Marketing Strategy For Tesco: Segmentation, Targeting, And Positioning
- December 21, 2023/ Uncategorized
Situational Analysis, organizational goals, and competitor activity
• Understand the concepts of segmentation, targeting and positioning
• Describe how the marketing environment affects a firm’s strategy
• Describe the role of marketing within service firms
• Analyse the marketing mix
Tesco is the leading retailer in UK and has been able to maintain the acme for a very long time. The prime propellant for the company has been a strong understanding of the market trends that have been followed up with effective marketing strategies. This report will discuss the organisational goals of the company with pertinent discussion on company strengths and weaknesses. Marketing objectives will be established followed by marketing activities so as to bolster the organisational standing within UK (Jordan, 2010). The report will also demonstrate the benefits arising as a result of implementing such marketing audit and activities.
Companies of the stature of Tesco have keen focus with a core vision. The vision of the company can be analysed to understand the organisational goals. It aspires to be the most highly valued business by dint of effective services taking into account the contribution and interests of the different shareholders. The retail supermarket within UK is ripe with high industry rivalry and there are established competitors in this domain in the form of Asda, Sainsbury’s, and Morrison’s. Market share for Tesco within this sector is almost 30 % that highlights the acumen of the company. Notable competitors for Tesco in the UK market are Asda with 17.2 % of market share, Sainsbury’s with a 16.3 % market share and Morrison’s with 11.3 % market share (MarketWatch, 2016). The aspect of vision for the entity is comprised of five elements that convey the image of it. Competition within the retail sector has increased quite significantly and Tesco’s market share has fallen in the last three years. Aggressive strategies by other companies along with innovative products have led to Tesco’s decline in the recent past. It has also been opined that the company has focussed on physical expansion without the needed focus on the market. As a result sales of some of the product for the company have lagged behind other innovative products offered by its rivals (Bronitsky, 2010).
Biggest opportunity for the company is the overseas market. It may be stated that the company has not been able to reap the benefits from foreign market. Strategic alliances are other significant scope of opportunity for the company. Opportunities for Tesco lie in consolidating present locations and launching some innovative products that are in sync with consumer preferences. The presence of the company through brick and mortar stores within UK is quite robust and the company has to make good use of the existing infrastructure. Being at the top of the retail market means that Tesco is under constant threat from other companies in this sector (Hennig-Thurau et al, 2002). These companies include the existing ones like Asda, Sainsbury’s as well as potential strategic alliances and joint ventures. After UK’s exit from the European Union Tesco’s threat includes dip in sales from other countries of Europe.
Reviewing the internal strengths and weaknesses
Tesco is the third largest grocery store in the world with more than 4300 stores and presence in three continents. The company boasts of a strong financial base with accentuation on market demands. It can also be observed that presence of a very strong customer retention strategy with schemes like ‘Tesco Clubcard’ has enabled the company to preserve its customer base (Thompson, 2011). Again highly developed infrastructure and managerial system that facilitates sound decision making are the other fortes of the company.
However the last five years have seen a host of problems for the company with issues like decline in sales, product recall and scams. Lack of geographic diversification with more than 75 % of the revenue coming from UK alone amplifies the fact of over reliance on the UK market. Too much diversification by the company without effective strategies has affected the entity negatively as market share has declined (Lillis, 2010).
It may be observed that vision and organisational goals are interconnected. Tesco’s vision can be classified into five broad categories. Interpreting these visions it may be seen that these visions are envisaged in a manner that lends credibility to the operations of the company and enhance the brand image of the company. In conjunction with the organisational goals of the company launch of a new health drink has been envisaged so as to cater to the ever growing number of people who are becoming health conscious (Weber et al, 2011). It has been observed that health related concerns among the population have increased and health beverages including sports drinks have witnessed greater acceptance among the populace. It is one of the organisational goals of the company to enrich the customers with a product portfolio that will take care of their ever changing needs. Keeping such a goal in mind Tesco will launch Endurance keeping in line with the consumer preferences. Effective STP strategies have been formulated so as to tap the intended audience with greater efficiency (McCarthy and Perreault, 2008). The potential age group of the targeted audience will include individuals from the age group of 18-40. By launching the health drink the company intends to cater to the targeted customers and earning trust and loyalty from them.
The four P’s of the marketing mix has been elaborated in the following section by which the company wants to maximise the returns from the launch of Endurance.
Establishing market objectives in support of organizational goals
Product: Composition of Endurance will be its main forte since it will be different from other health drinks in the market that are caffeine based. Main ingredients of Endurance will be taurine, ginseng, herbal extracts and vitamin B-Complex. Endurance will be a non alcoholic beverage that will be less calorific than other health drinks present in the market. Tesco will pay special attention to the suppliers who will manufacture the cans (Sun, 2009). Different governmental frameworks will be strictly adhered to while preparing Endurance. As such the product will be in strict conformity with product details as mentioned in the advertisement and labels.
Price: One of the most vital cogs in the marketing activities is the pricing aspect. Pricing of a product can make or break the prospect and as such special emphasis will be given on pricing. For a can of 330 ml the price will be 70 pence. The 1 litre pack will be priced at £2. There will be discounts given on bulk purchase. Since the product will be launched keeping in mind the young customer aggressive pricing strategy will be maintained. Pricing of the product has been made after due consideration to supply, demand and products of other competitors in the market (Zineldin and Philipson, 2007).
Promotion: Promotion is another significant element within the marketing mixes. It has been observed that the online promotional channels along with social media like FB, Twitter and G+ will be highly useful in enticing the customers. The beverage industry adheres to the online platform quite strongly so as to enhance the brand awareness of the product. Since the main thrust for launching Endurance are the young age band online campaigning will be highly beneficial. At the same time conventional platform like electronic and print media will be availed so as to make the launch successful (Bronitsky, 2010). Social media marketing and search engine marketing will help Tesco in maximising the returns from launching Endurance.
Place: Tesco seeks to enter the highly competitive market dominated by the likes of Coca Cola, Pepsi and other reputed organisations. Emphasis will be given to make sure that the right products are made available to the consumers at the right time. As a result placement will be quite important. Both conventional as well as online platform will be adhered to while marketing Endurance. Brick and mortar stores and online platform will be equally used while marketing Endurance. Moreover the online platform will be used for attracting the potential customers and converting them into actual clients (McCarthy and Perreault, 2008). The planning timetable for the launch of Endurance has been illustrated in the section below:
|
ID |
Task Name |
Duration |
July |
August |
September |
October |
November |
December |
|
1 |
Determining Objectives |
15 Days |
√ |
|||||
|
2 |
Goal Setting and Commitment |
15 Days |
√ |
|||||
|
3 |
Project Cost Evaluation |
1 Month |
√ |
|||||
|
5 |
Market entry strategy Analysis |
15 Days |
√ |
|||||
|
6 |
Final Product Testing |
15 Days |
√ |
|||||
|
7 |
Product Awareness Campaign |
1 Month |
√ |
|||||
|
8 |
Feedback on Product & Final Analysis |
1Month |
√ |
|||||
|
9 |
Product Launch |
√ |
Outlining marketing activities for the launch
The above section has illustrated the marketing mix that will be helpful in launching Endurance to the intended section. The discussion has encompassed the factors of product, price, promotion and place that are so vital in ensuring the success of any product launch. The intensity of the competition within the retail market is very high and there is a need for Tesco to adhere to the basic tenets of Product, Price, Promotion and Place so as to attain success. There are established players within the section of the health drinks and as such intense marketing campaigns have to be undertaken so as to familiarise the targeted section within the retail sector (Sun, 2009). Tesco has the necessary technical knowledge coupled with a strong brand image so as to make Endurance a popular product. Some of the established brands within UK are Coca Cola Classic, Espresso, Red Bull, Gatorade, Rockstar all of which have their loyal customer base. For Tesco challenge lies in making the customers switch from their preferred brands to Endurance. For harnessing greater response from the market metropolitan cities like Glasgow, Liverpool, London, Cardiff, Manchester and so on. Different sports bodies and associations will serve the purpose of the company (Weber et al, 2011).
Conclusion
The report has outlined the retail supermarket scenario within the UK and the different entities operating therein. The aspect of industry rivalry is tremendous within this sector and there is a need to systematically tap this sector. The report has highlighted the market share of different companies and has highlighted the process of launching a new health drink by Tesco. Marketing activity illustrated in the audit will help Tesco in entering the rapidly growing sector of health beverages and will be a right step towards consolidating the customer base in UK. The report has illustrated the 4 P’s of marketing mix that seeks to combine and capture the product’s USP for increasing the market reach of Tesco (Zineldin and Philipson, 2007). At the same time the report has illustrated the detailed planning that will be needed by Tesco to thrive within this sector.
Marketing strategy has been devised taking into account different aspects like product composition, customer preference, competitor analysis and industry trends. By the help of pertinent surveys it has been observed that the preference among the customer base is readily shifting to drinks that are calorie free. Endurance caters to the heath needs by including minerals, herbals and different vitamins. Thus the product addresses the customer needs by catering to specific needs. Present marketing scenario within the society has seen a paradigm shift as there is a greater dependence on the online platforms. Keeping in line with such preferences companies have adopted online marketing strategies and Tesco is no different. Moreover there is a greater dependence on social media like Facebook, G+ and Twitter for making the customers aware of the product portfolio (McCarthy and Perreault, 2008). All these intricacies within the marketing issues have been ascertained before the launch of the Endurance.
Marketing campaigns will be directed keeping in mind the younger section of the society. The preferred age band for Endurance will be 18-40 and as a result contemporary media will be highly useful. The growing awareness among the customer base is another factor that has necessitated thorough research before launching a new product. Analysis of the annals of Tesco will reveal that it is built around the needs and preferences of the customers and the employees. Strategic decisions being undertaken by Tesco is guided by the vision it shares. In conjunction with mission and vision of the company launch of Endurance has been sought that will bolster the position of Tesco within the market in UK (Jordan, 2010).
References:
Bronitsky G (2010) Creating Spaces Where Things Happen: The Life Story of a Business Anthropologist . Int. J. Bus. Anthropol., 1(1): 115-121.
Hennig-Thurau, Thorsten, Kevin P. Gwinner, and Dwayne D. Gremler, (2002) “Understanding Relationship Marketing Outcomes: An Integration of Relational Benefits and Relationship Quality,” Journal of Service Research, 4 (3), 230-247.
Jordan AT (2010). The Importance of Business Anthropology: Its Unique Contributions. Int. J. Bus.Anthropol., 1(1): 15-25.
Lillis M, Tian R (2010). Cultural Issues in the Business World: An Anthropological Perspective. J. Social Sci., 6(1): 99-112.
MarketWatch (2016): Online accessed from https://www.marketwatch.com/ accessed on 30/7/2016
McCarthy, E. J., & Perreault, W. D. (2008). Basic marketing: A marketing strategy planning approach. McGraw-Hill Irwin.
Sun, S. (2009). An analysis on the conditions and methods of market segmentation. International journal of business and management, 4(2), 63.
Thompson LL (2011). The Mind and Heart of the Negotiator (5th Ed.).New Jersey: Prentice Hall,
Weber Y, Belkin T, Tarba SY (2011). Negotiation, Cultural Differences, and Planning in Mergers and Acquisitions. J. Transnatl. Manag.,16(2): 107-115.
Zineldin, M., & Philipson, S. (2007). Kotler and Borden are not dead: myth of relationship marketing and truth of the 4Ps. Journal of consumer marketing,24(4), 229-241.i
Marketing Strategy For Tesco: Segmentation, Targeting, And Positioning
- December 21, 2023/ Uncategorized
Situational Analysis, organizational goals, and competitor activity
• Understand the concepts of segmentation, targeting and positioning
• Describe how the marketing environment affects a firm’s strategy
• Describe the role of marketing within service firms
• Analyse the marketing mix
Tesco is the leading retailer in UK and has been able to maintain the acme for a very long time. The prime propellant for the company has been a strong understanding of the market trends that have been followed up with effective marketing strategies. This report will discuss the organisational goals of the company with pertinent discussion on company strengths and weaknesses. Marketing objectives will be established followed by marketing activities so as to bolster the organisational standing within UK (Jordan, 2010). The report will also demonstrate the benefits arising as a result of implementing such marketing audit and activities.
Companies of the stature of Tesco have keen focus with a core vision. The vision of the company can be analysed to understand the organisational goals. It aspires to be the most highly valued business by dint of effective services taking into account the contribution and interests of the different shareholders. The retail supermarket within UK is ripe with high industry rivalry and there are established competitors in this domain in the form of Asda, Sainsbury’s, and Morrison’s. Market share for Tesco within this sector is almost 30 % that highlights the acumen of the company. Notable competitors for Tesco in the UK market are Asda with 17.2 % of market share, Sainsbury’s with a 16.3 % market share and Morrison’s with 11.3 % market share (MarketWatch, 2016). The aspect of vision for the entity is comprised of five elements that convey the image of it. Competition within the retail sector has increased quite significantly and Tesco’s market share has fallen in the last three years. Aggressive strategies by other companies along with innovative products have led to Tesco’s decline in the recent past. It has also been opined that the company has focussed on physical expansion without the needed focus on the market. As a result sales of some of the product for the company have lagged behind other innovative products offered by its rivals (Bronitsky, 2010).
Biggest opportunity for the company is the overseas market. It may be stated that the company has not been able to reap the benefits from foreign market. Strategic alliances are other significant scope of opportunity for the company. Opportunities for Tesco lie in consolidating present locations and launching some innovative products that are in sync with consumer preferences. The presence of the company through brick and mortar stores within UK is quite robust and the company has to make good use of the existing infrastructure. Being at the top of the retail market means that Tesco is under constant threat from other companies in this sector (Hennig-Thurau et al, 2002). These companies include the existing ones like Asda, Sainsbury’s as well as potential strategic alliances and joint ventures. After UK’s exit from the European Union Tesco’s threat includes dip in sales from other countries of Europe.
Reviewing the internal strengths and weaknesses
Tesco is the third largest grocery store in the world with more than 4300 stores and presence in three continents. The company boasts of a strong financial base with accentuation on market demands. It can also be observed that presence of a very strong customer retention strategy with schemes like ‘Tesco Clubcard’ has enabled the company to preserve its customer base (Thompson, 2011). Again highly developed infrastructure and managerial system that facilitates sound decision making are the other fortes of the company.
However the last five years have seen a host of problems for the company with issues like decline in sales, product recall and scams. Lack of geographic diversification with more than 75 % of the revenue coming from UK alone amplifies the fact of over reliance on the UK market. Too much diversification by the company without effective strategies has affected the entity negatively as market share has declined (Lillis, 2010).
It may be observed that vision and organisational goals are interconnected. Tesco’s vision can be classified into five broad categories. Interpreting these visions it may be seen that these visions are envisaged in a manner that lends credibility to the operations of the company and enhance the brand image of the company. In conjunction with the organisational goals of the company launch of a new health drink has been envisaged so as to cater to the ever growing number of people who are becoming health conscious (Weber et al, 2011). It has been observed that health related concerns among the population have increased and health beverages including sports drinks have witnessed greater acceptance among the populace. It is one of the organisational goals of the company to enrich the customers with a product portfolio that will take care of their ever changing needs. Keeping such a goal in mind Tesco will launch Endurance keeping in line with the consumer preferences. Effective STP strategies have been formulated so as to tap the intended audience with greater efficiency (McCarthy and Perreault, 2008). The potential age group of the targeted audience will include individuals from the age group of 18-40. By launching the health drink the company intends to cater to the targeted customers and earning trust and loyalty from them.
The four P’s of the marketing mix has been elaborated in the following section by which the company wants to maximise the returns from the launch of Endurance.
Establishing market objectives in support of organizational goals
Product: Composition of Endurance will be its main forte since it will be different from other health drinks in the market that are caffeine based. Main ingredients of Endurance will be taurine, ginseng, herbal extracts and vitamin B-Complex. Endurance will be a non alcoholic beverage that will be less calorific than other health drinks present in the market. Tesco will pay special attention to the suppliers who will manufacture the cans (Sun, 2009). Different governmental frameworks will be strictly adhered to while preparing Endurance. As such the product will be in strict conformity with product details as mentioned in the advertisement and labels.
Price: One of the most vital cogs in the marketing activities is the pricing aspect. Pricing of a product can make or break the prospect and as such special emphasis will be given on pricing. For a can of 330 ml the price will be 70 pence. The 1 litre pack will be priced at £2. There will be discounts given on bulk purchase. Since the product will be launched keeping in mind the young customer aggressive pricing strategy will be maintained. Pricing of the product has been made after due consideration to supply, demand and products of other competitors in the market (Zineldin and Philipson, 2007).
Promotion: Promotion is another significant element within the marketing mixes. It has been observed that the online promotional channels along with social media like FB, Twitter and G+ will be highly useful in enticing the customers. The beverage industry adheres to the online platform quite strongly so as to enhance the brand awareness of the product. Since the main thrust for launching Endurance are the young age band online campaigning will be highly beneficial. At the same time conventional platform like electronic and print media will be availed so as to make the launch successful (Bronitsky, 2010). Social media marketing and search engine marketing will help Tesco in maximising the returns from launching Endurance.
Place: Tesco seeks to enter the highly competitive market dominated by the likes of Coca Cola, Pepsi and other reputed organisations. Emphasis will be given to make sure that the right products are made available to the consumers at the right time. As a result placement will be quite important. Both conventional as well as online platform will be adhered to while marketing Endurance. Brick and mortar stores and online platform will be equally used while marketing Endurance. Moreover the online platform will be used for attracting the potential customers and converting them into actual clients (McCarthy and Perreault, 2008). The planning timetable for the launch of Endurance has been illustrated in the section below:
|
ID |
Task Name |
Duration |
July |
August |
September |
October |
November |
December |
|
1 |
Determining Objectives |
15 Days |
√ |
|||||
|
2 |
Goal Setting and Commitment |
15 Days |
√ |
|||||
|
3 |
Project Cost Evaluation |
1 Month |
√ |
|||||
|
5 |
Market entry strategy Analysis |
15 Days |
√ |
|||||
|
6 |
Final Product Testing |
15 Days |
√ |
|||||
|
7 |
Product Awareness Campaign |
1 Month |
√ |
|||||
|
8 |
Feedback on Product & Final Analysis |
1Month |
√ |
|||||
|
9 |
Product Launch |
√ |
Outlining marketing activities for the launch
The above section has illustrated the marketing mix that will be helpful in launching Endurance to the intended section. The discussion has encompassed the factors of product, price, promotion and place that are so vital in ensuring the success of any product launch. The intensity of the competition within the retail market is very high and there is a need for Tesco to adhere to the basic tenets of Product, Price, Promotion and Place so as to attain success. There are established players within the section of the health drinks and as such intense marketing campaigns have to be undertaken so as to familiarise the targeted section within the retail sector (Sun, 2009). Tesco has the necessary technical knowledge coupled with a strong brand image so as to make Endurance a popular product. Some of the established brands within UK are Coca Cola Classic, Espresso, Red Bull, Gatorade, Rockstar all of which have their loyal customer base. For Tesco challenge lies in making the customers switch from their preferred brands to Endurance. For harnessing greater response from the market metropolitan cities like Glasgow, Liverpool, London, Cardiff, Manchester and so on. Different sports bodies and associations will serve the purpose of the company (Weber et al, 2011).
Conclusion
The report has outlined the retail supermarket scenario within the UK and the different entities operating therein. The aspect of industry rivalry is tremendous within this sector and there is a need to systematically tap this sector. The report has highlighted the market share of different companies and has highlighted the process of launching a new health drink by Tesco. Marketing activity illustrated in the audit will help Tesco in entering the rapidly growing sector of health beverages and will be a right step towards consolidating the customer base in UK. The report has illustrated the 4 P’s of marketing mix that seeks to combine and capture the product’s USP for increasing the market reach of Tesco (Zineldin and Philipson, 2007). At the same time the report has illustrated the detailed planning that will be needed by Tesco to thrive within this sector.
Marketing strategy has been devised taking into account different aspects like product composition, customer preference, competitor analysis and industry trends. By the help of pertinent surveys it has been observed that the preference among the customer base is readily shifting to drinks that are calorie free. Endurance caters to the heath needs by including minerals, herbals and different vitamins. Thus the product addresses the customer needs by catering to specific needs. Present marketing scenario within the society has seen a paradigm shift as there is a greater dependence on the online platforms. Keeping in line with such preferences companies have adopted online marketing strategies and Tesco is no different. Moreover there is a greater dependence on social media like Facebook, G+ and Twitter for making the customers aware of the product portfolio (McCarthy and Perreault, 2008). All these intricacies within the marketing issues have been ascertained before the launch of the Endurance.
Marketing campaigns will be directed keeping in mind the younger section of the society. The preferred age band for Endurance will be 18-40 and as a result contemporary media will be highly useful. The growing awareness among the customer base is another factor that has necessitated thorough research before launching a new product. Analysis of the annals of Tesco will reveal that it is built around the needs and preferences of the customers and the employees. Strategic decisions being undertaken by Tesco is guided by the vision it shares. In conjunction with mission and vision of the company launch of Endurance has been sought that will bolster the position of Tesco within the market in UK (Jordan, 2010).
References:
Bronitsky G (2010) Creating Spaces Where Things Happen: The Life Story of a Business Anthropologist . Int. J. Bus. Anthropol., 1(1): 115-121.
Hennig-Thurau, Thorsten, Kevin P. Gwinner, and Dwayne D. Gremler, (2002) “Understanding Relationship Marketing Outcomes: An Integration of Relational Benefits and Relationship Quality,” Journal of Service Research, 4 (3), 230-247.
Jordan AT (2010). The Importance of Business Anthropology: Its Unique Contributions. Int. J. Bus.Anthropol., 1(1): 15-25.
Lillis M, Tian R (2010). Cultural Issues in the Business World: An Anthropological Perspective. J. Social Sci., 6(1): 99-112.
MarketWatch (2016): Online accessed from https://www.marketwatch.com/ accessed on 30/7/2016
McCarthy, E. J., & Perreault, W. D. (2008). Basic marketing: A marketing strategy planning approach. McGraw-Hill Irwin.
Sun, S. (2009). An analysis on the conditions and methods of market segmentation. International journal of business and management, 4(2), 63.
Thompson LL (2011). The Mind and Heart of the Negotiator (5th Ed.).New Jersey: Prentice Hall,
Weber Y, Belkin T, Tarba SY (2011). Negotiation, Cultural Differences, and Planning in Mergers and Acquisitions. J. Transnatl. Manag.,16(2): 107-115.
Zineldin, M., & Philipson, S. (2007). Kotler and Borden are not dead: myth of relationship marketing and truth of the 4Ps. Journal of consumer marketing,24(4), 229-241.i
