The two business that I am going to compare in this assignment are Tesco and New Look. Tesco is one of the biggest supermarkets in the UK. Their products range from food to clothes. New Look are a brand that specialises in selling clothes and accessories. I am going to be looking at the similarities and differences between these two businesses, basing it around the factors of their price, promotion, place, product, survival strategies and ANSOFF Matrix.
Background
Tesco, founded in 1919 by Jack Cowen, is now one of the biggest supermarkets in the UK and worth £245.50 today. There are around 7,000 stores with around 450,000 employees.
New Look was founded in 1969 by Tom Singh. New Look is a global fashion retailer with a chain of high street stores. New Look had around 895 stores and approximately 10,000 employees.
Both businesses market themselves in similar ways. They both use adverts to promote their business to the public. For example, they use TV advertising to engage with their audience and print ads to inform about their product/service. The brand will use slogans to allow the audience to base their own opinion on the product/service. For example, Tesco’s slogan is “Every Little Helps”. After shopping at Tesco, the customers can then have an option on whether Tesco really helped them save money whilst at the same time giving them quality products.
Businesses use the 4 Ps to market their business successfully and effectively. The 4 Ps are: Price, Promotion, Place and Product. These factors help understand what the product/service is and what it can do. There are questions that the business asks themselves to successfully market themselves:
- “How will your price compare to competition?”, “Will the price be affordable for the target audience?”
- “How to successfully market towards the target audience”, “How will we promote our product – online, print, TV adverts…”
- “Where can customers look for/buy our products – online, in store.”
- “How will our product/service be better than our competitors?”, “What is a catchy name for our product that appeals to the public?”
The ANSOFF Matrix is a well-known growth strategy used by many businesses e.g. Tesco & New Look.
Market Penetration – selling an existing product or service into its present market.
For example, Asda could be considered as one of Tesco’s biggest rivals. Asda specialise in selling products ranging from food to clothes to household essentials. When Asda improves their home delivery, Tesco would also make sure they add good deals to their homedelivery system i.e. “New customers can try for a month for free”.
New Look also use this strategy. Zara could be considered as their rival. In the case of a clothing/accessories business, New Look would have to create new products or trends so that their customers can keep coming back for new products.
Product Development – bringing out a new product with an existing market.
Tesco could create their own version of an existing product and sell it for a cheaper price, for example Tesco Value cookies – inspired by Maryland’s cookies.
New Look could create a new trend of stripes and continue selling a broad variety of clothes with stripes.
Market Development – making an existing product in a new market
Tesco could start targeting to a global audience. This will help their brand to be recognised as a supplier of good quality goods and services.
New Look could also expand their stores on a global basis so that they become a well-known clothing brand throughout the world.
Diversification – taking a new product into a new market
Tesco are diverse as they also sell clothes and phone deals. Tesco’s original purpose was to sell food/drinks but have now expanded to have their own clothing brand ‘F&F’ and phone shop.
New Look are not yet diverse as they only sell clothing/accessories. If they want to be diverse they could have a food brand as well as clothes, like M&S for example.
Branding
Branding is a name or design/symbol that customers can use to recognise the business. Having a strong brand image benefits a business because it creates an image of an established business that is well-known.
Tesco have their own logo and slogan “Every Little Helps”. They have their own different brands – Tesco Mobile, Tesco Finest, Tesco Value and F&F. This gives customers a chance to get their products/service at an affordable price. Tesco are trying to ensure that they are growing in terms of making profit in all aspects of their branding.
New Look have their own logo which customers identify their business with. All of the products that New Look sell, are their own. New Look as a brand is to be the trusted fashion authority for customers.
In conclusion, I believe there are similarities and differences between the way Tesco and New Look market themselves. This is through the way they use the 4 P’s, the Ansoff Matrix and Branding.
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