Tesco Marketing Report
INTRODUCTION
Tesco is one of the biggest grocery and general merchandise retailer in the world, operating around 6,351 stores across Asia, Europe and North America. Tesco’s core UK business is very significant within the group, with around 3,054 stores and over 300,000 employees, operating under four banners of Express, Extra, Metro and Superstore. Tesco as well has the widest range of any food retailer in the UK including the leading own-label range. Also, the company offers a home-shopping service through ‘Tesco.com’ website. (Tesco PLC, 2012)
This report will provide an insight into Tesco’s marketing strategy with its real marketing practices and activities, also recommendations will be made in regards to the marketing based strategies. CRITICAL FACTORS OF SUCCESS
Tesco’s annual revenue has reached £42,248 in the financial year 2011/2012. Three factors which we believe that have contributed to the group’s success are identified in this section.
VALUE AND PRICE
The group aim to provide better-quality goods to customers with lower cost comparing to other retailers. Porter theorised that the more products that become standardised or undifferentiated, the lower the switching cost, and hence more power is yielded to buyers. (M. Porter, 1980) As Tesco mainly sells necessities rather than luxuries, price will greatly affect customers buying decision. Also, Tesco’s famous loyalty card, Clubcard, has remained the most successful customer retention strategy, that greatly raise the profitability of the business.
STORES AND FORMATS
Tesco has around 3,054 stores in the UK so far, operating under four banners of Express, Extra, Metro and Superstore. General substitution is able to reduce demand for a particular product, as there is a threat of consumers switching to the alternatives. (M. Porter, 1980) In the UK food retailing sector, this has been further weakened by some new trends, such as smaller chains of convenience stores or local shops are emerging the business
Tesco is one of the biggest grocery and general merchandise retailer in the world, operating around 6,351 stores across Asia, Europe and North America. Tesco’s core UK business is very significant within the group, with around 3,054 stores and over 300,000 employees, operating under four banners of Express, Extra, Metro and Superstore. Tesco as well has the widest range of any food retailer in the UK including the leading own-label range. Also, the company offers a home-shopping service through ‘Tesco.com’ website. (Tesco PLC, 2012)
This report will provide an insight into Tesco’s marketing strategy with its real marketing practices and activities, also recommendations will be made in regards to the marketing based strategies. CRITICAL FACTORS OF SUCCESS
Tesco’s annual revenue has reached £42,248 in the financial year 2011/2012. Three factors which we believe that have contributed to the group’s success are identified in this section.
VALUE AND PRICE
The group aim to provide better-quality goods to customers with lower cost comparing to other retailers. Porter theorised that the more products that become standardised or undifferentiated, the lower the switching cost, and hence more power is yielded to buyers. (M. Porter, 1980) As Tesco mainly sells necessities rather than luxuries, price will greatly affect customers buying decision. Also, Tesco’s famous loyalty card, Clubcard, has remained the most successful customer retention strategy, that greatly raise the profitability of the business.
STORES AND FORMATS
Tesco has around 3,054 stores in the UK so far, operating under four banners of Express, Extra, Metro and Superstore. General substitution is able to reduce demand for a particular product, as there is a threat of consumers switching to the alternatives. (M. Porter, 1980) In the UK food retailing sector, this has been further weakened by some new trends, such as smaller chains of convenience stores or local shops are emerging the business
Bibliography: Brown, S. (1995) Postmodern marketing, London: International Thomson Business Press. Holt, D.B. (2004) How brands become icons: The principles of cultural branding, Boston MA: Harvard Business School Press. Schroeder, J.E. and Salzer-Mörling, M. (2006) Brand culture, New York: Routledge. Ruddick, G. (2012) ‘Tesco recovers UK market share’, The Telegraph, 28 November [Online]. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9224301/Tesco-recovers-UK-market-share.html (Accessed: 28 November 2012) Walters, D REPORTS Tesco PLC (2012) ‘Tesco PLC Annual Report and Financial Statements 2012’, Tesco PLC [Online] WEBSITES Tesco PLC (2012) Our business