Product Definition
Tesco PLC are one of the world nations largest retailers with over 500,000+ colleges operating in over 12 countries. Tesco stores over 75 million shopping trips every week in store and now with online services this has doubled from its previous rate. The company started in 1919 is now owned by the lead CEO Benny Higgins (1). Tesco's has become a nationwide traditional hypermarket that has been around as far as people remember, becoming a staple in British everyday lives. Tesco have recently faced a fault within the company as they have lost over 50% of the market value in the last year due to errors within the accounting for the company. They over predicted there profit margin having a ripple affect across the company as high losses where caused as money has gone missing within the system. This overall has lead to an inquiry into within the company which has attracted the public's attention causing a downfall in the sales as people state that if Tesco can't trust their accountant how can the public trust the brand.(2) Eagles Management hope to restore this trust as the sales figures drop,
The store has a wide variety of ranges within that store as being a supermarket it has become a platform store for all brands but most so have special connections with specific supermarkets. This means that some ranges are featured within the store higher for example specific bread companies are promoted higher then other due to the connection to the brand as Hovis stock more bread within the stores then Warburtons. Tesco also have their own various ranges within stores including everyday range, Heathy life and Finest range. To add to this recently they have added a range of affordable fresh affordable meat and fish These ranges provide everyone with services they need. Tesco also own connected companies that provide services and various other needs such as Tesco banking or insurance. This made them a multi channel retailer. The sideline to the company has attracted loyal customers to the brand this is what needs to be restored within the current system as the lack of skilled accounting has these customers doubting their trust and overall turning to other company. Tesco overall is a hypermarket that has added further service to add to their company. These have grown and in the case of the clothing brand F+F now have their own standing within a different market allowing Tesco to control the majority of the industry. This means that any campaign added will mainly have to target to one side of their services this will mainly be the in store operations.
Tesco own 7, 817 stores including franchises this means that they are the centre of hundreds of communities in and out of the UK. The majority of these are Tesco hypermarkets although this number does include the different stores available including Tesco Extras, Home, F+F and Dotcom only stores. This means that they are catering to a large variety of customers located everywhere even if this includes in the countryside where the population is lower there still is the possibility for a Tesco store to be located there. This has also meant that the stockist have to be located across the country as they have to be able to get everywhere this means that they have placed warehouses across the nation not only to keep their own ranges but also to stock other branded stock. This has lead to a team of vans going out every morning to deliver. The nationwide company in recent years has stretched further and further across the globe and have becoming a center to other countries including in Thailand where Tesco has its second largest international business with now 1,700 stores have been located. This is has created a name for Tesco as everywhere's local store.
Tesco are part of an competitive market meaning that all pricing is in according to this by using the most cost effective methods allowing the shop to keep the prices as low as possible. This relies on the company selling a large quantity of stock to produce a high profit margin. Although pricing may be changed depending on the range as they have many for the various target members to the store for example the everyday value will be of lower a standard of product at a lower coast and this compared the Finest range will be of a different standard but at a higher price. The pricing of their products has to be promoted as although they are occasionally cheaper then other competitors they still have to market any offers to sell the quantity that is needed for a profit margin. Tesco PLC use various promotion techniques but all within their overall business strategy of being cost effective. They have used a range of events such as media advertisements, sponsorship of events and scheme such as the recent sponsorship of the race for life they also heavily use promotional offers and discounts. They have also used the method of a club card membership scheme is used to not only attract customer loyalty ensuring that they are constantly using Tescos services but also the scheme is in alliance with other companies that also use this method for advertisement providing them with money also. The clubcard offers the customers exclusive deal and promotional offers while it also allow Tesco to track consumer behavior that will help whilst trying to target new products and services.
The store has a wide variety of ranges within that store as being a supermarket it has become a platform store for all brands but most so have special connections with specific supermarkets. This means that some ranges are featured within the store higher for example specific bread companies are promoted higher then other due to the connection to the brand as Hovis stock more bread within the stores then Warburtons. Tesco also have their own various ranges within stores including everyday range, Heathy life and Finest range. To add to this recently they have added a range of affordable fresh affordable meat and fish These ranges provide everyone with services they need. Tesco also own connected companies that provide services and various other needs such as Tesco banking or insurance. This made them a multi channel retailer. The sideline to the company has attracted loyal customers to the brand this is what needs to be restored within the current system as the lack of skilled accounting has these customers doubting their trust and overall turning to other company. Tesco overall is a hypermarket that has added further service to add to their company. These have grown and in the case of the clothing brand F+F now have their own standing within a different market allowing Tesco to control the majority of the industry. This means that any campaign added will mainly have to target to one side of their services this will mainly be the in store operations.
Tesco own 7, 817 stores including franchises this means that they are the centre of hundreds of communities in and out of the UK. The majority of these are Tesco hypermarkets although this number does include the different stores available including Tesco Extras, Home, F+F and Dotcom only stores. This means that they are catering to a large variety of customers located everywhere even if this includes in the countryside where the population is lower there still is the possibility for a Tesco store to be located there. This has also meant that the stockist have to be located across the country as they have to be able to get everywhere this means that they have placed warehouses across the nation not only to keep their own ranges but also to stock other branded stock. This has lead to a team of vans going out every morning to deliver. The nationwide company in recent years has stretched further and further across the globe and have becoming a center to other countries including in Thailand where Tesco has its second largest international business with now 1,700 stores have been located. This is has created a name for Tesco as everywhere's local store.
Tesco are part of an competitive market meaning that all pricing is in according to this by using the most cost effective methods allowing the shop to keep the prices as low as possible. This relies on the company selling a large quantity of stock to produce a high profit margin. Although pricing may be changed depending on the range as they have many for the various target members to the store for example the everyday value will be of lower a standard of product at a lower coast and this compared the Finest range will be of a different standard but at a higher price. The pricing of their products has to be promoted as although they are occasionally cheaper then other competitors they still have to market any offers to sell the quantity that is needed for a profit margin. Tesco PLC use various promotion techniques but all within their overall business strategy of being cost effective. They have used a range of events such as media advertisements, sponsorship of events and scheme such as the recent sponsorship of the race for life they also heavily use promotional offers and discounts. They have also used the method of a club card membership scheme is used to not only attract customer loyalty ensuring that they are constantly using Tescos services but also the scheme is in alliance with other companies that also use this method for advertisement providing them with money also. The clubcard offers the customers exclusive deal and promotional offers while it also allow Tesco to track consumer behavior that will help whilst trying to target new products and services.
Situation Analysis
In 2010 Tesco PLC boasted an incredible 30.5 per cent share of the grocery market today this has almost halved. As the business has faced a number of issues rippling through the shops including a 15 per cent plunge within shares as the companies worth is slowing sinking into non exsistance. They have had to make quick decisions such a ditching their US branch "Fresh and Easy" due to the major losses they are facing within their English stores. These losses have also extended to the loss of hundreds of local stores within the UK and of £804 millions worth of land brought for future developments. This has led due to public disarray as many locations have to face the loss of their local stores that have revealed to be most of the smaller branches within small communities that may need them. The main outset for these issues was down to their own accountancy as an accounting error caused an overstatement of profits by £250 million causing a losses as money that was spent that they did not posses. This problem in the recent years has only grown and became a greater problem for the company not only through the drop in sales because of their distrust in the company but also through the loss of money from the companies shares. Due to these recent faults the Accountant Deloitte has gone into a series of investigations, The financial conduct society has also started inquiring. This has so far placed eight of the executives at the top to be suspended and their is event talk of a criminal investigation into the issue. Overall, the company is now facing the backlash as the profits in the first half of 2014 have tumbled by 91.9 % within the first half of the year. This has also faced companies within the structure of the company as the chairman Sir Richard Broad bent stepped down and one of Tesco's most influential shareholders Warren Buffet ditched all of his shares and branded his investment a " huge mistake ". This has left Tesco's with a marketing problem as the trust between grocer and consumer has been lost and needs to be re discovered. (4)
Competitive Environment
Tesco's have always had the largest of the market share within their industry especially throughout of the 2000's before this was slowly diminished in the last 10 years due to the economically issues both within the company and the country. This has lead to the fracture of companies who are competing to offer the cheapest products leading to a increase in discount store such as Pound stretcher and Pound land. These companies offer the same products but at a lower cost. This competition is starting to threaten all supermarkets including Asda and Sainsbury's two of Tesco's main competitors. These hypermarkets are the biggest threat to Tesco as there raise in popularity has lead to many straying customers for Tesco as they are also widely available and have cheaper prices this leads to the start in thee uprising of competitive pricing strategy where a price is often changes to lower then a competitors store this is also most likely to be on home basics such as bread and eggs. The most recent of these competing schemes such as the price lock schemes where the store promises to keep the prise without changing it, this gains the trust of the customer and this is what the store is trying to receive. This recently has been threatened by smaller affordable foreign retail stores such as Aldi and Lidl who are slowly growing in popularity sue to their affordable prices and comparable shopping experience. This in recent years has forced Tesco to lower their prices within the profit margin sometimes creating losses to keep up with the competing companies. Tescos competitive strategy has created them a complacent company and people have stated that they have lost customer focus as they have become used to being on top this recent drop have forced them to rethink these points. Down below there is a placed chart that tracks the grocery store market for the last 20 years comparing the growth of the companies.
( http://www.bbc.co.uk/news/business-29310445, April 2015)
Target Market/ Market research Data
Products and services offered by Tesco cannot be attractive to all people in equal terms as they work as a market place. Their products have to suit the customers differences in needs and wants when shopping for products so instead of catering to one target audience Tesco instead separate theirs audience into certain categories. This market segmentation will happen by categorizing certain industries sold within the stores for example Health and Beauty who then will be split into to two target audiences most commonly the sexes. These segments can go further into detail as each variety or range will have a different key audience. This process allows Tesco the possibility to target at most of the general public. To segment they will divide the population they will sort them into groups according to the customers wants, needs and other criteria. This means they will create specific products and services that aim to satisfy needs and wants of particular groups. As an example of this the research has been done into the customer segment for a Tesco Technika 19-320 18.5 inch widescreen HD ready LCD TV :
( http://research-methodology.net/tesco-segmentation-targeting-and-positioning-2/)
This shows the majority of Tesco customers although some changes have been made sue to the nature of the product.
To further develop their widespread audience they also develop various brands to attract to a larger audience. They have developed new products for different markets to create a large audience. This is done mainly through positioning this identify's the different customer groups that they are going to appeal to. There are four groups within positioning that are based of the demographics for their customers. These four groups are :
This shows the majority of Tesco customers although some changes have been made sue to the nature of the product.
To further develop their widespread audience they also develop various brands to attract to a larger audience. They have developed new products for different markets to create a large audience. This is done mainly through positioning this identify's the different customer groups that they are going to appeal to. There are four groups within positioning that are based of the demographics for their customers. These four groups are :
- Functional positioning- This group will be attracted to products that are high quality. These are often middle class or higher that want the best of what they can get. Tesco have created the Finest range that are best suited to these psychographics.
- Symbolic positioning- These are based on the values, aims and aspirations of its customers. This is mostly found within its Fairtrade and free range products within the food sector especially within their fresh produce. This has recently been extended to their clothing range F+F by using cotton farms that are free of child labor.
- Price positioning - This is based on the price and service which is tailored for its customers. These ranges such as the everyday range has become increasingly popular due to recent economic downfalls.
- Experimental positioning- This is based on the stimulation of a product such as the service that it provides. This is most commonly used within the health and beauty segment of Tesco.
Tesco use these devices to divide their audience into specific groups that are easier to target towards. The main purpose of these techniques is to highlight that each target audience for products are different although they do have together when looking at the main branding of Tesco. In general these target segments for Tesco's products and services represent the cost-conscious individuals that are interested in bargain value. This has changed in recent times from their old middle class background customers due to a series of economic downfalls. This has changed a wide range of buying situations shifting the customers interests meaning that customer spending has been reduced customer spending causing a increase in cheaper competitive prices. (6)
To market these newly developed products whilst still raising the profile of Tesco's, Eagles Management have created a schedule of events. These include a number of short and long term solutions that will hopefully raise public profile and trust with brand whilst introducing this newly developed range. World Food day on October 16th and Eagles thought we could develop this into a celebration that could be held within store. To do this a schedule of World food day markets have been created where there will be a series of market stores for multiple conteries displaying the different conteries food's. These stools will sell full meals and recipes that feature the newly developed meat and fish ranges boasting how they can be used in multiple ways. We have extended the schedule to instead form the events into a week so that each of the larger Tesco retailers will have the opportunity to hold a market. The whole event will be held in connection to the US charity World food day who are hoping to bring their campeign to the UK. The charity raises funds for action against hunger whether this by establishing food banks or feeding the homeless they assist all they can to forfill this basic human right(8). This cause related marketing will publish the idea that Tesco's still are their for the customer and the community. The whole event will hopefully be publicised with the best of free media such as local publications and this may be extended with the use of their in house publications. This may also be stated on public media sites as most of the Tesco store hold their own Twitter or Facebook pages. Overall, Eagles Management believe that this first short term solution will raise the public image and most of all increase footfall within the stores themselves. The campeign will also hope to raise community spirit as this grows so will the trust and connection people have with the company.
The second wave of our campaign is a long term goal that allows Tesco the chance to raise their PR by becoming connected to their customers. This is by instating an edjucation system in connection with the younger generation that can teach all those that need to know how to cook. Eagles management has done research into the falling number of people that can cook and have discovered that pre cooked meals are taking over meaning that the market for Tesco's products are becoming limited but this could be prevented by creating a system that gives 9-18 year olds the chance to learn to cook. This can be carried out in connection with the world food day week as this may also service as the launch of this education system. It will also mean that the community spaces that are slowly being introduced through newly developed stores can hold classes for those needed whether this be on a pay for each session service or a free charitable contribution system. This system like may others by competitors can be faced by celebrity endorsements for example Sainsbury's one of the main competitors uses the very popular Jamie Oliver a talented chef, this could be similar for Tesco's but instead a relevant chef with the world education event can take place for example Gok Wan who has very recently extended his hand to teaching people how to cook Chinese food. This will run in conjunction with the short term events but will develop into a long term goal as it raises Tesco's profile whilst creating loyal customers from a young age.
Overall, Eagles Mangagement are aiming for three key goals. The first being to raise the PR of the company and we can do this by aiming to grow the connection between the company and its customers. This has been targeted in our campaign through the various cause related marketing suggestions and the system which allows the customer to interact re grow the broken trust with the company. This will mainly cover the bad press in which Tesco have recently faced and will hopefully replace it with the key ideals the company holds such as community and good service. The second of our main goals is the improvement of sales by increasing footfall this is not only the sales of the newly released line but also the general sales for the company. We hope to do this by raising publicity for new food and recipes that feature Tesco own brand ingredients that are exclusive to the company to get the best end result. This we hope will raise knowledge on all that is available within the stores and will sell the products. The third and final of the goals in to raise community spirit and creating a loyal customer base for all its local stores. We have hopefully covered this in our plan by raising hype for a new education system that will be promoting the companies newly stated community spaces. This will hopefully bring people together and remind those at Tesco of the people they serve. All these promotional techniques come together to form a campaign that will be effective and fun. Hopefully this will create good publicity and sales for the company and this new range.
Action Plan
Tesco's over the years has created a name for itself over its major competitor ASDA but this has recently hit a bump in the road as many accounting errors has caused a downfall in sales meaning Tesco has been left to improve its sales and to re grow its reputation with its customers. To do this they have chose to launch a new range of affordable fresh meat and fish that will be connected to a scheme that promotes the teaching of children. This will be similar to their already existing everyday range but will hopefully be of better quality for the money. They have chosen to specifically sell meat and fish as its on the rise as sales of meat, poultry and seafood reached £17.3 billion in 2013 a 20% increase since the previous results in 2008 (7). This has been altered in recent years due to the lack of knowledge of how to cook as the modern generation have become more adjusted to pre-cooked options. This is also the specific reason Tesco's would enjoy the possibility of teaching children and in turn the new generation to cook.To market these newly developed products whilst still raising the profile of Tesco's, Eagles Management have created a schedule of events. These include a number of short and long term solutions that will hopefully raise public profile and trust with brand whilst introducing this newly developed range. World Food day on October 16th and Eagles thought we could develop this into a celebration that could be held within store. To do this a schedule of World food day markets have been created where there will be a series of market stores for multiple conteries displaying the different conteries food's. These stools will sell full meals and recipes that feature the newly developed meat and fish ranges boasting how they can be used in multiple ways. We have extended the schedule to instead form the events into a week so that each of the larger Tesco retailers will have the opportunity to hold a market. The whole event will be held in connection to the US charity World food day who are hoping to bring their campeign to the UK. The charity raises funds for action against hunger whether this by establishing food banks or feeding the homeless they assist all they can to forfill this basic human right(8). This cause related marketing will publish the idea that Tesco's still are their for the customer and the community. The whole event will hopefully be publicised with the best of free media such as local publications and this may be extended with the use of their in house publications. This may also be stated on public media sites as most of the Tesco store hold their own Twitter or Facebook pages. Overall, Eagles Management believe that this first short term solution will raise the public image and most of all increase footfall within the stores themselves. The campeign will also hope to raise community spirit as this grows so will the trust and connection people have with the company.
The second wave of our campaign is a long term goal that allows Tesco the chance to raise their PR by becoming connected to their customers. This is by instating an edjucation system in connection with the younger generation that can teach all those that need to know how to cook. Eagles management has done research into the falling number of people that can cook and have discovered that pre cooked meals are taking over meaning that the market for Tesco's products are becoming limited but this could be prevented by creating a system that gives 9-18 year olds the chance to learn to cook. This can be carried out in connection with the world food day week as this may also service as the launch of this education system. It will also mean that the community spaces that are slowly being introduced through newly developed stores can hold classes for those needed whether this be on a pay for each session service or a free charitable contribution system. This system like may others by competitors can be faced by celebrity endorsements for example Sainsbury's one of the main competitors uses the very popular Jamie Oliver a talented chef, this could be similar for Tesco's but instead a relevant chef with the world education event can take place for example Gok Wan who has very recently extended his hand to teaching people how to cook Chinese food. This will run in conjunction with the short term events but will develop into a long term goal as it raises Tesco's profile whilst creating loyal customers from a young age.
Overall, Eagles Mangagement are aiming for three key goals. The first being to raise the PR of the company and we can do this by aiming to grow the connection between the company and its customers. This has been targeted in our campaign through the various cause related marketing suggestions and the system which allows the customer to interact re grow the broken trust with the company. This will mainly cover the bad press in which Tesco have recently faced and will hopefully replace it with the key ideals the company holds such as community and good service. The second of our main goals is the improvement of sales by increasing footfall this is not only the sales of the newly released line but also the general sales for the company. We hope to do this by raising publicity for new food and recipes that feature Tesco own brand ingredients that are exclusive to the company to get the best end result. This we hope will raise knowledge on all that is available within the stores and will sell the products. The third and final of the goals in to raise community spirit and creating a loyal customer base for all its local stores. We have hopefully covered this in our plan by raising hype for a new education system that will be promoting the companies newly stated community spaces. This will hopefully bring people together and remind those at Tesco of the people they serve. All these promotional techniques come together to form a campaign that will be effective and fun. Hopefully this will create good publicity and sales for the company and this new range.
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