Tesco PLC Final Report..docx

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1.Introduction The report is being conducted on the company Tesco PLC that is UK’s l eading grocery store. The aim of this report is to develop a three-year marketing strategy plan and a one-year tactical communication plan for Tesco. Te sco at some stage has faced difficulty hence by eploring the  brand and critically analy!ing its marketing strategy " # $ill then develop a strategy that $ould turn Tesco’s fortune around. 1.1. Methodology %arket research for the brand has been conducted through secondary research by visiting academic $ebsites such as %intel" &atabase reports"Leis'eis &atabase" (usiness reports" )rticles" (logs and 'e$s online. 1.2. History  T esco PLC is a mu ltination al gro cery and g eneral mer chandise r etailer headquartered in Cheshunt, Hertfordshire, England, United Kingdom. It is the third largest retailer in the world measured y !ro"ts and second#largest retailer in the world measured y re$enues. It has stores in %& countries across 'sia, Euro!e and (orth 'merica and is the grocery mar)et leader in the UK *where it has a mar)et share of around +-, the /e!ulic of Ireland, 0alaysia, and Thailand. 1ac) Cohen founded Tesco in %2%2 as a grou! of mar)et stalls. The Tesco name "rst a!!eared in %2&3, after Cohen !urchased a shi!ment of tea from T. E. 4toc)well and comined those initials with the "rst two letters of his surname, and the "rst Tesco store o!ened in %2&2 in 5urnt 6a), 0iddlese7. His usiness e7!anded ra!idly, and y %2+2 he had o$er % Tesco stores across the country. *TE4C6 PLC, &%8 2.BRAND audit 2.0.BRAND AUDIT. 2.1. BRAND VISION Te sco’s * strategic aim is to remain the most leading grocery retailer in the UK and globally $ith a focus on ecellent +uality products and eceptional customer service. Tesco’s vision is to form revelation by  being the most hig hly valued busines s around the $orld. #t asp ires to be an ever-gro $ing modern business that earns not only respect but also trust from its customers" different communities" committed colleagues and shareholders. ,TC/ PLC" 01234 2.2. BRAND MISSION Tesco’s mission is of creating value for its customers and to earn their lifetime loyalty. They aim to  provide somethin g ne$ every time for its cust omers by understandi ng there needs and $ants l ike no one else. They $ant to be a business that not only earns respect but also trus t. ,TC/ PLC" 01234

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1.Introduction

The report is being conducted on the company Tesco PLC that is UK’s leading grocery store. The

aim of this report is to develop a three-year marketing strategy plan and a one-year tactical

communication plan for Tesco. Tesco at some stage has faced difficulty hence by eploring the brand and critically analy!ing its marketing strategy" # $ill then develop a strategy that $ould

turn Tesco’s fortune around.

1.1. Methodology

%arket research for the brand has been conducted through secondary research by visiting

academic $ebsites such as %intel" &atabase reports"Leis'eis &atabase" (usiness reports"

)rticles" (logs and 'e$s online.

1.2. History

 Tesco PLC is a multinational grocery and general merchandise retailerheadquartered in Cheshunt, Hertfordshire, England, United Kingdom. It is thethird largest retailer in the world measured y !ro"ts and second#largestretailer in the world measured y re$enues. It has stores in %& countriesacross 'sia, Euro!e and (orth 'merica and is the grocery mar)et leader inthe UK *where it has a mar)et share of around +-, the /e!ulic of Ireland,0alaysia, and Thailand. 1ac) Cohen founded Tesco in %2%2 as a grou! ofmar)et stalls. The Tesco name "rst a!!eared in %2&3, after Cohen !urchaseda shi!ment of tea from T. E. 4toc)well and comined those initials with the"rst two letters of his surname, and the "rst Tesco store o!ened in %2&2 in5urnt 6a), 0iddlese7. His usiness e7!anded ra!idly, and y %2+2 he hado$er % Tesco stores across the country. *TE4C6 PLC, &%8

2.BRAND audit

2.0.BRAND AUDIT.

2.1. BRAND VISION

Tesco’s* strategic aim is to remain the most leading grocery retailer in the UK and globally $ith a focus

on ecellent +uality products and eceptional customer service. Tesco’s vision is to form revelation by

 being the most highly valued business around the $orld. #t aspires to be an ever-gro$ing modern business

that earns not only respect but also trust from its customers" different communities" committed colleagues

and shareholders. ,TC/ PLC" 01234

2.2. BRAND MISSIONTesco’s mission is of creating value for its customers and to earn their lifetime loyalty. They aim to

 provide something ne$ every time for its customers by understanding there needs and $ants like no one

else. They $ant to be a business that not only earns respect but also trust. ,TC/ PLC" 01234

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Tesco’s core purpose:‘We make what matters better, together.’ (Design like a quote on indesign)

2.!. BRAND "ROMIS#Tesco $orks hard for its customers as nothing is more important for Tesco than pleasing its customers and

gaining their trust. Tesco promises its customers to provide that trust through the food it produces and

sells. Philip Clarke" Chief ecutive" Tesco summaries his promise by assuring its customers that Tesco

shall set a ne$ standard for testing the products it makes" so that the customers kno$ $hat goes in the

 products they are buying as$ell as ho$ it is produced. #t promises to provide all the information of $hat

goes in the food like no other retailer so that the customers can make much sensible choices $hen buying

food for their families. ,TC/ PLC" 01234 ,/ur responsibility and our promise - Philip Clarke" 01254

2.$. BRAND VA%U#STesco’s values are6

 'o one tries harder for customers6 7or Tesco customers" communities and colleagues

comes first so it $ill go at any etent of listening to them and providing them $ith all that

they desire for.

8e treat everyone ho$ $e like to be treated6 Tesco believes in giving respect as that is

the path of getting respect back. o Tesco treats its colleagues $ith all the love andrespect considering them a part of the Tesco family sharing kno$ledge $ith them so they

gain eperience and get all the support re+uired.

8e use our scale for good6 Tesco not only provides affordable and high +uality products around

the $orld to its customers but through this scale Tesco aims to contribute positively to$ards the

society as a $hole to create that greater value. ,TC/ PLC" 01234

2.&. BRAND #SS#N'#

'TT/I5UTE4. Tesco is the most noted rand for its online e7!erience,

con"rming its strengths in e#commerce. *0I(TEL, &%3.

PE/46('LIT9. 'ccessile and a:ordale.*0I(TEL, &%3.

P/60I4E. Tesco;s !romise is that e$ery little hel!s. That means testing that

e$ery little hel!s !romise is deli$ered e:ecti$ely to the customers through

clucard. *Humy, C., &<.

46U/CE 6= 'UTH6/IT9.>rocer >old 'wards

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In 1une &%3 we won the >rocer >old ?5usiness Initiati$e of the 9ear? award

for acti$ely changing customer eha$iour towards low calorie drin)s. 's !art

of our amiiton to im!ro$e customer health, we are !roud that we ha$e een

ale to remo$e o$er three illion calories from our soft drin)s range, whilst

retaining great quality !roducts.

P/@ee) >loal 'wards &%3

@e were a "nalist in this year;s ACor!orate 4ocial /es!onsiility; category in

recognition of our AUsing our 4cale for >ood; strategy and the !rogress we

ha$e made in communicating it.

,TC/ PLC" 01234

5/'(B E44E(CE. uality and est Customer ser$ice.

2.(. BRAND "OSITIONIN)

8hat makes Tesco different from its competitors is the $ide range of products it offers ho$ever

according to ,%#'TL" 01294 it is considered as a retailer that only focuses on profits. &espite that

association Tesco not only has a high level of usage in comparison to its competitors but also earns more

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H i g h P r i c e

L o w P r i c e

H i g h Q u a l i t y L o w Q u a l i t y

consumers $ho shop at Tesco on regular basis. These fre+uent and loyal consistent shoppers are all under

93s" indicating the overall strength of the brand.

' !roduct;s !osition is the way the !roduct is de"ned y consumers on im!ortant attriutesDthe !lace

the !roduct occu!ies in consumers Aminds relati$e to com!eting ' !roduct;s !osition is the way the

!roduct is de"ned y consumers on im!ortant attriutesDthe !lace the !roduct occu!ies in

consumers; minds relati$e to com!eting .*Phili!, K &<

 Tesco is focusing on mar)et !ositioning and !roduct !ositioning, In UK mar)et Tesco ha$ing a

!rominent !osition and ad$ertising more to di:erentiate its rand image as well Tesco is o:ering low

!rice !roducts as Tesco new CE6 send email to all em!loyees and direct them that we should focus on

customers.

4ource *0I(TEL, &%3

!.Situatio* a*alysis

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!.1. +ey Ma,ro Tre*ds

Key touchpoints of %arco environment and trends for TC/.

I(TE/(ET 6= 4H'/I(> THI(>4(othing gets trend watchers more e7cited than when two se7y trends get all

amorous *e$en if most mainstream consumers ha$e hardly heard of either FIn &%8, the Internet of Things and the 4haring Economy collide to allow awhole new world of asset sharing s!ontaneous, useful, fun, !ro"tale andmore. Last year we urged inno$ators to !ut asic human needs at the centerof their connected oGect initiati$es. 'nd there have een some e7citingI(TE/(ET 6= C'/I(> THI(>4 inno$ations, such as Chinese tech giant5aidu;s set of smart cho!stic)s, which can detect the freshness of coo)ingoil. (ow, where ne7t for the Internet of ThingsEnter the I(TE/(ET 6= 4H'/I(> THI(>4. 's more oGects ecomeconnected, new ways of deri$ing $alue from them will ecome !ossile forconsumers, shared access eing one.

 The Collaorati$eA0esh; economy has long een !redicted, ut thecoming months will see it start to ecome a consumer reality $ia

the I(TE/(ET 6= 4H'/I(> THI(>4. 6ne signal currently only 3- of

consumers own an in#home IoT de$ice, ut nearly two#thirds !lan to

uy one in the ne7t "$e years *'cquity >rou! 'ccenture, 'ugust

&%3.

5/'(BEB >6JE/(0E(T

&%8 will e the year for !rogressi$e rands to initiate, underta)e or su!!ortmeaningful ci$ic transformation. 'cross the gloe, consumers )now that!ulic authorities are struggling to address many !ressing social andeconomic issues in the face of constrained funding andor ine:ecti$e legacysystems.In fact, +- of 0illennials don;t elie$e go$ernments can sol$e today;sissues alone, and <+- want usinesses to get more in$ol$ed *04L>/6UP,4e!temer &%3. That;s why in &%8, forward#thin)ing rands will ste! u! to the challenge ofreal, meaningful change in the ci$ic arena. 'nd not Gust with Astandard; C4/initiati$es, ut y identifying go$ernmental shortcomings and either

through !artnershi!s or y wor)ing directly with the community e:ectingreal and lasting !ositi$e change.6ne ca$eat. If it;s Gust your mar)eting de!artment dri$ing a 5/'(BEB>6JE/(0E(T initiati$e, then may we humly suggest you re#e7amine yourcommitment to your chosen cause. If it feels and loo)s li)e a P/ stunt, that;s!roaly ecause it is F

CU//E(CIE4 6= CH'(>E

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In search of wellness, strength, new s)ills, )nowledge and more, &%8?sconsumers will emrace de$ice#fueled rewards that incenti$iMe im!ro$ingeha$iours. The im!ulse towards self#im!ro$ement is dee!#rooted, ut toooften there?s a chasm etween as!iration and reality.4et that chasm against the fact that NN- of consumers feel that the $alue

e7change etween consumers and rands is one#sided. 0eanwhile, - feelthat rands are moti$ated y a self#centered desire to increase !ro"ts ratherthan y a sincere commitment to their customers *Edelman, 6ctoer &%3.In &%8, smart rands will loo) to Oi! that !icture.Here?s one a!!roach, uild your ine$itale ?what to do with wearales in&%8? discussion around how wearale de$ices *and smart!hones canenale your customers to earn CU//E(CIE4 6= CH'(>E !ersonalisedrewards, incenti$es and discounts that hel! them o$ercome theincon$enience, cost or Gust the oh#so#human inertia that so often !re$entsself#im!ro$ement.

'lfa#5an), =oodtwee)s and =ietsmodusIn 1une &%3, /ussian an) 'lfa#5an) launched a s!ecial accountthat rewards customers for ta)ing !hysical e7ercise. Users connect their"tness trac)er to the ser$ice, and for e$ery ste! ta)en, funds from theire7isting account are transferred into the sa$ings account, which !ays ahigher rate of interest than normally a$ailale.=oodtwee)s hel!s !eo!le loo)ing to decrease their calorie inta)e. Users tellthe a!! what they;re aout to eat and recei$e ti!s to reduce the dish;scalorie content. If the user says they followed the ad$ice, =oodtwee)s thenma)es a donation of the equi$alent numer of calories to a local food an).In (o$emer &%3, the ser$ice had !artnered with 88 food an)s in the U4.

@e;$e also seen a numer of anti#!hone CU//E(CIE4 6= CH'(>E initiati$es,from the U(ICE= Ta! ProGect to the 0cBonalds; 5== Timeout in thePhili!!ines. 6ne more =ietsmodus *meaning A5i)e 0ode; encourages !eo!leto a$oid using their cell!hones while cycling. Launched y the Butchgo$ernment in 4e!temer &%3, acti$ating the a!! while cycling earns!oints which can e used for the chance to win !riMes.

490P'THETIC P/ICI(>>et ready for a wa$e of imaginati$e discounts that relie$e lifestyle !ain!oints or o:er a hel!ing hand in diQcult times.

@e?$e seen ao$e that consumers will emrace rewards for good eha$ior.'nd how rands can ste! in and !ro$ide essential !ulic ser$ices. (ow onemore totally !ractical way to !ro$e that you ?get it? and are willing to !utyour money where your mouth is 490P'THETIC P/ICI(>.6ur full 490P'THETIC P/ICI(> Trend 5rie"ng ac) in 1une &%3 loo)ed athow and why consumers will emrace hel!ful, com!assionate discounts anddeals that su!!ort a shared cause or alle$iate !ersonal !ain !oints. 'nd thee7am!les Gust )ee! rolling in...

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@hy 5ecause when only +- of gloal consumers thin) rands ma)e asincere commitment towards their customers *Edelman, 6ctoer &%3,addressing an eternal consumer concern *!rice and lin)ing this to a !ersonalor meaningful cause, is a su!er#!owerful way for rands to show they care.4o start rainstorming how *and where will you im!lement a 490P'THETIC

P/ICI(> strategy in &%8

4outh China 0orning Post, PareU! and Lote 3&In 4e!temer &%3, Hong Kong news!a!er the 4outh China 0orning Post remo$ed its !aywall to gi$e readers free access to the !a!er;s 6ccu!yCentral articles.Launched in 0ay &%3, PareU! allows (ew 9or)#ased restaurants, co:eesho!s and grocery stores to o:er soon#to#e#wasted food at a discounted!rice. Partici!ating merchants can send alerts to users detailing what isa$ailale, and the discounted !rice.

Buring the =I=' @orld Cu! in 1uly &%3, 5raMilian !ulisher Lote 3&o:ered customers a %- discount for e$ery goal scored against the

national team during the soccer cham!ionshi!. 'fter 5raMil lost #% to

>ermany, customers were o:ered a - discount for &3 hours,

cata!ulting the rand to national attention. *Trendwatching, &%3

3.2. PEST Analysis

PE4T analysis is useful tool to measure mar)eting !osition of TE4C6. It ta)e

e7ternal factor to the organiMation, to !re!are three years mar)eting strategy!lan for TE4C6 we need to scan e7ternal en$ironment to identify TE4C6current mar)eting !osition in mar)et, so there are PE4T *!olitical, Economic,4ocial and technological factors.

Political: Tesco is o!erating in gloal en$ironment, and it owns hundreds of stores inall o$er the world its !erformance and decisions are highly inOuenced y!olitical factors, Bi:erent countries ha$e di:erent laws for foreign com!anies Tesco has to follow all these laws and regulation e.g. ta7 rates, em!loymentlegislation and of course due to "nancial instaility of the world wantscom!anies to o:er Go o!!ortunities. 'ccording to 5urch $. >eorge *%223Em!loyment regulations require !ro$iding mi7 Go o!!ortunities to largenumer of students, disale !eo!le, elders and other communities.

In each country where we o!erate, we may e im!acted y legal andregulatory changes, increased scrutiny y Com!etition authorities and!olitical de$elo!ment rele$ant to domestic trade and the retail sector. The

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regulatory landsca!e is ecoming more restricti$e in many mar)ets, whichmay im!act how we trade.E7am!les include stricter rules regarding o!eninghours customer, su!!lier and data !rotection, cor!orate crime andheightened an)ing regulation. *TE4C6 PLC # 'nnual /e!ort and =inancial4tatements, &%3

 Tesco;s worldwide !resence means that its !erformance is inOuenced y

gloal !olitical factors. These include s!eci"c acts of legislation, ta7 rates,

and the !olitical staility of the countries in which it o!erates *Peter '. Koen

et al, &%%

Econoics:

 Tesco is o!erating in international mar)et so it e:ects worldwide economicdown turn and recession. 'nd change in ta7 rate or interest rate directlye:ect Tesco;s orrowing !ower and !ro"t after ta7 as I discussed early that Tesco is maGor de!endent on UK mar)et. Tesco is growing internationally ithas more than &<.8- of mar)et share of UK in &%3 that &.8- lower than!re$ious years.*The >uardian, &%3

'lthough UK ta7 rate decreases o$er the years this may a:ect Tesco inmeanwhile we ha$e to consider !eo!le uying !ower and their dis!osaleincome to s!end. *The Telegra!h, &%+

In each country where Tesco o!erates, they may e im!acted y legal andregulatory changes, increased scrutiny y com!etition authorities and!olitical de$elo!ment rele$ant to domestic trade and the retail sector.*TE4C6 PLC # 'nnual /e!ort and =inancial 4tatements, &%3

Social:

@ith the !assage of time, there is $ariety of social changes, trends andchanging sho!!ing !atterns ha$e een a:ected in !eo!le li$ing style,wor)ing conditions and the increasing numer of young single !rofessional!eo!le. That indicates that customers are changing their uying haits theyare mo$ing towards ul) sho!!ing and !refer one#sto! sho!!ing that why Tesco is o:ering non#food items as well that are demanding y customersdue to change in social conditions and trends *TE4C6 Careers, &%3

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(ow customers are ecoming more health conscious so they are changingtheir food TE4C6 needs to consider these changes. *0ar)eting @ee), &%3

 There has een a mar)ed rise in young !rofessionals and wor)ing women.

5oth of these factors ha$e led to noted declines in the amount of time thathouseholds s!end on main meal !re!aration in the UK.

Technological: Technological changes and ad$ancement rings many new o!!ortunities for Tesco. 4ome distincti$e are de$elo!ment of new online sho!!ing systems forcustomers are ha!!y and satis"ed to use this system and !roduct can eought online and deli$er at their home.

*0a et al, &%3.

 Tesco is also de$elo!ing energy eQcient !roGects for future use. Change in

technology e:ecting Tesco o!erations recently Tesco launched a Hudl, a R

talet de$elo!ed y retailing giant Tesco, waslaunched in &%+, this will gi$e

 Tesco a com!etiti$e ad$antage and !ro$ide ways for customers to interact

with Tesco.Tesco said of the de$ice in its "rst#half results statement SHudl is

tailored around customer needs and ease of use with instant access to ourfull range of digital ser$ices, all in one !lace # these include 5lin)o7 mo$ies

and music, Clucard TJ, an)ing and of course sho!!ing for groceries,

clothing and general merchandise, as well as other !o!ular !re#loaded a!!s

such as 9ouTue, >oogle 0a!s and >oogle Play.R */etail wee), &%+

$.Mar-et A*alysis

$.1. Mar-et resear,h$.2. Mar-et sege*tatio*

' mar)et segment consists of a grou! of customers or consumers who share

the same or similar needs. Tesco mar)ets falls into natural grou!s, or

segments, which contain customers who e7hiit the same road

requirements. *0alcolm, 0. and Hugh, @., &%%

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!ustoer segentationsSegent "ased on geogra#hical $ Tesco is a multinational grocery retailer o!erating more than %+ countries

including ase country UK, its o:ering a multi!le !ortfolio of !roductsincluding food, non#food goods and ser$ices. Tesco distriution networ) iss!reading all o$er the world through its stores e.g. Tesco su!er store, Tescoe7tra, Tesco metro etc. a sustantial online customers. Tesco o:ers goods toall age grou! male, females in uran and rural areas. *The Telegra!h, &%3

Segent "ased on #sychological $ Tesco o:ers its goods to all ty!es of customer and for high or lower incomecustomers.

Segent "ased on "eha%ioral$

 The uying eha$iors of Tesco customers consist of cost#consciousindi$iduals who are interested in argains and sales and $alue $ariety ofchoice in Tesco !roducts and ser$ices.

Segent "ased on deogra#hics$

Bemogra!hics are commonly use descri!tions of customer and consumers

according to !ulic and measure criteria*0alcolm, 0. and Hugh, @., &%%

 Tesco di$ide their customers into di:erent categories according to age, se7,

rich and !oor y using Clu cards in order to !ersonaliMe its wesites to

dis!lay items geared toward your health. Tesco;s clu cards customers more

than %< million, will e segmented into se!arate grou!s, how much

!re$iously they s!end and when logged onto wesite. *Baily0ail, &%&

 

$.!. Mar-et share

&ar'et Share o( Tesco:U) >rocery mar)et has ecome more com!etiti$e o$er !re$ious years, Tescohas &2- to +- mar)et share. Tesco has lost its from !re$ious two to threeyears ut they are in$esting more "nance in mar)eting. The ig three in !articular, Tesco and 4ainsurys are suddenly ha$ing to!ull a halt to amitious e7!ansion !lans and in Tesco;s case ha$e een left

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red faced y !ro"ts falling short of !ro"t forecasts. (ow there is limitedchance to o!en new ig stores and mar)et shifts toward small stores. Tescoshould change their strategy and in$est in local small stores.

Kantar said the grocery mar)et was at its wea)est for at least %% years.

 Tesco?s mar)et share dro!!ed to &2- from +.8-, while 0orrisons? share fellto %.2- from %%.N-. The dro! in Tesco?s share is the highest since Kantar?srecords egan in %223. *The >uardian, &%3

 Tesco sales decreased y +.<- in %& wee)s !eriod ended 1uly & &%3.

Kantar research shows that o$erall UK >rocery mar)et /ecorded .2- growth

in last !eriod. *This is 0oney, &%3

)* Su#er &ar'et Share 2+1, Total till roll, %& wee)s to 2 (o$emer &%3.

 TescoF &2-

'sdaF %-4ainury?sF %N-

morrisonsF %%-

Co#o!F N-

@aitrosF 8-'ldiF 8-

LidleF 3-6therF -

&ar'et share

4ource *The >uardian, &%3

Tes,o/s See* ears Mar-et Share A*alysis

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  &,,< &,,2 &,%, &,%% &,%& &,%+ &,%3&K.8

&<

&<.8

&2

&2.8

+,+,.8

+%

+%.8

Tesco-s Se%en .ears &ar'et Share Analysis

 Tesco 0ar)et 4hare 'nalysis

4ource *>uardianKantar @orld!anel, &%3

$.$. Mar-et )roth Tesco has lowest mar)et growth in a decade and it was record reduction insales in !re$ious %& wee)s. Tesco sales are decreasing y +.<- in last %&wee)s 1uly &, &%3. 'lthough in UK the >rocery mar)et was recorded .2 -growths which is lowest in last % years. *>rocery (ews, &%3

's Com!ared to Tesco;s com!etitor 'ldi is ooming at the e7!ense of Tesco

and growth rate is +&- for last %& wee)s said Edward >arner, director atKantar @orld !anel. *55C (ews, &%3

UK;s 5ig four su!er mar)ets, Tesco and 0orrisons lost their mar)et share, ut'sda and 4ainsury )ee! their growth rate. Tesco, which has re!orted lowersales for three successi$e quarters, saw sales dro! y +.<- in the !eriod,Kantar.*55C (ews, &%3

In the face of declining sales, Tesco decided to ma)e new strategies and thechanged their leadershi!s also increased numer of sta: ut sales

continuously declining. *This is 0oney, &%+

Industry Trend:In the UK, food retail industry sale growth remains sudued o$er last years,now we ha$e seen reduction in large store o!ening. Large retailer in UKreduced their net s!ace of store y +<- as com!are with !re$ious years.

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(ow customers uy goods from their nearest stores rather than tra$el longdistance. (ow mar)et trend is, o!ening small stores nearing to mar)etsrather than o!ening ig stores.

,./.!onsuer Insight

,.0.Target Audience' set of uyers are sharing common needs or characteristics that thecom!any decides to ser$e. Tesco is targeting mass customers rather thanfocusing in deferential strategy or charge !remium !rices, Tesco is costconscious and trying to cut its !rices due to high com!letion in retailindustry, in !re$ious years Tesco is losing its !ro"ts now they are targeting

deferent customers e$en if some customers want to argain. Tesco moileand talet is low cost not targeting rich customers as com!are to '!!leIPhone is charging !remium !rices. @aitrose is targeting high#incomeauentcustomers who thin) aout quality rather than !rice.Tesco;s target consumermainly consists of !eo!le who want more !roduct range ut at a chea!er$alue and a reasonaly good quality. These customers range from youngstudents to the older !eo!le who run families.'ccording to *0intel, &%3 Tesco not only has a high le$el of usage in com!arison to its com!etitors utalso earns more consumers who sho! at Tesco on regular asis. Thesefrequent and loyal consistent sho!!ers are all under 38s, indicating the

o$erall strength of the rand.

/.!ustoer Analysis

!ustoer Trends: Technology is changing the way consumers consume, Consumers areincreasing internet usage for research N+- sho!!ers use their smart !honein stores and 3+- o) UK customers use moile to com!are !rice or readre$iew when they are in 4tore. In &2 a!!ro7imately &2- UK customer!urchase three or more time food or >rocery, ut in &%+ this !ro!ortion

increased to 32-. *TE4C6 PLC # 'nnual /e!ort and =inancial 4tatements,&%3

nline consuer Trend: Tesco is iggest online >rocer has increased its online mar)et share y &.3-due to o:er online distriution. UK grocery mar)et growth increases y &.<-in &%3. 6nline sale contriution is . n. com!ared to the whole of the

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grocery mar)et worth %3 n. *I>B, &%3

&,,+ &,,3 &,,8 &,,N &,,K &,,< &,,2 &,%, &,%% &,%& &,%+

%.%   %.+

  %.8  %.K

&.+

&.2

+.+

+.<

3.&

3.8

8.%

!onsuer S#ending In )* rocery &ar'et 2++342+135

4ource otained Kantar @orld!anal S4ho!!ing for >roceriesR # *Intelligent!ositioning, &%+.

0.!ultural Analysis5efore ma)ing any strategic mar)eting !lanning usinesses need to assessculture in target mar)ets, 5ut unfortunately Tesco fails to understand culturalissues in some countries and unale to o!erate in mar)et. Tesco is unale tounderstand Chinese consumers; culture and what !roducts were suitale forthe mar)et therefore they had to ste! ac) from china.*=ood 0anufacture,&%+

 Tesco also closedits 'merican stores due to Cultural Bi:erences.*Kwintessential, &%&

 The su!ermar)et giant has made some emarrassing a!!roaches tointernational usiness and &%%#&%& has seen Tesco !ull o!erations in 1a!an, and consider the same course of action in the U4'. *@olfestone, &%&

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Tes,o ,ultural e3

4ource *TE4C6 PLC, &%8

6. !o#etitor Analysis:

's we se see in elow igram Tesco lost its mar)et share y +.N o$er the year that

was higest reuction as com!are to its other com!atetors sainsy *+.%- 0orrison is

*%.<-. Burining analysis we can "nd that 'ldi mar)et share is higGest e$er in one

year that is &.+- lidle folowed him y %<.%-. this analysis concludes that aldi and

lidle growth is on the e7!ense of Tesco.

Sy"olsTesco is ar'et leader "y doing

the little thing (or custoers and

colleaguesStoriesTesco esta"lished in 1717

"y 8ac' !ohen 9 e%erything

we do a"out hel#ing our

custoers. 6rganiMational 4tructure

 Tesco;s 5oard consist Chairman, Two

e7ecuti$e Birectors and se$en non#

e7ecuti$e directors. Tesco also has

e7ecuti$e committee

The Paradig

ituals

Create $alue for

customers to earn theirlife time loyalty Power 4tructure

<- 0anagement !ositions com

from Tesco em!loyees!ontrol Syste

 Tesco im!lements UK code of 

cor!orate go$ernance which sets

main !rinci!les and guide line how

to go$ern

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 Tesco 'sda 4ainsury 0orrisons Co#o! @aitrose 'ldi Lidl Iceland

+.%

%.+ %N.

%%.2

N.33.2 +.< + &

&<.<

%.& %N.%

%%.N

N.38.& 3.<

+.8%.2

#+.N %

#+.%

#%.<

#.3

N.<

&.+

%<.%

#.

!hart Title

&%+ &%3 Change

4ource *>rocery (ews, &%3

)*;s Largest <our rocery etailers:

'4 earlier discussed that Tesco is losing its mar)et share., ut it is reducing its s!ace

are o$er theyears in &2 it was 88 square feet ut in &%+ it was reduced y

%N square feet to +2 square feet.

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&2 &% &%% &%& &%+

%

&

+

3

8

N

8832 32

+2 +2

  ? sq ft

4ource *I>B, &%3, *TE4C6 PLC # 'nnual /e!ort and =inancial 4tatements,&%3

6.1. Porter;s <i%e <orces

5efore ma)ing three years strategic mar)eting !lan, Tesco need to

understand dynamic of com!etitors with in industry where you are entering.It;s $ery critical for many reasonsF one is to e7!lore new o!!ortunitiesecause you are new !layer and how you can di:erentiate from others. 4ofor e7ternal analysis Porter;s =i$e =orces are $ery useful tool.

Threat (ro new Entrance: Tesco is o!erating in >rocery industry UK, and dominated in Industry ha$inga!!ro7imately +- mar)et share following asda with %.&- and 4ainsury;swith %N.3- of UK mar)et. >rocery industry is now e7!anding andincor!orated into hy!ermar)et and need high in$estment to o!erate in

grocery mar)et. It is $ery diQcult for new entrants to catch u! with Tesco,ecause they ha$e in$ested huge amount in mar)eting and to estalishrand. Tesco set aside % illion to s!end in mar)eting. *4tatista, &%8

Threat o( new Su"stitute o( #roduct:with the !assage of time as organiMations are mo$ing toward technologyintensi$e, it is a ig threat for organiMations sustitute !roducts. Tesco is

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o!erating its su!er stores and su!erstoresF'sda and 4ainsury;s are trying toacquire small#scale usiness and o!ening stores, metro in local areas andcities. 0any !ri$ate sho!s also o!erating in grocery, so Tesco should considerall factors.

=argaining #ower o( "uyers: Tesco;s famous customers loyalty clu card is still earning high !ro"ts andcustomer are increasing and uying more goods through loyalty cards. Tescois ful"lling customer;s demands and lowering down !rices, constant !roduct!romotion. Tesco has aligned its !erformance oGecti$es to manage customerfriendly !rices. Tesco always engages in !rice com!arison with its ri$al toensure !rice should e in fa$or of customers *TE4C6 PLC, &%8

=argaining #ower o( Su##liers:

5argaining !ower of su!!lier is an im!ortant elements term of laor, materialor any other form of in!ut e.g. e7!ertise. Tesco may face threat that theirsu!!liers may increase !rice of material ut quality remain same this causereduction in !ro"ts. *1ohn, =. and Leigh, 4., &3 Tesco may not face such situation ecause it is a high in$estment retailerand uys in ul).

i%alry:the Intensi$e com!etition and ri$alry in food and grocery usiness in UK. Tesco is facing tough com!etition from its com!etitors es!ecially from '4B'

and 4ainsury;s,0orrison;s and the coo!erati$es. They all ha$e more than8%- mar)et share of UK. They all are com!eting in !roducts, !rices and!romotions. '4B' is main com!etitor of TE4C6 with %- to %<- mar)etshare. Increasing com!etition from these com!etitors shows they areincreasing mar)et share as well this is a ig threat for Tesco to maintain its!osition as a mar)et leader. *4tatista, &%8

>. S?T

4@6T analysis is a useful tool efore !re!aring long term mar)eting !lan, to

analyMe TE4C6 current !osition. The !rocess of 4@6T analysis e$aluates TE4C6

internal strengths, wea)nesses and e7ternal mar)et o!!ortunities and threats that

can !ro$ide com!etiti$e insight into critical issues that can im!act the success of

usiness

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Strengths:

4trong 0ar)et leader  Tesco is UK largest retail rand, according to 55C news magaMine

Se$ery one !ound out of se$en !ounds s!ent goes in Tesco;s cash

tillR. 4o almost +- mar)et share of UK food and non#food mar)et

ca!tured y Tesco !lc. To retain this share Tesco needs huge

ad$ertisement cam!aign to reach customers.

4trong rand nameIt is one of the largest 5ritish retailers and holds third ran) in

retail industry after U4' ased com!any @al#0art and =rance

ased com!any Carrefour. It sells around 3 food !roducts.

*TE4C6 PLC, &%8

6$erseas e7!ansion Tesco is ra!idly e7!anding in o$erseas mar)ets, during sir Terry

leahy era Tesco had uilt highly !ro"tale em!ire in o$erseas.

E7!ansions includes south Korea, 0alaysia, hungry Poland U4 and

CHI(', across hy!ermar)ets and su!ermar)ets *This is 0oney,

&%%

6nline !ioneer

 Tesco is now ecome online !ioneer of online selling in allo$er the

world through its oQcial wesite and ma)e huge !ro"ts through

online sales. 'fter success of online ser$ices they are now

o:ering non#food through Tesco direct. *TE4C6 PLC, &%8

(umerous awards  Tesco won ig in the grocer;s foods and drin)s awards for own

Lael. *TE4C6 PLC, &%8

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Loyalty cards, Clu

Cards and Bunnhumy

data ase

 TE4C6 launched its clu card in nationwide in %228, this was the

foundation of Tesco;s rise and ecome a dominant retailer in the

world. It was one of the retail inno$ations y com!any in &th 

century. The loyalty card, and !articularly the Bunnhumy

dataase ehind it, !ro$ided Tesco with an un!recedented le$el

of detail into who its sho!!ers were and how they sho!!ed. *The

 Telegra!h, &%3

?ea'nesses:

Losses in U4E7!ansion in U4 was a ad e7!erience Tesco lost money and

re!ute. Tesco cut its !ro"ts y half after this failure and sold its

stores. Pro"ts at Tesco slum!ed y 8% !er cent last year as it

wrote o: %.&illion on a failed attem!t to conquer the United

4tates.

 The fall in !reta7 !ro"ts down y &illion to %.2Nillion was

its "rst in & years. *Baily 0ail, &%3

@arren 5u:ett sold more than &38 million shares in Tesco and

said it was my mista)e to in$est in Tesco. *C(5C, &%3

(on#food e7!osure

 Tesco who were s!ecialiMed in food industry, once they mo$ed in

non#food industry, initially they faced many !rolems. *The

 Telegra!h, &%+

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(egati$e 0edia

Co$erage Bue to the Horsemeat contro$ersies Tesco has asored a lot of

negati$e media co$erage, which has )noc)ed of +m o:

 Tesco;s mar)et $alue wor)ing a s disad$antage towards the rand

image as well as !ro"ts. *The Telegra!h, &%+

##ortunities

International E7!ansion Tesco should e7!and in di:erent mar)ets where there is !otentialof ma)ing !ro"ts li)e the 'sian and the eastern mar)ets.

Howe$er it should not ma)e the !re$ious mista)es it made of not

understanding the culture and mar)et efore entering into a new

mar)et.

5an)ing 4er$ice 's discussed earlier Tesco is one of the og rand in UK and

ha$ing more than +- UK mar)et share they ha$e good

o!!ortunity to create trust among customers and o:er more

mortgage !roducts to its loyal clu card customers.

4trategic alliances

 There are o!!ortunities for 4trategic 'lliances with local retail

chains to o:er more !roductsF Tesco is not o!erating in manycountries of '4I'. 4o they can ma)e 'lliance with local stores in

India and Pa)istan. This 6!!ortunity will gi$e Tesco a strategic

su!!ort.

/ecently Tesco Con"rms 1oint Jenture with Tata Trent for V%3

0illionF @ill 6!erate in Indian /etail 0ar)et worth V8 5illion.

*I5I Times, &%3

Threats:

UK com!etitors

 Tesco is facing tough com!letion from UK and (on UK customers

as Tesco is selling high quality good so ris) of losing customers,

they might switch to its com!etitors due to low !rices o:er y

them. 'lthough TE4C6 is trying to re!ositioning and catch u!

with what its ri$als are doing. *55C (ews, &%3

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6$erseas !rolems

 Tesco is facing some cultural and local issues in some countries

e.g. in south Korea they are facing sho! o!ening hours

restrictions y >o$ernment while China remains !rolematic.

*'sian >loal Im!act, &%+

Economic /ecession /ecent Economics recession and credit crunches will e:ect Tesco

!ro"taility and always a ig threat change in foreign e7change

rates as it is o!erating all o$er the world, reduction in !urchase

made y customers.

7. Strategic &ar'eting "8ecti%es

 Tesco;s main mar)eting oGecti$e is to im!ro$ing the customer !ro!osition,re$am!ing retail stores and cut down !rices. Tesco Chief e7ecuti$e Phili!Clar)e during his inter$iew, he told Tesco;s oGecti$e is to in$est inmar)eting.

SHe listed three areas for in$estment a large store refresh !rogram,con$enience stores tailored to their local consumers; needs and digitalR.*5old, 5., &%3

SThe ig o!!ortunity I see for us is to e much more Goined u! in the way weengage with indi$idual !eo!le across all the di:erent o:ering we ha$e in the!ortfolioR. Tesco CE6. Ba$e Lewis.*0ar)eting @ee), &%3

6ther short term 6Gecti$es of Tesco isF 0a7imiMation sales re$enue and Tesco forecasting its sales increased y %.+N-. 's its !ro"ts are decreasingso another oGecti$e is to ma7imiMation !ro"t after ta7, Tesco forecast its!ro"ts y +&-. 'nd increase mar)et share as it is decreasing. * Tesco PLC,&%8

 Tesco was facing ig crises and its sales and mar)et shares was reducingo$er the years under the leadershi! of SCE6 Clar)eR, 'fter changingmanagement structure new CE6 Ba$e Lewis, Tesco changed its strategy and

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committed to increase mar)et share and !ro"ts.Lewis is o!timistic aout the future of Tesco. SHis new strategy is a com!letefocus on our customers. The ste!s we;re ta)ing can hel! deli$er that.R *The Telegra!h, &%3

0r. Ba$e ga$e "$e ti!s for a strategic mar)eting Tesco includes e human,listen to your customers, e clear aout what you stand for, tell a story,0a)e the "rst day count. Tesco has clear strategy aout its rand re$i$al andgrowth. *0ar)eting 0agaMine, &%3

=ocus on The core UK grocery usiness.

Create Highly $alued rand

 To grow retail ser$ices in all our mar)ets

 To e strong in (on#food usiness

International E7!ansion

40'/T 651ECTIJE4

 Tesco 6Gecti$es should e 40'/T *4!eci"c, measureale, 'ttainale,/ealistic, Time oundeds#eci@c: Tesco wants to ma)e !ro"ts,&easura"le: its oGecti$e is to increase sales y %.+N- is measurale.

Achie%a"le:increasing mar)et share and increasing the numer ofcustomers can achie$e this oGecti$e.ealistic 6Gecti$e is realistic as ased in facts and historic "gures.Tie "ounded y deadline, when it should e achie$ed.

10.Mar-eti*g Strategies

Tes,o Strategi, ar-eti*g O4tio*s5 Alter*atie strategies

Tesco needs to implement ne$ strategies to revive brand image.

10.1. "rodu,t %i6e ,y,le

5usinesses always trying to manage their !roducts ma)e them a$ailale to

customer all the time, and ful"ll customer;s needs. E$ery indi$idual !roduct

launched y Tesco has four stages Introduction, >rowth, 0aturity and "nally

decline.

=or long term mar)eting !lan it;s im!ortant for Tesco to )now its !roduct life

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cycle which !roducts can ma)e more !ro"ts, I chose some of !roduct for my

analysis for e7am!le Tesco grated cheese in growth stage as its low fat and

customers are health conscious, as well they don;t ha$e time to grate chees

and contrarily Tesco lard is in declining stage.

Introduction stage:Its $ery "rst stage when !roduct is launched, initially Tesco doesn;t focus on

!ro"ts instead they are !romoting goods. In &%3 Tesco launches organic

health ears and then started its mar)eting and !romotional sales at Tesco

e7tra store across the UK. *=ood 5e$, &%3

rowth:at this stage !roduct ma)ing high !ro"ts and com!etitors are attracted in

new mar)et they o:ered same !roduct. Tesco;s grated cheese in at growthstage and sales are $ery high. In &%+ statistics 4hows most of !eo!le used

 Tesco su!ermar)et rand for cheese that was +.3 million !eo!le used Tesco

in the UK.*4tatista, &%+

&aturity:Product;s sales are decreasing o$er the !eriod, 0ay e due to alternati$e

!roducts or high com!etition, mar)et for that !roduct ecomes saturated

need new !roduct.

ecline:Bue to mar)et downturn customers sto! uying !roducts due to which !ro"ts

are decreased as we discussed ao$e Tesco;s lard is at decline stage as

customer are reluctant to uy, so the !roduct should discontinue and call

ac).

1+.2. a# analysis

!urrent situation Tesco is currently dominated in UK grocery industry with &2- UK mar)etshare and one of the strong rands. Tesco is declining its sales that arearound N3 illion. Tesco is largest retailer in >rocery %st !osition in UK andthird !osition in 6$erall world mar)et with %+- mar)et share. It o:ers foodand non#food !roducts and ser$ices e.g. hy!er stores, !etroleum, Insurance

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usiness and an)ing. 'fter huge in$estment in mar)eting Tesco continuallylosing its mar)et share and sales, around % million sho!!ers lost in a wee).

"8ecti%es:

 Tesco is ma)ing strategy to get its mar)et share ac) so as a im!lementationits strategy it change its higher management and trying to in$est in mar)et.In its forecasting Tesco reduce its sales N% illion as com!ared to !re$iousyears it was more than N3 illion. Tesco is committed to increased sales andE5T' y &%. Tesco is e7!ecting to continue grow in future years, so Tesco aims to ful"llcustomer;s needs, cut !rices and o:er ful"ll customer demand.

ecoendations:In order to achie$e its oGecti$es Tesco should in$est in small#scale stores inlocal area. >rocery mar)et is now turning into hy!ermar)et. Customer

!refers to uy where they "nd low !rices.

1+.3. AnsoB &atriC'nso: matri7 is useful tool used to identify o!!ortunities for e7!ansion orgrowth, es!ecially for those com!anies who are su:ering !rolems li)e Tescois declining its mar)et share, so this matri7 hel!s Tesco to identify whetherthey should de$elo! !roducts or need mar)et e7!ansion.

&ar'et e%elo#ent:

 Tesco is de$elo!ing its mar)et y entering in new geogra!hical mar)ets e.g.India, U4 and UK.Tesco is entering into India that has %.& illion !o!ulations,so its huge and lucrati$e retail mar)et for Tesco. *This is 0oney, &%%

'nother mar)et where Tesco is entering is U4 retail mar)et although Tescofaced losses in U4 mar)et ut with new strategy they can success. *Huge inc,&%3

&ar'et Penetration: Tesco is o!erating in UK core mar)et with e7isting !roductsF main oGect of

mar)et !enetration is Tesco wants to increase its current mar)et share ofcurrent !roducts. This can e achie$ed y o:ering low !rices and a goodmar)eting cam!aign through TJ ads and !romotion strategies. *The>uardian, &%3

i%ersi@cation: Tesco is not only increasing its !roducts in same mar)et ut it is entering into

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unrelated di$ersi"cationF =inancial an)ing ser$ices is entirely new mar)etand new !roduct for Tesco. It is a ris)y mar)et Tesco needs to carefullymanage this !roduct in case of failure Tesco faces a ig loss.

Product de%elo#ent Tesco selling new !roduct in e7isting mar)et, Tesco moile is an e7am!le ofProduct de$elo!ment, and Tesco fuel. Tesco is eroding its !ro"ts and losing mar)et share so I recommend Tescoshould focus on mar)et de$elo!ment and mar)et !enetrations throughcustomer satisfaction and further in$estment in 0ar)eting. *This is 0oney,&%3

1+.,. =STD &atriC

5C> matri7 is tool to assess indi$idual !roducts !ortfolio. It was de$elo!edy 5oston Consultant >rou! in early %2;s.I recommend this model in mymar)eting !lan to assess !roduct !osition, which !roduct needs morein$estment, more ad$ertisement and which should e called o:.

Stars: Tesco;s !roducts that ha$e high mar)et share and high mar)et growth, such!roducts needs hea$y in$estment, although they earned high income utnow they their growth is so slow and turn into cash cows. Tesco "nest range!roducts are 4tar !roducts they ha$e high mar)et share and high growth.

!ash cows: Tesco;s !roducts with low mar)et growth ut high mar)et share, these!roducts generate hea$y cash ut need not too much in$estment ecausethey ha$e already large mar)et share. Tesco wine, grocery might cash cow!roducts as they are generating enough !ro"ts.

Question ar' or Pro"le !hild:

 Those !roducts with low mar)et share ut high mar)et share, these !roductsneed more cash to sur$i$e in mar)et and hold its mar)et share. (ewlylaunched Tesco moile could e a !rolem child so Tesco should reconsideraout Tesco moile and con$ert it into 4tar !roduct otherwise it )ee!contriuting in Tesco ad !erformance.

ogs Tesco;s !roduct neither they ha$e high mar)et share nor mar)et growth,

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such !roducts needs enough resources ut not guarantee to earn money. Tesco;s lard is a Bog !roduct.

I recommend Tesco that they should reconsider their !roduct !ortfolio andcall o: dog !roducts ecause they only consuming com!any;s resources and

!rolem child !roducts should e con$erted into star !roducts. 4o Tescoshould )ee! continuing its mar)eting cam!aigns.

ecoended strategy1+./. , P;s

&ar'eting &iC strategy:0ar)eting mi7 is generally used y com!anies as a mar)eting tool to target

its customers and mar)et. It descries di:erent )inds of choices. Tesco has toma)e in the whole !rocess of ringing a !roduct or ser$ice to mar)et. The 3Pare one way !roaly the est#)nown way of de"ning the mar)eting mi7,and was "rst e7!ressed in %2N y E 1 0cCarthy. Tesco need to re!osition it rand image and !roducts, Tesco needs to !ut theright !roduct in the right !lace, at the right !rice, at the right time.

Products=or strategic mar)eting !lane it;s im!ortant for Tesco to de"ne its !roductline what they are o:ering. Tesco is o:ering more than 3 !roducts in its3<%% worldwide stores including %& organic food items ranging from eefand garlic to chocolate and salad *Baily0ail, &%. Its !roducts include food,non#food, clothing, "nancial ser$ices, consumer electronics and other goods. Tesco;s oGecti$e is to achie$e com!etiti$e ad$antage y o:ering its !roductsalance of quality and low !rice to all consumers and want to o:er all rangeof !roduct once customer enters into Tesco store doesn;t need to goanywhere to uy another !roduct. Tesco should o:er !roducts that suit forlocal culture li)e china so they should o:er own randed stores in china.

Price:

Price is im!ortant mar)eting strategy for organiMationsF /etail industry is$ery com!etiti$e industry so Tesco needs to de$elo! customer friendly!ricing strategy. Tesco;s !rice strategy is on ased of its mar)eting messageSE$ery little hel!sR. Customers who want low !rice !roducts and argainingare lured away y 'ldi and Lidl;s low !rice *The Economist, &%3.

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 Tesco wants !rices to e stale, we want them to e logical and, we wantthem to e com!etiti$e. *Tesco PLC, &%8

Place

Place is an im!ortant element of 0ar)eting mi7, Tesco needs to decide which!lace is est for their !roductsF so Tesco is using a!!arently two channels forsale its online $ia its wesite and o: through 3<3% worldwide stores./ecently Tesco went into Goint $enture with I(BI';4 largest rand T'T'>rou!;s Trent Hy!ermar)et ltd. Tesco had !ic)ed u! 8- sta)e in TrentHy!ermar)et Ltd. This 1oint $enture gi$es Tesco a com!etiti$e edge to enterIndia;s lucrati$e multi rand retail segment. *To! (ews, &%3

 Tesco s!ent a huge amount on refresh !rograms on its stores, they rein$eston ig stores to insure that stores ful"ll the needs of customers once they$isit the store.

Prootion: Tesco;s !romotional strategy is connected with its !rice strategy as Tescotoo) decision to cut its !rices to ma7imiMe sale. Promotional oGect can eachie$ed through mar)eting, media attention, and ad$ertisement. Tescorecently in$est one illion on its rand image mar)eting as well its onlineclic) and ric)s.6ne of the im!ortant !romotional tools is clu card that is more now e$erefore this. Clu crad !ro$iding deferential ser$ices to TescoR customers,they can choose unloc) greater $alues. 'round +8 million clu cards issued

to customers who $isits regularly. Tesco also o:ers discounts to its customers. Tesco;s online grocery homesho!!ing Tesco generates more than &.8 illion from UK sales. Tesco alsoo:ers grocery clic) and collect around the UK at &N stores. *Tesco PLC,&%8

In new mar)eting strategy Tesco should reconsider its 3 !;s, its criticalsuccess factor for rand re$i$al of Tesco. 4!eci"cally Tesco should cut its!rice and more in$est on !romotions through more discounts and mar)eting.

istri"ution !hannel: Tesco use di:erent distriution channels to sell their !roducts, they uy fromsu!!lier and mo$e through distriution networ) and sell to consumers. Tescohas more than +< 0illion clucard customersF they $isit Tesco + storesand uy their required !roduct. 82.- of UK customers use two channelsthey come stores or online sho!!ing. *Tesco PLC # 'nnual /e!ort and=inancial 4tatements, &%3

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4trategic !lan im!lications

 Target 'udience Tesco;s target mar)et is all le$el of income;s uyers ut they di$ide

customers according to their wealth high income and low income and age in

an attem!t to o:er more targeted o:er. Tesco design their wesite withaimed at indi$idual sho!!ers, Tesco wants their customers to feel a !art of

s!ecial >rou!. Tesco uses clu card to assess customer;s wealth. *Baily0ail,

&%&

Customer s!ending in /etail mar)et  The consumer goods sector is now the iggest s!ender in terms of online

ad$ertising and accounts for %N.%- of the total s!end *I'5PwC ad s!end

sur$ey H% &%3. *I'5, &%3

UK sho!!ers s!ent 2%n online in &%+ and loo) set to s!end %n in

&%3. *Internet /etailing, &%3

Annual nline S#ender Per !ustoer:

(ow customers change their eha$ior to uy !roducts, they uy onlinesho!!ing instead traditional methods. @hen customers enter into store they)now what e7act !rice and which !roduct they are uying. 6nline s!ending!er customerare increasing o$er the years.

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&%+. 2&3

&%3. %%

4ource */etail /esearch, &%3.

nline etail Sales In )*:'s we discussed ao$e that customer eha$ior is changing towards!urchasing goods they !refer to uy online so UK retails online sales

increasing and according to forecasters it will increase in coming years

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&%+ &%3 &%8

+2

38

8&

)* DLIDE etail Sales In =illions

UK 6(LI(E retail sales in 5illion

4ource */etail /esearch, &%3.

&%% &%& &%+ &%3 &%8

8

%

%8

&

&8

U) retail Industry s!ending on 'd$ertiMment In illions

ource6 ,The :uardian" 01294" ,)dassoc" 01294

 Tesco is one of the largest ad$ertising s!endersUK su!ermar)ets are s!ending less on mar)eting com!arati$ely !re$iousyears. In 6ctoer &%3, the leading su!er mar)ets s!ent &<.3 million on TJ

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and !ress ad$ertisement +.N- less than a year ago.Lidle s!end 3.2 millionand 'sda s!ent 8 million.

 Tesco dro!!ed s!ending &2- year#on# year to + million. Idle and 'ldi are

focusing on discounts rather than ad$ertising on TJ and Press. *(ielsen,&%3

 TE4C6 PLC

  £&%&

%%,3+,N%

  £&%+

%%N,&N2,8&N

  £&%3

+3,8+,N2&

4ainsury;s

4u!ermar)ets Ltd

N,N2<,88+ N,33,N%% %2,<<,%8<

'4B' %2,%+2,+8N 2,+8,&3  

'LBI 4tores Ltd 3+,+&%,2+ 8N,823,8N2 &&,N+,8<

LIBL UK >05H &3,2&+,83 +,+3,3< %+,<+2,+<

4ources *(ewswor)s, &%3, *0ar)eting 0agaMine, &%3

!o#etiti%e &edia S#ending)* =ig Su#erar'ets S#end

n Ad%ertiseent

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&,,2 &,%, &,%% &,%& &,%+ &,%3

%%N.&8

%++.8<

%38.K2

%%K.3 %%N.&K

+3.K8

Tesco &ar'eting s#ending Analysis in &illions 3F5

 Tesco 0ar)eting s!ending 'nalysis in 0illions *U

4ource *0intel, &%+

 Tesco announced one illion !ounds on mar)eting and re$am!ing of its

stores. 5ut o$er the !eriod of time its mar)eting s!ending reduced that is

one maGor cause of its worst "nancial !erformance. In &%3 only +3.8

million was s!ent hat was %% million less than s!ent in &%%, in my

strategic !lan I strongly recommend Tesco to increase its mar)eting udget

in &%8 and &%N as it was shown in forecast udget.

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CinimaF %- Birect 0ailF <-Boor Bro!sF %-

InternetF %-

6ut BoorF 8-

PressF +<-

/adioF +-

 TJF +3-

Tesco-s Ad%ertising =udget

4ource *0intel, &%+

 Tesco is one of the ig ad$ertiMer in UK , it s!ends more than %3 millions in

ad$ertising. 4ustantial amount of its udget is s!ent on !ress and TJ

ad$ertisement, only % - in intenet.ir should increase udget in !ersonaliMed

ad$ertising and internet s!eci"cally social media s!ending.

11.Tactical Plan4ecoendations

 Tesco tactical communications Plan how to a!!roach tocustomers.

 Tele$ision Tesco +3- of its udget s!ends of TJ ads, In &%& 6lym!ics Tesco ad$ertise

and light u! @igan.In &%3 Tesco;s ad$ertise on Christmas TJ with a lightshow. Tesco ad$ertise in =inale of ITJAs Bown ton 'ey. @hich features stra! line, The N second ad SE$ery little hel! ma)es Christmas.R *The >rocer, &%3

 Tesco should allocate udget for 6lym!ics &%N hosted y 5raMil. Tesco will

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get ad$antages y s!ending in TJ ads. *Cam!aign Li$e, &%3

Internet

 Tesco selling its !roduct online its world;s largest online grocery stores.it hasonline integrated stores all o$er the world. Tesco uses %- of its mar)etingudget on Internet mar)eting.'ccording to BunnHumyCE6 S The current model is ro)en. @e s!end moretime online than with any other media the ty!ical we user sees aout&, anner ads !er month, ut - can;t rememer the last ad they saw. If they did recall it, <- felt it wasn;t rele$ant to them.Tesco should spend more money on other types of Media e.g. fashionmagazines,Clucard is ?)ey? to Tesco?s online sho!!ing e$olution.*Bunnhumy, &%3

PersonaliMed ad$ertising Tesco should focus on !ersonaliMed ad$ertising and s!end more on it,acquisition ofsociomantic is a tremendous re$olution in !ersonaliMedmar)eting. *Bunnhumy, &%8

E$ents

 Tesco ad$ertise it rand on s!ecial e$ents y o:ering discounts e.g. 5lac)=riday, Christmas and Eid festi$als. Tesco is losing its mar)et share so theyshould s!end more in ad$ertisement ut in$ersely Tesco s!end <.+ millionand reduced its !ending on this Christmas reduced y &%- as com!are with!re$ious year, Tesco com!etitor;s 'dli and Lidl s!ent twice as s!ent y Tesco.*E40 0agaMine, &%3

Press 'd$ertising Tesco is s!ending a huge amount of it udget on Press ad$ertisement, so)ee! in$esting in this media will increase sale, Tesco should ad$ertise inEuro!ean su!ermar)et magaMine that is circulated in all o$er the world morethan + countries; su!er mar)ets.

S#onsorshi#:4!onsorshi! is a good source of ad$ertisement, Tesco should s!onsor some

Hollywood mo$ies, although they are s!ending in cinema 'ds ut it is not

stuQest. Tesco must s!onsor you tue $ideos and face oo) !ages. Tesco

needs to s!end a huge amount in 6lym!us &%N.

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Social &edia'lthough Tesco;s !resence in social media is enough ut it has not seriously

re!lied some twitter feeds, which cause customer dissatisfaction, Tesco

should acti$ely re!ly on social media e.g. =ace oo), Twitter and 9ouTue.

 9ou tue is a good source of ad$ertising now a days. Tesco should uild some

microsites. *>ira:e 4ocial 0edia, &%+

utdoors'ccording to (ielson, Tesco s!ends 2.2 million on outdoor cam!aign in %&

months ended &%+. *Cam!aign Li$e, &%+

irect ail:Birect mail is a strong mar)eting tool where Tesco can contact its customers

directly and ad$ertise itself, In early &; Tesco mailed &, free#CB#/60s featuring its online home#sho!!ing software to households across. 4o

 Tesco should in$est on direct mail ad$ertisement. *0ar)eting 0agaMine,

%222

11.1. Tieline

Initially Tesco /ethin) and resign its 0ar)eting strategy. 'fter resignation of

 Tesco CE6 Phili! Clar)e and newly a!!ointed 0r. Ba$e Lewis;s "rst !riority is5rand re$i$al, Tesco should increase its ad$ertisement udget in futureyears. 4o start a long term strategy, Early &%8 in$est on new software ando:er discount to customers. Increase ad$ertisement on TJ and 6nlinemar)eting, during &%8 o:er summer sales around the world and end of(o$emerBecemer &%8 increase s!ends on 5lac) Bay and Christmas. Tesco should s!onsor (5' >loal >ames London &%8 and 6lym!ics &%N,this would increase rand image.

11.2. =udget

Tesco &ar'eting =udget (or Three years:

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=udget is "ased on Tesco historic in(oration$ changesare ade "ased on our recoendations.

(o @ay of 

Communications

Bescri!tions &%3 &%8

*=orecast

  &%N

*=orecast

% 'ds on

Electronic

0edia

 TJ adsCelerity

endorsement

38

88

88

& 4ocial 0edia =aceoo)

ads9ouTue

+

+

+

+ PressPrint

media

5usiness

0agaMines/etail0agaMinesBirect

mail

+<

3

3+

3 E$ents 5lac)

=ridayChristmas

(ew 9ear e$e

&%

&8

&8

8 Personnel Tem!orary sta: for

'd$ertising and social

media cam!aign

&

&

&

N 4!onsorshi!s Bonations to

charities Bonation to

Political Parties

4!onsorshi! in

6lym!ics UK local

games

%8

%8

%8

Printing 5rochures, dis!lays,

anners

< 6nline U!date software %

%

%&

% Launching new!roduct

range Health

care co:ee

sho!

2 8

 Tota

l

%8

million

%N

0illion

%N8

0illion

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4ources *0ore 'out 'd$ertising, &%&, *(ielson, &%+

12. e(erences

•  TE4C6 PLC, *&%8. W6(LI(EX '$ailale at

htt!www.tesco!lc.cominde7.as!!ageidY%% *'ccessed &8.%%.&%3

•  TE4C6 PLC, *&%8. 6ur res!onsiility and our !romise # Phili! Clar)e,

&%+. W6(LI(EX '$ailale athtt!swww.tesco!lc.comtal)ingsho!inde7.as!logidY2N*'ccessed&8.%%.&%3

0I(TEL, *&%3. 4u!ermar)ets 0ore Than 1ust =ood /etailing # UK #(o$emer &%3. W6(LI(EX'$ailale athtt!academic.mintel.comdis!lay&+8%highlightZhit%  *'ccessed&8.%&.&%3

• Humy, C., *&<. 4coring Points How Tesco Continues to @in

Customer Loyalty. W6(LI(EX '$ailaleathtt!soo)s.google.com.twoo)sidYeiM+'h9Mmo<C[!gYP'&[l!gYP'&[dqYtesco\rand\!romise[sourceYl[otsY0McTiId$)@[sigYTLg3t>By@wqEe$]5$gsI10o1qL'[hlYMh# T@[saY^[eiY=K#qJLM(>sHuU$L@g<'L[$edYCBsN'Ew5'Z$Yone!age[qYtesco-&rand-&!romise[fYfalse*'ccessed &8.%&.&%3

•  Trendwatching, *&%3. % Trends for &%8 'nd % !rime inno$ation

o!!ortunities to run with and !ro"t from in &%8. W6(LI(EX '$ailale

at htt!trendwatching.comtrends%#trends#for#&%8W'ccessed

&.%.&%8X.

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• 5urch $. >eorge, *%223. W6(LI(EX. '$ailale at

htt!law.Gustia.comcasescaliforniasu!reme#

court3th&3N.htmlW'ccessed %.%&.&%3X

•  TE4C6 PLC # 'nnual /e!ort and =inancial 4tatements, *&%3. W6(LI(EX'$ailale athtt!www.tesco!lc.com"les!dfre!ortsar%3download_annual_re!ort.!df  W'ccessed %&.%&.&%3X

• Peter '. Koen et al, *&%%.THE TH/EE ='CE4 6= 5U4I(E44 06BELI((6J'TI6( CH'LLE(>E4 =6/ E4T'5LI4HEB =I/04. W6(LI(EX.'$ailale at htt!www.google.com.!)urlurlYhtt!www.iriwe.orgC0Bownload.as!7-+=ContentKey-+BN3&f+cc#%#3<8d#2a%#N3e8f+8f+f-&NContentItemKey-+Baa8fNN2#e2&#3<<f#aN<cfN<c2&d<2[rctYG[qY[esrcYs[saYU[eiYG=@MJKT/6tPnaIMwgc'=[$edYC5I=G''[usgY'=GC(E3PU<&9#uEsG9u=u#((m<M6!wW'ccessed &2.%%.&%3X

•  The >uardian, *&%3. Tesco mar)et share shrin)s to lowest le$el inalmost a decade. W6(LI(EX '$ailale athtt!www.theguardian.comusiness&%3mar%%tesco#mar)et#share#shrin)s#lowest#le$el#decade#aldi#su!ermar)etW'ccessed%.%.&%8X

•  The Telegra!h, *&%+. Cor!oration ta7 falls to & !er cent in fourthconsecuti$e 5udget cut. W6(LI(EX. '$ailale athtt!www.telegra!h.co.u)"nanceudget22338%8Cor!oration#ta7#falls#to#&#!er#cent#in#fourth#consecuti$e#5udget#cut.html . W'ccessed%&.%&.&%3X

•  TE4C6 Careers, *&%3. W6(LI(EX. '$ailale at htt!www.tesco#careers.com1os#in#the#Tesco#family6ne#4to!.as!7W'ccessed%&.%&.&%3X

• 0ar)eting @ee), *&%3. Tesco launches new healthy food rand.

Le7is(e7is W6(LI(E`. '$ailaleathtt!www.ne7is.comsearchhomesumit=orm.doW'ccessed&8.%&.&%3X

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• 0a et al, *&%3.;/'L#'<. )vailable

at6htt!connection.escohost.comcarticles32%<88deli$ering#customer#$alue#ased#ser$ice#!rocess#e7am!le#tesco#com ;)ccessed

0.12.0123<

• /etail @ee) *&%+. 'nalysis Tesco and 4ainsury?s quests for success.

W6(LI(EX '$ailale at htt!www.retail#wee).comsectorsfoodanalysis#tesco#and#sainsurys#quests#for#success88+N%.article W'ccessed %&.%&.&%3X

• 0alcolm, 0. and Hugh, @., *&%%. 0ar)eting Plans, How to !re!are

them, How to use them th edition.

•  The Telegra!h, *&%3. ' history of Tesco The rise of 5ritain?s iggest

su!ermar)et. W6(LI(EX. '$ailale athtt!www.telegra!h.co.u)"nancemar)ets&<<<2'#history#of# Tesco#The#rise#of#5ritains#iggest#su!ermar)et.html W'ccessed2.%&.&%3X

• Baily0ail, *&%&. Tesco to target customers according to their wealth

y using their Clucard data to !ersonalise its wesite. W6(LI(EX.

'$ailale at htt!www.dailymail.co.u)newsarticle#&%N3NNTesco#target#customers#according#wealth#using#Clucard#data#!ersonalise#

wesite.html W'ccessed %<.%&.&%3X

•  The >uardian, *&%3.6ne million fewer customer $isits a wee) at

 Tesco. W6(LI(EX. '$ailale athtt!www.theguardian.comusiness&%3Gun+tesco#morrisons#sales#fall#further#aldi#lidl W'ccessed &%.%&.&%3X

•  This is 0oney, *&%3. Tesco and 0orrisons continue to lose out to 'ldiand Lidl as sales slide amid lowest mar)et growth in a decade.W6(LI(EX. '$ailale athtt!www.thisismoney.co.u)moneymar)etsarticle#&232+Tesco#0orrisons#continue#lose#'ldi#Lidl#sales#slide.html  W'ccessed&%.%&.&%3X

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•  The >uardian, *&%3. UK grocery sales in decline for "rst time in &years. W6(LI(EX. '$ailale athtt!www.theguardian.comusiness&%3no$%<u)#grocery#sales#decline#!rice#war#asda#sainsurys#morrisons#tesco W'ccessed

&.%&.&%3X

• >uardianKantar @orld!anel, *&%3. Tesco su:ers worst sales fordecades. W6(LI(EX. '$ailale athtt!www.theguardian.comusiness&%3Gun3tesco#su:ers#worst#sales#in#decades. W'ccessed &.%&.&%3X

• >rocery (ews, *&%3. UK 4u!ermar)ets 0ar)et 4hare *&%+#&%3.

W6(LI(EX. '$ailale at htt!grocerynews.org&%&#N#%N#<#&#&Nsu!ermar)ets#mar)et#sharegrocery#stores W'ccessed &%.%&.&%3X

• 55C (ews, *&%3. 'ldi sales see ?record growth? at e7!ense of Tesco.

W6(LI(EX. '$ailale at htt!www.c.comnewsusiness#&<832+ W'ccessed &.%&.&%3X

•  This is 0oney, *&%+. 4hould Tesco ?go nuclear? with !rice cuts 4ales

fall %.8- at grocery giant as sho!!ers head to 'sda, Lidl and 'ldi.W6(LI(EX. '$ailale athtt!www.thisismoney.co.u)moneynewsarticle#&8%23NTescos#ongoing#sales#slum!#throws#dout#Chief#e7ecuti$e#Phili!#Clar)es#

strategy.html W'ccessed &&.%&.&%3X

• I>B, *&%3. UK >rocery /etailing. W6(LI(EX. '$ailale at

htt!www.igd.comour#e7!ertise/etailretail#outloo)++%UK#>rocery#/etailing W'ccessed &+.%&.&%3X

• Intelligent !ositioning, *&%+. UK 6nline >rocery sales u!, set to

doule in 8 years. W6(LI(EX. '$ailale athtt!www.intelligent!ositioning.comlog&%+2u)#online#grocery#

sales#u!#set#to#doule#in#8#years  W'ccessed &+.%&.&%3X

• =ood 0anufacture, *&%+. Tesco failed to understand the Chinese

consumer. W6(LI(EX. '$ailale athtt!www.foodmanufacture.co.u)@orld#(ewsTesco#failed#to#

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understand#the#Chinese#consumerW'ccessed &3.%&.&%3X

• Kwintessential, *&%& Tesco close 'merican stores due to Cultural

Bi:erences. W6(LI(EX. '$ailale at

htt!www.)wintessential.co.u)read#our#logtesco#close#american#stores#due#to#cultural#di:erences.html  W'ccessed &+.%&.&%3X

• @olfestone, *&%&. Tesco International 0ar)eting >one @rong.

W6(LI(EX. '$ailale at htt!www.wolfestone.co.u)logtesco#international#mar)eting#gone#wrong W'ccessed &.%&.&%3X

• 4tatista, *&%8.0ar)et share of grocery stores in >reat 5ritain, for the%& wee)s ending (o$emer 2, &%3. W6(LI(EX. '$ailale athtt!www.statista.comstatistics&22grocery#mar)et#share#in#the#united#)ingdom#u) W'ccessed %.%.&%8X

•  1ohn, =. and Leigh, 4., *&3. Logistics [ retail management # Logistics

in Tesco !ast, !resent and future # &nd edition. W6(LI(EX. '$ailale athtt!www.academia.edu&N<2<Logistics_in_Tesco_!ast_!resent_and_future. W'ccessed &.%&.&%3X

•  This is 0oney, *&%%. Tesco oss 4ir Terry Leahy lea$es with tills

ringing. W6(LI(EX. '$ailale at

htt!www.thisismoney.co.u)moneyarticle#%+N%2<%Tesco#oss#4ir#

 Terry#Leahy#lea$es#tills#ringing.html W'ccessed &<.%&.&%3X

•  The Telegra!h, *&%3. Clucard uilt the Tesco of today, ut it could e

time to ditch it. W6(LI(EX. '$ailale at

htt!www.telegra!h.co.u)"nancenewsysectorretailandconsumer%8N<8Clucard#uilt#the#Tesco#of#today#ut#it#could#e#time#to#

ditch#it.html accessed &2.%&.&%3X

• Baily 0ail, *&%3. Tesco sales fall at fastest rate for & years and share

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