Marketing Principle

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Marketing Principle

Introduction
TESCO is one of the leading retail companies in UK. The company maintains around
large number of supermarkets, hypermarkets and convenience stores in the UK, Ireland, Central
Europe and Asia. Tesco has its origins from 1919 when the entrepreneur known as Jack Cohen
started large number of groceries from a stall located in the Eastern end of London. The company
achieved large number of profit levels from day 1. The brand TESCO appeared five years after
1942 when he purchased the shipment of tea from a Mr Stockwell. During this period, TESCO
slowly improved its operations in retail business and at the moment they are a number one brand
in the UK retail business. The aim of the TESCO Corporation is to provide best products to the
customers. Therefore, all the marketing principles related to TESCO Corporation will be
discussed in detail.

Task One
Few definitions of Marketing
There are three definitions of marketing which will be described in the following
paragraphs.
1. Marketing refers to the performance that starts the direct flow of goods and services from
the producer to the consumers.
2. Marketing is the process in a society through which the demand for economic goods and
service is anticipated because of the certain activities.

3. Marketing refers to the exchange that takes place between the consumers and buyers. It is
concerned with the regulation of certain factors in order to facilitate the entire process.

Various Concepts of Marketing

Production Orientation: The concept of Product Orientation refers to the organizational

values where the competitive advantage is attained because of the increase in the business
productivity and volume. This usually occurs in the manufacturing companies.

Product Orientation: The concept of Product orientation refers to an organizational

culture where the competitive advantage is acquired with the creation of business
leadership. The focus is there on the high quality product.

Sales orientations: The concept of sales orientation is concerned with the organizational
culture where the competitive advantage is achieved in the business with the help of
capable sales force to generate high levels of sales units.

Marketing Orientations: The concept of marketing orientation refers to the organizational

culture where the high level of competition occurs because of the huge objective of the
businesses.

Cost and Benefits of Marketing Orientation

There are numerous costs and benefits related to the marketing orientation. The benefits
of marketing orientation are:

High level of customer satisfaction, loyalty and retention.

The increase in the sales and market share.

High levels of profitability and growth.

Reasonable level of competitive advantage.

An improvement of the corporate image.

The costs of Marketing Orientation are:

An increase in the level of customer expectations.

The need to satisfy the training and development needs of the employees.

There is a need to update the technology requirement for customer contract and to
improve ways of doing business.

The need to increase the resource demand for providing customer specific marketing.

A strategy needed to meet the complex needs of consumers.

Task Two
Analysis of the Macro and Micro environmental factors
The analysis of the Micro and Macro environmental factors of the TESCO Corporation
will require the assistance of PESTLE Analysis. The assessment of the PESTLE Analysis will be
carried out in the following paragraphs. PESTLE Analysis refers to the Political, Economic,
Social, Technological, Legal and Ethical aspects of the organization. The analysis of the TESCO
Corporation in this regard would turn out to be very useful. The positive and negative aspects of
the macro and micro environmental factors will be assessed in detail.
1. Political: The establishment of the European Integration and Free Trade Agreements has
enabled the market to open up for British Companies to invest in Eastern Europe. Tesco
has 60 hypermarkets operating throughout the country.

2. Economic: The retail sector is quite vulnerable to the economic policies especially the
interest rates. Since the terrorist attacks on 11th September, the worlds economies have
suffered miserably because of the drop in the stock price levels. Though, the worlds
economy has started to recover over the last few years.
3. Sociological: The change in the consumer preferences and lifestyle activities represents
both opportunity and threats for the industry.
4. Technological: The changes in the retailing methods like for example the selling of
clothes with the help of internet is now a common feature in retailing. The paperless
operations and the administrative decisions are taken on IT system. They are used with
the help of secure servers which provides flexibility in the running of the business.
5. Environmental: The threats are there in terms of the legal aspect for livestocks in regards
to health and safety. The environmental measures are necessary for TESCOs operations
because of their large customer base.
6. Legal: The legal factor is concerned with the laws for health and safety of the products
sold by TESCO Company. This is a vital phenomenon for having suitable legal position
in the market.
7.

Ethical: The ethical factor is concerned with the values taken care by TESCO to meet the
needs of the people. The ethical aspects of the business carry immense value for all the
stakeholders.

The concept of segmentation and targeting methods

There are different needs of the organization which requires a marketing segmentation for
the products and services. The companies require a practical approach in order to have suitable

market segmentation for their customers. There are some criteria which will be discussed in the
following paragraphs:

Identification: Different attributes related to the segments of the products which can be
easily identified by the customers.

Accessibility: The segments should have a proper reach with the help of communication
and distribution channels.

Substantial: The segments should be in sufficiently large in order to justify the need for
hiring maximum number of employees.

Unique needs: The customers must be given separate offerings of the products. The
segments should be given an option to respond in a different manner to the large number
of marketing mixes.

Durable: The segments must be relatively stable in order to decrease the cost of frequent
changes.
The good market segmentation is usually very vital for any businesses that are internally

similar and externally different. This is a typical feature for most of the business organizations.
TESCO Corporation has defined their market segmentation well for their products and services.
There is a huge customer base for segmentation in consumer markets. Consumer markets are
normally segmented on the following customer characteristics and traits.

Geographic

Demographic

Psychographic

Behavioralistic

Therefore, this is the overall market segmentation policies for TESCO Corporation. The
company needs to work further in future.

Targeting Strategy
There is large number of target market strategies created for the organization. Targeting
strategies are usually divided into many categories. Each one of them will be discussed
separately

Single segment strategy is also known as a concentrated strategy. There is one market
segment which is usually served with one marketing mix. A single segment approach is
usually adopted by small firms.

Selective Specialization: This particular strategy is known as a multiple-segment strategy

which is referred as a differentiated strategy. There are different marketing mixes which
are given to other variety of market segments.

Product specialization: There are many firms which have a specialization in serving the
needs of a particular product and reach the needs of different market segments.

Market specialization: There are many firms which specialized in meeting the needs of a
particular segment and offers that segment a large variety of different products.

Full market coverage is usually an attempt made by a firm to serve the entire market. This
coverage is normally obtained with the help of mass market strategy in which there is a
single undifferentiated marketing mix offered to the large numbers of customers. A
differentiated marketing strategy is also created in order to meet the needs of separate
marketing mix offered to each segment. All these issues have a lot of value for most of
the organizations. The full market coverage is indeed one of the major aspects of any

organization. The proper strategy has a major value for organizations that looks to satisfy
the needs of the consumers. Therefore, TESCO Corporation will also have a benefit from
full market coverage.
Factors influencing the buying behaviour of consumers
There is one of the most important parts of marketing which is known as buyer or
customer behaviour. This is the reason why TESCO should understand the reason because of
which the customer makes a purchase decision. The absence of understanding related to the issue
makes it difficult for TESCO Company to respond to the needs and wants of the customers.
There are six factors which carries immense value for the organizations when the customer tries
to buy any item from the store. There are large numbers of customers of TESCO Corporation and
they need to focus on their target market by meeting their buying needs. There are two main
aspects which would influence a purchase of TESCO Corporation. They are:

Cultural factor: There are cultural factors which have a significant impact on the
customer behaviour. Culture is one of the most vital issue in meeting the needs and wants
of consumers. They are families, children and other group of people who come under the
cultural elements of the organization.

Social factor: A customer buying behaviour is influenced by various social factors such as
the groups to which the customer belongs and their social status in the society.
All these factors have effects on the TESCO marketing operation because customer is the

king and every business organizations have to meet the needs of the customers. The business
organizations cannot provide every product to every customer because it depends on an
individual need. This requires a suitable marketing segmentation and a very good promotion
strategy in order to meet the needs of the consumers.

Achievement of Sustainable Competitive Advantage

TESCO Corporation made numerous changes in the marketing strategies and has grown
to become a number one retailer in UK. Today in the UK, the retailer has been quite dominant.
At the moment, the retailer is the dominant force since the last ten years. It is a truth that TESCO
Corporation always changes their strategy within the time base and they get success constantly.
In 1973, there were some people in the organization who worked for the betterment of the
company. TESCO Corporation even launched an Operation Checkout which included the
abandonment of green Shield stamps, price reduction and centralized buying for all stores
located in the country. This led to a rise in the market share of the companies by 4% in two
months.
In 1994, the company took over the operations of the supermarket chain known as
William Low. The company also sought to successfully fight the Sainsbury in order to gain
control of the Dundee based firm which operated 57 stores. TESCO Corporation also launched a
loyalty card branded as Clubcard in 1995 and then introduced an Internet Shopping Service. In
1997, TESCO and ESCO formed a business alliance that comprised of numerous petrol filling
stations on lease from ESCO with TESCO being the attached stores under the Express Format.
Around ten years later, over 600 TESCO/ESCO stores can be easily seen across the UK. In
October 2003, the company started the operations of UK telecoms division which included the
mobile and home phone service. The company also started a broadband service in 2004. In 200,
the TESCO took part in a joint venture with O2 with the TESCO Mobile Virtual Network

operator in Ireland. All these aspects proved to be vital for the company as they were able to
achieve a competitive advantage because of these elements. Therefore, all these aspects proved
to be valuable for the organizations in achieving a competitive advantage.
Range of Distribution Methods
There are large distribution methods for TESCO Corporation which they use very
efficiently for their operations. There are many people that play a vital role in the production and
delivery of products and service. The physical presence of the people performing the job is a
vital element of customer satisfaction. The elements of people mix are:

A suitable policy of job selection.

A suitable policy for maintaining appropriate level of workforce in the organisation.

The involvement of programmers in staff training etc.

There is also a need to develop the process mix for the organization. The elements of process
mix are:

Policies of the company.

Accessibility towards the information.

The vital feature of the service.

Expansion of Capacity Levels.

The physical element of the information is related to those issues of the service provider

which the customer can see and also assess from an impression of the service or its provider. The
elements of physical evidence mix are:

Logo or design of the company.

The different type of colour chosen for the company.

The installation of equipment in the company.

The usage of company vehicles for transportation.

The usage of labels in different functions.

The utilization of packaging for the company.

There are three new marketing mixes which also carries immense importance in

marketing. Therefore Tescos marketing operation is also affected by this new marketing mix.

Pricing methods used by business

Looking at the situation of Tesco, one way that it could acquire cost advantage is by
enhancing process efficiency, expanding exclusive contact to a large supplier of lower cost
materials, or steering clear of several costs in general. If rival organizations in the country are
incapable to lower their costs by a comparable quantity, Tesco will be capable of sustaining a
competitive anchored cost leadership.

Concept of Integrated Marketing Communication

Many researchers describe IMC as a discipline that encompasses a variety of
communication elements such as advertising, promotion, public relations, personal selling, direct
marketing and electronic media. Ideally, these elements come together to provide unified clarity,
consistency and secure the maximum communicative impact. Some of the other group of people
defines IMC more broadly as the application of analysis, communication and evaluation
techniques to create and manage integrated, multi-faceted interventions combining information,
instruction, collaboration, business process design, and feedback and incentive systems to
improve human performance in the workplace in order to achieve organizations desired

missions and visions. The concept of Integrated Marketing Communications should be utilized
by TESCO Corporation as well in order to manage the tasks in the best possible way. In this way,
TESCO Corporation would have a lot of benefits and success in the future. This would certainly
lead towards an improvement in the operations for TESCO Corporation.
Task 4
Extended Marketing Mix and their relevance to Service Marketing
The importance of extended marketing mix also carries a lot of relevance for Service
Marketing by TESCO Corporation. The company needs to improve its current strategy for
marketing mix in order to capture maximum customers for their products. In this way, the
company will have a much higher chance to earn maximum revenues for their operations. The
marketing strategy of TESCO Corporation has a major role to play in the upcoming days as the
company has expanded its service to other countries as well. All the elements of marketing mix
will require a suitable strategy in order to fulfil the business needs in the future. TESCO
Corporation has performed well in the past and they are looking forward to do further well in the
future. The main focus is on the overseas operation because the domestic performance is quite
satisfactory for the company. Therefore, this is the overall plan for the extended marketing mix
and their relevance to service marketing for future.

Differences between International and Domestic Marketing

The main issue is that the object of the marketing mix is to satisfy the large number of
people who are the customers of TESCO Corporation. TESCO Corporation has even launched
their services in different parts of the countries. Though, TESCO Corporation has not achieved
the same kind of success as in UK but is trying very hard to sustain its position in these

countries. On the other hand, the product price of TESCO is contributing towards success
regarding their operations in UK. There is a difference between the domestic and international
market. However, for TESCO, the domestic and international markets are both very important
for them. There are eight main factors which is play the key roles to different between domestic
and international market. The factor is below:

Market size

Market rate of growth

Government regulation

Economic and political factor

Market share

Contribution margin

Conclusion
The main purpose of this topic was to assess the marketing principles followed by
TESCO Corporation. It was seen that there are various marketing principles followed by TESCO
Corporation. In fact, it was a detailed marketing report on TESCO Corporation because it
highlighted all the information in detail. It was seen in the topic that TESCO Corporation is
managing its services quite well at the moment. Though, they need an improvement in the
foreign operations because they are facing strict competition from the domestic firms. The
company will have to develop certain plans and strategies to understand the local market
conditions in the best possible way. This will help them to reach the customers quite easily and to
also expand their customer base in the upcoming days. In the local market, the company needs to
retain their present performance level and to diversify their market operations further in order to

reach the needs of people. On the whole, TESCO Corporation is doing very well in their business
operations. Therefore, all the marketing principles of TESCO have been discussed in detail.

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