Tesco Marketing Strategy


A market strategy is a process that allows an organization to focus its inadequate funds on the greatest opportunities to boost sales and create a competitive advantage. A marketing strategy defines objectives and the course to follow so as to satisfy customer needs in desired markets. It is most effective when it is a fundamental part of firm strategy which elaborates the way the organization will effectively connect with their current and prospect customers and competitors in the market. (Hooley,J.G.,Saunders,A.J,2004 ).

Tesco is runs about 2,300 supermarkets, hypermarkets, and convenience stores in the UK, Ireland, Central Europe, and Asia. Its operations include gasoline retailing, financial services, grocery, legal services, clothing, pharmacy, electrical goods, books, music and telephony. Tesco is now expanding its services to a retail based education institution and a TV channel. (Hart, J.S., 2003).

Tesco’s marketing strategies

According to Hooley, et al, (2004) Tesco has employed the SWOT analysis to help them in finding out the company’s strengths, weaknesses, opportunities and threats therefore maximizing them in order to ensure that their market share is not affected. In considering its strengths, it has strong financial resources and its brand is widely known which has helped them to venture into new markets and products. The company’s weaknesses of being a foreign brand in new countries and lack of a local knowledge of these markets was countered by partnering with leading companies in foreign markets they wish to venture in so as to win customer’s trust and to make their brand known in the new market.

Tesco now has its brand awareness growing globally meaning they can easily to venture into new markets and with the new innovation on the range of products and services being offered through alliances with various leading service providers, it has an opportunity of increasing their market share(Lord, et al,). They are countering the threat posed by their competitors by providing efficient customer service and using loyalty scheme called club card which allows members to collect points whenever they shop in the Tesco group of companies which later translates to discounts.(Hart, S. 2003))

According to Ranchhod, et al,(2007)Tesco has segmented its market according to the demographic, geographic and geo-demographic information which is gathered from the club card data thus allowing them to plan for the future. This information has helped them to analysed its customer’s needs, buyer behaviour and expectations of its customers and grocery shoppers. This analysis is done by looking at shopping habits and spending patterns. Tesco’s target market is the rising number of affluent consumers looking for good quality goods in a customer friendly in-store environment. It achieved this by employing more qualified staff to promote efficient service delivery, providing a wide range of services and a new brand positioning.(Hart, S. 2003)

A PESTLE analysis is taken to examine local, national and international effects of social, political, economic, technological, legislative and environmental factors so as to understand threats and opportunities which the business is exposed to.(Baker, M. J., 2003)

Social analysis-Involves examining the changes in the society such as cultural practices, demographic changes, consumerism, attitudes and opinions. This information helps to counter market differentiation and keeping abreast with customer’s needs and preferences.

Technological analysis-Tesco considers technological developments taking place and how they affect the organization and their customers. Changes in mode of payment, using of electronic pay cards to beat queues, offering on-line customer service and orders.

Economic analysis-This looks at financial matters of consumers, suppliers and competitors. Tesco has moved to new markets in other countries and other sectors apart from grocery.

Educational analysis: – The education level of consumers impact on consumerism. Tesco has used this information to determine the purchasing power of its market

Political-Political factors determine the stability of the government, recognised foreign policy and competition protectionism policy. This has helped Tesco to venture into foreign markets.

Legislative factors-All organizations need to work within the trade laws, health and trade union legislation. Tesco operates within these laws.

Environmental factors:-Environmental implications of the organization’s activities. Tesco has been sensitive to the environment in its packaging and recyclable material.

Tesco has used the marketing mix as a market strategy. (Ranchhod et al, 2007)The marketing mix constitutes the 4p’s which are product, place, promotion and price. In addition the extended marketing mix makes them seven elements. The other three elements are process, physical evidence and participants. The kinds of products offered by Tesco are designed to meet customer’s needs and expectations. They are of high quality just matching the status of the brand. The prices of their products are reasonable and are available in their stores or their group of companies for quick accessibility. Tesco has used promotion activities to educate as well as inform their customers about their products, their qualified and ready staff and the ambience of their stores. (Peck, H., 1999)

Products have a life cycle from introduction, growth, maturity and decline. In monitoring their products, Tesco promotes their products to make them known and ensure their growth and finally maturity. To counter decreasing sales due to changing tastes and preference, consumer income and competition Tesco uses product reinvention to match their current tastes. (Hart, S, 2003)

Tesco conduct market research from time to time to get ideas on the current needs in various market segments, creating the need for new product development to match this needs. New product development undergoes stages. This includes objectives statement of the new strategy, idea generation about the product, initial screening of generated ideas, concept testing, development of marketing strategies, business analysis, product testing, market testing and commercialization of the product in the markets. (Baker.J.M, 2003)


In conclusion, Tesco has employed a number of marketing strategies which include the marketing mix, SWOT analysis, PESTLE analysis, new product development, product life cycle, market segmentation, targeting and positioning. These strategies have helped Tesco to be the leading brand in six of the thirteen countries it is operating in.


Lord, D et al. (1989) Retailing on three continents. The discount food store operations of Albert Gubay. The International Journal of Retailing.

Hooley, J. G., Saunders, A. J, (2004), Marketing strategy and competitive positioning, Nigel Piercy.

Baker, J. (2003), The marketing book. Butterworth-Heinemann.

Peck, H. (1999) Relationship marketing: Strategy and implementation. Chartered institute of marketing, Butterworth-Heinemann.

Ranchhod, A., Gurau, C. (2007), Marketing strategies: A contemporary approach. Finance times, Prentice hall.

Hart, J. S. (2003), Marketing changes. Engage Learning, EMEA.