. Considering the
present study organization chosen is Tesco who operates in retail sector and has worldwide
presence in the market. Business offers large number of products as per expectations of target
market. Various tasks have been covered in the study which involves difference in international
and domestic marketing, designing marketing mix for two different segments etc.
Marketing mix for two different segments
In order to operate efficiently in the new market it is necessary for Tesco to design
effective marketing mix for two different segments so that customers can be offered right kind of
products in the market. Further, it is well known fact that need and requirement of every type of
consumer differs from one another due to which it is must for business to design effective
marketing mixes for two different segments (Helgesen, Nesset and Voldsund, 2009). In short,
business can easily satisfy need of its target market through this and in turn it can act as
development. Generally marketing mix takes into consideration four elements which are product,
price, place and promotion. The selected product for two different segments is shower gel which
is generally used by both men and women. Marketing mix of the product is as follows:
 Product: The chosen product in case of men will be shower gel with vitamin E and
energy. This product is totally different from those offered to women as it will provide
unique feeling to men after it is applied. This personal care product is good for health and
will protect skin of men from germs.
 Price: It is regarded as one of the most important element of marketing mix where Tesco
has decide at what price the new shower gel can be offered to men so that they can be
easily attracted towards the range of commodity (Hennig-Thurau, Gwinner and Gremler,
2002). Further, ineffective pricing strategy adopted can lead to decline in sales volume of
product and it will have adverse impact on business. Tesco will adopt competitive pricing
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strategy for this product as many companies are present in the markets who are offering
this type of product and in case if prices are kept very high then no customer will prefer
to purchase the commodity and this will have adverse impact on business performance.
Apart from this, it will be ensured that prices set will be under purchasing power of target
market so that they can be easily attracted towards this personal care product in the
market. In case if competitors have set high prices then company will charge low price
for this shower gel and vice versa.
 Place: This element is associated with distribution channel of the target market. Further,
Tesco will offer this product with the help of its physical store and online too. The main
reason behind selection of this type of distribution channel is that men prefer to buy
products online and they are easily attracted towards it (Kuratko, 2013). Apart from this,
this distribution channel is more convenient for company as well as its target market.
 Promotion: It is also regarded as one of the most significant factor in marketing where
effective promotional tools are adopted so as to enhance sales volume of the commodity.
In order to promote shower gel sales promotion technique will be employed where
advertisement will be done with the help of social media and other channels. This will
provide base to enterprise in promoting this product. Apart from this through social
media customers can easily obtain information regarding new shower gel such as
ingredients, price etc (Lichtenstein and Johansson, 2011).
Therefore, the marketing mix designed for promoting product to men is appropriate and
with the help of this need of target market can be satisfied by business easily and in efficient
manner. On the other hand marketing mix of shower gel which will be offered to women is as
follows:
 Product: The main product which will be offered to women is shower gel with honey and
milk. Tesco has introduced this product especially for women who are more health
conscious as compared with men. It contains extracts of 100% natural origin of milk and
aloe vera. It protects skin from excessive dryness and contains moisturizers to help
nourish skin of women (Stavros, Pope and Winzar, 2008).
 Price: In order to enhance sales volume of this product in the market company has set
low prices as many others firms are present in the market who are offering shower gel
with almost same ingredients. Therefore, through penetration pricing strategy it is
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possible for Tesco to enhance its sales volume and in turn large number of women can be
attracted easily.
 Place: Distribution channel selected for offering shower gel with honey and milk is
shopping mall and company operated stores of Tesco. In short, through this it is possible
for company to deliver appropriate product to women as per their expectation level
(Stover, 2007). Apart from this majority of the women prefer to purchase healthcare
products from shopping malls and this is one of the main reasons behind selecting this as
place of distribution.
 Promotion: For promoting this product discount and other type of offers will be
introduced in the market such as buy one get one free. Through this technique it is
possible for company to attract large number of women and they can be offered the new
type of shower gel being introduced in the market. Further, it will also support in
enhancing overall performance of the business in the market and can assist in grabbing
large number of opportunities (Wang, 2007).
So, in this way the elements of marketing mix designed are totally different for the two
segments on the basis of which product named shower gel can be easily offered to both men and
women in the market. The present product selected named shower gel for different segment is
Men and Women. In short the segmentation criterion undertaken is on the basis of age or
demography one so that commodity can be offered to target market in effective manner. Main
advantage of considering this segmentation criterion is that it is appropriate for business as on
the basis of age product such as shower gel is purchased by target market and this will be
beneficial for business. Apart from this, main disadvantage of this segmentation criterion is that
it is not possible to understand overall need and requirement of target market. Therefore,
considering advantage along with disadvantage of the segmentation criteria will be beneficial for
Tesco and through this firm can deliver right products to its target market (Lichtenstein and
Johansson, 2011). Generally in demographic segmentation different variables are considered
such as age, gender, education, ethnicity, occupation, income etc. On the other hand in
geographic segmentation variables such as climate, region, density and population growth rate
are undertaken.
The 4p’s being developed appeal to the target market as they are being introduced
keeping in view overall requirement of the customers. Further, the product offered named
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shower gel is used by both men and women and due to this reason it will be profitable for
business to offer the commodity to the target market. Both men along with women prefer to use
such type of product (Wang, 2007). Moreover, the pricing strategy employed is also effective
where customers can be easily targeted by offering products at right price. Apart from this, the
place of distribution is physical store of Tesco through which more convenience can be provided
to customers. At last for promotion advertisement along with social media will be fruitful for
business and this can enhance market performance of Tesco in every possible manner.
How and why international marketing differs from domestic one
International marketing is regarded as the application of marketing principles to more
than one country. Further, in this type of marketing movement of commodities takes place from
one nation to another and considers different type of buyers along with sellers. On the other hand
domestic marketing is regarded as domestic trading where is associated with supply and demand
of goods within single country (Differences between International and Domestic marketing.,
2015). Market size varies at both level as in domestic marketing size is very less and at
international level market size is wide. No similarity is present in between domestic and
international marketing. Further, the major differences in both the type of marketing are
language and culture, risk involved, financial climate, political role, market aspect etc.
Marketing at both international and domestic level differs from each other and it is
required for every organization to design effective marketing strategies at both levels so that
customers can be easily attracted. In domestic market level of competition is moderate due to
which Tesco has to apply lesser efforts at the time of promoting its products in the market.
Further, at international level large numbers of companies are present and competition level is
quite high due to which more effective marketing strategies are required where organization
strongly focuses on promotion rather than on other tools (International marketing strategy.
2008). Further, cultural difference is also key factor wherein domestic marketing cultural
variation is less and people living in the society belongs to same culture but at international level
different type of cultures are present due to which taste and requirement of every individual
differs.
Therefore, considering cultural difference enterprise has to design marketing strategy at
global level by considering different type of culture. Moreover, at domestic level government
influence is less where laws and regulations introduced by government has very less influence on
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organizational activities. Further, at international level large numbers of regulations are present
which are associated with marketing and Tesco has to comply with all the laws so as to promote
its product range in appropriate manner (Helgesen, Nesset and Voldsund, 2009). The influence
of government rules and regulations is also one of the major differences in domestic and
international marketing which every business enterprise has to consider at the time of operating
at both markets. On the other hand at the time of promoting products at domestic level Tesco has
to employ lesser financial resources and in turn response of customers is more which is effective
enough in recovering the amount invested in promoting products at domestic level. Further, at
international level due to wide market size company has to invest higher financial resources so
that better promotional tools can be adopted. This is also one of the major differences which
Tesco consider while promoting its product at global and international level. Therefore, in this
way marketing differs in two different markets and different factors are present which affects
operations of company.
Feasibility study for expansion of business into new markets
The present markets which are being served by Tesco are profitable and are providing
large number of opportunities to business in every possible manner. Further, it will not be worth
for Tesco to expand its operations into new market as brand presence of firm in the present
market is highly felt and majority of the customers are brand loyal towards enterprise. Apart
from this, expansion into new market requires high investment and this can lead to decline in
profitability level of the business which is not in favor of company (Stover, 2007). Moreover,
before entering into any new market it is required for business to carry out market research with
the help of which trends and overall requirement of customers can be known easily. In short,
entering into new market is profitable for business but large numbers of challenges are present
which business has to deal with. Therefore, it is not recommended to business to expand its
operations into new market.
CONCLUSION
From the entire study carried out it has become easy to understand the significance of
marketing for company. The new product introduced by Tesco in the market named shower gel
can be easily offered to two different segments named women and men. Elements of marketing
mix have been designed differently for both the segments. Further, at both domestic and
international level marketing differs and company has to consider large number of factors which
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can influence its performance at different level. Moreover, main difference is in market size
where at local level it is small and is wide at international level.
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REFERENCES
Books and journals
Gainer, B. and Padanyi, P., 2002. Applying the marketing concept to cultural organisations: an
empirical study of the relationship between market orientation and performance.
International Journal of Nonprofit and Voluntary Sector Marketing. 7(2). pp.182-193.
Helgesen, Ø., Nesset, E. and Voldsund, T., 2009. Marketing perceptions and business
performance: implications for marketing education?. Marketing Intelligence & Planning.
27(1). pp.25-47.
Hennig-Thurau, T., Gwinner, K. P. and Gremler, D. D., 2002. Understanding relationship
marketing outcomes an integration of relational benefits and relationship quality. Journal
of service research. 4(3). pp.230-247.
Kuratko, D., 2013. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Lichtenstein, N. and Johansson, E., 2011. Creating hourly careers: a new vision for Walmart and
the country. Rapport pour l’organisation Jobs with Justice.
Stavros, C., Pope, N. K. L. and Winzar, H., 2008. Relationship marketing in Australian
professional sport: an extension of the Shani framework. Sport Marketing Quarterly, 17(3),
135-145.
Stover, J. S., 2007. Making marketing work for your library blog. Internet reference services
quarterly. 11(4). pp. 155-167.
Wang, C. L., 2007. Guanxi vs. relationship marketing: Exploring underlying differences.
Industrial Marketing Management. 36(1). pp. 81-86.
Online
International marketing strategy. 2008. [Online]. Available thorough:
<https://www.cengagebrain.co.uk/content/doole07630_1844807630_02.01_chapter01.pdf>
. [Accessed on 22nd Dec 2015].
Differences between International and Domestic marketing., 2015. [Online]. Accessed through <
http://www.enotesmba.com/2015/02/differences-between-international-marketing-and-
domestic-marketing.html>. [Accessed on 21st Jan 2016].
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