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Marketing Position of Tesco Ltd.

University: UK College of Business and Computing

  • Unit No: 9
  • Level: Undergraduate/College
  • Pages: 16
  • Words: 4000
  • Paper Type: Business Plan
  • Course Code:

    M/508/9862

  • Country: UK
  • Downloads: 0
Question :

The purpose of this report is to evaluate marketing practices and approaches that can assist an organisation to build direct connections with target customers. These kind of practices may help to conduct a research over target market as:

  • Provide a background of the industry, marketing positioning approaches and USP of Tesco.
  • Conduct a marketing audit and provide outline over market attractiveness and growth opportunities.
  • Discuss a competitor analysis over three main industry player.
  • Design a new marketing mix in order to fill market gap of Tesco.
Answer :
Organization Selected : Tesco

INTRODUCTION

Marketing management consider important role in the business to set activities and tasks in systematic manner. In this regard, several activities has been determines with resources which develop and implement the best possible strategy (Zakaria, Rahman and Osman, 2014). In this regard, organisation get directing for particular goals and activities that help to perform different activities and tasks in significant manner. Moreover, planning of new products and services has been developed to set long term strategy with different operations and functions. Present report based on Tesco which is retail sector business and develop their activities to attain desired results. Beside this, the company face tough competition in the market that create impact to launch new products and services. For gaining insight information of present report, it covers background statement of the industry in context to make market position and present unique selling propositions. Furthermore, it include  market audit that assists to develop systematic and effective functioning to maintain effectiveness. 

MAIN BODY 1 Background statement of industry in the context of market positioning and present unique selling propositions BACKGROUND STATEMENT    

Case study is based on Tesco organisation. This is a global grocery retailer which is situated in UK. It is world's number third largest retailer according to revenues  and the second largest according to the profit margin. There are various branches of Tesco which are expanded in 14 countries across Europe and north America (Zakaria, Rahman and Osman, 2014). It is generally specialized in food and beverages but there are different diversifications such as clothing, health care, music downloads and electronics. It also provides shopping from home as well as online financial services and telecommunications. Its profile can be understood by following table :

COMPANY PROFILE

Forms

It is a public Ltd. industry

Commercial enterprise

retailing

Listed as

LSE : Tesco

founded

In 1920

founders

Jack cohen

headquarter

Hertfordshire U.K.

Location number

5380

Primal people

David Reid

Philip Clarke

Net income

2.67 billion

Creations

Consumer products, telecoms, groceries and financial services

Operating income

3.81 billion

Workers

472000

Website

Tesco. com

MISSION

The mission of a company is to create more values for the people who are using their products and to gain their loyalty for lifetime.

VISION

Vision is to be most highly valued in the view of customers whom they serve products and services, communities in which they trade, committed staff and shareholders for growth of the industry and winning locally as well as globally and applying skills internationally.

OTHER ENTERPRISES

  • Tesco extra
  • Tesco metro
  • Tesco home plus
  • Tesco superstores
  • Tesco one stop

Swot analysis of the company:

  •  STRENGTH : this is one of the largest supermarket chain and the brand name is strongest with financial power. This is third largest retailer and second largest profit gainer across the world. The structure of this company is expanded across 13 countries. Tesco is using technological advancement in marketing, promoting and distributing (Çifci, Ekinci and Siala, 2016).
  • WEAKNESSES : as we all know that the structure of this company is very broad and expanded in different countries so it has to be faced more marketing complexities and issues. Employees of this industry do not have knowledge of insurance market and communication skills. It basically based and dependents on only U.K. Markets. The transportation cost is high as well because of the expanded.
  • OPPORTUNITIES : there is higher opportunity to open new stores and enters in new markets of ASIA. It can alliance with other companies for selling and marketing of their goods and services. Tesco can increase its potential customers by using more technical advancement.
  • THREATS : the main competitors of this company are WAL-MART AND CARREFOUR which gives tough competition to this company. This is the most threats factors to Tesco organisation. Other aspects such as fluctuation in tax rates, increasing raw material cost and creations by other market are also threats for this company.

MARKETING POSITION OF Tesco LTD.

To understand the position of this business in the grocery industry is very complex due to wide structure across the world. The company is foremost in buying and selling process. The focus of this company is to invest in those factors which are matters for the people. Present chief executive contribute to maintain the position of this industry and this is the cause that is why it has spent 13 years in the competitive market (Çifci, Ekinci and Siala, 2016). Position can be understand by analysed the company in the term of different factors which influenced the process and strategy of this company such as environmental, political, social and technical factors. These all factors can be evaluated by PEST model.

ENVIRONMENTAL ANALYSIS :

The plan of action of Tesco should be oriented at exploiting the environmental opportunities and to block environmental threats in a way that is pursuant with the internal capabilities. The environmental synthesis of Tesco will assist one realize what is happening both at the internal and external of the company and to increase the chances that the structural plan of actions will suitably indicate the environment.

POLITICAL ANALYSIS :

There are different factors regarding to politics which affect the business in strong manner such as increase and decrease in tax, education law, environmental law, trade control, employment law, discrimination law, health and safety law, regulation and deregulation, intellectual property law, consumer protection, data protection law and tariffs. But the main 4 effects of political factors are the impact on economy, political stability, changes in regulations and mitigation of risk. These all factors are necessary to be analysed because these affect the appeal of a particular local market.

ECONOMIC ANALYSIS :

It includes different factors such as interest rates, inflation, recession, taxes and exchange rates. Recession is the factor which affected a lot of sectors globally. Tesco overcome the negative impacts of economic factors by analysed all the factors of economic. After analysis, it improves their strategy by modify the prices of their products and services suitable to every classes without alteration in the quality of a product. Inflation is another substantial factor that could affect the market of grocery by leading changes in the purchasing power  and behaviours of customers (Fernie and Sparks, 2014).

SOCIAL ANALYSIS :

This analysis is important because the human beings are the most important factor for any organisation. They deal with customers and operate in the society. So, these factors affect the business in strong manner. Tesco consider the preferences and requirements of the customer by giving them better quality and services. The factors included such as population inhabitants and living standard.

TECHNOLOGICAL ANALYSIS

This factor contributes in the success of the company. It helps by reading and knowing the importance of information technology. IT has contributed toward the effective management of inventory logistics and by decreasing the cost down. It includes different factors such as online operations, supply chain management online and so on (Çifci, Ekinci and Siala, 2016).

At the last, it can be resulted that Tesco company analysed all these factors to maintain its position in the market. This company successfully analysed factors and gaining higher rate of profitability margin in the competitive market.

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2 Marketing audit

Marketing Audit is important element that assists to determine feasibility and ascertain effective results in the business. Following are certain elements has been considered in marketing audit:

  • Introduction to Tesco: Tesco is one of the famous brand of retail business in UK. They consider important role in the market to produce qualitative results. In addition to this, they are also focuses on Metro and Express so that sales and nourishment of goods introduced in more than 40000 supermarkets. The company deals in clothing and other kind of non food lines (Zakaria, Rahman and Osman, 2014). Retailing services in the UK encompasses with investment and effective functioning. The company produce their operations and functions in different areas of the world such as Europe, Ireland, Poland, etc. Hence, it is international retailer which produce to make effective functioning in the company. Although, in the UK the company consider international grocery and general merchandising chain which employing for 440000 staff members in all over the world.
  • Discussion to Tesco brand and segmentation: The chosen company selling their functions and operations in more areas of the world. The company also using different brands factors which assists to maintain its market position which give organisational edge. With the help of different categories of choice of customers in the segment (Donnelly, Simmons and Fearne, 2015). They also create separate brand which enable to make first choice in the segment. The company selling around 19% the finest food in the market. They are mainly considered their segmentation with healthy and cater to customers who are healthy conscious. The company also selling organic and healthy food products so that they can deal with the effective results in the country. There is one another segment which constitute and termed to deal with kids and play important role in the company. Hence, price sensitive customers easily meet with needs of such customers (Beitelspacher and Rodgers, 2018).
  • SWOT analysis: The company has strength that is maximum number of customers attracted towards the products and services. The company deal with innovative activities that help to maintain more significant results in the business. Furthermore, high competition is one of the major threat to Tesco which create negative impact on business. Employees of the company has weaknesses that is lack of training which impact negatively on business outcomes and results. The chosen business has opportunities to increase their products and services with diversify enterprise in new areas (DaSilva and Trkman, 2014).
  • Sources of data: In respect to carry marketing audit in Tesco, data has been gathered from primary and secondary sources. In this regard, different books, journals, magazines, publications, etc. tools has been assessed which assists to focus on desired results and outcomes in systematic manner at workplace. On the basis of assessment, it has been seen that company has effective promotional tools that assists to capture large areas of the market (Zakaria, Rahman and Osman, 2014). It is the best way to focus on increasing revenue and profitability as well. As results, effectiveness also developed with different advantages in the world.

3 Competitor analysis

Tesco is one of the largest UK retailer who compete with different kinds of supermarket such as Asda, Sainsbury, Morrison, etc. The chosen business compete with convenience stores which assists to gain popularity with consumer taste and shift with more trips. Tesco consider as the market leader among all the businesses. Its price reflect that how it influenced in the whole grocery market. The company consider market leader position from last 25 years (Laudon and Laudon, 2016). Hence, it taken 28% share of the whole market. It also delivers different grocery services in respect to reach with different demand which includes such as convenience stores, supermarket, superstores, etc. There are mainly 9 competitors exist for the chosen business that are explained under here:

  • Sainsbury: This enterprise consider their own operations in context of retail sector. It is 2nd largest retail sector business in UK. This company constantly struggle with Asda and behind Tesco. It is known as the experimentation with effective layouts and being customer friendly to charge premium price (Çifci, Ekinci and Siala, 2016). Sainsbury mainly consider operations with online booming so that online selling in the market continually developed.
  • Asda: Asda also consider their operations as third largest retailer in the UK. This company has around 15.7% market share in 2017. The company has subsidiary and they use penetration pricing to deal with huge number of people (Abosag, Baker and Zheng, 2017). The company increase their revenue through increase more number of stores in the world so that it help to develop more significant advantages in the world.
  • Morrison: Morrison is the highest Tesco competitor which take around 10% of market share. They tie up with maximum farmers and grocery suppliers so that cost of distribution reduced easily. In addition to this, they can also provide products and services qualitative to maintain customer loyalty (So, King and Wang, 2016). As results, cost will be saving in systematic manner.
  • The Cooperative: The Cooperative business consider different kinds of operations and functions in food and grocery market which consider as the Tesco competitor. This enterprise consider their operations and functions in different perspective of segments that help to attain more desired results and outcomes in the market. Therefore, they consider operations in Electrical retail, financial retail, food retail, etc. (Verhoef, Kannan and Inman, 2015). Furthermore, they consider the largest division in the cooperative group so that many convenience stores and mid size supermarket develop in the supermarket. This enterprise is not direct competitor of Tesco because they have not profited focus rather than cooperation focus.
  • Aldi: Aldi is one of the major retail enterprise consider operations as competitor in the UK. It is Germany oriented retail enterprise that determines massive presence in more than 10000 stores in all over the 18 nations. It is different from the other traditional retail companies. Traditional retail companies focus on maintain their effectiveness (Baek and Wang, 2018). Therefore, Aldi consider their focus on huge range of private label brand. They keep low cost for staff training and recruitment so that it is one of the major competitor factor in the UK.
  • Waitrose: This enterprise consider 6th highest position in term of retail business. In this regard, they consider royal warrant which help to bring effective results in the company. It is reputable company that supply different kinds of products and services in the country. They possess premium brand image so that price of the company is competitive. The company has effective UK retail and grocery products to produce effective consideration in the offline stores (Yu, Ramanathan and Nath, 2014). Online stores work tandem with the order so that produce delivery consider important role in the successful results. Waitrose consider operations and functions with innovative ideas so that brand image of the company increases systematic work performances in the market.
  • Lidl: Lidl is similar to Aldi which consider and originate functions with similar content. There are major features determines with different brand that are sold in the market. Aldi mainly sells private label brand which sourced in the different nations. It controls over the sourcing from local to manufacturers (Hair Jr, Wolfinbarger and Page, 2015). Hence, they attract customers with low price consideration. The company has around 4.5% market share in UK which ranked 7th amongst all Tesco competitors.
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