Tesco Utilising the Marketing Mix

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Tesco Utilising The Marketing Mix

Tesco is one of the world’s international retailers and is recognised as the market leader in the UK supermarket sector. Tesco state that their core purpose is ‘to create value for customers to earn their life time loyalty’ Evaluate how Tesco and other supermarkets utilise the marketing mix to compete in the market place.

Tesco is the leading retailer with a market share in 2010 of 29.7% (Wright, 2012), a reason they have proven to be such a successful business is because of their well thought through slogan ‘every little helps’ which is simultaneously used to shape their core values, the slogan is now embedded throughout every aspect of the organisation. Tesco along with many other business use the marketing mix model, otherwise known as the 7 P’s to set effective business strategies in order to provide a good quality of service to their customers. To compare the broadness of the way the marketing mix works for different businesses another leading supermarket chain should be chosen. Asda in 2010 had a market share of 16.9% (Wright, 2012) also applies the marketing mix in considering any values or goals. Consequently their slogan is ‘Asda, always cutting prices’ Asda’s slogan is used similarly to Tesco’s as a means of shaping the business. This ethos is used in order to sell their brand effectively to get a higher amount of Revenue. In a highly competitive market, Tesco and Asda need to make sure the marketing mix model is considered effectively to ensure the business is strong enough to survive in the supermarket sector, meaning all core values must be relevant and work effectively for these profit orientated businesses allowing them to reinvest and develop their brands.

Price is a section of the marketing mix, when considering prices if a product is priced too low or too high, it could mean a loss of sales for an organisation. Tesco attempt to meet the consumers in the middle by having lower prices that still give them a reasonable amount of profit. One of their aims is ‘continually increase value for money’ they did this by completing a basket scheme where they then implemented individual prices per product line to insure no major price difference between them and Asda (Anonymous, 2000). However the problem Tesco are facing is that 80% of consumers fell into the "squeezed middle" bracket (Wood, 2011), consequently Tesco is having to cut the price of essentials and enforce a psychological pricing strategy to attract customers who are now below the middle class category to ensure they keep their revenues high. Compared to Asda’s more laid back approach where their policy is to have ‘permanently low price through a rollback scheme’ research shows that their prices are on average 5-10% cheaper than the market average (Anonymous, 2000), after looking over Asda’s pricing methods it seems the favoured pricing strategy is the Economy pricing (Anonymous, 2003) where all costs are kept low to insure cheaper products and to make sure a mass market of consumers can afford various products due to the lower prices.

Product is a key part of the marketing mix, it involves the brand itself and the service a business is providing to gain a large amount of capital and attract customer loyalty. Tesco’s have expanded into many different markets with their range of products from petrol to food and clothes. It’s become clear to Tesco now that it’s value or basic range has become considerably popular and Tesco’s Value brand is now one of the biggest grocery brands in the UK, even bigger than large popular businesses such as Coca-Cola and Walkers (Anonymous, 2008). This break through has allowed Tesco to focus on other aspects of it’s product portfolio leading them to introduce over 2,000 new and improved food products after looking over customers reviews about product quality being increasingly important to them (Tesco PLC, 2011) as well as looking closer at it’s newer ventures, like Tesco bank and...
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