TESCO 1

RUNNING HEAD: MARKETING STRATGIES OF ORGANIZATION

Marketing

Writers Na e: M!"a

a# A#nan Ria$

ATHE Me %ers"i& N': ()**

E ai+ A##ress: a#nan,ria$--."'t ai+/0'/!k

1'nta0t N': 2-3))(*(332

Instit!tes Na e: Strat4'r# 1'++ege '4 Manage ent

TESCO 2 Marketing Strategies: Tes0' Introduction

Tesco is the largest food retailers in the UK, an estimated 15.5% share of the total market. Tesco is also designed to increase their share of non-market. The two most important factors for the success of Tesco in listening are to customers and learning from mistakes. Offering qualit products at low prices and put local people first in the wa the conduct their !usiness as their main strateg . "#i$on, %&&1, pp. 1'&( Tesco was !ased in 1)1) and commenced its first shop in *dgware, +ondon, UK in 1)%) "Tesco, %&1&, pp. ,5-55(- although, [Link] the decades it has [Link] to !ecome the market leader inside the UK food retail segment "#atamonitor, %&1&, pp. /,-05(. The relati.e positioning of Tesco1s market share with esteem to other premier pla ers in the market has !een showed as pursues. The 2ritish supermarket compan Tesco is now the fourth largest retail chain in the world, emplo ing ,5& &&& people and has a growth rate of 1'% annuall . [Link], things were not alwa s smooth sailing for the !ig retail in 1))% was forced to shift its strateg , focusing squarel on the shopper. 4t all !egan in 1)1) when 5ack 6ohen founded the first store in +ondon Tesco, dedicated to the sale of surplus production "7dams, 8eter, 9illiam, 3arrison, 1))0- 3uff, :eger, 1)0/- 2athor , 7le$ander, 1)0/, 1'&-1',(.

Discussion and Analysis Tescos Target Market

;rocer retail market is [Link] into geographical segments. <upermarket Tesco, as it is important to focus on the different consumption ha!its in each region and neigh!orhood to reach its target market [Link] . 7nother wa to market segmentation is the use of 76O:= "> 6lassification of +[Link] ?uarters(, which geodemographic segmentation method, which is [Link] in 7ppendi$ 1. 76O:= is !ased on census data. *ach inde$ is in the countr [Link] the name of a group of 7@. 4f ou are using 76O:=, Tesco could easil identif its local customers and make their products and [Link] that suit them, which

TESCO 3
shows the percentage of adults [Link] 15 ears, who do their main shopping at Tesco. 6onsumers are categoriAed as 76O:= and their demographic location.

Marketing Strategies of Tesco

Tesco first thing he did was follow the strateg of the giant 9all mart. 7 .irtuous c cle consisting of three pointsB to !e cheaper, sell more and grow more. The logic is that to !e cheaper, sell more products. 4n turn, ! selling more .olume can !e purchased at !etter prices and pass these lower prices to customers. Thus, we return to the starting point and continue the same circle. 2ut Tesco added another element to this strateg B ma$imiAe the shopping e$perience in different segments of shoppers. Tesco adapted distinct strategies to achie.e the competiti.e edge [Link] the cunning competition "@ahe , 6hristensen, 1)0C, 1C/D10'(.

Di44erentiati'n Strateg5
Tesco uses a differentiated marketing strateg . The compan targets [Link] market segments with separate offers for each of the goals. Tesco targets mainl consumers [Link] in ur!an and su!ur!an areas, as well as consumers [Link] outside the cit or area in su!ur!an locations. Tesco Eetro stores modern shops designed for consumers [Link] in ur!an areas, especiall [Link] [Link] who want to !u lunch or go shopping on the wa home. These stores are located in the cit center and offers products to customers of qualit .

1'st 6ea#ers"i&
Tesco has this strateg , and the o!Fecti.e is to !ecome the lowest-cost manufacturer in the industr . Ean "perhaps all( market segments in the commerce are [Link] with the focus put minimising costs. 4f the accomplished trading cost can not less than identical "or near( the mean for the market, then the lowest-cost manufacturer will "in theor ( relish the !est profits. This scheme is generall

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affiliated with large-scale enterprises proposing GstandardG products with somewhat little differentiation that are flawlessl agreea!le to the most of customers. Occasionall , a low-cost leader will furthermore discount its product to ma$imise sales, especiall if it has a important cost !enefit [Link] the competition and, in managing so, it can farther !oost its market share.

Gr'7t" Strateg5 8Market E9&ansi'n:

To increase sales, particularl focused on e$panding its portfolio of own !rands, !oost sales of non-food and offer differentiated [Link] to their shoppers. @urthermore, detailed anal sis of purchasing ![Link] of shoppers through the information the ga.e to the supermarket [Link] time the made a purchase and accumulated 6lu! card points on the card. Through these results, consumers were a!le to distinguish groups that ![Link] .er differentl B the traditional shopper, the health , sensi!le price, the more sophisticated shopper, who ha.e children and not among others. Then, each group was assigned an internal name, we anal Aed their ![Link], we measured the num!er of shoppers who were in each segment and !egan to offer differentiated products. 7ll under the Tesco !rand, !ut alwa s with a name that would distinguish the segmentB Tesco @inest "!etter qualit (, Tesco Halue "!est price(, Tesco Kids, Tesco health [Link] "health lifest le(, Tesco @ree @rom "GfreeG (, Tesco @air Trade "@air-trade(, among others. #ifferences in price for a product in the same categor can !e surprising. 7 pack of 15 Tesco Halue eggs can cost a!out %&& pesos and one with si$ eggs from three different colours and [Link].e design !rand "Tesco @inest( can cost two thousand dollars. 9ith this, it is found that the lowest price is not the onl .aria!le that looks for the shopper. 4n %& ears, own !rands went from %&% of total sales to 55%. 7long with this, started a differentiated communication with the different segments of shoppers, creating different clu!sB Tesco @ood 6lu!, 9ine 6lu!, 3ealth +[Link] 6lu!, 2a! and Toddler 6lu!, Tesco ;reener +[Link]. *ach appeals to different t pes of shoppers, whom offer promotions, products and [Link] [Link].

TESCO 5 ;a+!e A##e# Ser<i0es: 6'5a+t5 1ar#s

4n 1))5, the current head of Tesco, Terr +eah , at the time headed the marketing department, has created a network s stem of clu! cards. 2u ers recei.e them ! filling out the form with personal data, including, for e$ample, information a!out age children and a!out the culinar preferences of the famil . This amount of information can present a lot of surprises Tesco competitors. That clu! cards helped it keep its customers from fleeing to 7<#7 stores after the go to 9al-Eart. 7ccording to research compan Ta lor =elson, the introduction of lo alt cards has helped Tesco for 1& ears to win '1% of UK grocer market - almost twice the proportion of 7<#7, owned ! 9al-Eart.

M'%i+e Marketing
2ritish supermarket chain Tesco has strengthened its mo!ile marketing strateg ! launching the first [Link] commercial in its sector that promotes a mo!ile application. The application, which was launched in late %&1& and has managed 1.5 million, downloads "#ail Eail, %&1&, /-1&(. The compan has chosen to promote this application in 5anuar ! the increased sales of i8hones [Link] 6hristmas. Thanks to technolog , the app works like a !arcode scanner, with which allows users to purchase products directl from their own homes or [Link] the are. 7 compan spokesman cited ! Earketing 9eek, said that consumers look for wa s to make their [Link] more comforta!le especiall in the earl months of the ear, the are more !us . The ad has !een created ! agenc The :ed 2rick :oad along with the marketing team [Link]. 7ccording to the [Link] 2ritish, Tesco is the onl supermarket in the UK with a complete mo!ile marketing strateg .

1' &etiti<e A#<antage

The got !enefit [Link] competitors profited ! proposing consumers larger .alue, either .ia smaller charges or ! suppl ing larger [Link] and [Link] that supports higher prices.

TESCO 6 Ne7 st're 4'r ats

@rom the specific needs of shoppers, Tesco creates four formatsB the *$tra "all categories in one place(, the <uperstore "used to purchase monthl (, Eetro "for the purchase of weekl fill( and *$press "addressed to the quick purchase of the da (. 7nd as if that were not enough, he decided to pioneer the .irtual channel, with the appearance of the page [Link], !ecoming the largest online grocer retailer "#unn3um! , %&&), 5C-C%(.

Necessity of Branding in Tesco

Toda , consumers increasingl do more switching !etween stores, ranging from one to another to meet their price, selection and [Link] "Ee ers, ;erstman, %&&1, %/-'1(. The most important factor for this ![Link] is that C& to /&% of purchasing decisions are taken at points of sale, so that the store !ecomes a unique opportunit to reach consumers and !uild !rands "Tesco, %&&), 1/-',(. ;[Link] this, retailers ha.e no choice !ut to seek a .ariet of proposals, including the [Link] of multi-format, multi-channel, using its own !rand or the implementation of lo alt clu!s, focusing on promotions and discounts. The ha.e also had to create an [Link] and la out for the t pe of purchase ou want to satisf the customer "or pleasure-oriented task(. Traditional marketing is !ecoming less effecti.e as !rand lo alt , success rates in product launches and sales, the !ecome .er comple$ to achie.e. 4n response, a few ears ago emerges Trade Earketing, a discipline that seeks to increase the demand for the products, directl impacting consumers at the point of sale "#uff , 3oope, %&&', 0)-1&1(. The suggestion to enhance the !rand image of Tesco [Link] more is possi!le through the [Link] of a concept called Earketing 'C& degrees, which seeks to reach consumers in a more integrated across multiple media "+e8la, 8arker, 1))), ,C-5/(. 4n this wa a health Tesco succeeded in creating a health !rand image.

TESCO 7 SWOT Analysis Strengt"s

7 powerful financial performance has !een shown ! the !usiness [Link] the ears, which underscores its strategic capa!ilities. 7ccording to "#atamonitor, %&1&, pp. /,-05(, Tesco is a I 5,!illion [Link] !usiness notes a !oost of 1,.)% when in [Link] to %&&0. The foremost scheme that has !een taken up ! the !usiness is the product and [Link] customiAation in agreement with the market demands "#atamonitor, %&1&, pp. /,-05(. The [Link] in presentation of the !usiness [Link] the last ten ears can !e summarised with the assist of [Link] in ne$t ke signs "@ame, %&1&, pp. '&-'0(. Tesco1s strateg aspires to aim on product afforda!ilit which dou!le-checks that clientele gets the product to match their allowance without compromising on the qualit . #uring %&&) the sales from online non-food retail !usiness Tesco #irect ha.e e$panded ! [Link] 5&% "Tesco, %&1&, pp. 1,&(.

Weaknesses
Tesco has not !een adept to present well [Link] the last ear as in [Link] to its competitors. 7ccording to "Eintel, %&&), pp. 1&1-115(, [Link] products were recalled ! Tesco in %&&) that has produced in a financial decrease as well as impairment to its em!lem image "Office for =ational <tatistics, %&&)(. These encompassed compan 1s .alue lines, which ha.e !een sold as high .alue lower options to ke !rands. The ke operations of the !usiness are intensified inside the UK retail part, where it noted more than /5% of its income throughout the fiscal ear %&&) "Tesco, %&1&, pp. 1,&(. This need of geographic [Link] can !e glimpsed as a ke weakness for the firm as it is e$posed to s stemic dangers of the UK market.

O&&'rt!nities
The financial mesh portfolio of Tesco is on the increase. The opened [Link] C%& shops in %&&) of which ,'5 were worldwide "Eintel, %&&), pp. 1&1-115(. This geographic [Link] will assist the

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!usiness in [Link] its finances of scale, while minimising its s stemic risk e$posure. The [Link] of [Link] is increasing quickl , accounting for [Link] 1 million clients in %&1& ";uardian, %&1&- <hales, %&&), 1)-%%(.

T"reats
The commencement of an international financial crisis has produced in a contraction of the UK1s finances ! %.,% in %&&) which is appro$imated to agreement farther ! ,.%% ! the 4nternational Eonetar @und "4E@( "@ame, %&1&, pp. '&-'0(. There has !een furious affra in the UK food shop market. Tesco though has !een premier this part for 15 ears "Eintel, %&1&, pp. 1&1-115(, !ut is now faced with strong affra from its competitors which are profiting in market share. These encompass remainder of the Jlarge-scale four1 i.e., 7sda, <ains!ur 1s and Eorrisons [Link] "2lair, 2oal, 1))1, '&5D',,(. 4n the nourishment retail market, the su!stitutes of foremost nourishment retailers are little chains of [Link] stores, off permits and organic stores which are not glimpsed as a risk to shopping centres like Tesco that offer high .alue products at su!stantiall smaller charges "@inancial Times, %&&)(. [Link], the risk of alternates for non-food pieces , for e$ample apparel, is equita!l high "*uromonitor, %&1&, pp. /,-05(. 4t should !e documented that so long as the financial recession [Link] , clients will !e inclined in the direction of reduced charges therefore Tesco is a risk to the specialit shops "Kuthas, %&&), 1&5-1&)(.

Conclusion
TescoLs success can !e seen in the figures. ;rowth sitting on a dense and !alanced territorial [Link], with si$ siAesB 1// Eega-markets "Tesco *$tra(, ,,0 h permarkets "Tesco <uperstore(, 1/, supermarkets in the cit centre "Tesco Eetro(, )C/ supermarkets in industrial area "Tesco *$press( as well as supermarkets for customers in a hurr "and One <top Tesco 3ome plus(. Or %,'&& stores in the

TESCO 9
United Kingdom. <ome /' other proFects are !eing .alidated, if possi!le, !efore passing a law competiti.e. Tesco is also an international presence, where it has %,,%& outlets "/) in 6hina, 1)% 4ndonesia, 1,, in 5apan, '1) in 8oland, ',/ in <outh Korea, C') in Thailand, 115 in the U.<., where it is esta!lished since %&&1 after taking '5% stake in ;rocer 9orks(. Tesco is a!o.e all a legendB that of the founder 5ack 6ohen, a grocer in east +ondon in the interwar ears, one of the citations has often !een taken ! managers in poorl [Link] techniques. To call his compan , 5ack 6ohen fused the first three initials of his main supplier of tea, T* <tock well, and the first two letters of his surname to form Tesco, which entered into common parlance since the opening of the first supermarket self [Link] in 1),0, <aint 7l!ans "=orth +ondon(, which still e$ists toda . @ift ears of slow !ut stead e$pansion, then a sharp acceleration from the mid-ninet , with a marketing strateg that will take a short competition, with the support of seasoned [Link] "see side!ar(. The emphasis is on logic G*.er +ittle 3elpsG, [Link] ! the introduction of the G6lu! cardG in 1))5.

TESCO 10 Re4eren0es
7dams, 8eter <. and 9illiam 7. 3arrison, ed. *ssentials of 6ash Eanagement. E#B Treasur Eanagement 7ssociation, 1))0. 2athor , 7le$ander., 1)0/, The 7nal sis of 6reditB @oundations and #[Link] of 6orporate 6redit 7ssessment. +ondonB Ec;raw D3ill 2ook 6ompan . +imited, pp. 1'&-1', 2lair, 5. #. and 2oal, K. 2. 1))1. <trateg formation process in health care organiAationsB 7 conte$tspecific e$amination of conte$t-free strateg issues, 5ournal of Eanagement .ol. 1/ no. "%( pp. '&5D',, #ail Eail, "%&1&(, MTesco starts 8ounds 1!n price warN, #ail Eail, 5an 10, pp./-1& #atamonitor "%&1&(, J6ompan 8rofile D Tesco1, #atamonitor *urope, pp. /,-05 #uff , =. 3ooper, 5. "%&&'(, 8assion 2randingB 3arnessing the 8ower of *motion to 2uild <trong 2rands- 9ile , pp. 0)-1&1 #unn3um! , "%&&)(, M#ata!ases in direct marketingN, 4#E lecture presented at 2ristol 2usiness <chool, 2ristol, pp.5C-C% *uromonitor, "%&1&(, J4ndustr 8rofile D @ood retailing1, *uromonitor 4nternational, pp. 11-15 @ahe , +. and 6hristensen, 3. K. 1)0C, *.aluating the research on strateg content. 5ournal of Eanagement, .ol. 1% no. "%( pp. 1C/D10' @ame, "%&1&(, 7nnual :eports 7nal sis D Tesco plc, @7E* 4nternational, pp. '&-'0 ;inter, 8. E., <wa ne, +. *., O #uncan, 9. 5. "%&&%(, <trategic management of health care organiAations ",th ed.(. O$ford, UKB 2lackwell. 3uff, 7. <. and :eger, :. K. 1)0/, 7 [Link] of strategic process research. 5ournal of Eanagement .ol. 1' no. "%( pp. %11D%'C +e8la, 5. 8arker, +. "1)))(, 4ntegrated 2randingB 2ecoming 2rand-#[Link] through 6ompan wide 7ction?uorum 2ooks, pp. ,C-5/ Ee ers, 3. ;erstman, :. "%&&1(, 2randing P the #igital 7ge- 8algra.e, pp. %/-'1 Eintel, "%&&)(, @ood :etail 4ndustr D 4ncluding Online, Eintel :esearch, pp. 1&1-115

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Office forational <tatistics, "%&&)(, J4nternet 7ccess 3ouseholds and 4ndi.iduals1, Office for =ational <tatistics, [Link]!le at [Link]..ukQpdfdirQiahi&0&).pdf 8orter, E. "1)05(, 6ompetiti.e [Link] 6reating and <ustaining <uperior 8erformance, pp. ,5-,0 <hales, 7. "%&&)(, J7n unpalata!le attitude towards food1, @inancial Times, pp. 1)-%% Tesco "%&1&(, J7nnual :eport and :[Link] %&1&1, Tesco, [Link]!le at httpBQQar%&1&.[Link]$ , pp. ,5-55 Tesco "%&1&(, J7nnual :eport and :[Link] %&1&1, Tesco, [Link]!le at httpBQQar%&1&.[Link]$ , pp. 55-C/ Tesco, "%&&)(, J6orporate :esponsi!ilit :eport1, Tesco, [Link]!le at [Link]&)Qcrr&).pdf Tesco, "%&&)(, JTesco <trategic 8lanning :eport1, Tesco, [Link]!le at [Link]&)Qcrr&).pdf Tomlinson, 3. O *.ans, :. "%&1&(, JTesco stocks up on inside knowledge of shoppers1 li.es1, ;uardian [Link]!le at [Link]!usinessQ%&&5QsepQ%&[Link] Kuthas, K., "%&&)(, J4nputting the *[Link] :econsidering the *[Link] 4nformation Eatri$1, 5ournal of 4nformation < stems, 1)"%(, pp. 1&5-1&)

TESCO 12 A&&en#i9
Market S"are '4 Tes0'