SOSTAC Model: A Comprehensive Analysis of Tesco's Marketing Strategy

This report provides a comprehensive analysis of Tesco's marketing strategy using the SOSTAC model. It begins with an introduction to Tesco and its marketing practices, including digital marketing and relationship marketing. The report then delves into a situation analysis, employing the PESTLE framework to assess the political, economic, sociological, technological, legal, and environmental factors affecting Tesco's expansion into Nigeria. Key objectives, such as improving customer service, increasing sales, and achieving a competitive advantage, are outlined. The report details strategies and tactics to achieve these objectives and includes budget considerations. The analysis concludes with a summary of findings and recommendations for Tesco's marketing approach.

PRINCIPLES AND PRACTICE OF MARKETING
SOSTAC model to the marketing strategy currently being use by Tesco

Practice of Marketing 2
Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
OBJECTIVES...........................................................................................................................10
The primary objective of Tesco is ............................................................................................10
To give excellent customer service by providing high-quality products at the reduced price. 10
To give excellent customer service by providing high-quality products at the reduced price
within 2-3 years.........................................................................................................................10
To increase in the sales of Tesco by 2% in the first two years and most significantly achieve
the competitive advantage.........................................................................................................10
STRATEGIES......................................................................................................................10
TACTICS ............................................................................................................................11
1.6 Budget ...............................................................................................................................15
CONCLUSION .............................................................................................................................25
REFERENCES .............................................................................................................................26

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INTRODUCTION
Tesco is one of the largest retail organizations in the world and in the United Kingdom. The
organization makes use of a variety of marketing and development strategies to achieve set
growth and development. It is important for the organization to ensure that effective marketing is
taking place in both the domestic and international markets. It helps the organization in
achieving set growth and ensure require development is taking place. The marketing practices in
general used by the organizations include the usage of digital marketing, relationship marketing,
cause marketing, cross-media marketing and diversity marketing. All these marketing practices
ensures that the business is reaching set growth and is ensuring that required growth and
development is taking place.
It is important for the business to ensure that its marketing practices are allowing the
organization to grow itself in both the domestic and international markets. The major used
practice includes digital marketing. Digital marketing is one of the most important practice that
is used by the organizations across the world. It makes use of a variety of technologies and
platforms which often helps the business to reach new level of growth on a large level.
Practices of digital marketing includes the usage of internet specially. Internet has become one of
the biggest advantages for the organizations such as Tesco to grow the business on large scale.
Tesco tends to promote its products and services of platforms such as Facebook, Instagram, and
Twitter. This helps the organization to ensure that it is reaching a large set of consumers just by
once and receiving both recognition and reputation. Also, the usage of digital marketing
practices allows the organization and its business to ensure that desired growth is being achieved
on a large scale.

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The other marketing practices which is used by the organization includes relationship
marketing. The practice of relationship marketing helps the organization in making both
domestic and international businesses achieve growth and success. The concept of relationship
marketing helps the business to acquire and retain new customers. It is one of the most important
requirements of Tesco to make new developments and acquire new customers. In relationship
marketing Tesco tends to earn attention of the potential customers and make a convincing pitch.
These overall requirements help the company and the business to reach required success and
ensure that required development is taking place. Tesco has in recent years been working at
progressively expanding its world operations. Tesco, like other major corporations increasing
strongly into worldwide markets frequently faces different and challenging environmental and
competitive conditions in its various operational regions. Tesco is combating opposition in its
foreign places markets and trying to establish its presence with the assist of well installed nearby
firms and different shop formats.
TASK 1
SOSTAC Analysis

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Situation Analysis: To expand the business, Tesco needs to restore its lost market share. Despite
the challenges that Tesco is facing in the UK, Tesco is planning to expand its business operations
in Nigeria and serve Africa However, Tesco will have to investigate some factor that will affect
their business operation in Nigeria. These factors are known as the PESTLE.
Political Factors: For more than fifteen years now, Nigeria rule by the uninterrupted civilian
government. Within this period of democratic dispensation, there have been changes in
governments. The last change of government which took place last year was equally a change in
ruling political party. Politically, Nigeria seems to be stable except for the uprising of the
terrorists in the Northern part of the country. Also, another faction in the South-South agitating
for their rights over the oil revenue may make the business in that area to be volatile. There has
been series of oil pipes vandalization across the oil rich cities in Nigeria. Nigeria Corruption
Perception Index as reported by Transparency International based on the 2015 report stood at 26

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points. With this among other factors, the business confidence in Nigeria in the first quarter of
the 2016 as reported by the Central Bank of Nigeria has plummeted to -10.30. Nigeria is blessed
with fertile soil and several mineral resources. Therefore, anyone that want to explore this area
will definitely enjoy the backing of the government. In other words, political environment plays
most crucial role of any country in order to get the business success (Alserhan, 2017). The
political environment of Nigeria is appropriate for the organization to open its business. Its
government is supportive for foreign countries and allows them to expand their business. Its
stable economy is another factor which allows the government to be better and supportive for
other firms. Nigeria corruption perception index as reported by the transparency international
based. The current government administration seems to the fighting corruption and lots of looted
funds are being recovered. It is impact to the policies of company and its effectiveness in
effective ways. If government are introduce new law in then company have to follows this and
also add in their policies. In this city has need to diversify its economy in agriculture sector.
Economic Factors: Nigeria has an estimated population of 181.56 million people as at July
2015. It has the largest population in Africa and it ranks No. 7 in the whole world. That is why
Nigeria is being referred to as the large of Africa. The market possible here is very huge. In the
past years, notwithstanding the instability in the country, foreign direct investment has been on
the increase. For instance, the investment in the Telecommunication enterprise has been very
huge. As of April 2016, Nigerian Communications Commission suggested 147.57 million lively
numbers. The measurement of the population is enough to appeal to buyers into the country.
Fashion/Brand Preferences: An average Nigerian likes fashion. In some cases, they like spending
on frivolous things. Average Nigerians will spend money on something that appeals to his/her
interest. For instance, no matter the fact that most people in Nigeria stay beneath the poverty

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line, the record has it that Nigeria is nevertheless one of the bestselling markets for Smartphones
in the world. If your product is trending, you can be sure that it will sell in Nigeria. Although you
may additionally need to spend a few bulks on commercial in order to create awareness. If you
promote products in packs, it won’t be long before you discover that smaller packs with small
fee tag promote greater and faster. This is the reflection of the profits stage of the populace.
The economic situation is not buoyant and it has mono-economy with the total dependences on
oil market. Currently oil sector glut in the oil market, the revenue coming the country has come
down. Other hand economic factor is also considers the level of unemployment in city. Due to
the exchange rate rise in that prices of goods are also too rise. By that, this factor is impact to
company and its work.
Sociological Factors: In the past years, regardless of the instability in the country, overseas
direct funding has been on the increase. For instance, the investment in the Telecommunication
industry has been very huge. As of April 2016, Nigerian Communications Commission
pronounced 147.57 million active numbers. The size of the population is enough to appeal to
traders into the country. Religion is very suggested in Nigeria and it is a very touchy
issue. Ethnic/Religion: Nigeria is diverse in time of ethnicity and religion. Nevertheless, we still
have a good time our unity in diversity. Doing enterprise in Nigeria requires that you understand
the faith and cultural values of each group. Religion is very mentioned in Nigeria and it is a very
sensitive issue. The two essential religions in Nigeria are Christianity and Islam. You are no
longer pressured to belong to any faith, but you need to respect individuals for the religious team
they belong as well as.
The population of city is high in the world for that investment on telecommunication industry
has high. Fashion/brand are impact to company's growth Nigeria's fashion trend has totally

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different. They are spend money on anything that appeals to interest. This impact to company
Tesco because their fashion and preferences of peoples are different from others or company
have to lunch product as per peoples requirements.
Technological: Technology is the most effective tool to be considered when targeting the new
market. In contrast to before, Nigerians are rapid turning into computer savvy. A massive
amount of Nigerian youths are computer literate. Even though, laptops and personal computer
are still luxurious to few people, the use of Smartphones appears to be bridging this gap. With
Smartphones, many people are sincerely active customers of the internet with social media
presence. It is predicted that a range of 86.22 million internet customers giving a penetration of
46.10% of the populace. Therefore, for all people that need to do business in Nigeria, online
classified ads are honestly turning into a well-known way of carrying out focused customers. But
Nigeria may not have the advance technology which Tesco requires, which might affect the
company’s promotion. It is important that to deal with this situation, Tesco should outsource its
technological requirements (Legitsmallbusiness).
Technological factor are impact to Tesco because Nigeria business strategies are follow different
technology for the work. In that it is impact business like new technology has introduce in the
company its is difficult to understand by employees also give training to other. This factor is also
impact to business in negative ways but most of in positive way.
Legal Factors: On common, personal income tax hovers at around 24%, an organization Tax is
30% and value added Tax is 5%. With the dwindling oil revenue, the government is now trying
to block all the leakages within the income coming from taxation. Therefore, the era of tax
evasion also can soon become the factor of the past.

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Any organization that desires to operate business in Nigeria should prepare to conform with
applicable tax felony recommendations. Otherwise, such corporation can be asked to pay fines if
found that it has not been paying accurate taxes. Federal Inland sales company now operates
included tax machine which made tax evasion almost impossible. Any company that wants to
open a financial group account is anticipated to provide the economic group with the Tax
identification number. Tax law are impact to the business and its profit margin because
Nigeria operates tax system for personal income.
Environmental Factors: The Federal authorities of Nigeria plays a vital function in protecting
the ecology of the country. Similarly, each state is empowered to formulate legal
recommendations or recommendations with a view to make certain that the surroundings is clean
to prevent the outbreak of sicknesses. And due to the shortage of electricity, the extent of noise
and air pollutants coming from strength producing devices is excessive. This influence
residential, enterprise and business areas respectively. Tesco will need to consider this factor and
plan properly on how to generate electricity for their business.

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OBJECTIVES
The primary objective of Tesco is
To give excellent customer service by providing high-quality products at the reduced price.
To give excellent customer service by providing high-quality products at the reduced price
within 2-3 years.
To increase in the sales of Tesco by 2% in the first two years and most significantly achieve the
competitive advantage.
STRATEGIES
To achieve the above-mentioned objectives, Tesco needs to introduce effective and efficient
marketing strategies. It is very necessary for the company to maintain competitive advantage in
the market in which it operates. By the help of analysing the porters generic model Tesco can
build a good position in the Nigeria market.
GENERIC STRATEGIES
Cost leadership strategy: This is the first strategy which shows for being the low-cost producer
in an industry for a given level of quality. To earn the profit in the market, company operates a
low-cost business model: low-cost supply chain, low cost human resources, removing wastage.
This strategy helps to gain market share and helps to get efficient distribution channel.

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Differentiation Strategy: This strategy more focused on the product or services rather than
product’s price. In other words, differentiation strategy produces the unique and different product
strategy that attract the customer without consideration of price
Focus Strategy: This strategy is more focused on the narrow segments in order to achieve the
cost advantage and differentiation. By the help of this strategy, company can get better attention
of customers towards the company.
To attract Nigerian people, Tesco should require adopting the cost leadership strategy with good
quality of product or services (Fozer and et.al., 2017). By the help of this strategy Tesco can
make competitive advantage. The cost leadership strategy is going to allow the business to gain
new customers in the market of Nigeria. This is one of the most important requirements of a
business because it is newly launching itself in the markets Nigeria and cost leadership strategy
can help it in reaching that position.
TACTICS
Product
In order to keep costs down products and technologies at the mature stage could be introduced
into the developing country where there is demand and there is still scope for market share
growth

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Therefore. For certain products, product extension strategies could be implemented to help
reduce costs.
Initially Tesco should start with a smaller range of products and services while it goes through
the learning curve, Then, other product categories could be introduced.
Pricing strategies Need to know if using differentiation or Ansoff)
Pricing is the foremost element that attract customers towards the price. Price is the identity of
the product which represents the product quality. On the other hand, it also shows how much
product is worth. Premium class people more focus on the high prices to get quality products. In
contrast, medium or law class people want higher satisfaction at low prices. There are some
pricing strategies that company could r their product or services (Nowak and et.al., 2015).
Psychology Pricing: this is the type of strategy that helps to encourage customers towards the
product or services on emotional levels rather than logical ones.