Practice of marketing MC4060
Academic year 2021/2022
Chosen Business – Tesco
Introduction
In this assignment I will be analysis Tesco’s target audience, their marketing mix and providing recommendations.
Tesco PLC is a very popular grocery and general mechanise retailer based in Hertfordshire, England. Studies show
that in the UK, Tesco is the leading grocery retailer with a market share of over 27% (Statista, 2022). It is commonly
classed as one of the ‘big four’ supermarkets with Morrison’s, Sainsburys and Asda.
Tesco’s Target Market
Tesco’s target market is cost-conscious individuals who are interested in bargains and sales and value variety. This
can be supported by the fact that Tesco shares that they use ‘low pricing strategies’ on their products. This means
that Tesco’s target audience is essentially customers with common needs as opposed to targeting differentiated
customers – products and services available in different Tesco’s are subject to demographics.
A 2021 Statista study showed the following:
- 87% of the UK consumers regualrly shop at supermarkets for household essentials and food
- 30% of consumers visit supermarkets 2-3 times a week
- Tesco is the most favoured supermarket for over 50% of UK consumers
- 44% of UK consumers order groceries online from Tesco
(Statista, 2022)
Positioning concept, analysis and evaluation of Tesco
A positioning concept involves creating an image of a business’s products or services compared to other brands - in
the mind of the consumer. This process is beneficial because it allows businesses to see their position in comparison
to their competitors and create new strategies and targets.
Tesco’s competitors include Sainsburys, Asda, Morrison’s, Waitrose, M&S, Co-op, Aldi, Lidl and Iceland. Below is an
example of the positioning concept for UK supermarkets.
From the positioning diagram, Tesco’s products would
be considered average price and high quality. From this
we can see that Tesco’s fulfilling their promise of high-
quality products, the price being considered average
does not align with Tesco’s aim of low price and good
quality products. By using this concept, Tesco will be
able to interpret it and plan on how to move to their
desired area on the map of ‘low price, high quality’ like
Aldi as shown on the diagram.
, Tesco’s Marketing Mix (7P’S)
Product- Tesco offers a large range of products such as groceries, electronics, clothing, cosmetics, books, home and
décor, homeware items and more. Additionally, Tesco also offers financial services including insurance, loans and
more. Although these products/ services can vary depending on the type of store customers visit e.g., Tesco extra,
express and etc - It is fair to say that Tesco’s product range is very impressive and caters for multiple different
customer needs.
Price – Tesco takes pride in being able to provide low price goods and high quality. However, because the company
is in close competition with other big supermarkets – it is important that Tesco matches or has better prices than its
competitors to maintain consumer retention.
Place – In 2019 it was recorded that Tesco had 6,993 stores worldwide. However, due to the pandemic and having to
shut down stores – the company now has 4,673 stores worldwide (Statista, 2022). There are different types of Tesco
stores which are Tesco extra, superstore, metro and express. These stores mostly offer similar products but there are
a few key differences. For example, superstores are the biggest type and offer large ranges of groceries and non-food
items. In comparison to metro stores which are significantly smaller store commonly located in city centres and
towns.
Additionally, in October 2021, Tesco
announced their partnership with Gorillas
with the aim to provide ‘ultra-fast delivery
Promotion – Tesco uses multiple for customers’. Tesco products with be
marketing strategies including digital available for purchase on the Gorillas app.
marketing, charitable events, print and This partnership involved the setting up
media. As mentioned, Tesco focuses on ‘micro-fulfilment sites’ at five Tesco
attracting customers through low pricing superstores where they will be able to pack
strategies - therefore they regularly have and delivery orders (Tesco PLC, 2021). This
‘buy one get one free’ discounts online and partnership is predicted to be very
in store. beneficial for both parties and very
convenient for consumers.
Additionally, the company has its own club
card program. Clubcard owners gets points
after every purchase that they can redeem
to claim additional perks, discounts and
personalised offers.
