Marketing mix of Tesco (7Ps of Tesco)
Marketing mix is one of the most widely discussed marketing topics. A number of elements together constitute the marketing mix, however, Edmund McCarthy has identified the four key elements namely product, price, place and promotion. The marketing mix is actually the set of actions that companies develop and implement in order to promote their products and services to the target audience. This article focuses on the marketing mix of Tesco. It analyses the 7Ps of Tesco (Product, Price, Place, Promotion, Process, People, and Physical Evidence) and explains the company’s business & marketing strategies.
Tesco is a leading retailer in the world. Approximately 420,000 people work the company which has almost 7000 stores around the world. It serves millions of customers every week, in its stores and online. It operates in the UK, Ireland, China, India, and many other countries. Tesco has its largest operations in the UK with over 3900 stores (Tesco Plc, 2021).
Products of Tesco
Tesco sells a wide variety 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. It has its own products 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 the range product categories depends on the type stores customers visit.
Price and pricing strategies of Tesco
Cost leadership is Tesco’s pricing strategy. As a result, the company maintains as low price as possible for its products and services without any compromise with quality. Tesco enjoys economies of scale and works continuously with it 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
Like many other retailers, Tesco uses two main channels of distribution namely online and offline. It has almost 7000 offline stores around the world. The offline stores of Tesco 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.
Promotion strategies of Tesco
Tesco has a strong brand image which helps its promotional activities significantly. The company uses television, newspapers, and other media outlets to take its message to its customers. According to Nielsen AdIntel (cited in Briggs, 2020) it is the biggest spender in traditional advertising in the UK grocery retail industry. It spent over £80.8m in 2019 which was a lot higher than the amount spent on advertising in 2018.
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 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.
Process in Tesco
Process refers to a set of activities performed in order to achieve something. According to Baltzan & Philips (2008), business process 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.
People of Tesco
Approximately 420,000 people work in Tesco. Tesco has a great number of customer assistants who play an extremely important role in the success of the company. The employees are usually competent, and 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 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.
If you liked any of these articles, please feel free to share with others by clicking on the social sharing icons below.
Last update: 10 January 2021
Briggs, F. (2020) Tesco is UK’s biggest traditional advertising spender in grocery retail, available at: https://www.retailtimes.co.uk/tesco-is-uks-biggest-traditional-advertising-spender-in-grocery-retail/ (accessed 10 January 2021)
Kotler, P. and Armstrong, G. (2012) Principles of Marketing, 14th edition, London: Prentice Hall
Lancaster, G. and Reynolds, P. (2004) Marketing, 1st edition, New York: Palgrave Macmillan
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 2020)
Tesco Plc (2021) About us, available at https://www.tescoplc.com/about-us/our-businesses/ (Accessed 10 January 2021)
Photo credit: Tesco Plc
Author: M Rahman
M Rahman writes extensively online 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.