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Marketing Principles: Tesco Plc - Essay Example

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Marketing Principles: Tesco Plc

A proposal on how they can position a product in a new market will also be examined towards the tail-end of this report. Micro and Macro Environmental Effects Micro: The micro environment mostly consists of the various factors that impact the company’s operations directly or indirectly especially from an internal perspective (Drucker 2008:10). Rivalry is one of these factors. Tesco has several rivals in the business such as Morrison and Sainsbury’s and needs to keep its position in the market. They have to make sure that their quality, pricing, products and convenience keep them above their competitors. This is because these are some of the strongest factors that may drive profits to zero if not looked into carefully (Drucker 2008:12). Threat of substitutes is another factor that needs to be considered. This is because the products may be sourced from other companies in the same business environment and this would reduce its attractiveness to its clientele. It is, however, benefiting from its bulk purchases since it gets its products at cheaper prices and with greater benefits trickling down to the clients at the end of the day (Lancaster and Reynolds 2005:9). Suppliers also determine how a company fairs. This is a horizontal factor that needs to be highly regarded. ...
The threat of a new entrant poses considerable danger to the company because it has the ability to influence profitability and control the market share. To counter this, they engage in expensive advertising which makes it difficult for the smaller or new companies to match. For instance, they spent 4-million-pounds on advertisement in 2007 which outdid many companies (Simms 2007:48). Macro: The macro environment, on the other hand, deals with factors that have a direct influence on the business (Drucker 2008:10). Political/legal factors affect the regulations that are passed and which may hinder Tesco’s growth. Laws imposed by the government or any legal hurdles that they may face due to anti-competitive practices will mean that they have to look for other ways of making profits. Economic factors affect many things amongst them the buyer power and the ability to grow (Kotler et al. 2008:21). For instance, the recession that took place in 2008 led to one of the worst sale performances due to the heavy discount offered though it increased its clients’ loyalty. Socio-cultural factors play a part in the advertisements and the need to understand the clientele base. Technology affects the dynamism of the business environment and it helps to provide new opportunities for growth and development. Tesco has taken advantage of this and engaged in online shopping as a way improving its sales. The environment affects the buyers, the supplies, the availability of resources and the natural system that all depend on for survival. To this effect, Tesco has begun a 500 million pound investment in green initiatives (Simms 2007:50). Segmentation This is quite a significant aspect of the marketing strategy that helps ...Show more

Summary

Marketing Principles: Tesco plc Tesco plc is the grocery market leader in the UK and the second largest retailer, measured in profits, after Wal-Mart. It is the third-largest retailer in the world when measured in terms of revenue after Wal-Mart and Carrefour…
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Marketing Principles: Tesco Plc essay example
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