This project provides an opportunity to conduct an in-depth marketing project for Tesco. The various aspects which will be covered under this project are as follows:
- Providing an introduction considering Tesco.
- Identified the problem faced by Tesco.
- Identifying the implications of the problem if that has not been addressed by the company.
- Proposing solution to the problem identified by the company.
- Conducting an analysis of macro, micro and internal business environment of Tesco with the use of suitable models.
The Marketing association defines marketing as a set of institutions which are known to deliver value offering to the its distinct customer base or society (Belz and Peattie, 2012). It is an approach which attempts to identify link between customers and offering of an organisation. The concept of marketing emphasises on creating value offerings for customers through facilitation of information and building strong relations with the consumers. There are marketing consultancies which are known to provide expert services to client organisation so that they are able to carry out their operations in an improved manner. The ashforth marketing and communication have provided an opportunity to work with Tesco in order to counter their problem. This assignment will focus on the identifying current position in the market along with determination of business problem along with its implications. The second part of assessment will focus on conducting a situational analysis so that market can be reviewed.
Outline of the company
Tesco is the international grocery and merchandise retailer operating in the market of United Kingdom. The headquarters of this organisation are in Chestnut, UK and have been listed on the London Stock Exchange as well. It is a public limited company as its ownership is obtained be general public in exchange of investing their saving into the business. This organisation has been established by Jack Cohen in the year 1919. the word Tesco is the combination of the names of T.E. Stockwell and Cohen. The net income which has been availed by this organisation stood around 54 million in the year 2017 and employs approximately 476,000 people worldwide. This organisation is known to diversify their product range and offers services which relates to the banking, petroleum, tech supports and booker groups. This organisation have acquired operations of numerous other retailer so that their market could be expanded and as a result this organisation is carrying out its operations in the European, American, African and Asian regions through their retail outlets.
The positioning of the business defines how an organisation is being perceived in mind of the consumers. The marketing strategy which are undertaken defines the manner in which products and services of an enterprise are perceived by the customer (Brown, 2013). The institution are known to form a marketing plan in which this organisation helps in achieving its defined targets. The competitive price which has been set by the organisation helps a business into attaining a distinct position in the market. The competitive price strategy which has been employed by this organisation tend to influence the manner in which operations are carried out. Another emphasis of this organisation is on delivering quality goods and services and that too in an affordable manner (Hair and et. al., 2012). The consumer perception index states that there is an significant increase in the manner this organisation is perceived favourable in the market.
The quality deliverable of this organisation makes sure that there is an ideal function positioning of this organisation. It is dependent upon the distinct customer base to which is being served by this organisation. The multi-segment positioning is referred to be an approach in which an organisation offers variety on products in the same segment. For instance: The customer who are looking for to buy expensive television are supplied with Samsung UHD TV whereas people who are looking to avail quality product are catered with Panasonic 32” TV. The customer service is referred to a key in which an organisation focuses on the experience which has been delivered to consumers while shopping with the brand. Customers have always perceived this organisation to be more customer friendly which makes it stand out among its competitor brand. There has been a positive relationship identified with the time being spent upon floor and sales revenue which are entertained by an organisation. Their is steady improvement in the level of satisfaction which have been derived by the consumers which supports a business into retaining paramount business position in the market (Ries and Trout, 2013).
Identification of problems relates to company
An organisation performs well when there is right functioning and coordination amongst all the factors which leads to attainment of organisational objectives. It is very important for a business organisation to resolve its major challenges so that they don't affect brand perception and loyalty of customers. The major problem which has been encountered by Tesco is due to technical fault in the online service delivery (Tesco customers miss out on deliveries due to tech fault, 2017). The complete system failure which has been experienced by this organisation resulted in cancellation of thousands of orders for this enterprise.
Implication of problems upon business
It can be said that technology plays a substantial role in the upliftment of an organisation and failure on the such grounds possess numerous implication upon business. The foremost impact can be ascertained on the sales revenue which has been encountered by the company. The company has released a statement in which they stated that approximately 10% of the online orders have been lost due to technical glitch which has been encountered by the organisation. Therefore it can be said that such disruptions cost business in terms of revenue due to cancellation of online orders. The frustration of consumers can be ascertained through footfall as well, implication is that there will be a positive influence on the competitor sales. The encounter of people with such technical faults enforces them to opt for rival organisations.
Another implication which can be ascertained is that there will be a decline in the customer experience which will further perception which this organisation have formed in the mind of the prospects. Technology is very important for business organisation as it offers convenience and comfort to people. The failure of a business on technical grounds will not only impact customers but will also influence in the internal working environment of an organisation. There will be a lack of communication amongst organisational members which tend to influence the manner in which operations are fulfilled (Mogotlane and et. al., 2010). It has been ascertained that aggregate population of the country is inclined towards older age group and are persuaded to make use of corner grocery shop available in the neighbourhood.
Situational analysis is an approach through which management of an organisation conducts assessment of internal as well as external environment so that major capabilities of business could be identified along with determination of influence of distinct factor pertaining in the business environment (Kimang’a, 2012). It is very important to consider for a business organisation to consider internal and external environment factors so that better strategies could be formulated. Tesco have been known to conduct situational analysis on regular basis so that organisational and product position could be identified in respect to the competitors. The determination of opportunities and threats can be helpful in attaining growth for a market.
1. Macro Environment (PESTLE Analysis)
This analysis is more concerned with factors which lies in the external environment of an organisation. It is a valuable tool to be possessed by an organisation as it helps in identifying their influence and simultaneously constructing policies and strategies for the future. Such analysis helps in determination whether a business should take up expansion or consolidation measures. The various factors of this analytical tools are evaluated briefly down below.
Political Factors: The political factors taken into account legislation and regulation which has been formed by the government. This retail organisation carries out its operations in numerous countries and therefore influenced by the legislation by each country. The extent to which legislation of an organisation is stable determines extent to which operations could be carried out. The current environment encourages growth so that phase of recession could be completely surpassed. Therefore activities and actions of this organisation are encouraged as this organisation have emerged to be a mega employer in the country. Tesco have been known to be encouraging diversity in an organisation which is well appreciated by the government.
Economic Factors: The economic factors stands most crucial to an organisation as it the operations of this retail organisation are carried out to achieved defined level of profitability through its operations. There are numerous factors which tend to influence working of this organisation such as VAT and other relevant taxes. The recent increase in the taxation policies have impacted profitability aspects of this organisation in a negative manner (Eriksson and Emmelin, 2013). Even after venturing into international market this organisation have not been successful as much as growth attained through local market. The recession have impacted the capacity of people to avail products and services offered by this organisation persuading a business to produce less. To counter the scenario, Tesco have been known to adopt competitive price strategies along with providing value to consumers.
Social Factors: The social factor tend to focus on trends and preferences of people along with considering buying trends. There is a latest trend for the people to possess one stop shopping and buying products and services through online portals. The presence of online shopping portals have emerged to be more convenient and comfortable to elderly people. The perception of people towards this organisation have emerged to be more favourable which tends to reflect upon the sales revenue of this organisation (Theaker, 2017). The people are now more conscious about their health which persuades this business to incorporate offering which are well appreciated by the health conscious segment. This organisation have recently started to deliver organic food to people which have emerged to be most profitable manner of accommodating to these demand for people.