Concepts of Marketing Principles
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7242 Downloads I Published: 31 Jan ,2017
Marketing acts as a crucial link between product and consumer desires that result into a significant cost/benefit ratio. Herein this report shall identify the different product development for sustaining competitive advantages. The core distribution arrangements that leads to customer convenience has been discussed in detail. Moreover, different promotional techniques as well as the segmentation on different marketing mix is outlined in brief.
Competitive advantage is a superiority gained by providing a differentiated and exclusive product to its consumers. Company either serves high valued products than its competitors at high prices or they serve products which are of similar value as of their competitors but at a lower price. With the positive link between companies core competencies with its opportunities, firm can provide it with a competitive edge over others.
Core competency of Tesco is to build a retail store that serves environmental friendly product which holds esteem quality product at cheap prices. Thereby, it seeks to provide customer products which are value for money.
This competency has given motivation to provide premium quality products to its existing range of product and make an exclusive lane for Fast and Furious customers.
It can be clearly seen that Tesco provides products that hold high value than Sainsbury that too at a low pricing. It also assists in delivering additional facilities that enhances its brand reputations. But, since Sainsbury is in close competition with Tesco and delivers the same range of products, Tesco needs to keep a close watch on Sainsbury’s move.
It has been observed that the customer’s perspectives and opinions are changing at a fast pace in the retail sector. Companies belonging to this sector must ensure that they are approachable by its customers. It might become difficult for companies to reach at their probable customers or are not equipped enough to meet their needs (Dibb, 2010). In this regard, Tesco has open its store at different places so that customers can visit their and buys product as per their needs. In addition to it, online portals of Tesco also helps in reaching to large set of customers. This aids in boosting the sales of the company.
The firm can either chose to sell their products through direct channels of distribution or by using various intermediaries for a specific task of marketing. Since, Tesco belongs to retail sector which is one of the largest renowned retail chain stores in the world; it must apply for indirect means of distribution. Here, in this case of Tesco, it can introduce its premium products in metro cities and in countries where there is high spending capacity of individuals. Through indirect channel of distribution, it can easily open up its own premium outlets in such regions.
Direct selling on the other hand can curb the cost of employing intermediaries and thus, it is a method of distribution that can be used for providing ease to fast and furious consumers (Ghauri and Cateora, 2010). Along with this channel, fast and furious consumers can sold goods through internet mode. This modern mode of distribution will make it convenient and satisfy the needs of such consumers.
Pricing reflects company’s offerings. Pricing is a determinant that holds potential to influence companies’ profits, sales, revenue and market share in an industry. Pricing strategies must be evaluated after considering all aspects like fixed and variable costs, objectives, costs, goals, competitiveness, projected positioning strategies and targeted segment. Pricing strategy should be evaluated after taking the following aspects in due consideration. Different strategies that can be used are perceived as value pricing, bundle pricing, penetration pricing, optional pricing and competition pricing (Hassan and Craft, 2005).
Tesco is currently keeping its prices according to the competitive pricing strategy and generally keep it prices at low cost than its competitors. Currently, company with an aim to attract Elite Class of consumers is looking forward to please them with their premium quality products and for this purpose, it can use perceived value pricing strategy. The values are set as per the aspiration of customers rather than its cost. With value pricing strategy, it can attract such consumers as far as possible.
There are different promotional strategies that can be used within an organization. A few of such strategies that can help in targeting the Elite class and Fast & Furious customers are-
Advertisements- This is a non-personal and paid form of medium where message is spread among consumers at large within less time (Savaskan and Van Wassenhove, 2006).
Public Relations- This method of promotion is a planned effort of establishing and sustaining goodwill and for mutual understanding between organization and their public.
Sales promotion- It is used to boost up the sales through coupons, discount vouchers etc.
Sponsorship- Funding events in exchange of some prestige and publicity (Hastings, 2007). In this regard, Tesco in association with Cancer Research UK runs campaign to spread awareness against cancer and also supports suffers with financial measures. Tesco also sponsored football challenges for kids as part of promoting Tesco Banks.
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Personal selling- Face-to-face communication between buyers and sellers in order to evaluate needs.
In order to determine the promotional strategy for Tesco, it can use SOSTT (situation, objectives, strategy, tactics and target) along-with 4Ms (Men, money, minutes and measurement). The application of these will help company in making clear analysis of the marketing strategy that Tesco must apply. Tesco in order to attract fast and furious customers can employ personal selling technique of promotion. On the contrary, to attract Elite class of customers, it can use advertisements, social media and sponsorship techniques.
Service marketing is not just limited to product, price, place and promotion but in fact, it has been extended with additional 3 elements which are as follows-
People- People are the important part in service provision, recruiting as well as training the staff will help company to achieve competitive advantage (Osada and et.al., 2015).
Process- This element looks on systems that help in efficient delivery of services.
Physical evidence- Physical evidence is about the location from where services are being delivered. For retailer in specific physical evidence depict the shops from where it delivers its services. In this context, Tesco can offer bags and card holder as part of physical evidence to the customers. Further, spatial layout and ambiance of Tesco will also act as a physical evidence that aids in developing healthy relations with the customers.
Tesco can look upon to market its products internationally for enhancing its market share and sales on simultaneous basis for the current products. Tesco has opened up its outlets in different countries. Toyota has focused on marketing products for Elite class of consumers as well as fast and furious customers.
|FACTORS||INTERNATIONAL MARKETING- Tesco||DOMESTIC MARKETING- Tesco|
|AREA OF BUSINESS OPERATIONS||Across all countries||UK|
|LABOR||Easy availability of cheap labor||less availability of labor as UK has high labor cost (Warner, 2010)|
|ECONOMIC CONDITION||Growing economies of the world with high opportunities||Tesco has positioned itself as No. 1 company with great performance|
|SOVEREIGNTIES||Abide by different regulations and policies of different countries||Only some restrictions|
|MONEY EXCHANGE RATE||Unstable foreign exchange rates||Standard currency rate|
From the above, it can be seen that Tesco has more uncertainties that are lying ahead of them than in domestic marketing of its products.
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It can be e concluded from this report that company by serving high valued products than its competitors at high prices of similar value and by establishing a positive link between companies core competencies with its opportunities can lead to gaining competitive edge over others. Promotional activity like Advertisement, Public Relations, Sales promotion, Personal selling etc have been identified by Tesco. Lastly, Tesco can look upon to market its products internationally by opening up its own outlets in different countries.
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