MAR032-2 Interactive Marketing Management

Mihai Banica

Student number- 1820078

University of Bedfordshire

1
Executive Summary

The aim of the project of the project is to understand the marketing mix of Tesco Company. The

7 Ps of the company is discussed in the content of the study, and the loopholes that still exist in

the company will be identified and along with the strategies, the company utilizes to ensure their

revenue growth. The study also includes some recommendations for the company that will help

them to eradicate the shortcomings.

Marketing Mix................................................................................................................................4

Price.............................................................................................................................................4

Product.........................................................................................................................................5

Place.............................................................................................................................................6

People..........................................................................................................................................6

Promotion....................................................................................................................................7

Process.........................................................................................................................................8

Physical Evidence........................................................................................................................9

Recommendation..........................................................................................................................10

Conclusion....................................................................................................................................10

Reference list.................................................................................................................................11
Introduction

Tesco is a UK based company conducting its business in the retail sector. It is a

multinational retail company. The company was founded Jack Cohen in the year 1919 and he

opened the first grocery store in the year 1931 in England near London. The business witnessed

its growth very rapidly; there were 100 outlets of the company by 1939. Earlier the company

only sold food items later it expanded to grocer and retail sector Tesco Plc. ( Tesco.com 2019).

Owns the Tesco Company they intervene in big to small markets with 3000 outlets operating its

business in UK (Tesco PLC (2019). Thus, the aim of the repost of the company s to understand

the marketing mix of the Tesco Company The 7Ps of the marketing mix will be discussed in the

study and understand the strategies that the company is placing in order to withdraw to good

amount of revenue from the industry and increase it at the same time. There will some

recommendations that will help the company to eradicate the loopholes that still exist in the

company.

Marketing Mix

Price

The main aim of Tesco is to provide comparatively low prices to the customers so that

the other companies cannot attract their customer base towards them. Yet, the company ensures

that the low pricing strategy does not hamper the quality of the products as this can dissatisfy the

customer and then they cannot be retained (Armstrong et al. 2013). The company believes in

providing low prices for high quality products or else run the company in loss. The company

uses economy of scalethrough which they reduce their operational and purchasecostand it

helps them to provide the customers all the cost benefits. The low pricing strategy of the
company has helped them in retaining the customer base (Peck et al, 2013). The pricing strategy

of the company is formulated by the management of the company based in the strategies and the

mission of the concern and this helps the company in gaining the competitive advantage in the

market. The message that Tesco provide “Every Little Helps”mainly helps them in formulating

the marketing and pricing strategy. The company has also restructured the product team of the

company so that good offers are provided to the customers. The company has brought the cost

down by 3% in 2016, they also brings changes in their pricing structure after taking reviews and

feedbacks from their clients. Tesco also reduces their promotional cost to lower the prices for the

customers.

Product

Tesco has a wide variety of product range, thecompany deals with clothing, food, and

electronics along with financialassistance.The company also does not restricts itself in

expanding its product line. The existing products that the company provides to its customers are

satisfying and catering to their needs. The company has many stores where they ensure that there

is ample availability of products so that customers do not have to switch to any other brand or

company for the unavailability of that product. The company also has its own product range

that helps them in gaining maximum revenue, as they do not have share the profit with any

distributor and the inventory costs also reduces(Pearson 2013). Thus, the company has also

expanded its business in the e-marketing sector, the company entered the online platform so

that they reach to a huge number of customers all over the globe this will help them in increasing

the revenue and their customer base.

sites have proper quality. The company believes in providing quality products to the customers

so that they can maintain their loyalty. The company offers products like pet products, frozen

products, baby products, beverages, bakery products, toys, electrical products and many more.

The company has its own brand products such as Tesco Lotus, Tesco Loves Baby, Tesco Bank

and Tesco Value (Charith2015).

Place

The company has its main headquarters in Chestnut in England. The company has its

outlets in small and large markets in far and near locations. The company has two main channels

of distribution for the services and the products that the company provides to its customers,

which is offline and online platforms. The offline platform in which the company distributes its

services and products are Tesco metro, Tesco express,Tesco extra, Tesco Homeplus, Tesco

compact.The study has shown that it is not convenient for many customer to avail the services

and products from big outlets such as Tesco extraneither is it possible for the company to

establish any more stores (Baker 2014). Therefore, the company has many small stores for the

accessibility of the customers and their convenience. The online platform of the company is their

official website. Tesco also distributes its products in many supermarkets that sells groceries

along with small range products that fall under non-food category. The Tesco express are mainly

the smaller stores that sells essentials with products of high margin.Tesco uses many

multichannel or distribution channels in order to make their products reach to its clients.Tesco

also has warehouses that helps them in maintaining the supply chain effectively, and uphold the

distribution of their products to all their outlets (Leonidou et al 2013).

Tesco is a huge multinational firm that requires a huge number of employees in their

concern to cater the huge base of customers. People are mainly the workers or the employees of

the company that undergo through selection processes so that their potentials and abilities are

properly analyzed and check if they are suitable for the company. This also helps the company in

understand the amount of productivity the employee can provide to them. The company has

recruited almost 48,000 staffs in 11 markets across the world. The company highly encourage

diversity in their work culture, they tend to employ employees belonging from various cultural

background (Audu, Danjuma and Habukuk2014). The cultural diversity amongst the employees

help the company in assisting the customers coming from various geographical areas and they

are more comfortable in their linguistic language, which become an added advantage for the

company. The employees are highly cooperative and they tend to maintain a healthy

environment by helping each other. The employees are also given the responsibility with few

promotional activities for instance making the customers aware, convince about the new

launches, and highlight the good properties of the product and persuade them to make the

purchase (Hill 2013). The company also has many benefits for the employees of their concern,

which is based on their performance.

Promotion

The biggest advantage that Tesco has is its pricing strategy that is comparatively low.

This makes the company distinct from other rival organization operating their business in the

same domain. This helps the company in enhancing its brand image;the major objective of the

company has been to develop its brand image in the market by reducing the costs of the products

and maximizing the profit margin of the company. The company also uses many platforms to
promote the company and its products such as advertisements in television, promotional offers

and discounts sponsored charitable events, distribution of flyers and animated characters in

front of malls and other stores with placards about the ongoing sale and new launches of the

company(Shih,Chenand Chen2013). The advertisements of the company mainly emphasize on

its low pricing strategy, offers and discounts on products. Tesco also uses attractive hoardings to

highlight about the new launches and the ongoing offers in all their outlets that attracts a large

number customer towards them and this helps in building the client base of Tesco.The company

also has loyalty cards for their customers, which is the ‘Tesco Clubcard’that helps in segmenting

and targeting the clients convince them to make purchase on the new launches. The loyalty

cardholders are also given added offers and discounts (Chowdhury2016).

Process

Tesco is a company that highly encourages innovation and advancements in their

processes. The company has invested huge capital in implementing technological advancements

in their production process to maintain an Omni channel ofcustomerexperience. This also helps

the company in building a competitive advantage in the market and outshine from its

competitors. This greatly attracts customers towards the company as they sell technological

advanced products that serves the needs of the customers in their fast pace life (Munusamy and

Wong 2018). The company has also launched its official website that has helped them in serving

lot of customers at the same time. The company also ensures that they are no technical issues in

their website so that the customers face any issue while operating it and placing orders

(Ozineh2014). The research and development program conducted by the company help them in

understanding the needs and preferences of the customers and they tend to implement them in

their company. The company also develops the process that the company uses in the present
times and implement advancements in it so that can cater the huge requirements of the customers

and no outlets run short of products (Ma, Ding and Hong 2015). The company also has many

technical devices that provides fast billing services to the customers and they do not have to long

hours in the queue.

Physical Evidence

The company has a very positive environment and they always keep their floors clean.

The company sells food items in their stores so the employees are strictly instructed to maintain

the proper cleanliness and hygiene factors within the company. This also pleases the customers

and they highly consider the hygienefactors within the company, which in a great way convince

them in being loyal to the company and make purchases. The arrangement of the productsare

done in a very organized manner, which help the customers in proper navigation and identifying

the items that they require (Bridson, Evansand Hickman2018). The company also places the

ongoing offers on the products very strategically that lures the customers and make them

purchase more. The website of the company is also very easily accessible and convenient for

many customers that are reluctant in vising the stores. The employees also have a very polite and

professional approach towards the customers and assist them with whatever requirements they

have the logo of the company is also very attractive and bright that attracts many customers who

are new to the areas (Nordin2018). The company also has different sections and shelves of

products for kids, pets, electronics, and groceries. The company also ensures that there are two

employees to attend the customers and segregation of employees are based on the genders so that

the female customers do not feel uncomfortable in stating their requirements to the staffs. The

privacy of the customers is highly maintained and respected by the company. There are CCTVs
all over the floor to ensure the safety aspects of both the customers and the company (Hung,

Cheng and Hsieh 2015).

Recommendation

The company has many strategies that makes them successful in the retail industry but

there are few prevalent loopholes in their management, which they need to eradicate. The

recommendation for the shortcomings of the company are stated below:

 Tesco should increase the added benefits for the purpose of buying its products that will

include extended warranties, credit and delivery, helpline services.

 The company should introduce novel products that the company should align with the

latest demands and trends of the customers. The company should understand the

opportunities in the market and implement products that can help them in attaining good

revenue.

 Proper examination and tests should be done to the new products so that the customers

cannot complain about it. This will help the company in building their brand image.

 The company should expand its product portfolio, and offer many new and innovative

products in the market.

 It also requires cost that are to be considered to set the prices of the products of which

either proper information are not available to the competitors.

 The prices that are sold online are priced high, which should be controlled by lowering

the delivery charges.

Thus, the report can be concluded after analyzing the seven Ps of Tesco. The strategies

that the company is placing in order to make good revenue from the industry and increase it at

the same timehave been stated. Some recommendations are also statedthat will help the company

to eradicate the loopholes that still exist in the company.

Reference list

Armstrong, G.M., Kotler, P., Harker, M.J. and Brennan, R., 2018. Marketing: an introduction.

Pearson UK.

Audu, A., Danjuma, H. and Habukuk, A., 2014. The Conquering Strategies of Oligopoly firms.

A review on entry strategies of Tesco Company Plc in the UK and beyond.

Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher

Education.

Bridson, K., Evans, J. and Hickman, M., 2018. Assessing the relationship between loyalty

program attributes, store satisfaction and store loyalty. Journal of Retailing and consumer

Services, 15(5), pp.364-374.

Charith, B., 2015. THE EFFECTIVENESS OF RELATIONSHIP MARKETING STRATEGIES

IN DEPARTMENT STORES. International Journal of Management (IJM), 6(10).

Chowdhury, B.N., 2016. A critical analysis of customer loyalty and customer satisfaction-a case

study on Tesco Club Card (Doctoral dissertation, University of East London).

Kogan Page Publishers.

Hung, S.W., Cheng, M.J. and Hsieh, S.C., 2015. Consumers’ satisfaction with online group

buying–an incentive strategy. International Journal of Retail & Distribution Management, 43(2),

pp.167-182.

Leonidou, L.C., Leonidou, C.N., Fotiadis, T.A. and Zeriti, A., 2013. Resources and capabilities

as drivers of hotel environmental marketing strategy: Implications for competitive a

Ma, Y., Ding, J. and Hong, W., 2015. Delivering customer value based on service process: The

example of Tesco. com. International Business Research, 3(2), p.131.

Munusamy, J. and Wong, C.H., 2018. Relationship between marketing mix strategy and

consumer motive: an empirical study in major Tesco stores. Unitar e-journal, 4(2), pp.41-56.

Nordin, N.D., 2018. Acceptance of Tesco store brand of products by consumers.

Ozineh, S.M.H., 2014. Investigating the Relationship between Perceptions of Pricing Strategy

and Consumer's Satisfaction in Insurance Industry. Kuwait Chapter of Arabian Journal of

Business and Management Review, 33(2569), pp.1-9.

Pearson, D., 2013. The 20 Ps of marketing: A complete guide to marketing strategy. Kogan Page

Publishers.

Peck, H., Christopher, M., Clark, M. and Payne, A., 2013. Relationship marketing. Routledge.

Shih, B.Y., Chen, C.Y. and Chen, Z.S., 2013. Retracted: an empirical study of an internet

marketing strategy for search engine optimization. Human Factors and Ergonomics in

Manufacturing & Service Industries, 23(6), pp.528-540.

https://www.tescoplc.com/about/our-businesses/ [Accessed 4 Nov. 2019].

Tesco.com (2019). Tesco - Supermarkets | Online Groceries, Clubcard & Recipes. [online]

Tesco.com. Available at: https://www.tesco.com/ [Accessed 4 Nov. 2019].