M RahmanMarketing mix of Tesco (7Ps of Tesco)
This is a detailed analysis of the marketing mix of Tesco (7Ps of Tesco). It analyses how Tesco uses the elements of the mix i.e. Product, Price, Place, Promotion, Process, People, and Physical Evidence and explains its business & marketing strategies.
Tesco is a leading retailer in the world. Approximately 345,000 people work the company which has thousands of stores in several countries. It serves millions of customers every week in its stores and online. It operates in the UK, Ireland, China, India, and some other countries. It has its largest operations in the UK (Tesco, 2023).
Products of Tesco
Tesco sells a wide range of products including food, clothing, stationary, cosmetics, electronics, financial services etc. With ever expanding product lines, it caters to every possible need of customers. It sells products from great brands in almost every product line.
Tesco has its own products and services too. Everyday Value, Tesco Lotus, Tesco Value, and F&F Clothing are some of Tesco’s own brands. However, it is worth mentioning that the availability of product categories depends on the type stores customers visit.
Highfield (2022) reports that Tesco has been accused of taking more than 100 budget products off its shelves at a time when the costs of living are very high. Also, it was ranked as the UK’s “worst supermarket” for food quality in the past.
Price and pricing strategies of Tesco
Cost leadership is Tesco’s pricing strategy. As a result, it maintains as low price as possible for its products and services without any compromise with quality. It enjoys economies of scale and works continuously with the suppliers to make the supply chain efficient to reduce prices.
Fierce competition from companies such as Aldi and Lidl in the UK market also impacts on the pricing strategy of Tesco. However, it is worth mentioning that Tesco has planned major price wars against the discounters (Quinn, 2020).
Place/Distribution strategies of Tesco
The next component of the marketing mix of Tesco (7Ps of Tesco) is place. This involves the distribution of the products/services to the customers. Tesco operates a variety of stores, from large supermarkets to small express stores. It also offers online shopping for customers to purchase from the comfort of their own home.
As stated above, Tesco uses two main channels of distribution namely online and offline. It has over 5000 offline stores around the world (Bedford, 2022). The offline stores are of six different types e.g. Tesco Express, Tesco Extra, Tesco Metro, Tesco Compact, Tesco Homeplus, and Tesco Superstore.
The online business of the company is called Tesco Direct. This shows that Tesco uses different channels available to reach out to its customers. However, its website was attacked by hackers in the past leaving many customers frustrated.
Promotion strategies of Tesco
Tesco has a strong brand image which helps its promotional activities significantly. It uses television, radio, newspapers, social media, and other outlets to take its message to its customers. It is the biggest spender in traditional advertising in the UK grocery retail industry.
In addition to advertising, Tesco uses other forms of promotion. For example, it often provides ‘buy one get one free offers’ for some of its products. It also offers discounts on many products and services during festive seasons.
Tesco has a loyalty card as well. Tesco Clubcard owners get points each time they shop which they can redeem to get discounts. They often get personalised discounts and offers as well. Tesco often communicates with the cardholders via direct mail posts.
Process in Tesco
Process refers to a set of activities performed in order to achieve something. According to some writers, it is a standardized set of activities that accomplish a specific task, such as processing a customer’s order.
In Tesco’s offline stores, customers pick up their products and go to customer assistants to pay. They can also use self-service machines to make payments. Tesco has also decided to increase the number of self-checkouts to reduce costs and improve efficiency.
People of Tesco
Approximately 345,000 people work in Tesco (Tesco, 2023). Tesco has a great number of customer assistants who play an extremely important role in the success of the company. These employees are usually friendly and competent.
Tesco invests a huge amount money and time in employee training and development. The reward schemes for employees are very good in Tesco as well. However, many analysts argue that Tesco fails to motivate its young workers.
Physical evidence of Tesco
Physical evidence or environment is the last element in the marketing mix of Tesco (7Ps of Tesco). It includes but not limited to all the tangible representations of a company such as furniture, aprons, menu, brochures, letterhead, business cards, reports, signage, and equipment.
Tesco has an excellent logo and makes efficient use of colours. Offline stores are easy to navigate with all products well categorised which make it easy for customers to find their products. The Tesco website is also fantastic in its look and easy to operate.
Summary of the marketing mix of Tesco (7Ps of Tesco)
In conclusion, Tesco has been successful in utilising the 7Ps of the marketing mix to become one of the most successful retailers in the world. It has been able to differentiate itself from competitors by offering a wide range of products and services, competitive prices, attractive store designs, and a variety of promotional strategies.
Tesco considers each of these 7Ps seriously in order to create an effective marketing strategy. However, there are some areas (as shown above) that should be reviewed for future strategies.
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Last update: 31 January 2023
References:
Bedford, E. (2022) Tesco store numbers in the United Kingdom (UK) and Ireland, available at: https://www.statista.com/statistics/490947/tesco-group-stores-united-kingdom-uk/ (accessed 31 January 2023)
Highfield, A. (2022) Tesco slammed for cutting 100 budget products, available at: https://www.mylondon.news/whats-on/shopping/tesco-slammed-cutting-100-budget-24752951 (accessed 31 January 2023)
Quinn, I. (2020) Tesco plans major recession price war against the discounters, available at: https://www.thegrocer.co.uk/tesco/tesco-plans-major-recession-price-war-against-the-discounters/645577.article (accessed 10 January 2023)
Tesco (2023) About us, available at https://www.tescoplc.com/about-us/our-businesses/ (Accessed 31 January 2023)
Photo credit: Tesco Plc
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
