4MK514: Tesco Marketing Plan Case Study

4MK514: Tesco Marketing Plan: Analysis, Positioning, and Future Strategies

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Introduction to Tesco's Marketing Operations and Functional Areas

A marketing plan is a tactical strategy that specifies the particular steps and strategies to be taken in order to advertise a good or service. In order to accomplish marketing objectives, it contains objectives, target audience, market analysis, budget allotment, and a calendar of operations. Thus, one of the main objectives behind conducting this report is to provide a proper plan based on the information given in the assignment. The company that has been selected to this part of the assignment will be based on the first assignment, that is Tesco.

a.) Current marketing environment based on: Assignment 1

Based on assignment 1, an analysis of Tesco's present marketing environment reveals both strong and weak elements. From the SWOT analysis, it can be seen that Tesco must comprehend these elements in order to successfully navigate the cutthroat grocery retail business and develop efficient marketing plans. Tesco's brand awareness and excellent brand image, which foster consumer trust and familiarity, are its key competitive advantages. Additionally, the business offers a wide variety of goods and services, such as financial services, general products, and groceries. Tesco is better able to satisfy a wide range of client wants and tastes because to its diversity. Tesco also enjoys a sizable and devoted client base, which shows a degree of patron trust and contentment. The company's wide-ranging distribution network and effective supply chain management help it be able to provide goods to clients quickly. Tesco's focus on sustainability and moral behaviour is also in line with the rising demand for environmentally friendly goods and ethical company conduct.

This dedication to sustainability may draw in more environmentally aware clients who give ethical issues first priority while making purchases. Tesco, however, has a number of shortcomings. Its reliance on the UK market for the lion's share of its income is a serious problem.

Tesco is more susceptible to changes in the UK economy and consumer trends as a result of this dependency. Opportunities exist for Tesco to consider entering new markets, notably those in Asia and Africa. These areas have untapped development potential and can lessen the company's reliance on the UK market (Hub, 2022). Additionally, expanding client access to internet and mobile services offers a chance to address the rising need for flexible and accessible purchasing alternatives. Also, it has been recognised that Tesco operates in a market that is extremely competitive and must contend with issues like this: fierce rivalry, shifting customer tastes, economic swings, and uncertainty relating to Brexit. However, the firm is well-positioned in the market because to its strong brand image, wide range of products, broad distribution network, and focus on sustainability. Tesco has the chance to diversify its business by entering new markets, providing online and mobile services, concentrating on health and wellness items, and funding sustainability projects.

Tesco can preserve its market position and promote development in the dynamic marketing environment by utilising its strengths, seizing opportunities, and minimising dangers (Hub, 2022). Moreover, the current marketing environment for Tesco is characterised by low barriers to entry, high bargaining power among customers, and a threat of substitute products. The industry faces intense competition from established players like Sainsbury's, Asda, and Morrisons, as well as online retailers such as Amazon and Ocado. While Tesco enjoys a strong brand image and a diverse product range, it must continuously adapt to changing consumer preferences and leverage its marketing strategies to maintain a competitive edge. The company should focus on customer loyalty and differentiation through value-added services, innovative marketing campaigns, and personalised experiences to withstand the challenges posed by new entrants and substitute products.

b.) An analysis of the organisation’s positioning and targeting strategy

STP

Tesco has a thorough positioning and targeting plan to establish its place in the market and draw in its intended demographic. The business presents itself as a dependable and approachable merchant with a broad selection of goods and services to meet the demands of various customers.

Positioning

Now considering, perception maps give a visual picture of how consumers judge various companies on the market according to particular characteristics. To examine Tesco's stance in respect to its rivals, two perception maps may be made:

Price vs. Quality Perception Map

Customers' perceptions of Tesco and its rivals in terms of quality and pricing are evaluated using this map. Price is shown on the horizontal axis, running from low to high, while quality is represented on the vertical axis, running from low to high. Tesco would probably be located somewhere in the centre of this map, emphasising a balance between reasonable costs and decent quality. Discount stores like Aldi and Lidl could be positioned at the lower end of the pricing axis, focusing on lower costs but possibly compromising some perceived quality in the process. Premium stores, such as Waitrose, may, on the other hand, be positioned towards the higher end of both price and quality, focusing on clients ready to spend more for higher-quality goods (Singh, 2021).

Convenience vs. Variety Perception Map

Tesco's positioning on this map would likely be towards the higher end of both convenience and variety, emphasizing its extensive store network, online presence, and diverse product range. Discount retailers like Aldi and Lidl may be positioned towards the higher end of convenience but towards the lower end of variety, offering a limited range of products. Specialized retailers like Boots or Currys PC World may be positioned towards the lower end of convenience but towards the higher end of variety, focusing on specific product categories (Bianchi, 2009).

The 4 Cs of Positioning

The 4 Cs framework can be used to assess the effectiveness of Tesco's positioning strategy which is done above:

• Customer: Tesco's target consumers are understood, and the company strives to satisfy their demands by providing a variety of goods and services. To draw in new customers and keep the ones it already has, the business emphasises ease, price, and quality.
• Competition: Faces fierce competition from stores like Sainsbury's, Asda, Morrisons, as well as online merchants like Amazon and Ocado. By highlighting its wide retail network, varied product offering, and affordable prices, the firm sets itself out from the competition.
• Channel: Tesco uses a variety of distribution channels, such as its physical shops, online marketplaces, and mobile apps, to make sure that customers can readily obtain its items.
• Company: With a strong brand image and dedication to quality and customer happiness, Tesco portrays itself as a trustworthy and dependable store (Papadas, 2014).

c.) Two recommendations for the future marketing plan

Based on the analysis of Tesco's current marketing environment, positioning, and targeting strategy, here are two recommendations for the future marketing plan:

d.) Justification of one of the two recommendation

One of the recommendations provided in the above segment was to enhance personalized marketing and customer experience. This recommendation can be justified and reinforced by applying the Ansoff Matrix and the BCG Matrix.

In this case, enhancing personalized marketing and customer experience aligns with the market development strategy of the Ansoff Matrix. Tesco can focus on expanding its customer base and increasing market share by targeting new customer segments through personalized marketing efforts. By leveraging customer insights and data analytics, Tesco can identify untapped customer needs and preferences, and tailor its marketing campaigns to effectively reach and engage these new segments. This can result in increased brand loyalty and market penetration (Evangelia, 2017).

The BCG Matrix can also support the suggestion to improve personalised marketing and customer service. In this instance, the advice fits the Stars quadrant. Products having a significant market share in quickly expanding areas are stars. Tesco can further solidify its position in its current markets and increase market share by improving personalised marketing and customer experience. By doing this, the business may maintain its leading position in the market and increase sales and profitability of its flagship items. The advice can support the BCG Matrix's further indication of the possibility for diversification into new markets or market sectors. Tesco can successfully target new client categories and broaden its market reach by improving personalised marketing and customer experience, which will diversify its customer base. This can lessen risks and enable sustainable growth by reducing the company's reliance on a particular market or market niche. The framework provided by these strategic marketing models may be used to assess the growth potential and support recommendations to improve personalised marketing and customer experience (Kar, 2021).

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Conclusion

Overall, the study reveals key findings about Tesco's marketing environment and strategies. The strengths of Tesco lie in its strong brand image, diverse product range, and extensive distribution network. However, the company faces challenges such as dependence on the UK market, high levels of debt, and intense competition. The opportunities for Tesco include expanding into new markets, offering more online services, and investing in sustainability. The threat of new entrants, changing consumer preferences, and intense competition highlight the need for continuous adaptation. The analysis also emphasizes the importance of Tesco's positioning, targeting strategies, and recommendations to enhance personalized marketing and customer experience to ensure future growth and success.

References

Beauvisage, T., 2019. Mobile consumers and the retail industry: the resistible advent of a new marketing scene. Journal of Cultural Economy, 13(1), pp. 1-171-17.

Bianchi, C., 2009. Investigating Consumer Expectations of Convenience Store Attributes in Emerging Markets: Evidence in Chile. Journal of International Consumer Marketing.

Butt, Z. M., 2018. Tesco Marketing Strategies, s.l.: s.n.

Chandra, S., 2022. Personalization in Personalized Marketing: Trends and Ways Forward, s.l.: NITIE-National Institute of Industrial Engineering.

Evangelia, T., 2017. Application of Ansoff’s Matrix-Methodology:Marketing Growth Strategies For Products, s.l.: SCHOOL OF ECONOMICS.

FATRICIA, R. S., 2014. STRATEGIC ANALYSIS OF TESCO SUPERMARKET, s.l.: Staf Pengajar Fakultas Ekonomi dan Bisnis Universitas Jambi.

Hammad, M., 2020. STRATEGIC MARKETING, s.l.: SoftSite.

Kar, S. K., 2021. Tesco: Entry and Expansion Strategy in India. Emerging Economies Cases Journal, 3(2).

MD MOLLAH, A. S., 2014. The Impact of Relationship Marketing On Customer Loyalty At Tesco Plc, UK. European Journal of Business and Management, 6(3).

Papadas, K., 2014. The 4 Cs of environmental business: Introducing a new conceptual framework. Social Business, 4(4), pp. 345-360.

Singh, P., 2021. Service Quality Dimension and Customers' Satisfaction: An Empirical Study of Tesco Hypermarket in Malaysia. International Journal of Applied Business and International Management, 6(3), pp. 102-114.

Surbhi, K. R., 2018. Analysis Of Trends, Challenges And Best Practices In Contemporary Retailing:A Case Of TESCO Group. International Journal of Business and Management Invention, 7(12), pp. 09-14.