TESCO Marketing Communication: Applying STP and Marketing Mix

This report provides an in-depth analysis of TESCO's marketing strategies, focusing on the STP (Segmentation, Targeting, and Positioning) model and the marketing mix (Product, Price, Place, Promotion). It examines how TESCO segments its customer base, targets specific segments with quality products at affordable prices, and positions itself competitively in the market. The report details TESCO's product offerings, pricing strategies aimed at attracting medium and lower-income groups, extensive distribution network including both online and offline presence, and various promotional techniques such as TV advertisements, discounts, and social media engagement. The analysis highlights TESCO's emphasis on low prices, wide product range, and strong market presence as key factors contributing to its success in the competitive supermarket industry, ultimately aiming to build a positive brand image and maximize profitability.

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Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Segmentation, Targeting and positioning....................................................................................3
Marketing Mix Strategies:...........................................................................................................7
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Introduction
Marketing is an activity to promote, advertise the products or services in order to gain the
attention of target segment in an efficient manner. Here, the main aim is to attract more and more
number of people to increase the overall sales & profit margin. Further, marketing includes the
process of preparing strategies, plans for the purpose of promotion. Additionally, it also helps in
getting an edge over the competitors that is imperative to sustain in the current competitive
market place (Deepak and Jeyakumar, 2019). The present study is based on TESCO that is a
well-known retailer of groceries and other general items based on UK. The report will cover the
fundamental aspects of marketing that are being adopted by the company. Additionally, it will
cover the activities adopted by the company for the purpose of communication. Here, suitable
model such as STP analysis, marketing mix will also cover in the following study.
Main Body
Segmentation, Targeting and positioning
Segmentation, Targeting and positioning: It is well-known model that is applied by the
business entities to divide the customers in different segments. The main aim of this model is to
classified the customers in different groups in order to select a specific target segment for future
growth of business (Litvinenko and et. al., 2019). It also helps in identifying the suitable target
segment so that the company can make efficient use of the available resources. Additionally, the
marketers can easily position the product or services positively through appropriate marketing
efforts.
In TESCO, the marketing decisions of the entity are highly affected by the macro and micro

elements. Here, the company classified the customers in different segment by considering the
macro and micro factors. Also, they consider the abilities of company of using its internal
resources while choosing the target segment. The organization is targeting to the medium
income, group of people by providing the quality products at affordable price. For this purpose,
they ensure to enhance the quality of products by keeping a track on the quality throughout the
production process. Additionally, they prepare suitable strategies to maintain positive relations
with the target segment. Also, the organization aims to earn substantial amount of profit by
offering suitable products to the customers. In the current competitive time, positive positioning
is highly imperative to ensure long-term sustainability in the market. Here, the positioning helps
in gaining the attention of the customers and also makes the company enable to earn significant
amount of profit. In this context, TESCO strive to position its products positively in order to get
competitive advantage significantly.
Segmentation: Segmentation refers to classify the group of customers. Here, individuals having
similar characteristics are put together in a group so that it will be easy for the company to
prepare the marketing and strategies. The main rational behind this is limited resources of an
organization to target the entire population. An entity does not have sufficient amount of
resources to target the entire population. Hence, they classified the customers in different groups
based on the characteristics & attributes. There are different ways of segmentation such as
demographic, geographic, psychographic and behavioral. Here, demographic segmentation is
based on age, income, occupation, gender and other such factors (Garcia-Lamont and et. al.,
2018). In geographic segmentation, people are classified in terms of location, region, city and
more. Psychographic segmentation is related to classifying the customers on the basis of their
personality, attitude, perception, values, beliefs and more. Behavioral segmentation is associate
with frequency of purchase, occasions and so on.

In context of TESCO, they are targeting to low and medium income group of people by offering
quality products at minimum price. Additionally, the products of the organization are available in
rural as well as urban areas. Due to the wide presence, TESCO is able to cater rural & urban
audience. Apart from this, they are targeting to both males and female customers by offering
large variety of products. This segmentation strategy will help the organization in preparing
suitable marketing strategies. By embarking segmentation, the entity can easily make efficient
use of its resources for the future betterment. Here, it will allow the marketers to prepare suitable
strategies to earn substantial amount of profit in an efficient manner.
Targeting: After segmentation the next step is targeting wherein the company selects a
particular segment of customers. Here, selecting target segment is crucial to utilize the resources
of a company in an efficient manner. While selecting target customers, it is imperative to
consider the profitability, growth opportunities, need of the customers and more. Basically,
targeting is a strategy of classifying the large population into small segments so that the company
can concentrate on a specific group of customers (Thompson, 2018). Further, the company
designs strategies which fit as per the requirements of target set of the customers.

In context of TESCO, the main target of the organization is middle class households who
look for quality products at affordable price. The main reason to choose such strategy is to
enhance the presence and target most of the people. In other words, cost conscious customers are
being targeted by the entity. Here, they are targeting such customers who are likely to do
bargaining and wants to purchase variety of products. Additionally, differentiating targeting
strategy has adopted by the respective company so that they can target maximum number of
people by offering different varieties of the products in an efficient manner.
Positioning: Positing is the final element of STP model where the major focus is on the
perception of the customers regarding the products or services that are being offered by the
organization. Every company aims to maintain positive position in market as it is imperative to
ensure long-term sustainability and growth. An organization can easily survive in the market by
maintaining positive position among the customers (Iyer and et. al., 2019).

In context of TESCO, they are required to position the products in a positive way. They
need to establish a clear and desirable image in the mind of target segment. For this purpose,
they need to formulate effective strategies so that they can gain the attention of the target people
in an efficient manner. Here, the positive positioning will make the company enable to compete
with the rival firms effectively.
Marketing Mix Strategies:
Product: It is the most important element of marketing mix. It refers to the commodity that is
produced to fulfill the requirement of end users. Here, the product can be tangible or intangible
as it can be provided in the form of goods as well as services (Lim, 2021). To meet with the
customer’s requirement, it is imperative to carry out a detailed research before developing a
product.
Tesco is a large multinational company which offers large varieties of products including
food, electronics, clothes financial services and more. The company keeps on expanding its
product line so that they can effectively cater the needs of huge segment. Majorly, Tesco is
known for the groceries but it has expanded the project line to meet with different needs of the
customers.

Price: In marketing mix, price holds a specific importance as it is the monetary value of a
product or service that is being paid by the customers. The survival of a company depends on the
price they charge from the customer. It is crucial to pay significant consideration while
developing the price as a little difference can make a huge impact on the entire company.
Additionally, price also directly affects the sales and demand of the product in market. Certain
factors which need to consider while setting the price are list price, discounts, competitors price
etc (Solimun and Fernandes, 2018).
In Tesco, they focus on maintaining the price at lower level so that they can attract medium and
lower income group of people. Also, they ensure to offer product at lower price without
compromising the quality. To earn potential profit, company focuses on keeping its customers
happy and satisfied and enjoy economics of a scale. Here, low price strategy enabled the
company to make a first choice of the customers in the supermarket industry UK.
Place: Place is one of the essential elements of marketing mix. It is associated with selecting an
appropriate place from where the company will offer the products or services to the end users. It
also considers the distribution of product so that customers can easily access the product or
services. For this purpose, organizations maintain effective supply chain in order to fulfill the
market demand in timely manner (Kumar, Shankar and Aljohani, 2020).

Tesco is headquartered in UK but it has stores across the globe. The company has presence in
nearly 13 countries globally and has several numbers of stores in the international market.
Additionally, it has significant presence in both online as well as offline marketplace. Tesco has
six different kinds of offline stores such as Tesco Express, Tesco compact, superstore and more.
The main reason behind this is to make the products easily access able to those customers who
are not comfortable with the big stores. Apart from the physical stores, Tesco also allows the
customers to place the order via website
Promotion: Promotion refers to a marketing communication process wherein the organization
makes customers familiar with the features and attributes of their product and services. The main
aim of promotion is to maintain a proper interaction with the customer and encourage the buyers
to purchase the product. It helps the entity in gaining the attention of buyer and influences them
positively. In current time, promotion is highly imperative to gain an advantage over the
competitive firms (Lim and et. al., 2020).

Tesco has the biggest advantage of low price which sets it apart from the other rival firms. It also
helps the brand to improve its market reputation and maximize the profit. However, Tesco uses
TV advertisements, promotional discounts and more to promote the product. Additionally, they
also sponsor charitable events to maintain a positive image in the society. Heavy discount offers
play a crucial role in attracting the customers. According to the current time, the organization
also ensures to maintain significant presence at different social media platforms such as Face
book, instagram and more. Here, the presence of the social media platforms will help the entity
in attracting more number of people efficiently.

Conclusion
It is assessed through above-mentioned information that marketing is a vital business
function that is related to promote a product or service efficiently. In marketing, the organization
aims to earn substantial amount of profit by promoting the product at wide level. It is analyzed
that TESCO is well-known supermarket chain which is targeting to the medium income group of
people by offering quality products at affordable range. Additionally, they are offering wide
range of products to meet with the market demand. The company is working on lower price
which makes it different from rival firms. Further, it is analyzed that the organization has
presence at different places which make them enable to provide the products to the customers in
timely manner. It is found that the organization is using various promotional techniques to set a
unique image in the competitive market.

References
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