Marketing Management Report: Analysis of Tesco PLC Strategies

This report provides a detailed analysis of the marketing management practices employed by Tesco PLC, a multinational grocery and retail store. It begins with an executive summary and introduction, outlining the importance of marketing and positioning in enhancing company performance. The main body delves into the retail industry background, focusing on market positioning strategies such as customer needs, perceptions, brand recognition, pricing, quality, and convenience, all of which Tesco utilizes. The report also examines Tesco's unique selling proposition and conducts internal and external market audits, including a PEST analysis to assess the macro-environmental factors impacting the company. Furthermore, the report explores Tesco's marketing mix actions, addressing how the company adapts to the external environment to maintain its competitive edge in the market. Overall, the report provides a comprehensive overview of Tesco's marketing strategies and their impact on the company's success in the global retail sector.

Marketing Management

TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of industry and Market Positioning.........................................................................3
Market Audit................................................................................................................................6
New marketing mix actions ........................................................................................................8
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

EXECUTIVE SUMMARY
Marketing is the activity which plays significant role in raising performance of the company.
It always tries to improve efficiency level of firm by generating more demand. Positioning is
important factor for organization. To stay competitive in the market place it is important for
organization to keep its positioning good. To achieve better positioning organization, use various
practices like product attributes and benefits, product pricing, product quality, product
application / use and competitors. The position of organization is analysed on the base of
position of competitor in the market. This study describes unique selling point of Tesco and also
highlights its strength and weakness of Tesco. It also conducts external audit in order to identify
positon of the firm in external market.
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INTRODUCTION
Marketing management is a process that is used by organization to perform focused
practical application of marketing concepts, techniques and methods that are applied within the
organization to improve the performance of company in the market place. Marketing is one of
most important function of organization which is used to improve the reputation and selling of
company product in the marketplace (Deepak and Jeyakumar, 2019). This report is providing
brief information of marketing management practices that are used in Tesco PLC (Public
Limited Company). Tesco PLC is a multinational grocery and retail store. It was established by
Mr Jack Cohen in 1919 in Hackney, London, United Kingdom. Tesco PLC is operating on 6800
locations around world. This study will provide brief information of marketing management and
its background in retail sector industry. For Tesco PLC, the role of marketing management will
be provided to analyse its current positioning in the current market scenario. This study is
explaining unique selling proposition for Tesco. Internal and external marketing audit will be
explained for organization to find overall market attractiveness and potential growth in market.
The latest marketing mix action will be explained to find gap between present marketing strategy
and external environment for Tesco to stay effective in the market place.
MAIN BODY
Background of industry and Market Positioning
Industry Background
Retail industry is the end step in the product chain in which the product is sold to end
consumer. This industry is different from the wholesale industry because in retail sector the
goods and services are directly provided to the end users. Retail industry consists of
departmental stores, discount stores, category killers, E-tailers, speciality stores, grocery stores
and convenience stores. There is major contribution of retail sector in the economy of country. It
is one of the oldest form of industry that is present in market. Retail sector is continuously
developing in current market scenario (Chernev, 2018). In the last two decades, this industry has
faced major changes. These particular changes are part of evolution of retail sector industry.
Technological and management changes are most common for retail sector industry. Changes
that are currently occurred in this sector are most important for development and growth of
market and industry. Few years ago the retail sector was limited to the physical stores but with
the application internet it is growing as online market. Now a big part of revenue generated by
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retail sector companies comes from the online market. Organizations are using the latest trends
of marketing management to improve their performance in the market.
Retail industry works on the market trends and these trends are constantly changing with
the time. Changing trends are leading the growth in retail sector. Companies like Tesco PLC are
working with innovations and continuous changes to meet their goals in global market. Retail
sector organizations are using the technology like RFID, Information System, consumer resource
management and artificial intelligence to develop better result in output with expansions. Online
business or use of internet for business is considered as the future of retail sector. Currently this
is concept is used by most of the organization, and they are generating huge profit from it. Use of
technology like Artificial intelligence and Automation is changing the face of retail sector by
allowing the customers to perform smart shopping, and it is also helping the companies like
Tesco to perform consumer analysis to decide their marketing strategy to improve profit in
operations.
Tesco is the organization which is more creative and innovative in business. It is the
leading firm in retail sector, it has branches across the world. Firm aims to work better for the
satisfying consumers. It has 6800 shops globally. 63911 million revenues were generated by
Tesco last year. (Kerin and Hartley, 2015). This practical implementation has made Tesco PLC
as one of the largest retail sector organization in United Kingdom. For market positioning of
Tesco, it is important to stay update with the needs and demands of consumer.
Positioning
Market positioning can be explained as ability to influence the perception of consumers
to allow an organization to achieve competitive advantage in the marketplace. It is all about
creating better brand image for organization in market place to improve customer reviews and
attract them to buy products from company store. Tesco has strong brand image in UK and other
markets. It has become popular and valuable brand across the world. Market share in the year
2017 was raised by 27.2%. It has raised its sales by 2.2% as compared to last year. Whereas
Sainsbury which is biggest competitor of Tesco raised only 1.2% sales and its market share was
15.1%. Hence Tesco has strong positon in the market and it focuses more on its consumers
which help business competition in the market successfully. There are different marketing
management policies are used by various organizations to improve their positioning in the
market place. This is important for organization to stay aware of market condition, consumer
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demand and performance of competitor to effectively perform business (Wierenga and Van der
Lans, 2017).
For retail sector organization the positioning is one of most important factor because
there are many competitors in market. There are different types of positioning that can be
classified as- customer needs, customer perceptions, brand recognition, pricing, quality and
customer service and convenience. Tesco PLC keeps the data and behaviour analysis of its
customers to know their demands in better way. By this data they focus on the products of
customer interest to keep them retail for longer time. Also the market researches are performed
regularly to stay aware of customer needs. This helps them to provide relevant product to
consumers (Quelch, 2017).
Customer Perception- In this policy, organization try to influence the mind set of
customers to create better brand image. With a good image in the customer’s mind organization
can highly influence them to buy product from their store. Tesco PLC is using the Corporate
Social Responsibility to full fill their social responsibility to create positive image for Tesco
brand.
Pricing- This is the most common strategy that is used by all retail sector organization. In
this strategy organization provide better quality product at lower price to attract more consumers.
It implements penetration pricing strategy. This is strategy of Tesco PLC to provide low cost
product to consumer as compared to the competitors. Through this strategy, it is easy for Tesco
to increase the number of customer visits in store.
Quality- This is one of the best strategy to retain customers for longer time. By provide
better quality product to consumer organization can provide better satisfaction to customers. By
this company in improve their brand image and reputation in target market. Tesco PLC is
providing the premium quality products to its customer. High quality product can improve
consumer satisfaction and it can help the organization to encourage the customers to buy goods
from the Tesco Stores.
Convenience- In this strategy, organization try to provide better and quick services to
improve experience to customer. Better billing and purchasing process develop by companies to
make people comfortable in store. Tesco is using digital and RFID technology to provide better
experience to consumers. This is how by providing better buying experience Tesco ensures it
positioning in market.
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This is how different positioning strategies are used by Tesco PLC to improve and secure
its position in local and global market.
Unique Selling Proposition
Unique selling proposition is defined as the unique concept or characteristic which makes
the product or service of organisation unique or different from that of others so that its value is
enhanced. It is a marketing concept that is used by different companies to influence the
customers to switch their current brand. These are the key services or products of organization
that make them different for the other companies. Companies use various methods to look
different form other companies. For example, Tesco use slogan “Every Little Helps”. This is one
of the way to influence their customers (Heding, Knudtzen and Bjerre, 2015). The slogan
demonstrate that organisation is committed to its social responsibility which is also one of the
important aspect of its promotional events (Rowley, 2017). Also Tesco provides large range of
products to consumers.
There are many services provided by Tesco PLC which are better and Cheaper from the
other competitors in the market. Slogans like something for everyone also attracts people
towards the company store. Tesco follows the low cost market penetration policy to reach to
customer of various category. This is how Tesco use variety of marketing and business policies
to improve it positions in the market place. Tesco is the third largest provision store in world so
it can be considered as one of the best known organization for people. In terms of pricing
organisation is getting tough competition from Walmart, Aldi, Tesco and other local
supermarkets in UK. Cheap pricing policy help the organization to address vaster range of
people.
Market Audit
Tesco is one of the largest retailer among the world and the third one in United Kingdom.
It has its expansion all over the different countries which consists of 16 in Asia, six in European
country with the addition of its in North America. As to understand the all over of the market
attractiveness along with the identification of the potential market, proper environmental analysis
is required to be done. It consists of the format for the analysis of the environmental effecting
Macro analysis (PEST)
Socio Cultural factor- This is considered as most essential factor which impact on the
firm to great extent. Changes in lifestyle change the buying behaviour of consumers. In such
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condition firm has face difficulty in attracting buyers and managing its operations. If people
want healthy product and entity fails to provide them same products, then people will be negative
which will influence them and they can turn towards other firm.
Economic factor- Tesco has survived in the great depression in year 2008 along with
the increasing profit for 3 billion in the next year 2009. Moreover, due to increase level of
unemployment, the demand of the goods and service has been slowed. On the other hand, it turns
out to be had increasing traffic for money in the area to have the new stores set up. The company
is trying to make up the profit from all direction in different countries and pay all sort of taxes.
Technological factor- the company is trying to implement various new technology in the
company to make the business and selling of goods and services easier. There are various
customer points that are been convenient to customers, such as the home delivery, online
shipping, club cards bas many of the technological upgraded devices. The company is using
technological advancement such as the radio frequency identification and electronic shelf
labelling as to make the company more technologically advance.
Political factor- There are many of the EU regulation along with respond to the changes
with legal framework, employment regulation and other respective laws of countries. The
company have the implementation of various tariff of UK government turns out to the largest
private sector.
Micro Analysis
Customers- the company has large variation in its customer rating between different ages
and the social classes. The company has to importantly understand the strategy to gain customer
loyalty. The company used to set up different locations as to provide convenience to the
customers as to provide the different level of customers to have the rest to their competitors and
the supermarkets. The company is also trying to provide the best service at home to customer.
There is being the increased years by rear of the increased profit accordion.
Suppliers- there are many locals and international suppliers available in many countries
which also help in having the growth of small suppliers to grow. The company is more
concerned about the reputation in market as to have the cheap products. Tesco has the power as
to push down the prices as to pays to its suppliers.
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Distributors- Distributors refer to the company help in selling and distributing the large
variety of good to final buyers. The company is the retailer who sells directly the goods to
company s it didn't deal with local and regional distributors.
Competitors- the major competitors of the company Tesco are Asda, Sainsbury and safe-
way as these supermarkets used to provide the similar products to public with wide variety of
range but the Tesco wants to keep the customers, loyal by different ways.
SWOT analysis
The company has following strength, weakness, opportunities and threats.
Strength
The company has the strong brand image which turns out to be had the brand equity of
company for period. It is the market leader in retail market. This turns out to be the positive
aspects for company. The company have the less risk in the product diversity along with loyal
customer as Tesco is having the operation level across various fields which is stretched in
different parts of world.
Weakness
The failure of lead centre city market has been turned out to be major weakness for the
company. The company also faces to have the lack in company marketing approach. The
company is facing the issue of the high debt of customer on various loyalty and debit cards of
customer.
Opportunities.
The company have the increase chances in which there is demand of private product will
increase. The customers of UK are major demanding for the private label products that has been
turned as the opportunity in company. Due to company has the diversified appeal towards the
product have the many explores areas which can be having the acceptability of company growth.
Globalisation gives opportunity to the Tesco and it can growth well in the market. Technological
advancement helps the firm in improving operations which supports in building strong relations
with consumers and offering them products as per their requirement.
Threats-
Changes in legal regulations create threat for business. The company have the threat
regarding the failure in international level. The losing of upper social class customers as the new
competitor are appraising in the markets.
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New marketing mix actions
With the online retailing the organisations such as Tesco have been undergoing through
significant operational and management changes. In order to excel through outstanding
performance, it is required that on the basis of above situational analysis Tesco must incorporate
significant changes in its marketing strategies. The organisation must upgrade its marketing mix
actions in following pattern so that it can withstand the ongoing changes in the retail industry and
globalisation trends.
Marketing mix actions recommended for Tesco:
Product:
The organisation is dealing in wide range of products and services. The retail giant
provide product such as clothing, stationary, food, financial services as well as electronics. With
the increasing demand, organisations aim at providing products with innovative packaging and
features so that a wide range of customers can be served. Apart from the product range of other
brands like retailer the organisation also has its separate product line such as Tesco value,
Everyday value and Tesco Lotus. Existing product range of the Tesco is attractive and
satisfactory enough to meet the needs of variety of consumers. However, in order to meet the
market competition and global changes Tesco must also ensure that it emphasis more on
customized products as per the market segment in which it is providing its services. The product
and service customization as per the choice of target customers can help organisation to enhance
their sales (Abril and Rodriguez-Cánovas, 2016). Apart from the physical stores, the organisation
is also having option for online retailing at which customers can get electronic products,
household, home appliances, health and beauty as well as sports and leisure products. For
keeping the product innovation and preference of the target customer’s products strategy must be
addressed and improved.
Price:
Tesco experience competition from big brands such as Aldi, Sainsbury and Morrisons in
terms of pricing and product quality. The pricing has been one of the most significant element of
marketing mix which helps organisation to sustain good brand value in the market. Tesco has
been using cost leadership strategy for the long terms so that along with the effective product
quality organisation is able to deliver goods at least possible price. The cost leadership strategy
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for pricing is one of the main reason which attract people to purchase the products. However,
with the major technological changes in the online retailing company is facing huge challenges
in offering low price services (Bahadir, Bharadwaj and Srivastava, 2015). In order to reduce the
prices, the organisation must emphasis on improving its supply chain as well as to manage its
other operational expenses. The existing program named Brand Guarantee assure that
organisation serves the product at the least possible price than all other available service
providers. For retaining the competitive advantage these recommended pricing challenges are
mandatory as they help in keeping dominance in the market.
Place:
The distribution strategy of Tesco can be assumed to be very wide and effective. For
instance, for the customers who desire to visit physical stores the company has huge range and
number of stores. Tesco superstores provides services for non-food products and groceries while
Tesco metro stores are available for the city and town centres. For premium and high priced
products, the organisation has Tesco express which aims at providing services to highly potential
customers who can afford high price as well. In order to meet the needs of routine shopping so
that all types of products are available under one roof. However, company must redesign this
strategy because majority of the customers now expect more efficient services through online
platforms. Tesco must try to assure that along with these physical stores online services are also
more feasible and approachable. Company must expand its distribution network for online
services so that quick home delivery is possible for all distant routes. Through filling of this gap
service quality will be improved to great extent in terms of product delivery and quality.
Promotion:
The low pricing strategies and superior product quality makes it possible for Tesco to
have strong brand image. However, the organisation also uses effective promotional strategies to
promote its services so that its brand can be improved. Along with the charitable themes
company also uses television ads, theme based advertisements, customer loyalty card programs.
However, there is need to make a major transformation in the promotional strategies of the
organisation. In response to the global market there is need that company must have its major
focus on social media and digital marketing. Along with the search engine optimisation and
website promotions Tesco must encourage social media campaigns so that most of the audience
can be approached. The use of social media will allow company to have more regular interaction
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with the people and to promote their achievements (Dadzie and et.al., 2017). Organisation must
also bring innovations in its customer loyalty programs so that it can improve its customer
retention for the long term. The bridging of promotional gaps is necessary for keeping the Tesco
brand popular and active among audience which is necessary for the growth of company.
People:
The success of the physical stores of Tesco is represented by the employees of
organisation. Thus, it is highly recommended that service provider must value its employees
(Abril and Rodriguez-Cánovas, 2016). The organisation has organisational culture and work
environment bounded with all legal and ethical considerations. Tesco also emphasis on the
diversity so that staff members are also able to understand the diversified needs of various
customers. However, with the increasing competition and global interference it is required that
company must change and improve its recruitment and people management strategies (Haider
and et.al., 2019). The recruitment and selection strategies of the organisation must also take
global communication and technical skills so that Tesco is able to serve quality services in both
online and offline media. Through bridging this gap organisation can enhance the product and
service quality and long term customer loyalty can be achieved. Since employees of Tesco
represents organisation globally it is also recommended that employees must be provided with
high standard training framework and motivation to assure the desired quality standards.
Process:
The operational and management processes followed by Tesco are aimed at achieving
market objectives and sales targets. The task oriented processes are the key reason which assure
that all consumers are provided with on time and quality services. The existing processes are not
much focused on the concept of sustainability thus necessary improvements are required in the
accessibility, production capacities and service features. The integration of the sustainability with
the process will not only reduce the operational expenses but will also help company to fulfil its
corporate social responsibility. All the staff members of Tesco assure that their tasks are
accomplished as per the company policy and quality standards so that there are no possibilities of
functional defects and errors. The processing gaps are vital for assuring the expansion of Tesco
business successfully into new global market which consist of huge success opportunities.
Physical evidence:
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