Tesco Marketing Mix (4Ps) Strategy

Published by MBA Skool Team, Last Updated: April 19, 2020

Marketing Mix of Tesco analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Tesco marketing strategy. As of 2020, there are several marketing strategies like product/service innovation, marketing investment, customer experience etc. which have helped the brand grow.

Marketing strategy helps companies achieve business goals & objectives, and marketing mix (4Ps) is the widely used framework to define the strategies. This article elaborates the product, pricing, advertising & distribution strategies used by Tesco.

Let us start the Tesco Marketing Mix & Strategy:

Tesco Product Strategy:

The product strategy and mix in Tesco marketing strategy can be explained as follows:

Tesco has a huge range of product offerings at its various stores. The product offering is vast so as to cater to every need and preference of the customers from different segments of the market. The product strategy in the marketing mix of Tesco can be understood as below.

The products are: Food, Pet care products, Beverages, Frozen food, Bakery products, Technology and gaming products, Home electrical products, Home and garden products, Toys, Do-it-yourself (DIY) and car products, Sports and leisure products, Baby and toddler products, Party and gift products, Health and beauty products, Clothing and jewellery, Entertainment and books

Tesco also has its own brands these are: Tesco, Finest, Everyday Value, Tesco Loves Baby, Tesco Lotus, Tesco kipa, Tesco Bank, F&F Clothing, Tesco Value, Choice

Tesco has different types of stores and the product variety available depends on the type of store. Tesco also sells its products online. Tesco has recently reviewed the 33 food categories and reduced the product lines by 18%. Tesco bank provides financial services such as loans, saving accounts, credit cards, mortgages and insurance.



Image: geograph


Tesco Price/Pricing Strategy:

Below is the pricing strategy in Tesco marketing strategy:

Tesco follows the strategy of cost leadership in its pricing strategy. It provides the lowest priced goods while at the same time maintaining quality. Tesco uses economies of scale and the best channels for procurement to maintain low prices. Tesco continuously works with its suppliers to improve and make the supply chain efficient to reduce prices. Tesco has brought down the cost of an average weekly shop by over 3% in 2016. Tesco provides low and stable prices, after receiving feedback from its customers Tesco cut down promotional expense to further lower prices. Tesco has a unique programme called Brand Guarantee in which if customers can get lower price of any branded product at any other place Tesco will match the price if the customer is buying 10 or more products, this way it’s guaranteed that the customer pays the least at Tesco. Tesco has recently launched new food brands at low prices. Tesco has restructured its product team to get the best offer for customers.


Tesco Marketing Strategy comprises of not only its Marketing Mix, but also segmentation, targeting, positoning, competition and analysis like SWOT. Also read Tesco SWOT Analysis, STP & Competitors

Tesco Place & Distribution Strategy:

Following is the distribution strategy of Tesco:

Tesco has 6,900+ stores in 11 countries. Tesco has the following types of stores:

Tesco Metro, Tesco Express, Tesco Extra, Tesco Superstore

Tesco superstores are large supermarkets which sell groceries and a small range of non-food items.

Tesco Metro are sized on an average 1,000 square metres, situated in towns and city centres.

Tesco Express are smaller stores which essentials and high margin products. Products at express are priced higher than other Tesco stores.

Tesco Extra are large hyper stores which carry a wide range of products under one roof including groceries and general merchandise, allowing customers to complete all their routine shopping in one trip and under one roof.

One stop is a separate brand of stores under Tesco.

These are very small stores and charge higher rates than any other Tesco store.


Tesco Promotion & Advertising Strategy:

The promotional and advertising strategy in the Tesco marketing strategy is as follows:

Tesco has a strong brand image which relies on low prices. Tesco’s promotional activities are centred on this theme. Tesco uses hoardings, television ads, and charitable events as promotional channels. It also uses to a large extent promotional discounts and offers such as buy one get one. Tesco has a loyalty card called ‘Tesco Clubcard’ which allows Tesco to segment and target its customers. Clubcard owners get points which they can redeem to get discounts. Clubcard owners also get personalised discounts and offers. Tesco also sells and promotes its products online.


Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Tesco.


People:

Tesco is one of the leading retail brands employing a lot of people. People are the employees of the company who are undergo selection process held by the company. Careful job and policy selection is required in order to get the correct people for the organisation and the project. There are over 480,000 employees in 11 markets around the globe. Diversity is highly encouraged in Tesco. People are valued more in order for them to perform better for the company. The employees of Tesco are encouraged to help one another and to be supportive. Promotional opportunities are given to the staffs that are identified to have greater potential.


Process:

The process followed by Tesco is a one where the attaining of the market task was kept in mind. It was designed such that the deviations from the company policies were kept the minimum. The other factors that are considered are the accessibility, service feature and capacity levels of production.


Physical Evidence:

The physical evidence stands as a proof of authentic products provided to the customer. The logos, colours, labels and equipment are a few of the evidence that’s used by Tesco as a proof to its consumers. The stores are also a physical evidence of the brand and is it place of moment of truth with the customers. This completes the marketing mix of Tesco.


About Tesco:

Tesco is one of the largest retailers in the world with over 6,902 stores in 11 countries. The stores provide a wide range of products from groceries and clothes to petrol, software and financial services. Tesco is UK’s biggest supermarket with a market share of about 28% and 5th largest in the world by revenues. Tesco is a British company founded in 1919. Tesco had global sales worth £48.4bn and operating profit of £944m. Tesco also operates a bank called Tesco bank.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse 4Ps Analysis of more brands and companies similar to Tesco Marketing Mix. The Marketing Mix section covers 4Ps and 7Ps of more than 800 brands in 2 categories.

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The names and other brand information used in the Marketing Mix section are properties of their respective companies. The companies are not associated with MBA Skool in any way.
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