Marketing Strategy And PEST Analysis Of Tesco

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1. INTRODUCTION
1.1 BACKGROUND DETAIL
Universally Tesco is one of Britain’s leading food retailer and also the third largest in the world (Innovation Leaders,). It has its headquarters in Chesunt, but has many stores around the country. Tesco was founded in 1919 by Jack Cohen as a group of market stalls. The Tesco brand first appeared five years later in 1924 when he bought a shipment of tea from a Mr T. E Stockwell. The brand continued its rise in the 1930s when Mr Cohen built a headquarters and warehouse in North London, and in 1932 Tesco became a private limited company. In Malaysia, Tesco stores was opened in May 2002, first in Puchong, Selangor. There are stores throughout Malaysia which are located in Kuala Lumpur, Perak, and Penang
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SITUATIONAL ANALYSIS
The objective of analysis is to contrast and compare Tesco from other retailer and determine what the reason behind of it is. Therefore, the marketing skills of Tesco is being analysed.
2.1 P.E.S.T.L.E
P.E.S.T.L.E or more known as PEST Analysis is a macro environmental framework which is used to understand the impact of the organization’s external factors. It stands for Political, Environmental, Socio-cultural, Technology, Legal and Environmental.
2.1.1 Political
Tesco is supportive of Malaysian government’s policy of sale of alcohol to under age of 18 is prohibited. Not only that, Tesco supports meaningful programs and even have high spirit of each occasion celebrated in Malaysia. Tesco is highly active in charity too. They commonly have a donation box nearby counter, capable of doing charity by business too.
2.1.2 Economic
This has a huge part in Tesco. It is considerable that all business is directed to revenue-making. For Tesco, the economic trend influences the operation. Example, the inflation rate, currency rate and consumer purchasing power are one of the trend that senior management must take part and provide solutions. This trend applies to Tesco’s current market
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Not only for that, is location needed for product distribution as well. Tesco is one of hypermarket that have online shopping and store shopping as well. For more convenience in selling their product and services, Tesco have utilized two different channels, online and offline. Online sales channel is for Tesco Direct where it is directed straight to its official website. For offline sales channel, it is divided into four store formats which is Tesco Metro, Tesco Express, Tesco Superstore and Tesco Compact for UK base only (Research Methodology, 2014).
5.2 Price
The pricing strategy of Tesco is being developed accordingly to Tesco’s business strategy meanwhile pricing strategy would contribute to Tesco’s competitive advantage. To be more specific, based on the marketing message saying “Low Prices Everyday”, Tesco’s pricing strategy was made. Moreover, Tesco’s aim is to have reduction in cost purchase and operational cost in economics scale (Research Methodology, 2014).
5.3

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