Analysis Marketing Plan of Tesco Plc

Страница 2

Various legislations government policies also render direct influence on performance Tesco. For example, Food retailing commission (FRC) has offered Code of practice should be created, prohibiting many of existing practice, such as demanding payments from suppliers and variation in the coordinated prices retrospectively or without notice. Availability of powerful competitors with known brands creates threat of intensive price wars and strong requirements to differentiation of production. (Kotler, 2008)

Government policy on monopoly of management and decrease in power consumption of buyers can limit an input in this sector from such control, as license requirements and restrictions on access to raw material. With a view of realization politically a proper pricing policy, Tesco offers consumers, reduction of prices on purchase of fuel on the basis of the sum spent for products in the stores. Though the prices are lowered on the advertised goods, the prices in other shops rise to compensate. (Lancaster,2005)

2. Customer Analysis (markets, segmentation, targeting and positioning, branding)

Marketing strategy (STP)

Segmentation, targeting and positioning are three marketing strategy which should be used by the company for promoting its Fairtrade products aggressively, with objective of increasing sales. (Porter, 1980)

The following concern to them:

Segmentation of strategy: Segmentation strategy plays a huge role in success or refusal of the company. Mass, local and niches, all segments of the market should be considered in marketing plan on expansion of sale of Fairtrade products for increasing satisfaction of clients in effective manner. For maintenance of the maximal consumer value, behavior of consumers will be studied before segmentation in which their taste and preferences, attitudes and the behavior of buyers will be estimated.

Pink: Pink part of a matrix designates area which has high appeal of a segment and the most suitable for the company over the longer term.

Red color: red part of a matrix reflects environments which have a smaller piece of appeal in comparison from the mass market. This part has less validity for the plan in comparison from the mass market.

Green: In this part of a segment of a matrix, reflects to a measure of appeal from the point of view of a segment and has smaller validity for marketing-plan developed for a retail network.

Targeting strategy

Targeting strategy in the marketing plan of business also defines viability. The target market for marketing plan must involve those people who have preferences for Fair trade products as children, youth and people of middle age should participate all.

The company should estimate demands of clients, with objective to reveal them in well planned in the image. For this purpose the firm should analyze the preferences and taste in Fairtrade products. The consumer behavior should be well analyzed prior to the beginning of targeting strategy. (Porter, 1980)

Positioning strategy: positioning in the market for separate types of production plays a major part in the marketing plan. Fairtrade products should be located in city centre market in all stores of Tesco. Fairtrade products for youth and people of middle age in the Great Britain and other countries are recommended.

For satisfaction of a growing demand for target clients for Fairtrade products, the product will be positioned in a convincing manner. On quality Fairtrade hints innovative design and to the added cost, this product will be positioned in intelligence of clients.

This brand competes with the license goods offered by Wal-Mart. For this purpose the companies should go on some innovative modes to entice attention of clients to production of Fairtrade products.

3. Competition analysis (major competitors, their strengths and weakness etc)

Strategy: Tesco accepts effective marketing strategy for achievement of objects in view, which are viable during long success of start of the business. By means of these strategies, the company competes in the world market and has reached the top position in field of retail commerce.

The company is organized in viable image which is responsible for its lead positions in field of retail commerce. For this part, model of McKinsey from 7Ss as strategy, staff, shared values, structure, skills, system and style is applied in Tesco.

Five forces of Porter model is applied for an assessment of competitive advantages of industry. Tesco PLC works in industry of retail commerce, which is diversified industry. Progress of a competition in the industry for PLC Tesco looks as follows:

Porter’s Five Forces Analysis

The analysis of structure of the industry should be undertaken to find effective sources of competitive advantage. (Porter’s Five Forces, 2008)Therefore, with objective of the analysis of the competitive environment of Tesco, analysis of Porter’s five forces has been used by the researcher as follows:

Threat of substitute products and services

· The threat of substitutes in the grocery retail market is essentially below for food stuffs and from an average up to high for non food items.

· In retail trade of food stuffs, substitutes of the giant food retailers are chain of small convenience stores and organic shops which are not considered as threat for supermarkets as Tesco which offer products of high quality under significantly lower prices. Besides Tesco is further holding its upper hand by, opening Express shops in local cities and the city centers thereby creating obstacles for these substitutes in the market.

· Nevertheless, threat of substitutes for non food products, for example clothes is rather high. It is necessary to note, that until then as economic recession prevails, clients will be inclined to discounts, and consequently, Tesco is threat for special-purpose shops. (Porter’s Five Forces, 2008)

Threat of entry of new competitors

· Threat of occurrence of new competitors in the food-processing industry is low.

· It requires huge capital investments to be competitive and to create a brand. The basic brands which have already grasped retail trading in food stuffs are Tesco, Asda, Sainsbury's and Morrisons and their fraction is 80 % of shopping in the Great Britain. Thus, new participants should make something at extremely low price and / or high quality to establish their market.

· Reception of permit from planning local self-management borrows a significant amount of time and resources for creation of new supermarkets and it is therefore a significant obstacle for new participants.

Intensity of competitive rivalry

· The intensity of competitive rivalry in food and grocery retail industries is extremely high.

· Tesco has an intensive competition from the direct competitors, including Asda, Sainsbury's, Morrisons and Waitrose which compete with each other at the price, products and promotional activities. Therefore it is necessary to emphasize, that Asda is one of the basic competitors in this segment with an increase in fraction of the market from 16,6 % up to 16,8 % in 2010 financial year / 09 while Sainsbury's has shown growth up to 16,1 % from 15,8 % and Morrisons up to 11,6 % from 11,3 % through the same period. Slow growth of the market in essence means that these increases of a fraction of the market from competitors became more active in the market rivalry which threatens leadership of Tesco’s position in the market. (Porter’s Five Forces, 2008)

· In rural areas where the nearest supermarket maybe at some distance, some primary consumers are attracted by Somerfield and Co-op.

· Rigid discounts by Aldi, as well as Lidl have taken in the market during recession. In 2008 they have recorded growth of sales more than on 25 %.

Bargaining power of buyers