University of Suffolk: TESCO Marketing Strategy and Recommendations

This report provides a comprehensive analysis of TESCO's marketing strategy, utilizing environmental analysis tools such as SWOT and Porter's Five Forces to identify threats and opportunities within the competitive organizational environment. It examines TESCO's STP (Segmentation, Targeting, and Positioning) strategy, detailing how the company segments its customers based on various parameters like income, age, and gender, and how it positions itself in the minds of consumers. Furthermore, the report explores TESCO's marketing mix, focusing on the four Ps (Product, Place, Price, and Promotion), and concludes with recommendations for improving TESCO's marketing strategy at an international level, aiming for better framing and execution.

Marketing Consultancy

Executive Summary
The report covers analysis about competitive organisational environment with support of
environmental analysis tools like swot analysis and porter's five forces model of TESCO. This
has been done to identify threats and opportunities that can impact performance of TESCO
company. The report also covers analysis about STP strategy used by TESCO company.
Company has segmented its customers on certain parameters and target them on the basis of their
income, age and gender as well. Positioning of company also help in understanding minds of
their customers and their p[references as well. The report also talks about marketing mix which
will help in better understanding their four P'S. Recommendations given for TESCO company
supports in terms of better framing its marketing strategy at international level.

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Explain about the competitive organisational environment with support of environmental
analysis tools to identify threats and opportunities that impact on chosen organisation ................4
Analyse about STP strategy and also explain about how targeting, segmentation and positioning
applied by chosen organisation .......................................................................................................7
Explain about marketing mix, which is focused on 4 ps on the chosen organisation......................9
Give recommendations on how to improve its marketing strategy based on chosen organisation
........................................................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing consultancy refers to professional services provided by qualified and
experienced experts in the field of marketing. The marketing consultants are specialised in
analytics, strategy, auditing due to which it is easier for consultants to focus on implementation
and execution. Marketing consultancy plays a very important role in this business world because
it will help a business to create a marketing plan and also supports in terms of developing the
marketing message(Cappellini and et.al., 2016). They will also help in creating a marketing
strategy for purpose of promoting the business into positive manner. In the present report,
TESCO is taken into consideration as particular organisation. TESCO plc is a British groceries
at multinational level and merchandise of general level that is headquartered in Welwyn Garden
City, England. TESCO was founded in the year of 1919 by Jack Cohen in Hackney, London.
It is the third largest retailer in the world and ninth largest in the world measured by
revenues according to gross revenues. The company's aim is to serve customers on daily basis
with affordable, healthy and sustainable food. They also support in terms of enjoying a better
quality of life and an easier way of living. The report will cover competitive organisational
environment with support of environmental analysis tools. In addition to this, the discussion is
about STP strategy used by organisation. Moreover, the report will cover marketing mix which is
focused on 4 Ps of the organisation and also it covers recommendations of TESCO organisation
which will help in improving its marketing strategy.
MAIN BODY
Explain about the competitive organisational environment with support of environmental
analysis tools to identify threats and opportunities that impact on chosen organisation
SWOT analysis act as competitive advantage for an organisation because it helps in terms
of identifying opportunities which will help a business in terms of making greater profits(Chan-
Olmsted and Wolter., 2018). This type of analysis will help in understanding the factors at
internal level which will influence the ability to take advantage of new opportunity.

STRENGTHS
 Company has strong product portfolio
majorly in case of top sector segment
which sells equipments and provides
services across segments in all over the
world.
 In order to develop various kinds of
technologies company holds various
patent license agreements and patents
for purpose of benefit of the company
 TESCO is that company which is
leader in UK market in the sector of
grocery store and supermarket and it is
very famous among people. By holding
maximum market share of 27%. UK
market has dominated by TESCO
company.
WEAKNESSES
 TESCO has to face failures in terms of
expanding their business in US and
Japan market because the company
couldn't execute its plans into effective
manner
 Company has suddenly taken this
decision to change its club card without
giving any information to their
customers due to which customers got
angry with this kind of decision. As a
result they can switch to some other
brand as well.
 TESCO's profit is seriously affected
due to high credit card debt and this is
the main reason of low performance
 Company use debt for their advantage
by increasing profit if debt reduces the
profit.
OPPORTUNITIES
 There are some emerging markets like
Indonesia, turkey and TESCO has
expanded its business operations in
fourteen countries.
 There are certain stores whose
performance is not very well. If they do
partnership with local business then it
is an opportunity for the company.
 TESCO has mobile app for online
shoppers so they should upgrade the
app and in this way they can attract
THREATS
 There are some national economic
factors such as government rules and
regulations, taxation, credit,, are a
serious threat for the performance and
growth of TESCO in some parts of the
country.
 Due to BREXIT deal, it has serious
impact on its business operations
because TESCO has been running its
business operation in many European

customers on a larger scale. countries.
 There are some giant supermarket
competitors such as Walmart, Aldi and
Carrefour. These competitors give
tough competition to TESCO company.
Porter's five forces model aims for examining impact of the five forces on TESCO that
operates in the supermarket industry(Du Plessis and et.al., 2015). This model also help in terms
of identifying threats and opportunities of TESCO organisation and this is explained into
following manner:
 Bargaining power of buyers: TESCO serves to number of people through their offline
and online stores that's why bargaining power in UK country is low as they are not
organised into proper form. They can choose another options such as Asda and
Sainsbury's. In this way, it makes the industry attractive for TESCO.
 Bargaining power of suppliers: They work with different number of suppliers in UK
country and thousands of suppliers in abroad. To increase their profit margins, TESCO
Source : Drive business strategy
and competitiveness

negotiates very hard to their suppliers(Fägersten., 2015). TESCO has been accused of
bullying suppliers over price cuts.
 Threat of new entrants: In UK supermarket threat of new entrants is very low because
of capital requirements. They do not need to worry about new entrants because they have
theie own competencies and enjoy economies of scale.
In UK country, competitors does not have enough money and access to distribution network to
explore the supermarket industry into positive manner.
 Threat of substitute products and services: Company has offered different kinds of
products and also sells substitute of majority of their products. For example, they sells
both butter and margarine and it is easy to argue that threat of substitute products and
services are irrelevant in most cases.
 Rivalry amongst existing competitors: They have large number of competitors in UK
country and they spend heavily on different techniques and advertising as well. TESCO
has large number of competitors in the UK country and they spend heavily on advertising
and other techniques of marketing(Fleischmann and et.al., 2015). Pressure from rivals is
very intense as TESCO is the market leader and in the similar manner price-wars
launched by Aldi and Lidl are affecting TESCO's profit margins. Due to its tough
competition from their rivals it somewhere affects performance of company through job
losses, disappointing sales and many other factors as well.
Through SWOT analysis and porter's five forces model it is easier to identify threats and
opportunities of a particular organisation.
Analyse about STP strategy and also explain about how targeting, segmentation and positioning
applied by chosen organisation
STP strategy can be defined as it is a marketing tool which stands for segmentation,
targeting and positioning. Basically it is a three step model that examines about services and
products as well as the way in which it communicate their benefits to particular customer
segments(Gross and Rottler., 2019). As much as the more focused and personalized marketing
efforts then the company will be more successful in terms of their growth. Under this strategy,
according to habits and preferences audience has been segmented, positioned and targeted. The

positioning factor adjustments has been done in branding and marketing strategies to
accommodate expectations and needs.
Segmentation: Segmentation refers to the research which determines how an
organisation has to divide their customers or cohort into smaller groups according to different
traits such as personality traits, behaviour, income and age.
These segments can be further used to optimise products and advertise to different
customers. Basically the process of segmentation is all about identifying common traits and
characteristics between people in the market. It gives an opportunity to develop much more
engaging and relevant marketing campaigns. There are some common segmentation variables
which includes:
Demographic: Ethnicity, marital status, gender and age
Geography: Climate, country, city and region
Psycho graphics: Attitudes, habits and personality traits etc
Values: Identification, cultural beliefs, religion, politics
Life Stages: Retirement, education and work status etc
Behaviours: Data browsing, interests and purchases etc
TESCO has segmented its customers according to geographic, demographic, psycho
graphic and behavioural parameter. From perspective of geographic parameter, they have
divided their customers on the basis of rural and urban areas. Company has considered all age
group people whether they are males and females(Johnston, J. and Sheehan., 2020). They have
also considered lower and middle income category in terms of better growth of their company.
According to psycho graphic parameter, TESCO has segmented its customers on lifestyle and
personality basis as well. From perspective of behavioural context, customers also segmented on
the basis of occasions, benefits sought, attitude and user status as well.
Targeting: Targeting refers to breaking the target audience into different segments and
then design marketing activities which will reach to the segments most likely to be responsive to
the efforts. Targeting strategy basically involves segmenting the market, choosing which
segments of the market are appropriate and determine the products that will be offered in each
segment. After doing segmentation, it is important that to have a look on chosen segments which
identify the best opportunities for the business(Khojastehpour and Johns., 2015). First of all to

look at the size of the segment and then look at on the significant markers which set the segments
apart. In the last step it is important look at whether the market segment is accessible to the
company or not.
TESCO has mainly targeted its customers for its health and beauty range of products.
Forty two percent of the supermarket customers are in the age group of 24 to 35. Thirteen
percent are the people of age group of 18 to 24 years and only 1 percent are the age group of 13
to 18. In this manner, company has targeted its customers.
Positioning: Positioning can be defined as it talks about products where it stands in the
market in relation to others who are offering similar services and products in the market place. It
also explains about status of product in the minds of consumer. A good positioning gives an
opportunity of unique selling proposition of product. Positioning can be achieved through the
four Ps: Product, Place ,Price and promotion. TESCO mainly targeted its customers through
experiential positioning and multi segment positioning is also an another alternative type of
positioning which is used to target several segments for different products at the same time.
Multi-segment positioning has been used on an extensive level by the company. In this manner,
company has positioned itself in an international market.
Explain about marketing mix, which is focused on 4 ps on the chosen organisation
Marketing Mix: The marketing mix can be defined in a manner that it is the set of
actions, tactics that a company uses to promote its products or brand in the market. Marketing
mix is majorly consist of 4 PS i.e. Product, place, price and promotion. Marketing mix also
includes several other Ps which includes Packaging, physical evidence, people and process as
well. Marketing mix of TESCO is explained into following manner:
Product: Under this head, product is a commodity which is usually have been produced
to satisfy needs of their customers, group individual. Product can be tangible or intangible and it
can be in the form of goods and services(L'Etang., 2015). With context to TESCO, it provides
range of products which include food, clothing, financial services and electronics etc. It also
offers services of delivery and free music downloads besides the other more product lines that its
store exhibit. TESCO also provides various options within each category ranging from brand,
regional produce, international cuisine in food and other choices as well.
Place: Distribution or place is very important part of marketing mix strategy. Products
should be position or distribute in such a place where it is easily accessible to potential buyers or

customers. In context to TESCO, its store are widely spread in all over the world and it employs
two main channels of distribution for its products and services-online and offline.
There are different kinds of offline forums which include TESCO express, TESCO
extra, TESCO metro and TESCO compact and TESCO superstore. It has been observed that
customers are not satisfied to such big stores so they shifted themselves to online mode as their
official website named as www.tesco.com
Price: Price is most important element of marketing plan because it talks about
company's profit and survival. Adjusting the price of product creates a great impact on entire
marketing strategy as well as greatly affect the demand and sales of product in the market. While
determining the cost of a product it is important to consider certain parameters which include list
price, customer location, competitor's price, terms of sale and discount etc(Lau., 2016). With
context to TESCO, it attempts to maintain its low price without reducing quality of its products.
TESCO also provides club card system to their customers in order to gain points for its purchases
and it can be converted into money form at later stage. This act as an excellent price-promotional
strategy of providing loyal customers with extra discounts. This kind of pricing strategy help in
terms of reducing prices to further increasing sales without affecting profits.
Promotion: Promotion refers to marketing communication process which helps the
company to publicise its products and features to the public. It has been observed that most of the
marketers uses promotion tactics to promote their products and reach out to public on a larger
scale. Promotion also includes direct marketing, sales promotion, personal branding etc. In
context to TESCO, it focuses on advertisements, sponsor charitable events, uses of point of sale
strategies and so on. In this way, company uses different tactics to attract customers on a large
scale.
Promotional mix is also one of the parameter which is very important from perspective of
promoting their products and services. (Opute and Madichie., 2017).It is blend of promotional
tools that is used by business to maintain, create and increase demand for products and services.
Promotional mix is basically consist of seven components which includes advertising, sales
promotion, personal selling, direct marketing, corporate image , exhibition and public relations.
In terms of promotional channels, it uses television ads, hoardings and charitable events. The
company also uses large extent offers and promotional discounts such as buy one get one.

Give recommendations on how to improve its marketing strategy based on chosen organisation
It has been recommended that TESCO company has to consider current issues with
respect to their customers and also take marketing mix as one of their important step as well. The
company can focus on creating new product lines which includes new farm brand
products(Watts and et.al., 2021). They have to focus more towards digital marketing rather than
their old promotional methods. According to current period of time, there are some latest digital
marketing methods which include search engine marketing, local search marketing, content
marketing, re marketing, responsive web design, email marketing, social media marketing,
influencer marketing and many more. To attract customers on a large scale it is necessary that
they should reconsider their packaging strategy and should focus on new packaging designs and
branding campaigns for those products which need assistance (Parowicz., 2019).
For improving its marketing strategy, they can take step towards customising media where
individual experience plays a very important role. TESCO'S marketing team has given various
marketing ideas and it ranges from discounts delivered by email on birthdays to print campaigns
delivered directly to door. Company has made its strategy in such a manner that instead of
maintaining big, generic image and its goal is to hyper target particular shoppers and earn their
trust into positive manner. According to above discussion, it has been observed that company has
certain strengths due to which TESCO can perform in out of box manner with respect to its
marketing strategy. Due to its strong holder position into UK market it is easy to attract
customers with new ideas and innovation. Company has some certain weaknesses with respect to
its execution spectrum so they have to plan their marketing strategies according to changing
period of time.
Opportunities in different countries leads towards growth in terms of their market area and in
this way it is easy to target countries on international level(Samuel and Sarprasatha., 2016).For
giving tough competition to their competitors it is important that company has to reconsider their
process of working and in terms of promotion they have to adopt latest parameters. It has also
been observed from above discussion that TESCO has to work on its marketing strategy into
effective manner for purpose of creating a new brand image in the minds of customers. They
have to come with new process and surprise for their customers so that company can retain their
customers for longer period of time (Tadajewski and Jones., 2016).

They have to come with variety of products for old age people as well so that they can
increase their customer segment on a larger scale. Company can also take efforts with respect to
target their customers on new parameters as well so that they can create their market strategy in a
more precise manner. In this way, TESCO can improve its marketing strategy into positive
manner.
CONCLUSION
The above report concludes that marketing consultancy has its own importance in this
business world to stand strongly at international level. The competitive organisational
environment has been analysed through different environmental tools like SWOT analysis and
porter's five forces model. These analysis help in terms of understanding organisation at
competitive level and how it can act as competitive advantage at international level. Company's
STP strategy also help in terms of understanding products and services from customers point of
view. Through this way, it is easy for an organisation to take their further steps and launch their
products and services accordingly. Marketing mix is also another marketing tool which will help
in terms of different tactics and methods used by an organisation for purpose of promoting its
products. The recommended marketing strategies also help an organisation in terms of improving
its marketing strategies. With support of different strategies a company can make improvement
in terms of their performance as well as in their brand image.