The Introduction Of Tesco Plc Marketing
Tesco plc is one of British largest retail grocery currently the first in terms of the top 10 retail
grocery in the United Kingdom. It was the first UK business to make £2 billion in profits when it
announced the feat early in 2005, (Tesco Annual Review, 2005) and the third largest global retailer
based on revenue. Over the years, retail grocery sector represents the largest industry in UK
providing employment for millions of people in UK either in manufacturing or in retailing. In
2003 retail accounted for 9% of domestic product (Datamonitor, 2003).
The name TESCO was derived from the combination of a tea supplier's name T.E.Stockwell and
Jack Cohen the founder of Tesco plc. Tesco was founded by Jack Cohen when he began to sell
surplus groceries from a stall in the East End of London in 1919 and in 1924 Jack Cohen made a
new label by combining the first three letters of the supplier's name (TES), and the first two letters
of his surname (CO) to form TESCO. Tesco is one of the largest food retailers in the world,
operating around 2,318 stores and employing over 326,000 people.
In UK, Tesco plc operates under four banners namely Tesco Extra, Superstore, Metro and Express.
The first Tesco store was opened in 1929 in Burnt Oak, Edgware, and Middlesex and in 1947;
Tesco was floated on London Stock Exchange as Tesco Stores Holdings Limited. Fifty percent of
sales in Tesco are gotten from Tesco's own-label products which are in three levels, values, normal
and finest. Tesco plc is also becoming one Britain's largest independent petrol retailer because as
well as convenience produce, many stores have gas stations and other retailing services rendered
by Tesco also include Tesco personal finance. Tesco plc does not only specialise in food and
drinks, the company also specialise in some other areas like clothing. Electronics, telecoms,
retailing and renting of DVD's CDs, music downloads, car insurance and lots more.
Products with range of Prices: Tesco has several kinds of product in the market. These products
range from food, non-food products, home appliances, medicines and so with different prices on
all the products. In Tesco you can get whatever product you want at an affordable price. The prices
vary anyway, the higher the quality, the higher the price and vice versa and this depend on the
Growing supermarket space: Tesco in the grocery business has long witnessed a significant
growth in size since its establishment in 1924 and this is as a result of the growing population of
consumers patronising the company and their increasing demand of several products.
Strong brand image: Tesco is a household name in UK known for their market dominance in good
quality and trustworthy product. It is because of Tesco strong brand image that most customers see
great value in their services and this has earned the company lots of profits.
Tesco Online: Online marketing has also influenced the development of many TESCO products
and this benefits both the company and its customers. This personalised service makes shopping
more convenient for the customers and currently being used by over one million customers in UK.
The use Tesco Online in marketing is one of TESCO's expansion strategies. It has enabled
customers to pay their bills electronically thereby reducing long queues thus bringing simplicity
Prices: Their price of goods poses lots of problem for Tesco plc. Trying to satisfy their customers'
needs by cutting cost of their products even their services can lead to a reduced profit margin for
their business. High reliance on UK market: Tesco's reliance on UK market is also one major
weakness because if at any time the economy faces any challenges, this will definitely affects the
business of Tesco, so it very much advisable for Tesco to look beyond UK and increase its foreign
outlets and selling other commercial items.
Internet: Tesco's online successes is one great opportunity. Since the introduction of Tesco online,
the use of technology in shopping has grown in quite a short space and moved into profitable
status. Their website is so fully packaged totally different from all other grocery site and since
there are no matches in terms of comparisons, it remains an advantage on the side of Tesco.
Intervention in Asian market: Tesco's intervention in the Asian market has serious positive
implications in their growth internationally and this in no doubt will give Tesco an opportunity to
develop its brand more so make Growth of non-food sales: Tesco known for their cut-cost
structure can initiate same strategy to non-food retail and it is evident that Tesco capitalising on
these opportunities are opening new store basically for the sales of non-food items which has
given Tesco a tremendous result in increased market share in UK
Economic instability: The unstable, unpredictable nature of the economy and political changes in
UK pose lots of threat to Tesco and one critical example of these changes is the credit crunch
which strokes the UK. This impacted on the consumers' a lot because going by their low income,
they had to go for products with low prices thereby paying less attention to higher priced brands
and this can force a switch in Tesco's price structure.
Competition: This has also been a persistent threat and this one major reason why Tesco will keep
up with the price cuts so as not to lose their customers to major competitors like Asda and
High price of raw material: The upsurge in cost of raw materials from both food and non-food
could trigger poor production and this can impact Tesco overall profit margin.
Tesco's vision is concentrated basically on their customers. They see themselves in many years to
come as being the only grocery business in UK due their market development strategy.
CRITICAL SUCCCESS FACTORS
The objectives of an organization govern the potentials value of the organisation. The following
Tesco aims to minimize the cost of products and at the same time aim to earn high. Profit
maximization is one major reason why a business will stand and Tesco sees selling at low price
will attracts more customers thereby giving customers better chances of making choice in the
quality and quantity of products at a valued price.
Dedication to their employees as well as to customers, ensuring that all their wants and needs are
KEY PERFORMANCES INDICATOR
For Tesco to remain on top rather to maintain its position in the top 10, the following measures
need to be critically evaluated:
Tesco employees need to have sound knowledge of their products so as to make shopping not too
complex for their customers. Customer's satisfaction is one vital key to business success. Tesco
actually need to improve more in their customer service.
Tesco at all time need to assure customers quality brands and also services by investing more in
CORPARATE AND BUSINESS
Tesco is an organization more voluminous in terms of revenue acquisition and customers than any
other grocery market in UK and for it to maintain its current standard or create a wide margin in
the market, a lot need to be done to achieve it objectives.
Firstly, Tesco need to divert the attention of customer from non-food products to food products. To
do this, they need not to concentrate their advertisement more on non-food products but also
encourage their customers to eat more sea foods, fruits as well as vegetables. They should also
emphasis more on sales promotion of their own-labelled products on advert thus re-directing the
customer's usual orientation of branded products.
The management need to put the quality of staffs into consideration not only the quality and
quantity of their products. Arranging training programs will be appropriate to evaluate their
employees quality, such programs will enable them gather vast knowledge of their products more
so keeping the goals of the organization alive in the employees.
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