Tesco and Its Strategic Marketing Strategies Essay

3591 Words Oct 8th, 2008 15 Pages
1.0 Executive Summary
This report examines the marketing strategies of Tesco, the market leader in the retail grocery industry in the UK. Analysis has shown that in this oligopolistic market, Tesco is following different marketing strategies to remain market leader. Tesco has been doing extremely well in focusing on different marketing strategies by constantly sticking to its principles “very little helps”.

Subsequently the report highlights the different marketing strategies adopted by Tesco, specifically market penetration, product development, market development and diversification have been analysed in order to see in which ways Tesco is competing profitably in the retail grocery market.

The following section discusses how Tesco
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Tesco applied market development by marketing existing grocery products, which are normally sold in out-of town superstores to a new market segment the convenience shoppers (Tesco express, Tesco metro) (Jobber 2007). In addition to that, “Tesco.com” is a good example for new distribution channels as Tesco offers besides the groceries and non-food products in stores, a whole product range online. Tesco is currently the most successful online grocery shopping service in the world; therefore it can be staid that this market development strategy has certainly contributed to the strong position of Tesco (Tesco Plc. 2007).

The development of new products for existing markets is called product development. This can mean to extend existing product lines. Tesco for instance has extended its “Finest” brand, which is worth between £ 400 m. and £ 500 m. into the home ware market and other non-food products (crockery, cutlery, cotton bed linen etc.) as well as into health and beauty products (Silk Creme Bath, Smoothing Body Polish …) to give current customers a greater choice (Jobber 2007; Tutor2u 2007).

Diversification is concerned with development of new product for new markets, either related to existing activities or unrelated. Of all the above mentioned strategies the diversification strategy can be considered as the most risky one, especially when it is not based on core competences of
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