Marketing Environment - An Analysis of Tesco

Marketing Environment - An Analysis of Tesco

Question 1

INTRODUCTION

Tesco Plc, otherwise also referred to as Tesco, is an in-store retailer. The company also has a strong and steadily developing on-line presence. Tesco is committed in the operations of around 2,200 stores. This count constitutes stores of multiple formats; these include express, superstore, extra and home-plus. Tesco boasts a broad array of food and non-food items, including clothing for men, women and children, consumer goods, electronics and household appliances. The company also sells stationery, kitchen utensils, furniture and a wide range of similar products. Tesco has continued to expand the product range that it offers and notable expansions include travel and tourism services, telecom services and financial consultation. By taking such services under its wing, Tesco has managed to set the bar high for other members in the retail industry.

The retail industry in the UK is known for the competitive nature it harbours. Tesco's success comes across as the result of the successful execution of a number of strategies that the company has executed since its inception. Since the UK retail market continues to evolve and develop rapidly, Tesco is in a position where it faces a continuously increasing degree of competition from retailers in the UK and from those which are expanding into the UK from abroad (Aaker and Joachimsthaler 2000). The intense competitive landscape creates a scenario for Tesco where marketing is a crucial element and the executi0on of a half-baked marketing strategy can result in the company losing valuable market share.

MARKETING STRATEGIES

Tesco's fundamentals are based on what is referred to as the 'Steering Wheel'. The Steering Wheel is Tesco's approach to the development and execution of processes. The steering wheel is based on four main parts: Customer, operations, People and Finance. The model addresses each of these in depth since each part has multiple dimensions.

The marketing carried out by Tesco aims to address all the four factors. Data collection and evaluation plays an integral function in the formation of Tesco's marketing strategy since the marketing strategies are founded on the basis of the data derived from clients through extensive surveys and reviews. Information derived from these surveys and reviews is processed into information to establish consumer demand trends. Furthermore, this exercise is carried out individually for each market in which Tesco operates (Hoyer and MacInnis 2001). Each operating region carries out distinct analyses and the outcomes are amalgamated for the development of a comprehensive understanding of consumer demand trends that exist with regard to Tesco. This assists in bringing forth a customer plan designed to satisfy consumer demands that are influencing the performance of the company. Key elements considered in this regard include Tesco's costs, profits, product quality, service quality and the like. However, the essence of every policy made in this regard; which is also the key building block of the company's marketing strategy, is the reduction of costs by getting better margins from suppliers through operational efficiency and ...