Identification Of Strategic Problems Of Tesco Marketing Essay

1. After doing the Infestations analysis of the business, we can discover the effect or the marketing issues, an organization is facing. Pest analysis is about doing examination of political, cost-effective, social and technological factors, which a firm is bounded by.

2. Get a knowledge about why stable issues require to get instant thought and why there are strategic marketing problems once the findings are evaluated.

3. Determine the consequences of not dealing with certain issues by taking into consideration the urgency or immediacy of the problem.

4. Combine overlapping or related issues into a controllable number. The final list will include only twelve issues.

5. Organize issues in goal order by considering how they transfer to one another.


After the strategic issues are found, the next thing is to use the conclusion to identify tactical issues. It is in this level that participants determine which issues are critical to the success of the business and its dream of bettering the marketing strategies.

"Marketing Strategic problems or issues are those fundamental policy choices or critical problems that must be addressed in order for a company to achieve its eyesight. "

For over a hundred years now, Coca-Cola has been the number one soda company on the planet. They may have vast profitable resources plus some of the best marketing brains existing at their removal. Despite all of that, Coca-Cola failed glumly when it presented New Coke to the public back in 1985. The reason why was that these were unable to understand the marketing risks and may not aim for the right market and were fail to arrangement their new product in the market. The simples reason of failing was people did not like the new dick.

In spite of all the research that was done, and despite the thousands of flavor assessments conducted; the buying consumer just didn't like the tastes of New Coke. And completely nothing at all Coca-Cola said or does could change that one simple fact.

Unfortunately, that crooked out to be a very expensive lesson for Coca-Cola. They lost an incredible number of customers to their bitter competitor and number two soft drink large, Pepsi.

Yes, Coca-Cola continues to be the main soft drink. But the slit has been narrowed significantly.

Burger Ruler required very much to be 'French Fries King. ' For years, the No. 2 hamburger chain defeat out McDonald's in flavor tests of hamburgers, however the Golden Arches retained a lock on having the number one french fries. So, Burger Ruler spent several years formulating a new french fry, a potato keep coated--unlike its precursor--with a layer of starch determined to help keep warmth and add chomp. Equipped with a $70 million marketing conflict chest, the company rolled out its biggest product start ever before in 1998.

So, what took place? Burger King's new french fries turned out to be a whopper of an flop! 'Sales of fries are significantly down, ' stated a 1999 interior memo. 'Two times digit percent of consumers keep away from Burger King because of our french fries. '

Fortunately, Coca-Cola and Burger King could actually live on near disastrous miscalculations, because that they had billions of dollars behind them.

But other companies that inadequately miscalculate their tactical marketing problems, and don't have those kind of money, generally end up moving away from business.

That's mainly why so many dot-com companies are reducing like flies--and will carry on to do so.


The presented piece of work studies the display of the TESCO people imperfect company in UK stock market, follows its improvement and interesting incidents for the new time as well as provides with financial The presented piece of work studies the performance of the TESCO general public limited company in UK stock market, follows its progress and interesting situations for the recent time as well as provides with financial statements, balance sheet and calculates statistics necessary.

, balance sheet and calculates statistics requiredFirst, name and address of the business is presented. Secondly, annual report, show prices graphic in compare with other companies and show price graph for the past two years, latest media and other information is provided in this statement. TESCO was founded in 1919 by Jack Cohen it made unbelievable success in international grocery store and basic merchandising retail chain. Nowadays it is the largest store in global and UK local market show which's profits exceeds Ј2 billion. First of all company expert in drink and food and later it has diverted areas such as clothing, financial services, electronics, insurance and others. Now it offers 3, 728 variety of stores all the world and 440, 000 numbers of employees doing work for the TESCO. TESCO market leaders define their beliefs as every little helps toward erecting value for customers and earn their loyalty. Company work hard for the customers, meet their needs, act sensibly and treat with employees in trust and admiration. The strategy of the business is to provide great quality, affordable prices, high variety and customer support. TESCO own 2, 115 stores in UK and had already penetrated to 13 international marketplaces including European countries, Asia and USA. Aiming to provide excellent value and choice TESCO Company tries to provide all its customers with the goods they would like to have and also be a part of social and environmental obstacles. (www. tescoplc. com)


Tesco runs more than 2, 300 supermarkets, hypermarkets, and expediency stores in the UK (where it's the market head in food retail), Ireland, Central Europe, and Asia. Its operations include convenience and gas retailing (Tesco Express), small municipal stores (Tesco Metro), hypermarkets (Tesco Extra), and financial services through Tesco Personal Finance. A global leader in online food sales, it is the owner of a 35% stake in US food chain Safeway's GroceryWorks. It really is the main online supermarket which is now extending its business with a Television set route and a "retail structured education organization".



A PEST evaluation of the industry will study the local, nationwide and global influences of political, economical, social and scientific factors to understand opportunities and risks well.

External Environment - PESTLE Analysis

All of these (political, economic, interpersonal, technological, legal and environmental) factors will to some degree connect with the retail creation in Sweden.

POLITICAL - Following European addition and Free Trade Contracts, the marketplace has opened up for British Companies to purchase Eastern European countries. Tesco already has 60 Hypermarket store in Hungary. Lidl is frankly fighting to keep its market share with an violent charges strategy.

ECONOMIC - the Retail sector is rather recession prawn and also very very sensitive to changes in interest rates. Since the events of September 11th the entire world economies have endured heavily, shares plummeted and prices are in all time lows. The world economy is however, now on the up post September 11th. Individuals are positive and the retail industry is once again booming.

SOCIAL - changes in consumer tastes and lifestyle represent both opportunities and risks for the industry. Opportunities in terms of new market and consumers, however, there are new hazards in terms of alternative established Swedish national retailers (overseas company bias).

TECHNICAL - Changes in retailing methods as a result clothes sales via the web is now a common put in place retailing. Paperless procedure, the management and administration of the company are undertaken onto it systems, that are utilized through secure machines; provide versatility in the working of the business enterprise. As Sweden is at the forefront of scientific advancement with national companies like Ericsson, Tesco would enjoy the complete logistic and circulation channels already in place.

LEGAL - Countrywide legislation for health insurance and safe practices both in terms of consumer protection under the law and also in conditions of development of own natural alternative resources for making clothes.

ENVIRONMENTAL - The alternative source of resources used in production, namely cotton and wool are green. The risks are in conditions of legal penalty for livestock's in terms of health insurance and safety.

After the on top of analysis, pursuing were the proper marketing problem found for Tesco:

Identification of Strategic Marketing Problems of TESCO

Belief of poor -(Tesco value brands)

Lack of local understanding of customers and culture

Foreign brand


New & existing competition

unpredictability in Price of fresh materials

Economic recession

Market switch to globalisation

conquest bids

Far-East low priced brands

Extremely high competition for customers and resources

Strategic Marketing opportunities of TESCO:

Diverse runs of products

Open 24 hours a day

Strong Cash Flow Position

Increase turnover and trading profits

Strong Balance Sheet

Leading Supermarket Chain

Brand Awareness

Individuals resources

Online Shopping

Capabilities to carefully turn resources into advantages OPPORTUNITIES

Develop brand recognition globally

New Markets

Market switch to globalisation

Health understanding expansion -GM crops

Invention & Alliances

Low priced brand growth


Non-food - offers untapped new market segments with higher margins

Market Accessibility Strategy of TESCO:

We can utilize An off's product/market matrix to recognize recommendations for Tesco's proper development. This environment offers guidelines for proper choice available to Tesco in conditions of products and market coverage, taking into account its strategic capability and also expectation of stakeholders

Markets Existing Protect/build


Market penetration Product development

With existing capabilities

With new capabilities

Boyond current expectations

New Market development

New segments

New territories

New users

With new capabilities

Beyond current goals Diversification

With existing capabilities

With new capabilities

Boyond current expectations

Source: Johnson, G. , Scholes, K. , Whittington, R. , (2005)

We can easily see from the Ansoff Matrix that Tesco's start of Baby wear in Sweden will involve a market development strategy. As Tesco already markets kid's clothing (existing product) but Sweden will be a new market. Both ability and market factor has motivated Tesco to into development into new market segments. Kid's clothing is something that may be exploited in other market sections and also physical pass on internationally. Tesco may encounter some troubles around creditability and expectations as they attempt to type in the new market. Tesco may not be observed as a credible 'mainstream' provider.

Tesco Plc Concentrate on Customers

Tesco must determine which market section in Sweden it would like to focus on; this will subsequently determine its common strategy. If it hopes to with the reduced cost retailers then it must adopt a cost control strategy. Otherwise it will have to consider differentiation such that it can charge premium prices at the high-end market. As the competitive rivalry in the reduced cost market is ardent, Tesco should enter the high-end market with a differentiation strategy. However, before Tesco makes a decision on its goal customers, we have to conduct a market analysis, in provisions of size of the infant clothing market in Sweden, market stocks of all the existing firms in the market and ultimately segments within the market, to recognize particular sections, so that Tesco can concentrate on these and change its marketing.

TESCO Marketing Goals:

Tesco would have the following aims:

Success, in terms of operating margin (a 10% aim for)

Swedish Market share (a 20% focus on)

Customer advocacy (the amount of customers who recommend Tesco top quality clothing, repeat business)

Reputable company (the number of community stakeholders who value Tesco)

Employee inspiration (the number of employees who feel encouraged to provide Tesco's goals)

Tesco must ensure that it models 'SMART' marketing targets that are measurable, time limited, attainable and relevant.

New Marketing Strategy of TESCO:

Tesco' strategy is clear, with development being from four areas - the core UK grocery business, non-food, international extension and pursued retailing services such as financial services, the dotcom business andtelecommunication packages. In essence, Tesco is which consists of strong stable main to keep carefully the business ticking over while it forges new riskier areas of growth. Moving further into non-food within the next period (Johnson, G. , Scholes, K. , Whittington, R. , (2005)). Lidl is currently "destroying" the market by selling the merchandise below cost price. Therefore, Tesco's universal strategy will have to be cost control, unless we can successfully differentiate our line of clothing so that people can charge reduced price.

A online marketing strategy calls for analysing the market segments, and which products to provide. The strategy is executed through marketing methods, which involve complete decisions about factors including the price and the way the product is distributed. So Tesco must decide on its style of entry in conditions of, own stores, Internet selling or jv with a preexisting national merchant.

Source: (http://www. universitydissertations. com/Marketing/Tesco-Marketing-Strategy. php)

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