MARKETING

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 Table of Contents
1. Introduction ................................................................................................................................. 3

2. The Marketing environment ....................................................................................................... 3

2.1. Macro environment .............................................................................................................. 3

2.2. Microenvironment ................................................................................................................ 6

3. The four Ps .................................................................................................................................. 7

3.1. Product ................................................................................................................................. 7

3.2. Price...................................................................................................................................... 8

3.3. Place ..................................................................................................................................... 8

3.4. Promotion ............................................................................................................................. 8

4. Conclusion and Recommendations ............................................................................................. 9

References ..................................................................................................................................... 10

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1. Introduction

The combination of internal and external forces and factors that are responsible for establishing
the ability of a company to serve its customers and market is known as the marketing environment.
This is significant for understanding the effectiveness of business and enhance the business
outcome and help to achieve competitive advantage effectively. In order to analyze the internal
and external business of the chosen company Tesco, a systematic analysis has been conducted.
Along with this, the company is conducting an effective potential business strategy for enhancing
marketing outcome which is analyzed by the means of price, promotion, place and product. In this
way, the company's current marketing position in the UK has been evaluated in the current report.

2. The Marketing environment

2.1. Macro-environment

Forces Impact
Political Political stability is the greatest strength of the country which are associated
with the rate of foreign direct investment (FDI). Along with this, the tax rate
of the country has reduced from 19% to 17% which also provided the
opportunity for conducting business in the UK. On the other hand, Rastogi and
Trivedi (2016) stated that the Brexit has also opened a wide door by its chaos
and unmanageable business barriers. This is influencing the business
opportunity of Tesco effectively.
Economic The economic landscape of the country is very much sound which is effective
for the retail market growth. As the company, Tesco is operating in the global
market it has a great brand name which is already establishing their business
in the UK market. As opined by Pestle et al. (2016), along with this, the GDP
of the country is nominal and it is the 5th largest economy of the world. The
rate of inflation has increased 3.1% in 2017 that is showing the effective
business environment of the country. This is suitable for Tesco for promoting
their business in the competitive business environment of other retail
supermarket chain.

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Social Being a retail business, Tesco is having a huge consumer market in the UK.as
the population of the UK is about 65.6 million. According to Widya Yudha et
al. (2018), the consumer market is quite high with a variety of demographic
people. Instead of social market culture, the UK is having the culture of
supermarket chain mostly and the customers are also well acknowledged the
concept. For this reason, Tesco is having a great advantage in the UK retain
market in context to customer acquisition.
Technological The UK is one of the most advanced technology depending country of the
world. In terms of technological institution, London is renowned. Apart from
this, the number and rate of tech-savvy consumers are also available in the UK.
Along with different other businesses, the Tesco is operating in different
technologically advanced businesses. As influenced by Pestle et al. (2017), for
providing the best solution for the customers, the UK market is operating in
the greatest field. The tech-savvy customers are also incorporating the AI, big
data, Fintech, online marketing, and other services effectively.
Legal The legal obligation is also less critical in the UK. In the field of skilled and
white collared labor, the Tesco is acknowledging the policies and legislative
frameworks of Employment Act 1996. Along with this, in order to eradicate
workplace discrimination and any type of stigmatization, the Equality Act
2010 has been incorporated. On the other hand, the Income Tax Act 2007 is
another act that is imposed on both the employees as well as company for
conducting their business operations (legislation.gov.uk, 2019).
Environmental Maintaining CSR activities has become a major concern for different big and
small business houses. Their production-related activities and increase of high
competition is increasing the burden on the environment. Aithal (2017)
mentioned that significant negative impact has imposed on the environment
which has become the most significant concern of the UK government. As for
this reason, the Environment Act 1995 is incorporated in the policymaking and
operation strategy of Tesco in order to lower environmental burden effectively
(legislation.gov.uk, 2019).
Table 1: PESTLE Analysis of Tesco

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 (Source: as influenced by Fozer et al. 2017)

As per the above-mentioned analysis, almost all factors are effective for Tesco to compete in the
UK market. all the factors are showing signs for developing and maintaining the sustainability of
the organization. The operation of the Tesco has although highly affected by the Brexit
phenomenon. As per the comments of Barba et al. (2016), this Brexit has influenced the present
business highly but it might have some significant role while promoting business in the long-term
aspect. However, with the help of business opportunity, the employment opportunity of a country
can be enhanced. For this reason, Tesco has created a huge workplace in the UK. In the UK, Tesco
has about 30% market share which is associated with their prices, profits, demand and leverage
cost (tesco.com, 2019). For this reason, the brand name of Tesco is well known for UK consumers
and they have adapted the supermarket retail culture in comparison with the local retail market.
Bismark et al. (2018) mentioned that, in this way, the company is achieving high competitive
market and sustainability in that. However, in spite of these favorable market conditions, the Tesco
is having high competitive rivalry due to the increasing market support for the retail industry. The
number and rate of tech-savvy consumers are also available in the UK. Along with different other
businesses, the Tesco is operating in different technologically advanced businesses. The Brexit has
also opened a wide door by its apparently chaos and unmanageable business barriers. This is
influencing the business opportunity of Tesco effectively.

However, due to the influence of Brexit, the retail business industry is suffering from various issues
regarding economic downfall. Lack of opportunity of conducting European trading, Tesco is
having great barriers in order to achieve effective outcomes of the business. Along with this, the
internal taxation system and high cost of transportation are also affecting the business of the retail
industry. In the case of Tesco also, this impacts their market sustainability in the UK as well as in
the case of the international market. in accordance with Barba et al. (2016), this has a major impact
on customer volatility due to the high sensitivity economic downturn which impacts on the
business. Apart from this, due to the increase of environmental sustainability concerns in the UK
industry, lowering carbon footprint strategy has been incorporated. For this reason, the government
has imposed the Environment Act 1995. This is also providing a business concern for Tesco and
barriers for traditionally managing their operations. Instead of social market culture, the UK is
having the culture of supermarket chain mostly and the customers are also well acknowledged the

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concept. For this reason, Tesco is having a great advantage in the UK retain market in context to
customer acquisition (tesco.com, 2019). In spite of this, Tesco has a huge and potential consumer
market in the UK which is offering better outcomes of the business.

2.2. Microenvironment

Strength Weakness
 Biggest retailing and grocery market  Fraud Trial and Accounting Scandal
 Leading market share  Decrease in operating profits
 Growth of stores (Niederwieser et al.  Low-cost strategy
2016)  In specific markets Poor operational
 Largest private employer performance (Blockeel et al. 2016)
Opportunity Threat
 Expanding special discount store Jacks’  Brexit Referendum
business  Competition with supermarket giants like
 Strategic alliances with other brands Aldi, Carrefour, Walmart, ASDA and
 Joint ventures others
 Online shopping  Economic crisis and credit crunches Shi,
 Emerging markets 2016)
Table 2: SWOT analysis of Tesco

(Source: as influenced by Bohari et al. 2017)

Tesco is one of the biggest grocery retailer market in the UK as well as European union. The
annual operating profit of the company is about 28% in 2018 which is increasing higher revenue
and sales. The market share of the company is also high which is 4% (tesco.com, 2019). According
to Phadermrod et al. (2019), this is influencing the grocery retailing market of the UK and by its
increasing number of stores, the operational chain is increasing. However, several other
weaknesses the company is having such as misrepresentation of the profit issue which is known
as fraud trial and accounting scandals. Along with this, in October of 2018, the operating profit of
the company has lowered by 9%. As influenced by Bull et al. (2016), due to the development of
low-cost strategy, a poor operational performance issue can be noticed. additionally, the company
has a very strong brand name which is influencing the company's sustainability. The customer

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outcome of the company is based on its existing and stable brand name and exclusive marketing
strategy. This is effective for enhancing the business outcome of the company in order to achieve
better customer outcomes in the UK market. Gürel and Tat (2017) stated that online and offline
store, both are the key features off retail industry that can acquire a huge figure of customers. For
this reason, Tesco has developed both online and offline retail stores for attracting the majority of
the demographic people of different geographical locations. (Blockeel et al. 2016) mentioned that,
this is a sound marketing policy that the company has developed strategies that are influencing
customer retention and loyalty. Apart from this, Tesco has created loyalty cards to their existing
and potential customers which ensures their loyalty and buying behavior towards the company.

On the contrary, the company has also some opportunity like their newly incorporated business
strategy which is a discount market known as Jack's business. This is providing significant
commotion to their low-cost rivals like Lidl and Aldi. Apart from this Gürel and Tat (2017)
mentioned that maintaining a strategic alliance with other brands is also necessary for a company
in order to maintain effective competition. For this reason, Tesco is operating in a business
environment which is providing a successful business environment to the company. Apart from
this, the company has undertaken several successful joint ventures in the UK market to enhance
its performance in a certain region. On the other hand, incorporating online shopping opportunities
also helped then to enhance business outcomes and customer acquisition. In accordance with
Ervural et al. (2018), this has also lowered work pressure in retail stores. In spite of this, the Tesco
is operating in the UK business market with some significant threats such as they have conducted
disrespectful behavior with Christian ethnicity by campaigning Christmas advertisements. Apart
from this, due to the referendum of Brexit, the dealing and costing of products has been changed
completely. Along with this, Abdel-Basset et al. (2018) suggested that Brexit has changed people's
buying behavior and restricted the financial transaction in the country. For this reason, a credit
crunch and economic crisis have predominantly present in the organization.

3. The four Ps

3.1. Product

A huge range of product is offered by Tesco stores in their both retail stores and online market.
along with this, a huge variety of brands are also available in the stores of Tesco. As opined by
Brogaard and Detzel (2015), by analyzing the customer perspective, the features and quality of the

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products are differentiated. Brand warranty and designs are the prime concern for the company
along with reliability and quality. As for this reason, the brand name of Tesco is well known for
UK consumers and they have adapted the supermarket retail culture in comparison with the local
retail market. This is effective for influencing and attracting the purchasing intensions of customers
which is effecting the business outcome of the company. This s also associated with the service of
the company which they offer in different fields. Both retail shop facility as well as online shopping
experiences are provided to the customers as per the demand. van der Rest et al. (2018) stated that,
with the help of quality products and service the competitive advantage can be achieved.

3.2. Price

The cost leadership strategy of pricing is followed by Tesco predominantly in most of their
business market. In the case of the UK, the cost leadership strategy is applied to their diversified
and potential consumer market. According to Leggat et al. (2018), the cost leadership strategy is
known for providing low-cost goods with high quality. Therefore, the Tesco enterprise
incorporated strategy for maintaining low prices by managing the quality of the products and
services. The economics of scale are applied for maintaining low price products. As for this reason,
they have cut down their weekly cost by 3% and also lowered their promotional expense
effectively (tesco.com, 2019). With the help of this, the cost leadership model is imposed in their
newly launched food brand. Therefore, this is effective for ensuring customer outcome in the
company.

3.3. Place

Based on the place and distribution of the company in the UK, it can be divided into Tesco
Superstore, Tesco Extra, Tesco Express and Tesco Metro. The most of the retailing shops are
present in the main city regions. Along with this, in some countryside also, several stores are
implemented and many are also opening nowadays. As per the statement of Liao (2015), it can be
known that online and offline store, both are the key features off retail industry that can acquire a
huge figure of customers. Tesco is also incorporated a similar strategy for developing online e-
retaining and well-distributed offline stores. However, the online delivery facility is not available
in all places especially in the countryside which is affecting the business outcome of the company.

3.4. Promotion

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Both online and offline promotion is conducted by Tesco effectively. This is establishing a strong
brand image of the company which is the central theme of Tesco's promotional activities. Starliper
et al. (2015) cost dependent production is a key aspect for a company which is beneficial for
obtaining a mass consumer market. The main central aspect for the company's promotion strategy
is providing low-cost products and advertisements for occasions as well as regular discounts. In
most of the cases, the company is charitable events, television advertisements and hoardings for
branding. Along with this, the loyalty card namely ‘Tesco Club card’ is also incorporated for
targeting and segmenting customers (tesco.com, 2019).

4. Conclusion and Recommendations

Henceforth, it can be concluded that, with the help of effective marketing strategy Tesco can
acquire the UK retail market in a better way. Tesco enterprise incorporated strategy for maintaining
low prices by managing the quality of the products and services. The cost leadership marketing
policy is the key strategy that leads them to achieve better market sustainability. Apart from this,
the company has undertaken several successful joint ventures in the UK market to enhance their
performance in certain regions. On the other hand, incorporating online shopping opportunities
also helped then to enhance business outcomes and customer acquisition.

Therefore, it can be recommended that the company needs to incorporate strategies for overcoming
competition in the market. Along with this, the internal business structure needs to be changed for
retaining more employees and maintaining and skilled workforce. The low cost strategy is
effective for attracting the mass market, but in the case of high profile customers, the branded
product and effective cost leadership model is necessary that can engage the customer outcome
effectively.

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