Marketing Strategy for Tesco's Expansion in Romania: SOSTAC and PEST

This report examines Tesco's marketing strategy for expanding its fashion retail business into Romania. It utilizes the SOSTAC model (Situation, Objectives, Strategy, Tactics, Action, Control) to analyze the market and develop a comprehensive plan. The report begins with an introduction to marketing principles and then applies the SOSTAC framework to the Romanian market, including a PEST (Political, Economic, Social, Technological) analysis to assess the external environment. The objectives are defined using the SMART criteria, and strategies such as cost leadership and market development are explored, along with the use of the Ansoff matrix and market entry modes like Greenfield investments. Tactics are discussed across product, price, and place, including penetration pricing and distribution strategies. The report concludes with a control phase, emphasizing key performance indicators and benchmarking. The analysis justifies Romania as a viable market for Tesco, considering its political stability, economic growth, social factors, and technological advancements. The report provides a detailed overview of the principles and practices of marketing, offering valuable insights into market expansion strategies.

PRINCIPLES and PRATICES
of MARKETING- PPM

Table of Contents
INTRODUCTION.......................................................................................................................................3
SOSTAC.....................................................................................................................................................3
Situation..................................................................................................................................................3
Objectives................................................................................................................................................4
Strategy...................................................................................................................................................5
Tactics.....................................................................................................................................................6
Control.....................................................................................................................................................7
Justify the chosen country as a new market by doing PEST analysis of the SOSTAC................................7
CONCLUSION...........................................................................................................................................8
REFERENCES..........................................................................................................................................11

INTRODUCTION
Marketing refers to the critical framework of the business enterprise that is made for
profit and not profit criteria of the businesses. This report is based on the Tesco which is a
fashion retail store in the UK and want to spend their business in Romania so that they will
increase its market growth and profits for a long term survival. This report is based on maintain
the proper research on SOCTAC Model in which Tesco can identify the new country market and
their culture using various techniques and theories in this SOSTAC model. It helps in enhancing
the market share of the business enterprise(Duncan and Goddard, 2016).
SOSTAC
SOSTAC model is represent as a marketing model that is proposed by PR Smith since
1990s. It includes the six acronyms that shows the fundamental results of the marketing. In
includes situation, objectives, strategy, tactics, action plan and control. It can be represented by a
Tesco manager because they want to explore their business unit in Romania for this it is very
essential to apply this model that can be explained below(Dumont and et. al., 2016).
Situation
This is the first step which shows the marketing planning framework that helps in
expanding the business and earns a high market growth. In this Tesco manager can plan to
expand there business unit in Romania and for this they need to analyse the situation of the
market in the new country for this they do a pest analysis of the country of Romania to know the
facts related to the business expansion(Vos, 2015).
Pest analysis
Political factor – Political factor of Romania is a republic independent parliamentary that is
linked with judiciary and legislative branch of the government of country. It has strong relation
with European countries and United States due to this fact Tesco want to expand their market in
the country because of good relation between the country and they follow a liberalizing rule that
is very helpful for the company to expand their business without any extra cost and trade
tariffs(Юровская, 2017).

 Economical factor – The economic growth of the Romania is stable and due to this
country has be managed all the economic activities in a good way. Due to this they can
stable growth in the economy. In UK the risk avoidance is low due to this they face the
problem. In this Tesco is based on UK and expand their business in Romania helps in
managing the profit margin as it is stable country and there people are more spending on
the products.
 Social factor - This factor shows that Romania is far from ethnic composition in the
country. In this if a Tesco expand their market in romaine it is very difficult by this factor
as there people are far from ethnic composition.also there language are different form UK
they follow a Romanian language to operate the business they need to appoint the local
employees who know that language. In this Romania contains low score on Normative
culture in the society.
 Technological factor – This factor show the using of advanced technology by the
country in this Romania is high- technology user country in the world and there is tough
competition with other high-tech country due to this expanding the business of Tesco is
favorable in the country(ALIF, 2018).
Objectives
SMART Objectives
 Specific – In this organisation is expecting to encourage large customer base with
high profit margin related to their fashion store and their related
products(MIRCHEVSKA and KARANFILOVSKA, 2016).
 Measurable – In this Tesco is planning to increase their consumer base in
Romania by 20% and profit by 15%.
 Achievable – In this company is plan to accomplish and reach the goal by
providing proper training and development session to their employees so that
they work efficiently and effectively and give the positive outcome in the
Romania.
 Realistic – In this Tesco is enhancing their revenues and sales by examining their
present and past data of the profit margin and sales. Time constraint – to achieve

the high market growth and large customer base in the new market Tesco need 8
months in achieving this target.
Strategy
Porters generic model
 Cost leadership strategy - To enter into the new market Tesco can choose the
cost leadership strategy where they increase the profits by charging the lower
price and provides a variety of offers that may attract the large customer base in
the new market and company enhance their profits and revenues(Rai, 2016).
Ansoff matrix
 Market development – By using the Ansoff strategy Tesco is using the market
development strategy. In this firm enters into the new market with their current
selling products. in this Tesco is enter into the new market i.e. Romania and it
helps in increasing the sales and profits of the firm and also make new customers
within the new market. That helps in increasing the sales of the products and
profit margin of the firm.
Market entry mode
 Green field investments – Tesco choosing this mode of entry to enter into the
Romania as it is the largest fashion retail store in UK so to expand their business
unit and enhance the profit company need to directly enter into the market by
opening thuer stores to attracts the large customers base. In this they appoint the
local employees who have proper knowledge about the market(Voronina,
Markina and Aksiuk, 2018).
Pricing and positioning strategy
 Penetration pricing strategy –In Tesco they could the penetrate pricing strategy
in which they sale their products on low cost with quality products this helps in

increasing the profits and enhancing the market growth and share that helps in
longer sustainability in the new market with large customer base.
Tactics
Product
 Product portfolio – in this Tesco offers in their fashion store a variety of range
including men’s wear, women’s wear, kids fear, jewelery etc. In this they research
the whole market and generally attracts the family group where they but cloths for
themselves and thier family members. They offers a good quality product in a
reasonable price this will create a great impact on the person’s spending and
attracting then towards the company products.
Price
 Penetrate pricing –Tesco enter into the Romania with their fashion store to earns a
profit and enhance their market share they need to choose the penetrate pricing
strategy so that they will attracts large customer base. For people in Romania
Tesco is new brand so to become a familiar they offers quality products at low
cost so the brand name is popular among the people of the county.
Place
 Distribution – In this Tesco distribute their products in Romania where there are
large customer base and set a location according to that where there are majority
of population is living. They offers both services as online and offline so
customer is being comfortable to shop as per their needs.
How standardization, adaptation and globalization covered in 4 Ps of marketing
Standardization Adaption Glocalisation
Product It suggest the
consistency and
uniformity in the
products company
In this Tesco can
modify their products
like sale only western
outfits because
Tesco enter into the
new market with
globalization that
means they sale the

offered to the
customers.
Romania people enjoy
this.
fashion product that is
need to the global and
international market.
Price Tesco cannot follow
the standardized price
in the new market.
And there is no
consistency present in
the price of goods.
They could choose the
penetrate pricing that
is new to the tesco to
enter into the new
market.
They could choose
that price which is
familiar to the
international level.
Place Tesco choose the
consistence place
where they sale their
products and services.
They provide a online
service where they did
not need any store to
sale their products.
Tesco develop their
market where
economic stability is
strong.
Control
It is the last stage where company can monitor and control all the activities and plan that
was made earlier in this they need to use the key performance indicator to measure and evaluate
the performance at every stage that is helpful in earning the high profits. They also use
benchmarking process to set the goals according to the marketing standard and taking regular
customer feedbacks on the products and company so that they reduce the drawbacks in that.
Justify the chosen country as a new market by doing PEST analysis of the SOSTAC
 Political - due to openness in the government rules regarding the foreign direct
investment Tesco can easily enter in the market and sales their products to the
people of Romania.
 Economic – The economic condition is stable of the country due to this company
can easily maintain the large customer base. Economic condition plays an
important role to achieve the set objectives of the company.
 Social – They follows a Romanian culture so it is difficult to stay in the market by
the Tesco but their penetrate pricing strategy is attracting the large customer base
because they also offers a good quality products.

 Technological – Romania using High technology it helps Tesco to provide the
online and offline services to the people of the country.
CONCLUSION
From the above using information it is to be concluded that principles and practices of
marketing play an important role to identify the customers, environment, geographical,
technological, social factor etc to enhance the profit margin and sales of the company. This
report examine the facts related to expanding the business unit in other country with their
products and for this they could use the SOSTAC model so that they can easily operate their
business unit in the new market and attracts the large customer base. In this analyzing the
situation of the market, company need to PEST analysis and than expand their business in the
new country by the Tesco i.e. Romania.

REFERENCES
Books & Journal
ALIF, A.P., 2018. PENGEMBANGAN SOSIAL MEDIA MARKETING MENGGUNAKAN
SOSTAC MODEL UNTUK MENDUKUNG STRATEGI PEMASARAN (STUDI
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Dumont, A.M. and et. al., 2016. Clarifying the socioeconomic dimensions of agroecology:
between principles and practices. Agroecology and Sustainable Food
Systems. 40(1). pp.24-47.
Duncan, S.F. and Goddard, H.W., 2016. Family life education: Principles and practices for
effective outreach. Sage Publications.
MIRCHEVSKA, T.P. and KARANFILOVSKA, M., 2016. SOCIAL MARKETING AND ITS
APPLICATION IN THE REPUBLIC OF MACEDONIA. Economic
Development/Ekonomiski Razvoj. 18(3).
Rai, M.K., 2016. The Impact of Hrm Practics on Organizational Performance. International
Journal of Management, IT and Engineering. 6(4). pp.84-92.
Voronina, V., Markina, I. and Aksiuk, Y., 2018. Marketing information for holding leading
positions in the market segment of the grain processing enterprises.
Vos, L., 2015. Simulation games in business and marketing education: How educators
assess student learning from simulations. The International Journal of Management
Education. 13(1). pp.57-74.
Юровская, М.Б., 2017. Use of the SOSTAC model and SMART method in developing
marketing campaigns. In Наука, образование, общество: тенденции и
перспективы развития (pp. 238-239).