Tesco Strategic Marketing: Comprehensive Analysis and Recommendations

This report provides a comprehensive strategic marketing analysis of Tesco, a multinational grocery and merchandise retailer. It begins with a market analysis, including market size, competitor analysis (Aldi and Sainsbury), and an examination of macro and microeconomic forces using PESTEL and SWOT frameworks. The report also covers customer and stakeholder analysis, identifies key strategic marketing objectives, and outlines a campaign strategy incorporating the RACE model. The marketing mix of Tesco includes product, price, place and promotion strategies. It details a budget, key performance indicators (KPIs), and offers recommendations for enhancing audience engagement in the digital environment. The analysis highlights Tesco's strengths, weaknesses, opportunities, and threats, providing a holistic view of its market position and strategic direction. The report concludes with insights into Tesco's stakeholder relationships and their influence on business operations, emphasizing the importance of aligning marketing strategies with customer needs and environmental factors.

Strategic Marketing

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Market analysis.......................................................................................................................4
Market size.............................................................................................................................5
Competitors analysis..............................................................................................................6
Macro and Micro economic forces affecting organisation.....................................................8
Customer analysis.................................................................................................................10
Stakeholder analysis.............................................................................................................11
Key strategic marketing objectives......................................................................................12
Campaign strategy................................................................................................................12
Budget...................................................................................................................................12
Race model...........................................................................................................................13
KPI........................................................................................................................................13
Recommendation..................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
APPENDICES...............................................................................................................................16
Group log..............................................................................................................................16

INTRODUCTION
Strategic marketing can be described as use of marketing disciplines in order to attain
goals of organisation with developing and maintaining sustainable competitive advantage. It
focusses on higher level of consideration related to target market, services offered by companies
and prices and promotion of products (Crick and Crick, 2021). This project report includes
analysation of TESCO that is a multinational organisation. It was introduced by Jack Cohen in
the UK in the year 1919 that is British groceries as well as general merchandise retailer. It is
among ninth largest organisation on basis of their revenues. This project report includes market
analysis of a company that consist market size, competitors analysis, macro and micro economic
factors, stakeholder analysis and customer analysis. It identifies strategic key objectives and
campaign strategy along with race model for purpose marketing and communication mix.
Moreover, it consists marketing roll out plan, budget, key performance indicators and
recommendation for organisation to engage audience in digital environment.
MAIN BODY
Market analysis
Marketing mix can be described as tactics and action plan that is used by company for
purpose of promotion of its brand, product in market (DeLuca and Fornatora, 2020). It mainly
consist four component like product, prices, promotion and place. Marketing Mix of TESCO for
attainment of its making objectives is mentioned below:
Product Price
Tesco is a large multinational organisation
which is providing different products to their
customers including food, financial services,
electronics and clothing (Faranda, Clarke and
Clarke III, 2021). It is not only providing its
products and service in their stores but also on
online platforms. It is offering delivery
services of their grocery to their customers.
Tesco is making efforts in order to provide low
prices to their customers that can be without
make any compromise with quality of their
products. It is reducing prices of their products
by getting cost advantage as it is adopting
economies of scale in order to enjoy their
products.
Place Promotion

Headquarter of Tesco is existed in Chestnut,
England and is having numbers of stores in
different parts of world. It is distributing its
products on basis both online and offline
channels. Offline stores of Tesco is including
six main stores like Tesco Extra, Tesco
Express, Tesco Metro, Tesco Compact, Tesco
Superstore and others.
Tesco is conducting different activities in
market for increasing awareness of their
products as they use television advertisement,
sponsors events, offering different types of
promotional discounts and sale strategies
(Hansen, King and Mouritsen, 2018). It is also
getting popularity due to its low prices
strategies and cost advantage in market.
Market size
Illustration 1: Market share of UK super market
Source:TESCO SWOT Analysis, 2021
Tesco is a leading supermarket as well as grocery retail stores in UK which is becoming
more popular among people of UK ass well as Ireland. Tesco has dominant company in market
of UK as it have capture more market share which is about 27%. There are various other
marketing players like Sainsbuy, Asda, ALDI, Waitrose which are providing similar products in
market but still Tesco has highest marketing share in market as it is getting cost advantage
(Honea, Castro and Peter, 2017). It is an organisation which has diversified their market in

around 14 countries in market of Asia and Europe. It has around 6800 groceries stores and super
market in different parts of world.
Illustration 2: Tesco's number of stores worldwide
Source: TESCO SWOT Analysis, 2021
Tesco is getting success in market and is increasing day by day on basis of it marketing
share and strategies (Herrington and Lollar, 2020). In the year 2008, it only has 3751 stores but
in the year 2019, it increase to 68700 stores. Its annual revenue is also increase over the years
with addition of new stores in their business.
Competitors analysis
It is a strategy which involves identifying and researching businesses that provides
similar products and services in order to gain insights into their marketing strategies and tactics.
Conducting strong competitor analysis is beneficial in capturing larger market share, defending
against competitors to gain a upper hand above them. In context to major competitors of Tesco,
which are Aldi and Sainsbury, competitor analysis is discussed below:

Basis of Difference Tesco Aldi Sainsbury
Market Share In UK's retail sector,
Tesco had over 28.4%
of overall market
share.
Aldi secures 8.2%
market share in retail
industry of UK.
Sainsbury has 15.3%
market share in UK's
retail industry.
Marketing Strategy Tesco uses hoardings,
advertisements etc. for
promoting their
products. For
segmenting and
targeting its customers
it uses a loyalty club
card known as Tesco
Club card.
Aldi uses above-the-
line and below-the-line
promotion strategies.
It essentially involves
printed leaflets, social
media, newspaper
articles etc.
Sainsbury offers
Nectar Reward card
to generate sales and
increase customer. It
also offers discount
vouchers and coupons
to customers.
Pricing Strategy Tesco adopted cost
leadership as its
pricing strategy as this
aids in maintain
quality with lowest
priced goods.
Aldi uses value based
pricing strategy which
aids in catering its
existing consumers
effectively.
It has adopted
competitive pricing
strategy in its
operations in order to
tackle rival
company's products.
Products & Services Products offered by
Tesco are wines, in-
store bakery items,
home wares, beauty
products etc.
It offers organic meat,
fresh produce, gluten-
free products etc.
Sainsbury sells a lot
of organic and
environmental
friendly food
products such as
prepared salad, frozen
vegetables etc.

Macro and Micro economic forces affecting organisation
PESTEL analysis:
PESTEL analysis can be be described as framework that can be used by different
marketers for purpose of analysation and monitoring of macro environmental factors that create
impact over organisation, industry and company (Hunt, 2020). PESTEL analysis of Tesco can be
described underneath:
Political Factors: Tesco is a British multinational organisation which are providing their
products and services in different countries. It is a largest retailer and needs to ensure different
regulation of government. There is instability in political structure of UK due to Brexit which
create negative impact over performance of company.
Economic factors: Economy of UK is facing crisis due to Brexit and global pandemic
situation which create impact over performance of company (Mills and Hair Jr, 2021). Due to
there is reduction in purchasing power of people which create impact over sales of company. An
changes in economic situation of UK create impact over cost of company and prices of products
of company that does not allow them for purpose of getting profit.
Social Factors: These factors considering behaviour, preferences, values of people.
There is changes in pace of life due to which people prefer to purchasing things in one go and
based on these trends, people are preferring to buy things in bulk, Due to it, Tesco is planning to
facilitate these facilities in their stores.
Technological Factors: Technological factors are those which are related to
technological up-gradation, advancement which provide competitive advantage to a company.
Using these technologies. Tesco is providing their products and service to their customers in
lower prices in compare to other payers which can be done due to technology. It is also providing
different payment methods to their customers in order to enhance their satisfaction like credit
card, debit card, digital payment including paytm and others.
Legal Factors: There are different laws to be existed in different countries which is to be
follower by multinational organisation like Tesco. It is difficult for them to understand different
laws which create problems for them (Mintu-Wimsatt and Lozada, 2018). They needs to
consider all types of laws from local laws to international market laws in order to conduct
smooth flow of operation.

Environmental Factors: Environmental factors play important role in operation of
company. Due to increasing awareness among people of UK related to environment, TESCO
needs to consider these factors in their minds. For this, company needs to consider all
government regulation related to environment protection which improve their image in minds of
consumer. It provide competitive advantage to a firm and also helps them for purpose of them
from competitors.
SWOT analysis:
Strength Weakness
 Tesco has biggest grocery store in
terms of its revenue. It is one of top
retail grocery stores in market of UK
and getting around 63,911 million
pounds revenue in the year 2018-19 by
combining of UK and Ireland (Salary,
2021).
 It has efficient network of supplier
which play important role in operation
of business. Tesco is following simple
business model that results in reducing
cost of company as it has implemented
effective waste management system. As
a result, it has good relationship with
their supplier who provide products on
time.
 It is one of organisation which has
higher marketing share in UK in term
of super market chain.
 Tesco has expanded their marketing
share in US and Japan in the year 2012
but company does not get success in
that market and needs to shut their
stores.
 It is also involved in fraud scandal that
is related with accounting as in the year
2017, this organisation is reflecting less
profit in their accounting ledger for
purpose of avoiding taxes that create
negative impact over image of
company (Spais and Paul, 2021).
 Tesco is also affected with higher
credit card debt as company is using
debt for purpose of getting advantage
with increasing profit that reduce their
profit that reflect that company is not
using their profit in right manner.
Opportunities Threat
 Tesco is an organisation that has
expanded launches not discount stores
 There are different scandal in which
company is involved as Christmas

with name of Jack and also perform
different kind of things. It is essential
for business of TESCO it invest more
as this has more potential for growth as
it can complete in market with
competitors like aldi and Lidl by
offering lower cost (Spiller and Tuten,
2019).
 It has expanded their business operation
in large market countries but there are
emerging market where they can
expand as these market has more
potential to grow like south Korea,
Indonesia, Turkey.
 It also alliance with other brands in
order to get growth which allow
company to come in market with new
products.
scandal in the year 2017. As company
launches a new Christmas as and which
offend people and they consider it
disrespectful.
 There are different economic factors
that create threat for company as
company of UK is facing crisis due to
pandemic situation and Brexit.
 There is increasing competition in
different country which create impact
over profit of company.
Customer analysis
Tesco is an organisation which are considering customers as their priority and for which
they are providing good quality of products as customers cannot comprise with quality of
products. It is emphasis over good quality of products along with their services (Thoumrungroje
and Racela, 2020). It is also offering low prices products to their customers along with
maintaining quality standards products. It is providing their products in market of Asia, Europe
and other countries. This organisation is also using technology in their organisation which allow
them to speed up payment options in thir supermarket.

Stakeholder analysis
It can be termed as an exercise which allows an organisation to build road map to establish
pertinent relationship with its stakeholders in relevance to their interest and influence in business
operations. In context to Tesco, all elements of stakeholder analysis are discussed below:
High power, High interest- This includes owners and investors of company. These needs
to be managed closely as they have vested interest and influence in business operations. In
relevance to Tesco, shareholders have high interest and high power as they are in a position to
take decisions at any point of business.
High power, Low interest- Government and communities fall under this category having
high power simultaneously low interest. In relevance to Tesco, UK government have power to
modify corporate regulations and employment rules. It has limited interest in Tesco's operations
till they are getting corporate tax timely.
Low power, High interest- Organisation's employees have low power in decision making
process and high interest in company's workings, profitability as well as business strategies. In
accordance with Tesco, employees are delegated with responsibility and accountability to
encourage employees to show higher interest in workings.
Low power, low interest- Customers came under this category with low power and
interest in business's operations. In relevance to Tesco, customers is only concerned with
products as well as services and customer support service they get.
Illustration 3: Stakeholder analysis

Key strategic marketing objectives
Marketing objectives of Tesco is to provide higher quality of food, outstanding services
to their customers along with greater values for money. It is aiming at quick services and values
for money for their customers. Main focus of their organisation is to develop value for money for
their customers along with increasing their marketing share.
Campaign strategy
Reason behind this campaign to increase awareness among customers or extra values
create by customers by providing good quality of products to customers within affordable prices.
It create values for money for their customers and also allow them to increase numbers of
customers.
STP analysis:
Segmentation: Tesco is adopting geographic segmentation as it is expanding their
business on basis of geographic location. It is also adopting demographic segmentation as it
providing different products to different age people and different gender people like male and
female.
Targeting: Tesco is targeting market on basis of profit and marketing share. it analyse
potential in target market in order to select a segment. it is planning to expand their business in
different countries like Korea, Indonesia, turkey.
Positioning: Positioning assist to differentiate their products and service from those of
their competitors. Tesco is positioning their products as it is develop price values for their
customers by providing good quality of products and service.
Budget
TESCO Marketing Monthly £
Advertising campaign £30m
Social Media advertising £39m
Marketing automation £30m
Online display advertising £55m
Search engine optimisation £25m
Management training £85m

Total £264m
Race model
Implementation of different types of strategy and other tactics consist different areas of
marketing along with communication mix that demonstrate knowledge of RACE mode. It is a
framework that can be used in planning of digital campaign and also important for campaign
plan. Race model is a concept that assist marketing in planning and managing different strategy
of digital marketing and also assist in set target market of company. Marketing campaign of
Tesco consist use of different social media channel like Facebook ,YouTube, Instagram, Twitter
and others. It helps them to increase awareness to customers about discount offers of company.
KPI
KPI is a tool that is a key performance individual and a indicator of success of a
company. It helps in establishment of goals and work of company as a performance indicator that
contribute towards attainment of objectives of company. Major indicator in KPI in marketing
campaign of Tesco is mentioned below:
Customer satisfaction: It is one of indicator for measuring success of marketing
campaign as company can get feedback from customers regarding their services and products.
Satisfaction of customers can be measure on quality of products they are providing.
Revenue Growth: It can be measure on basis of revenue growth as it measure cost of
good sold, and also track sales of company.
Recommendation
From above mentioned discussion, it can be recommanded to managers of company that they
should promote their discount offers to customers in order to get benefits of it and increase sales
of company.
It is also suggested to company to actively available on online platform as most of people are
actively using social media platform. They can solve problems of customers at thee platforms
and also create their awareness related to new products and service of company.