Organizational profile and industry analysis 350
Introduction 250
The importance of online shopping in global marketing is the fact that digital marketing strategies have captured the world. With handy, fast and attractive tools and techniques, the nature of online shopping has increased with incredible business opportunities in the modern days. Online marketing tactics have helped people with convenience and easy shopping ideas. There are desirable discounts that are provided by marketers with online shopping. The immensity of the internet has offered many business transactions in the modern age. The report aims to analyze the global marketing and online business practices of Tesco in the UK. The organization’s operations are spread internationally and have an online presence.
The key areas that are addressed in the report are industry analysis, situational analysis, models and theories, marketing activities, online activities and recommendations. SWOT and PESTLE analysis provides the current situation of the business based on internal and external factors. The models and theories that are used in the report consist of internationalization theory, cultural factors, standardized strategy and competitive advantage model. Marketing activities such as segmenting, targeting, positioning, branding and consumer trends are provided in detail. Online presence of Tesco is mentioned in detail while emphasizing social media websites and online shopping. Recommendations for the organization include exploring the emerging markets, upgrade online business, resolve controversies and customer feedback. Tesco will increase sales volume and revenue while focusing on recommendations and compete effectively with rivals.
Organizational profile and industry analysis 350
Tesco is a leading food retailer in the United Kingdom with its global marketing strategy. Tesco supermarket is the third-largest retailer in the world with its presence in seven countries across Europe and Asia. The company is the market leader in the UK to which the organization adopts effective marketing strategies. Tesco was established in the year 1919 with a small market stall named Cohen. Business expansion of Tesco has a rapid growth by the year 1939 to which 100 Tesco shops were present across the country. Currently, the organization has more than 6800 shops across the world. Tesco has expanded in the early 1990s within 11 countries. The company has diversified its products in several categories, such as books, electronics, clothing, petrol, financial service, internet services, etc. The company is listed in London Stock Exchange and has made a market capitalization of 18.1 billion pounds with a primary listing in London Stock Exchange. Supermarket giant Tesco deals with its primary business of groceries and consumer goods. Tesco has provided online services from local Tesco stores since 1995. The company has started its Internet access facilities. The online system of the company has an impact on sales volume to which profitability index has increased subsequently. The company implements e-marketing activities through websites, ads, TV, e-tools, etc. Tesco understands customer needs and maintains better relations with customers by harmonizing the power of customers. E-marketing strategy is conducted, and other marketing activities that engage customer satisfaction rate are addressed to increase sales volume.
The retail industry in the United Kingdom is the private sector that consists of more than three million workers. The retail industry consists of department stores, supermarkets and shops that sell grocery or other items. This sector has plenty of opportunities for people that help in generating sales and influence strategic business decisions.
Situation analysis 350
PESTLE analysis
The PESTLE analysis tool helps to analyze the unpredictable environment of Tesco, and the factors affect the business operations and performance. PESTLE analysis consists of political, economic, social, legal, technological and environmental factors that affect the business.
Political factors: Tesco operates in more than 12 countries to which it exposes to many political factors that affect the business operations. The factors include legislation, political instability and tax rates that hinder in the growth of the company. In different countries, the business operations differ specifically due to tax rate and legislations.
Economic factors: Economic instability of a country affects the sales volume and the performance of the business. Labour cost, financial condition and inflation rate are few factors to describe the position of the company. The upward shift in the value leads to decreased sales volume. Therefore, prices, cost and profit largely depend on the economic stability of the country. Diversification is one such strategy that has helped for the success of the company.
Social factors: Consumers shopping trend affects business performance. People with sophisticated lifestyle need online shopping facility to which Tesco meets the demand of people. Lifestyle, attitude and beliefs of the consumer should be understood by the organization to which consumer satisfaction rate and buying behaviour increase with increasing revenue in the business.
Technological factors: Technological advancement has created a significant change in sales volume. Poor customer experience was the issue that the company faced a few years back. Still, with the latest promotion, online shopping and Radio Frequency Identification (RFID) technology have increased customer attention.
Environmental factors: Environmental issues are responded by the company to which fuel-saving routes are adopted to encourage consumers to shop with eco-friendly measures. Unwanted plastic bags and recycling aspects are taken into account while ensuring environmental awareness among customers. Renewable sources are used to which the company promises to minimize the use of carbon footprints.
Legal factors: Legal actions are taken by the business to which fraud and misleading activities are controlled with rules and regulations that ensure a strict code of practice.
SWOT analysis
SWOT analysis provides the current position of the business while evaluating the strengths, weaknesses, threats and opportunities of the market. SWOT analysis is a tool that ensures to make effective decisions for the company in the future. The strengths, weaknesses, opportunities and threats of Tesco are listed below;
Strengths
Biggest grocery retailer in the UK
Increased market share
Geographically diversified market
Online business practices
Superior technology usage
Efficient supply chain network
Weaknesses
Failed operations in Japan
Accounting scandals
Decreased operating profit
Low-cost strategy
Poor operational performance
Opportunities
Strategic alliance marketing
Joint ventures
Emerging markets
Increased online shopping
Threats
Competition
Economic crisis and effects
Brexit referendum
Models and theories 250
International theory
International joint venture theory is an appropriate theory that is used by Tesco to enter the global market. Interpersonal relationships are build while using this theory to which cultures and relationship networks are build and clients tend to be close and personal. Trust and respect are built-in business interactions with high uncertainty avoidance levels.
Cultural factors
Cultural factors define the shared assumptions, beliefs and values of customers. Cultural factors influence the sales volume while it affects negatively. Cultural factors are external factors that cannot be controlled by the business and affects the business sales volume. Cultural changes occur when an organization enters a new market to which organizations should induce a new turn in the company based on cultural acceptance.
Standardized or adapted strategy
Tesco should adopt a pull plan to which the business is highly dependent on customer promotion and advertising to build the loyalty of customers and build the demand for products.
Home nation’s competitive advantage
A nation’s competitive edge depends on the company to innovate and upgrade the products and achieve competitive advantage against the competitors. Tesco should focus on building good relations and providing quality products in the retail industry. The competition is possible because of challenge and pressure. The role of the nation has grown, and a highly localized process ensures national values, economic structure and histories that contribute to competitive advantage.
Marketing activities 500
Segmenting, Targeting and Positioning
Market segmentation is based on geographic, demographic, psychographic and behavioural aspects to which an organization takes decisions to target customers and position the products in the market. The geographic base includes region and density to which Tesco targets the rural and urban customers. Consumers are attracted based on market segments that are present in the business area. Demographic basis includes age, income, gender, occupation, education, family size and social status of customers. Targeting customers based on these aspects, the company decides to attract youth and married couples. Single individuals and extended families are targeted to draw for the products that the company targets. Psychographic segmentation is based on the lifestyle and personality of customers. Comfortable going customers are invited to which marketing activities will ensure product development. Behavioural segment base includes occasions, user status, benefits and attitude of customers. Customer who regularly visits in the retail stores is attracted to which cost advantage strategy benefits are addressed. The supermarket chain tends to target customer segment based on the high-income range while prioritizing the quality of the product. Different customer segment is sent based on a cost-effective strategy that ensures individuals who can compromise to the quality of the product because of low price strategy.
The positioning of a product is the marketing activity to which the target customer segment is attracted. Target customers range between 20-40 are invited to sell Tesco most beautiful products with the help of functional positioning. Positioning is an act that ensures designing and offering a product to occupy a distinctive image in the mind of the customer. The primary goal is to locate the product and provide potential benefits to be addressed by the organization. Tesco has positioned in the market as a low price retailer and consumers are attracted by the advertisement such as the lowest price every day. Low price strategy is successful as it helps to attract consumers and ensure consumer loyalty. A loyalty program is addressed by Tesco to which customer is invited, and at a certain period, customer can rebate the amount and gain points based on total purchase. Cash vouchers are sent to the business to customers and customer collect it online and purchase other products. Tesco uses this strategy which helps the company to attract customers and ensures that customers keep shopping and visit stores.
Branding
Every organization engages in business activities that helps in building trust and ensures customer brand loyalty. People need brands and look for effective ways to achieve products in the best way. Tesco has created brand awareness and ensures resurrecting the brand by overcoming obstacles and ensuring customer loyalty. Tesco has relaunched the brand portfolio to attract customers and benefit society and community at large.
Consumer trends
Tesco measures customer performance and trends in the retail group. Tesco is the third-largest retailer in the world has measured the profit by engaging customers in online shopping and tracking the shopping habits of customers in the stores. Loyalty programs are introduced by Tesco to which loyalty schemes were introduced to gain insights and improve business operations. Loyalty schemes are proposed to target customers with offers and discounts that are self-defeating. Competitive advantage was gained by senior leaders to ensure information through Clubcard Data.
Online activities and recommendations 500
Effectiveness of online presence
Customers have different options provided on the company website while selecting the best products. Customers can buy online whatever they need from grocery site to electrical. Online home delivery products are available with Tesco’s direct website. E-commerce activities are the latest forms of activities that help in building customers trust and relationship. The company’s website has extended over the period while being one of the largest supermarkets in the country. Attracting customer and providing a sound strategy that helps increase sales volume is the best online strategy that ensures global development. Global marketing is possible while practising online strategy. The success of the company depends on an online policy that helps people to ensure flexible shopping habits. A computerized event-triggered messaging strategy is used by the company to promote regular purchase of products for the customers. The approach of touch is used for follow up communication in the business. Customers can provide online feedback that helps in creating reviews and producing effective change.
Social media website
Social media website has provided an opportunity for the business to introduce new products and update the offers and discounts of the company. Social media websites such as Facebook and Instagram helps in increasing sales volume and impacts effective communication that proves to be extremely important for the company. The dominant trends that a company considers while using social media website are updated information about events and programs to be held by the company to ensure personal experience and create a brand image in the society. Impressive returns are delivered when a company considers social media strategy to achieve sales volume and profitability index.
On the one hand, the cost of online marketing is increased, but business performance is expected to fill the gap in expected sales volume. Social customer care programs are introduced by Tesco to gain effective results and ensure as the best global marketing business that indulges in best online practices. Twitter updates by Tesco provide a sense of gaining customer attention and engaging in effective communication strategies that lead to customer satisfaction approach.
Recommendations for Tesco to improve retail marketing will ensure an increase in sales volume and revenue. Here are some recommendations
Explore the emerging market
Resolve controversies
Upgrade online practices
Customer feedback
Tesco should focus on the emerging market such as African and Asian countries to gain useful sales volume. The level of internationalization will help to achieve the top position in the retail industry. There are issues that the company observes such as data attack, security issues and marketing issues which need to be resolved on an immediate basis. Upgrading online business will ensure e-commerce and provide flexible shopping habit for customers. Customer feedback is an essential aspect that cannot be ignored by the organization. Customer feedback facility for new schemes should be submitted to prevent disapproval and failure of the business.
Conclusion
The report consisted of an analysis of Tesco and its online marketing strategy. SWOT analysis and PESTLE analysis were carried out to know the current position of the business in the external environment. The international theory was selected to which Tesco can gain success while reviewing cultural factors and gaining importance of pull strategy. Tesco makes an effort while focusing on the Nation’s competitive advantage aspect and ensures innovative ways to compete in the retail industry. Tesco has given the focus on advanced technology and has launched a loyalty card to which customer response had been increased drastically. The marketing activities such as segmentation, targeting and positioning were mentioned in the report. Tesco has customized the products and helped customers to purchase from the company’s website. Online shopping is the most innovative way to which Tesco has adopted in the business.
References