Unit 3-Introduction to Marketing ***Distinction level assignment*** (all P’s, M’s & D’s)
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Course
Unit 3 - Introduction to Marketing
Institution
PEARSON (PEARSON)
("Distinction level assignment"), this assignment is the full assignment for this unit as in it’s the complete assignment (all P’s, M’s & D’s)and I have completed this unit only a few months back and it is the latest version of the assignment after all the latest syllabus changes. It's an ...
The two companies that I will be providing information on for this unit are:
1. TESCO
2. IKEA
What is marketing- Marketing pertains to actions initiated by a business in order to
promote the purchasing or selling of a product or service. Marketing involves advertising,
selling, and distributing products to consumers or another business. Furthermore, this
may include celebrity advertisements, catchy expressions or slogans, remarkable
packaging or visual designs and overall media exposure, marketing tries to match an
organization’s goods and services accordingly to the customers demand.
TESCO- Tesco, British multinational supermarkets and general retailer is
headquartered in Welwyn Garden City, Hertfordshire, England, and United Kingdom.
They are the third biggest retailing company globally in terms of gross revenues and
ninth largest retailing company in the world in terms of revenues. It has stores in several
nations across Asia and Europe to add to it, it is the market leader of supermarkets in
the UK. With a market share of 27.4% in the UK. Tesco was established in 1919 by Jack
Cohen as a bunch of market stalls. The name Tesco first emerged back in 1924 when
Cohen bought a cargo filled with tea from T.E. Stockwell and joined these initials with
the first couple of letters of his surname, Tesco’s first shop was built in 1931. Tesco as a
company grew immediately, and just in the matter of 9 years he had opened more than
100 stores all over the country
Tesco’s vision- To be the most highly valued business by: the customers we
serve, the communities in which we operate, our loyal and committed colleagues
and of course, our shareholders.
Tesco’s mission- Tesco aim to become/stay their leading retail supermarket and
provide good quality services and products at a low cost so that they are cheaper
than their competitors.
Tesco’s purpose-To make what matters better, together.
IKEA- Ingvar Kamprad was the founder of IKEA in 1943. Initially it was mainly a mail-
order sales company, however five years down the line it started to sell furniture. The
very first IKEA store was established in Sweden, in 1958, with the name Möbel-IKÉA
(Möbel, as in “furniture" in Swedish). The initial stores outside Sweden were established
in Norway in 1963 and in Denmark in the year 1969. In the 1970s IKEA was opened
throughout Europe. Then a few years later IKEA went global, opening hundreds of stores
across the globe.
IKEA’s vision- Our vision also goes beyond home furnishing. We want to create
a better every day for all people impacted by our business.
IKEA’s mission- At IKEA our vision is to create a better everyday life for the
many people. Our business idea supports this vision by offering a wide range of
well-designed, functional home furnishing products at prices so low that as many
people as possible will be able to afford them.
IKEA’s purpose- IKEA’s brand purpose is to create a better everyday life for the
many people
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, UNIT 3 - INTRODUCTION TO MARKETING - ASSIGNMENT
Ansoff matrix
Ansoff Matrix, designed by Igor Ansoff,
exists of a mechanism which assists a
company to build a plan that will help the
business thrive. The market and its’
product are two separate sections on the
grid when connected, this gives us four
separate elements on the Ansoff matrix.
Figure: Ansoff Matrix
Ansoff’s matrix strategies for IKEA and Tesco:
Diversification
IKEA- IKEA used diversification by entering the food and beverage industry long time
ago. Now nearly all IKEA stores have restaurants inside IKEA. The owner of IKEA decided
to implement this idea as he did not like the idea of hungry customers, and he did it by
serving quality Swedish food to all customers. When this technique was applied it was a
completely new product in a new market. IKEA’s chain of restaurants inside its IKEA
furniture stores is a perfect example of diversification.
Tesco-Tesco being a retailing business, started their own mobile operator telecom
company called “Tesco mobile”. By doing this, Tesco implemented diversification into
their business. Many multinational companies like Tesco use diversification nowadays to
enter new markets and gain access to new customers to increase revenue.
IKEA being a furniture retailer diversifies into the food and beverage industry (IKEA
restaurant). Tesco being a chain of retailing supermarkets that diversifies into the
telecom business (Tesco mobile). Both companies used unrelated diversification in their
business. IKEA however managed to incorporate it in a better way as they opened
restaurants inside their furniture malls , whereas Tesco wasn’t able to do so because
they can’t have a telecom business running inside a Tesco supermarket , Tesco might be
able to sell some hardware telecom products inside super markets like sim cards but
they can’t run a full telecommunication provider business inside a supermarket.
IKEA’s diversification strategy is very effective as customers would come to shop but
then on the way out, they would see IKEA’s restaurant and they would get attracted;
hence they would stop by. It could be the opposite case as well, as in people come to eat
breakfast at IKEA then after breakfast, they might take a walk around the store. One
more thing that IKEA does that is unique is that, in its restaurants they have used all
IKEA products from tables to chairs to cutlery or even lamps and lights. This allows
customers to get a real feel of the product before buying it and this is am extremely
unique strategy that IKEA uses.
Tesco cannot incorporate 100% of their telecom business into their chain of
supermarkets, whereas IKEA managed to incorporate it. In conclusion, it’s obvious that
IKEA’S diversification strategy is much more effective than Tesco and this will help IKEA
to increase sales and be the market leader.
IKEA’s breakfast is extremely cheap as you can see ,
hence even people of the modest economic means
can afford a meal. This ensures that customers
wouldn’t have the need to leave IKEA in search of a
cheaper meal so most customers will get grab a quick
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, UNIT 3 - INTRODUCTION TO MARKETING - ASSIGNMENT
bite from IKEA’s restaurant. According to Wall Street Journal , IKEA’s food division has
an annual revenue of $2 billion globally and around 700 million people would eat in their
restaurant’s worldwide , more over in Europe it has become a tradition for many people
to eat IKEA’s iconic Swedish meatballs when they come to shop at IKEA.
Figure: IKEA breakfast cost in Dubai, UAE
Tesco can’t incorporate 100% of their telecom business into their chain of supermarkets,
whereas IKEA managed to incorporate it in a brilliant manner.
Figure: The Wall Street Journal Article on IKEA’s diversification strategy
IKEA’s food diversification seems to be working and is clearly impacting their sales. This
also proves that there is a huge demand for IKEA’s food products. IKEA’S diversification
strategies is much more effective and unique compare to Tesco and this will definitely
help IKEA to increase sales, be more globally recognized and definitely enhance their
brand image allowing it to be the market leader in all operational geographies.
Market development
Market development means selling your current products to new markets to reach out to
new customer segments.
IKEA - IKEA used market development initially when they wanted to expand out of
Sweden, they started off expanding in markets that are similar to Sweden in terms of
culture and people. They initially used market development when they entered the
Turkish market selling their existing products that they had in Sweden but in a new
market like Turkey. IKEA has been using this strategy for many years now, allowing to
be one of the biggest furniture retailers globally.
Tesco - Tesco implemented market development into their business years ago when
they saw an opportunity for expansion in Singapore in hopes of taking on carrefour as
their main competitor there and trying to be the market leader , they sold existing
products which they had back in the UK and sold them to a new audience in Singapore
hoping that customers would like it. Their plans did work. Local Singaporean
supermarket chain FairPrice offers over 400 Tesco products at close to 60 of its outlets
and at its online store. The range includes Tesco finest - the premium version of the
brand - with products such as Fair-Trade certified coffee, authentic Italian pasta from the
Italian city Gargano, traditional British biscuits and a large selection of quality wines.
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