Digital Marketing Strategy Report: Tesco's Approach

This report provides a detailed analysis of Tesco's digital marketing strategy. It begins with an introduction to digital marketing and an overview of Tesco's online strategies. A thorough situation analysis, including environmental and marketing audits, is then presented, encompassing SWOT and PESTLE analyses to assess Tesco's strengths, weaknesses, opportunities, and threats, as well as political, economic, social, technological, legal, and environmental factors. The report links digital business with digital marketing strategy, followed by the formulation of SMART objectives, including increasing sales and online traffic. An implementation plan is designed, covering target customers, strategies, and tactics, with a focus on market segmentation and positioning. Finally, the report addresses budgeting, monitoring, and control aspects of the digital marketing campaign, concluding with a summary of findings and recommendations.

Digital marketing strategy
Assessment 2

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Overview of Tesco and Online strategies followed.........................................................................3
Situation Analysis............................................................................................................................3
Environmental analysis and marketing audit..............................................................................3
Linking Digital Business with Digital Marketing Strategy.........................................................6
Formulation of objectives...........................................................................................................7
Designing implementation plan..................................................................................................7
Budgeting....................................................................................................................................9
Monitoring and control.............................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Introduction
Digital marketing strategy refers to the plan which helps a business organization in
achieving their particular marketing objectives via effectively selected online channels of
marketing like earned, paid and owned media (Kingsnorth, 2019). This report will focus on the
digital marketing strategies of Tesco which s a British multinational organization that retails in
general merchandise like home and food products as well as grocery. The company operates over
7000 supermarket chains across the globe and is headquartered in Welwyn garden city, England.
In the present times, Tesco has focussed on tapping into new markets through the digital
marketing strategy, such as the signature campaign ‘every little helps’ which proved successful
in the engagement. Tesco has also been creating new product lines and shifting towards online
methods by heavy investments (Aiello and et.al., 2020). This report will aim at the overview of
digital marketing process, create a digital marketing campaign for Tesco after situational
analysis.
Overview of Tesco and Online strategies followed
Tesco is one of the largest retail store that offers groceries, accessories and other products
in UK sector. Their main competitor are Asda, Sainsbury and Marks and Spencer. Tesco has
been investing in digital marketing in order to gain competitive advantage and expanding its
operations across various markets around the world as well as diversifying their products line to
offer more to consumers through retail stores. As, online marketing is the modern marketing
techniques that is been followed by every company. Tesco also adopt the marketing technique
and strategies is made to promote the company brand and their products. Tesco had focused to
increase their online presence in the market and willing to increase the online shopping by
consumers. To increase the online presence, company had created the website for shopping,
mobile app and social media handles to connect with their customers.
Digital marketing process is the wide term to evaluate the steps taken to achieve the
digital strategies. The process help to assist content, schedule post and help to engage with
audience which is the part of digital marketing strategy.
Situation Analysis.
Environmental analysis and marketing audit
Environmental analysis is extremely significant for understanding the current situation of
the market where an organization operates and plans to expand the operations or diversify the
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products. It helps in the understanding of decision-making in various business situations as Tesco
depends upon precise decision-making abilities. Studying the market through market audit helps
Tesco in selected the best options in the market plan and aim at growth and success of the
company.
SWOT analysis
 Strengths: Tesco has higher sales and revenue when compared to other organizations in
terms of successful campaign through digital marketing. It leads in the market share
through digital marketing campaigns that had been promoted extensively. Tesco is
continually promoting its online shops and investing in digital marketing campaigns. The
stores are highly diversified and various categories of stores are there such as Tesco extra
and Tesco home plus as well as Tesco metro for premium items. (Gürel and Tat, 2017).
 Weaknesses: Digital marketing campaigns had failed in US and Japan which made Tesco
closed its operations and stores. . Tesco has also been experiencing a decrease in its
major operating profits in the recent times and has been having various financial errors
due to high credit liabilities. Tesco has tried to maintain a low cost strategy which
although made it a supermarket leader in the UK but reduced its profit margins.
 Opportunities: The major opportunities for Tesco is growing and further expanding the
Jacks business which is a new discount store that has shown high growth, which can help
Tesco in competing with low cost competitors such as Lidl and Aldi. Developing
strategic alliance with other companies can offer many opportunities for Tesco as it can
start new products lines and thus new digital marketing strategies as per them (Vallati,
and Grassi, 2019). The company can also expand in emerging markets such as Asian
countries, South Korea and turkey (Fatricia, 2017).
 Threats: The major threats that Tesco faces in the current times are being vigilant with its
digital marketing campaigns as it receives backlashes from the public in case it becomes
disrespectful. Post Brexit referendum, various trade deals and the cots and taxations poses
a threat for Tesco. Another threat is excessive competition among the supermarkets such
as Walmart, Asda, Carrefour, and Sainsbury’s (Tirawatnapong and Fernando, 2018).
Pestle Analysis:
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 Political factors: The political stability affects the market conditions, which impacts how
Tesco will perform in the retail market. Post Brexit, the taxations and trade duties and
tariff has changes which impacts how the logistics and supply chain will work. Also,
there is high level of uncertainty what other effects Brexit will bring about (Simões,
2020).
 Economic factors: The economic stability of the country where Tesco operates has a huge
impact on how the sales and market penetration will happen. The purchase behaviour of
people is determined by their income level and that explains how they will proceed after
watching a digital marketing campaign in buying a product. Also, high labour costs and
other economic changes have to be kept in consideration (Adamyk, 2019).
 Social factors: the social factors refer to the values, traditions, beliefs etc., that have an
impact on the mindsets and behaviour of the customers that purchase from Tesco. Also,
the tastes, preferences, lifestyle and social trends. For example, Tesco Likewise, it needs
to promote healthier and even vegan products due to the changing mindsets of people.
Organic food items have also got high demand in the European markets, which Tesco
needs to consider while promoting its brand for target customers (Mondal, and Haque,
2017).
 Technological factors: Tesco has majorly benefited from technologies like Club card
which led to a high number of customers and loyalty. In recent times Tesco is adopting
CRM systems and RFID technology in its stores to smoother the operations. Tesco needs
to analyse the impact of technology in the customers, who heavily use electronic methods
(Li, 2020).
 Legal factors: the legal factors that affect Tesco in terms of launching online marketing
campaigns such as data protection laws and adverting mishaps such as consumer
protection laws. Apart from these Tesco needs to take care of employee legislations,
intellectual property and copyright laws etc.
 Environment factors: the rise in the environment consciousness of the people has led to
environment laws and regulations which Tesco needs to follow. Tesco currently uses
green supply chain and waste disposal methods to adhere to these standards and also
create a goodwill. (Phan, 2018).
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Competitor analysis
The major competition that Tesco is currently facing in the grocery market are from
various supermarket giants like Walmart, Morrisons, Asda and Sainsbury as well as Wait rose in
the United Kingdom. In the recent times, the major German competitors that prove heavily
discounted products have become a major competitor such as Aldi and Lidl. Also, various
convenience stores have been rivals of Tesco (Laville and Taylor, 2018).
 Competition in Industry: Tesco had many competitors which are also following the new
marketing strategy through marketing tools which are Asda, Sainsbury’s, Aldi and Lidli.
 Potential to enter new industry: The marketing strategy are that are followed by Tesco
can be also used by other competitor which haven't used modern marketing techniques
like Local store of the country.
 Power of supplier: through digital marketing, Tesco can be analysed the market and raw
material that are offered by different suppliers and can monitor each of them easily due to
technological advancement.
 Power of Buyer: Tesco need to offer more and at low price as the consumers can easily
compare the product price online at various store and purchase where they find best deal.
 Threat to substitute: as the digital marketing strategy are also used by competitor, Tesco
need to low its price and offer more to attract the customers towards their website.
Linking Digital Business with Digital Marketing Strategy.
The various digital business that currently have taken over the globe through social media
and search engines are Facebook and google (Peeroo, Samy and Jones, 2017). They tend to
advertise the promotions on their websites and search engine. Tesco has to link up its marketing
strategies with these digital giants for their promotional techniques. Tesco has used pay aper
click advertisements, webinar production, content marketing, social media marketing through
these platforms. The digital marketing promotions will be done to the target market by posting
highly engaging content, tag lines, offers, discounts, events etc. then it will be monitored using
analytics and benchmarked if it is working as per the set objectives (Peeroo, 2019).
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Formulation of objectives
Marketing objectives are a clearly laid out targets that Tesco wants to achieve in a
specific time period through its digital marketing campaigns and it provides an aim and focus to
the entire process. It is highly important to identify, anticipate and satisfy the customer needs
profitably. The best objectives are SMART in nature which means they are specific, measurable,
achievable, realistic and timed (Kingsnorth, 2019). The major digital marketing objectives for
Tesco are as follows:
 Increasing the sales from the present customers by 15% by targeting through lead
generating from various social media platforms in the UK market by the end of the
financial quarter.
 To enhance the organic traffic conversion rate by 20% for the online presence within 8
months.
 To increase the percentage of visitors on the company website by at least 10% within 1
year (Saura, Palos-Sánchez and Cerdá Suárez, 2017).
Designing implementation plan
In order to go ahead with the marketing plan, it is necessary that there is efficient use of
human resources, finances and resources of Tesco. The market place is evaluated and the tactics
to be used are decided (Yim, 2020).
Target customers: As per market segmentation, the customers are divided into four categories
which are demographic, behavioural, geographic and psychological. In terms of demographics,
all the age groups are targeted of sub urban and urban population to. All the religion, gender and
education levels are focussed. The household income of average and high is targeted. In terms of
geography, the areas of operations across the 14 countries and their online markets are targeted.
As per behavioural segmentation, the people with good loyalty and their past purchase behaviour
and feedback is analysed and targeted accordingly. As by psychological segmentation, the
beliefs, attitudes, lifestyles of the people targeted are analysed. This involves people that want to
purchase more discounted products without compromising the quality and healthier organic
items to be promoted. The positioning will be based on these target customers to increase the
sale by 15% in the financial quarter and to increase the online presence through organic traffic, it
should be identified and analysis the keywords that are trending on internet. Blog post need to be
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increased on the website to improve the ranking and optimize the higher Click-through Rate.
(Dolnicar, Grün and Leisch, 2018). Targeting is method that identify the activities of consumers
target and intentionally aim the created content, connection by using platforms and target
specific demographic and geographic customers and their needs. Tesco need to target those
customers which are near the store and had the activity related to their internet. Whereas,
segmentation is done for the audience in different groups on the basis of their criteria which
include demographic and social media used by each of them. Segmentation is key part for the
digital marketing strategy. Tesco need to make different segment of their customers according to
strategy made.
Strategies and tactics: For achieving the marketing objectives, market penetration and product
development policy will be used where Tesco will market the new product line across its existing
markets. The digital marketing tactics that can be adopted are:
 Using social media marketing through Facebook, Instagram and google search. The pay
per click advertisements will be displayed across the popular social media pages and
posts. Higher search engine marketing will be conducted. Retargeting display ad and
google add words will be used. This can increase the conversion rate of the company and
hence achieve the target by increasing in sale by 15% in a quarter. It helps Tesco top
create organic traffic through their social media pages. Through social media, youngster
are target which are between age of 18 to 49 with both men and women.
 Using influencer marketing: various social media influencers will be publicly promoting
the supermarket chain through their Instagram posts, social media reviews endorsements,
or social media pages and provide a positive review of various products of Tesco
(Vinerean, 2017).
 Email marketing will be adopted to send out newsletters, events and offers to customers
periodically advertising the products and services that create the website presence in the
market while this are targeted those people which are not so active on social media and
which are engage in job or business.
 Use of media graphics and videos for promotion of supermarket across different channels
such as social media, search engines, websites etc.
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 Using content marketing through various blogs and articles that will promote the products
and services of Tesco along with marketing automation and increase the website presence
on the internet.
 Public relations can use used by conducting cooking contests using the groceries of Tesco
and sharing it across social media and other promotional events and activities that people
can do online.
Marketing Mix
Through the campaign run by Tesco to achieve the objective can be done through
Marketing mix by the following ways:
 Product: To achieve the objective of increase in sales by 15% can be done by targeting
the customers according to the product range and preferences of the products consumers
are looking for. These also brings the customers through website or social media which
increase the conversion rate (Thabit, and Raewf, 2018.).
 Price: The customers are targeted via individual income level consumers are having. The
shows' product range which they are looking with price effective.
 Place: This will increase the presence to those customers which are leaving nearby to the
store and looking for the products at different stores.
 Promotion: To increase the website presence through analysing trending Tags for those
costumers which are looking for the related goods on internet.
Budgeting
Marketing budget represents the documents that will be used to explain the amount of
investment and funds that will be used in the implementation of the marketing plan over a
specific time period and will consider all costs associated with the marketing like paid
advertisements and marketing tools. It is highly important as it helps the company in keeping
track of its expenses and funds and help in not overspending. It will help in allocating the funds
as per the needs and in the right places. It will help in the benchmarking and monitoring process.
It helps in the planning of the long term and business growth. For creating of a robust marketing
budget, it is essential that Tesco establishes its sales cycle and sales funnel to breakdown its
marketing budget. This can be done through awareness, consideration, decision and action.
Tesco needs to know its outside costs like operational costs, employing staff, variable and
fixed costs etc. it needs to evaluate the digital marketing tools cost such as google analytics,
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email marketing, Facebook and Instagram analytics, SEO tools, social media management tools,
website analytics tools conversion rate and funnel analytics etc. It also needs to consider costs to
be spent in influencer marketing and endorsements (Chaffey and Smith, 2017).
Monitoring and control
The digital marketing campaign has to be implemented and the monitored to track its
performance. This can be done through various methods to for evaluation such as benchmarking
and KPIs. The major KPIs that will be used in this digital marketing campaign are number of
leads in the sales growth, the lifetime value of a customer, return of marketing investment or
ROMI, website traffic to website lead ratio, social media reach and engagement, email marketing
performance, Blog visits, landing page conversions etc. The benchmarking indicates a
comparative analysis with the other major performers in the retail market and comparison of the
customers, the sales growth in various quarters, the marketing performance, company
performance revenue etc. The Digital Marketing campaign will work effectively in the retail
market because of the efficiency of the implementation plan to attain the objectives in terms of
right target segmentation, the popularity of the Tesco brand, the right digital marketing strategies
and tactics (Saura and et.al., 2017). Analyse of the campaign need to be monitor and control to
avoid unnecessary cost inured on the campaign. Like if the Saturdays and Sundays are seen as a
low rate conversion in the weekend, then campaign can be stopped on those days and it helps
company to save the cost and use it on other normal working days. Whereas, Controlling of
campaign is tough to measure as it reach in wider areas and which can't be measure properly.
Controlling can be easy when it measures the corrects time and day company to promote the
advertisements and posting the blogs. To know correct time to post the picture and blogs can
create the high reach of the popularity and reach the target customers. This can result in high
conversion rate and increase the sales of company by achieving the target that are set in the
campaign. Also, the campaign are need to be carefully monitored to reduce the risk of failure of
campaign and loss incurred. To achieve the target that are set by the company can only be
successful when the campaign is properly control and monition by the digital marketing team.
Hence, objective of the company can be achieved easily with the effective marketing tools and
plan made by the company to increase the sales and website presences in the market.
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Conclusion
It can be concluded from the above report that the digital marketing campaign for Tesco
will consist of a situational analysis that was evaluated through pestle and swot analysis and
highlighting major rivals. The digital business was linked with digital marketing strategies and a
marketing plan was devised. Major smart objectives were set and implementation plan was
developed through target customers and digital marketing strategies. The process of budgeting
was determined and monitoring methods were analysed.
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References
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