Market Strategy in Tesco, Aldi and Morrisons Essay

(Please note: Task 1, 3 & 4 have been combined together into one report. Task 2 is separate and can be found on page 9)

Product offerings by these contenders are similar as Tesco’s to a huge degree. This procedure helps Tesco to ensure its commercial center by expanding competition. A large portion of the contenders of the Tesco have an equivalent or a bigger market share in the store business. By industry investigators, Tesco PLC has a twenty nine per cent of shares the grocery store industry.

From the time it opened, Aldi has expanded the number of product assortments that allow consumers to find nearly anything they need to supply and feed their families. Aldi developed a strong marketing program and decentralized their pricing and assortments that also include some well-known products. Aldi’s begins its value propositions to shoppers with its amazingly low prices. Their “hard” discount pricing, averages about 30% below standard supermarkets like Winn-Dixie or Kroger’s (Brick, 2016). They attribute their success and growth to the “hard discount” model as it has demonstrated to be highly effective. Aldi is different than “large” discounters like Walmart where Walmart’s varieties are limited in size and led by private label products, and investments are made in stores atmosphere, unfortunately, resulting in lackluster customer service. This allows “hard” discounters like Aldi to win the grocery price war by greater margins than Walmart, making Aldi a major competitor of Walmart (Bartone,

1. Introduction The intended purpose of this report is to outline the nature of the Australian retail market, specifically the retail food sector. This report will then discuss the role of market segmentation and how it has resulted in the emergence of new retail channels available to consumers. The emergence of ALDI as a new retail channel will be the focal point of the report along with a brief overview of other new-coming organizations such as Costco. Through the use of current journal articles, books, internet sites and government publications, this report will outline the benefits of the new retail channels available to consumers, especially in regards to saving on common expenses. This report will also discuss the possible room for

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

Tesco has a good progress and their strategy is made up of of five elements:

Larger stores also offer people the convenience of additional services along with their shopping, for example post office, pharmacy and opticians. By addressing consumer’s expectations and using their buyer power they can offer a choice of products to reflect consumer’s diverse budgetary, dietary, ethical and environmental requirements. Furthermore their global buyer power enables consumers to benefit from choosing exotic produce all year round. With 30,000,000 customers (Bevan cited in Allen, 2009) choosing to use the big four supermarkets on a weekly basis it would suggest that they provide a format that consumers want.

Tesco will need to be eager to develop as a business by trying new methods, by constantly purifying Tesco’s strategies this would lead to the business identifying greater paths of accomplishing its goals and also adapting innovation. This will allow Tesco to become competent leading to advanced profits and lower costs. The disadvantages of this would be that developing new methods may be time consuming, the time that it takes for Tesco to familiarize new strategies could be more efficiently towards the high demanded products that would lead to more sales.

In addition to outlining such aspects of the retailing industry, theory of the marketing mix and the extended services mix will be applied to the industry to draw a better understanding of the key roles of marketing to large supermarket chains like Woolworths and Coles. Furthermore, by acknowledging past results and findings of industry reports and marketing theories, practical and managerial implications will be made to further analyse and contribute to the facilitation of the retail industry’s marketing strategies as consumer markets are in a constant state of flux. At the end of this report, a conclusion will be drawn, summarising the various findings.

Tesco can be said to be a global leader in the UK retail business. It is one of the leading world retailers. The company started using the trading name TESCO in the 1920s and since the group has expanded in many ways venturing in different markets and with interest in different sectors. Over the years, Tesco has recorded growth which has been achieved through different strategies. There has been emphasis on the growth of Core UK business in order to expand internationally. This growth has allowed the company to position itself in food and non-food sectors based on retailing services. Over the years, the company has witnessed financial fortunes which have been reflected in its growing sales. Sales have risen from 31,726,280 from 2013 to 32,074,650 in 2014 (Kantar, 2014.) This has been achieved through growth strategies which have seen the company expand its retail outlets and at the same time enter into new markets with high growth potential using their famous ‘every little helps’ branding along the way. The ‘Every little helps’ branding helped Tesco’s attract 1.3 million new customers in the period from 1990-1995, and the campaign achieved good effects on staff morale, attracting quality marketers to join Tesco, directly affected the share price and allowed the brand to move into non-grocery sectors where brand credibility is a key requirement. Disadvantages….limitations etc

The UK supermarket industry resembles an oligopolistic industry, with several characteristics. Oligopolistic markets tend to be characterised by high concentration ratios, barriers to entry and…Since the turn of the century, the industry has been scrutinised by both the Office of Fair Trading and has been referred to the Competition Commission on two occasions. (Seely, 2012)

According to Survey by national consumer organization, CHOICE (2014), a comparable basket of goods at ALDI is 25% cheaper than at one of the MSCs. ALDI is estimated to hold 9.1% market share in 2015-16 as compared to other grocery stores (ibis). In terms of the strategy of ALDI, ALDI focus on reducing costs to the customer in such a manner that customer is convinced to continue shopping. However, on further analysis, the organization illustrates a differentiating strategy and prefers to distinguish itself from other major retailers the likes of Coles, Wesfarmers and Woolworths. For example, ALDI provides weekly specials like on gardening, camping, kids, and kitchen with discounted offers. ALDI is a low-cost player that stocks a less variety of popular grocery items. Over past five years, an incredible achievement contributes to ALDI 's rapid growth to which consumers have responded positively (ibis). Therefore, it can be said that in terms or corporate strategy, the organization has characteristics of both a cost leadership strategy as well as a differentiation strategy.

Aim of this easy focus on Tesco marketing operation and how they control their domestic and international market. The information that use in this report is secondary data and also different techniques, analysis such as PESTEL analysis, SWOT analysis, Marketing mix analysis, market segmentation, targeting analysis etc are used to discover Tescos marketing position in national and international place.

* External Context of Sainsbury’s belongs to the biggest supermarket leaders in UK. In other words, Sainsbury’s is part of big four ‘Asda, Tesco, Sainsbury’s, Morrison’s. The biggest rival today in UK market is Morrison’s, they booth fighting for a market but Sainsbury’s ram in a higher place. In Appendix 3, we can find concept of retail and types of functioning.

Profits for Tesco’s operations in Europe, Asia and Ireland increased by 78% during the last fiscal year. The company has a strong brand image, and is associated with good quality, trustworthy goods that represent excellent value. Tesco’s innovative ways of improving the customer shopping experience, as well as its efforts to branch out into finance and insurance have also capitalized on this.