Managing Principles of Marketing

Task 1

1.1 Elements of the marketing process

Various elements of the marketing process are as follows...

Corporate objectives

The corporate objective of Tesco includes the mission, vision, strategies, and policies of the company. It guides and provides direction to its employees to make their best efforts which enables the company to meet its marketing goals and objectives.

Marketing audit

The marketing audit shows a detailed statement that contains the marketing activities of Tesco. Besides this, it also entails the past, present, and future actions of Tesco. It enables the company to compare its performance against its competitors.

Marketing and environmental analysis

Through marketing analysis, Tesco is able to identify the effect of market growth, trends, cost, and pricing structure on the profitability of the firm. In addition to this, environmental analysis indicates the effect of legal, political, and economic factors on the business operations of the organization.

SWOT analysis

SWOT analysis shows strengths, weaknesses, opportunities, and threats that are present in the business environment. It aids Tesco in converting its weaknesses into strengths and building a competitive advantage.

1.2 Costs and benefits of a marketing orientation program

Marketing orientation can be defined as a tool through which Tesco designs and delivers its products as per the needs, wants, and desires of customers. To deliver the products and services more effectively and to satisfy the customer needs, Tesco undertakes a marketing orientation program. The company conducts research to identify the needs and desires of customers. For this, the organization prepares a questionnaire and makes a survey to identify the needs and wants of customers. Besides this, organization also makes use of email id to understand the needs and wants of customers. It proves to be more beneficial for the organization as it makes a contribution in increasing productivity and profitability as well as helps the firm maintain long-term relationships with the customers. In addition to this, it also imposes high costs in front of company in terms of marketing research. Customer's demands and expectations are continuously changing with the passing of time. It is very difficult for Tesco to understand the customer's needs, wants, and desires in the same manner. If an organization succeeds in identifying customer needs and wants through a market research program, then it provides benefits such as customer satisfaction and customer loyalty as compared to the cost associated with the market orientation program.

Task 2

2.1 Effects of macro and micro environmental factors on marketing decisions

Microenvironmental factor consists of controllable or internal factors that can be easily controlled by Tesco. It includes customers, competitors, employees, shareholders and suppliers. They have a direct impact on the business operations and success of the firm. So, Tesco needs to take into consideration all the above-mentioned factors before making any marketing decisions. The impact of microenvironmental factors such as competitors and employees upon Tesco are as follows...

• If there is more competition in the market then the organization requires more focus on promotional strategies.
• Before making any decision, Tesco needs to understand and consider the competitor's policies and strategies.
• Employees of the company closely affect the marketing decisions of the business. If they are able to deliver cost-effective and satisfactory services to the customers then the company needs to make less expenses on promotional activities and vice versa.

Macro environmental factors are known as uncontrollable factors which cannot be controlled by Tesco. Political, economic, social, technological, and legal factors are the main macro-environmental factors that closely affect the business strategies, policies, and marketing decisions of a company. The impact of macro-environmental factors such as economic and social factors upon marketing decisions of Tesco are as follows...

• Economic conditions such as inflation and deflation highly impact the marketing policies and strategies of an organization. During inflation, the purchasing power of customers increases so Tesco needs to consider marketing conditions while making the marketing decisions.
• Customer's needs and expectations are continuously changing as time passes. To cope with this situation, Tesco undertakes a marketing research program that imposes costs in front of the company and affects the other marketing decisions.

2.2 Segmentation criteria that can be used for products in different markets

Segmentation can be defined as a process through which a company takes a total heterogeneous market for a product and then divides it into several sub-markets which can be served with a distinct marketing mix. Tesco introduces health drink products to increase its sales and profitability in the beverages section. To segment its customers, the company uses demographic aspects such as age as well as Tesco can also segment its customers on the basis of their personality characteristics. By making segmentation on the basis of age, organizations can easily attract children and old age people. Parents prefer more health drinks as compared to soft drinks which provide benefits to their children. In addition to this, old people are very health conscious so by introducing the benefit of health drinks, Tesco can attract more customers. Tesco can also segment its customer base on the basis of their personality characteristics such as attitude and habits which proves to be more beneficial for the organization. Health-conscious people prefer healthy drinks in breakfast for better health. Appropriate segmentation of the customer provides help to the company in increasing its productivity and profitability.

2.3 Targeting strategy for new product

The target market can be defined as a group of customers that Tesco select as a target and focuses its marketing efforts and strategies. Companies can use differentiated, undifferentiated, and concentrated targeting strategies as a tool to serve customers more effectively and efficiently. It makes contribution in the achievement of organizational goals and objectives. Tesco undertakes a differentiated marketing strategy to fulfill the needs and desires of the customers more effectively. In differentiated targeting strategy Tesco uses different strategies to attract different segments of customers because no one strategy is suitable to all consumer groups. To achieve success in the competitive business environment Tesco targets kids and old people. Because most of the buying decisions are taken by the old people as well as children also affects the buying decisions of the family.

2.4 Effect of buyer behavior upon marketing activities in different buying situations

Buyer behavior highly affects the marketing activities of Tesco in different buying situations. Buying situations and behavior depend upon the quality of services and information that a firm provides to its customers. Besides this, the experience that customers get from the sales personnel and products or services of retail stores has an impact on the repeat purchases of the customers. Different buying situation has different impacts on the marketing activities of Tesco which are as follows...

Straight rebuy

In a straight re-buy situation customers are engaged in the routine purchase of the product. They purchase products from known suppliers because they are more familiar with the product and show less involvement in purchasing. It indicates customer loyalty towards the specific product and supplier. It has a direct impact on the marketing activities of Tesco. Reference groups such as family and, friends as well as the social status of the customer also affect the buying decision of the customer. Tesco needs to take into consideration all the factors that affect the buying decisions of potential as well as loyal customers and impact the marketing activities of the firm.

Modified rebuy

In modifying re buying situation customers are more involved in the purchasing decisions. According to this, customers purchase similar products but it differ from the previous purchase in terms of the supplier or product characteristics. Customers undertake research to identify the quality and services of different suppliers and make comparisons with Tesco to make appropriate decisions.

2.5 Positioning strategy for product and services

Positioning can be defined as a tool to design a company's offering in such a way that creates a distinct image in the target customer's mind. Tesco can use different positioning strategies to position itself against competitors. It proves to be more beneficial for Tesco in achieving success in the dynamic business environment. Organizations can position themselves on the basis of the quality of healthy drinks. The quality of the product plays an important role in attracting more customers as compared to competitors. On the other hand, Tesco can also position itself on the basis of price that it provides health drinks of high quality at very low prices. It enables firms to increase productivity and profitability. To take a competitive position in the dynamic business environment companies make use of a brand endorsement strategy. To position its services Tesco can take the help of sports stars, Bollywood stars, and other great personalities of England in promotional strategies or campaigns. It helps the company attract more customers and fans of great personalities to make purchases and experience

Task 3

3.1 Development of product to sustain competitive advantage

To survive in the dynamic business environment Company needs to build and sustain competitive advantage. For this, Tesco can use either a cost leadership strategy or a cost differentiation strategy. For example: Tesco adopts a cost differentiation strategy which indicates that it provides quality products and services at very low cost. It enables firms to achieve success by attracting more customers. Besides this, Tesco can also build and sustain a competitive advantage by providing better discounts to customers as compared to competitors.

In addition to this, the organization undertakes research and development activities to assess the customers' needs, wants, and desires. It provides deeper insight into the company about the likes and dislikes of the customer. Through this, Tesco is able to develop or produce innovative products or services that create mental satisfaction among them. By raising the satisfaction level of the customer organization can build a loyal customer base. It enables the organization to build and sustain competitive advantage in the dynamic business environment. Tesco operates in the retail industry so it needs to make efforts to offer a wide variety of products and services to the customer (Hollensen, 2015). Along with the food products, organizations are required to offer clothes and other unique products to their customers. By taking advantage of the wide level of customer base organization is able to achieve a competitive position in a dynamic business environment. In order to cope with the strategic business environment Tesco makes efforts to offer innovative services to its customers as compared to its rivals.

3.2 Distribution arrangement to provide convenience to customers

Distribution arrangements play an important role in providing satisfaction and convenience to customers. Tesco adopts both direct and indirect channels to distribute its services more effectively and efficiently. To provide more convenience to customers Tesco also makes available products through online retail stores. Through this, customers are able to purchase products at any time from any place. Besides this, it enables them to compare the product and price with competitors. On the other hand, Tesco also provides home delivery arrangements or services that provide more convenience to customers (Solomon and et.al, 2014). They can order the products through a phone call or mail. It develops satisfaction among the customers which provides more benefit to the company in terms of increasing productivity and profitability of the organization.

3.3 Pricing strategies of Tesco which reflects its objectives and market conditions

Tesco needs to take into consideration the objectives of the company and market conditions while framing pricing strategies and policies. For example: One of the main objectives of Tesco is to increase the productivity and profitability of the company through customer satisfaction. Tesco adopts a penetration pricing strategy through which the firm charges low prices for the product and provides quality services to customers. It enables the company to increase its market share and obtain long-term profitability and productivity. On the other hand market conditions such as inflation and deflation also affect the pricing decisions and strategies of the firm. During inflation, Tesco must adopt a skimming pricing strategy which makes contribution in the achievement of organizational goals and objectives. In contrast to this, deflation or recession indicates a situation where the purchasing power of the customers decreases. Penetration pricing strategy enables Tesco to attract both potential as well as existing customers. Because prices charged by Tesco are very low during the period of deflation.

3.4 Integration of promotional activities to achieve marketing objectives

Tesco undertakes advertisement, publicity, relationship marketing, and word of mouth as a promotional tool which helps it increase the productivity and profitability of the company. Through advertisements in newspapers, books, etc. about discounts and availability of the product Tesco can easily attract a wide customer segment. Besides this word of mouth is a non-paid tool that increases the sales and profit of the company. Satisfied customer share their positive experience with friends, family, etc., and motivate or suggest others to experience Tesco retail outlets. In addition to this, Tesco can use relationship marketing as a tool to retain its customer base. By providing regular information about products and discounts the firm can easily fulfill its goals.

3.5 Extended elements of the marketing mix

It is also known as an augmented marketing mix which includes the following...

People

Employees are the assets of the organization and play an important role in providing satisfaction to the customers. The success of the organization depends on the quality of the service provider. Tesco organizes training and development sessions to improve the skills of the employees which enables it to provide satisfactory services. If employees of the company treat its customers very politely and solve their problems then customers are motivated to make purchases only from Tesco.

Process

The process indicates the way through which Tesco delivers its services. For example Effective problem-solving procedure and effective payment system plays an important role in achieving success.

Physical evidence

It plays a vital role in influencing more customers. Interior and exterior, music and arrangement of merchandise also help the company in increasing productivity and profitability of the firm.

Task 4

4.1 Marketing mix for two different segments in the consumer market

Marketing mix can be defined as a combination of four inputs such as product, price, place, and promotion which constitute the core of a company's marketing system. It plays an important role in the achievement of organizational goals and objectives. The company is planning to introduce diet chips in the UK market. In this, Tesco can segment its customer base on the basis of their age such as young and old customers. For this segment marketing mix developed by Tesco is as follows...

Product

A core product that Tesco is going to introduce is diet chips. In the present scenario, old age and young people prefer to consume diet chips which place a positive impact on their health. Thus, by focusing on such people company can attain success in the competitive business arena.

Price

Price has a significant impact on old age people. Tesco sets competitive prices for diet chips which helps them attract more customers in the UK.

Place

Tesco will offer diet chips through their all retail stores which are situated in the UK. In addition to this, the company will also offer such chips through its online store which also offers convenience to its customer base.

Promotion

Tesco undertakes social media advertisements to develop awareness among young and old people about the diet chips that are offered to them. Moreover, people spend lots of time on social networking sites. Hence, it is the best way through which a company can maximize its sales and profitability aspects.

Conclusion

From this project report, it has been concluded that various elements of the marketing process play an important role in the achievement of organizational goals and objectives. Besides this, it also has been concluded that micro and macro environmental factors have significant decisions on the marketing decisions of the firm. It can be seen in the report that segmentation, targeting, and positioning play a vital role in achieving success in the competitive business environment. By summing up this project report it also has been concluded that to develop and sustain competitive advantage organization needs to focus on effective strategies. In addition, these pricing and promotional strategies enable Tesco to increase the productivity and profitability of the company.

References

• Akgün, A. E., Keskin, H. and Ayar, H., 2014. Standardization and Adaptation of International Marketing Mix Activities: A Case Study. Procedia-Social and Behavioral Sciences.
• Armstrong, G. and Cutler, F., 2014. Marketing Principles. Translated by Mehdi Zare, Tehran: Office of Cultural Research.
• Bouzdine-Chameeva, T. and Hill, A. V., 2015. Pricing Strategy in a Clearance Period. In New Meanings for Marketing in a New Millennium.
• Cui, G. and Choudhury, P., 2015. Effective strategies for ethnic segmentation and marketing. In Proceedings of the 1998 Multicultural Marketing Conference.

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