Evaluative Report to Support a Marketing Environment - Essay Example

?Evaluative Report to Support a Marketing Environment The aim of this report is to explain the integration of Tesco’s products with in-store promotions, window display, pricing policy, and other marketing strategies. In particular, we want to report whether the total retail product offer and experience match other visible signs of a marketing mix. To do this we decided to visit two Tesco retail outlets in London and evaluate the marketing strategy they have adapted. The two retail outlets we decided to visit are London Smithfield Express and Holborn Viaduct Express. Jack Cohen in East end of London started Tesco in 1919. It started when Jack Cohen began to sell surplus grocery from a stall in east London. It become a private limited company in 1932 and two years later the company built it’s headquarter and a warehouse. Later in 1947 its stocks were floated on the stock exchange and in 1956 it opened its first self-service supermarket. By 1995 Tesco had become the world leading retailer and a year later it launched a 24 hours trading. Currently Tesco operates in 14 markets across Europe, Asia, and North America. Tesco UK is the largest of the Tesco businesses contributing to over 60% of the group’s sales and profits. Its plan to build a better Tesco focuses on six key elements that are service & staff, stores and formats, price & value, Range & quality, Brand & Marketing and Clicks & Bricks (Tesco 2012). Throughout this report, we will be underpinning our empirical finding from our research with the theory from various appropriate literatures. We will show how practices on these two retail outlets correspond to the available theory of marketing practice available in various marketing literature. Moreover, we will also show how some of the practices in these two retail outlets deviate from the available theory of marketing and management. According to Cant (2004), the retailers need to keep up with the latest innovations due to the rapidly changing consumer markets. In the case of innovation, Tesco has not been left behind since from my visit to their two retail outlets I found out they have adapted some of the latest technologies. The new technologies that they have adapted have enabled this organization to adapt new forms of retailing like online selling and home delivery. Moreover these new technologies has enabled this retail outlet to make its retail transactions more efficient by reducing the delay in which the customers are served thus improving the retail productivity of these organization. Moreover, I found out that the two retail outlets have started to practice online retailing where customers are required to place their orders on the organizations website and then after paying for the products they have delivered to their homes. In a consumer oriented organization such as a retail organization, to gain a competitive advantage the business has to ensure that customers are served better as compared to their competitors (Cant 2004). In these two retail outlets, I found out that the service to the customers is the key objective of every employee. I found out that employees are placed in almost every subsection of the retail shop to assist the customer in case of any need. This actually has differentiated this retail outlet from their competitors and thus making them to have a competitive advantage in the areas where they are located. According to Dahlen et al. (2010), brand positioning for retailer brands involves the design and implementation of a retail mix to create an image of the retailer in the customers mind relative to its competitors. Using the quality and the attractiveness of the product these group of retailers put in its retail outlets, it has helped them in the brand positioning. As revealed by the information which I received from several customers that I talked to most of the customers have a very good image of this retail outlets. This kind of positioning that this retail outlets have employed have helped them to gain a competitive advantage over their competitors and thus enabling this organization to enjoy a very large market share in these areas. Several in-store environment variables drive buying behavior in customers and thus improving sales. Some of these variables are point of sale posters and other window displays, in-store promotions, product discounts and presence of sales people (Rajagopal 2009). I found out that these retail outlets are actually doing their best to vary these variable according to improve their sales and still maintain their profit margins. I found out also that these two retail outlets have a specialized service to assist the people with disabilities in doing their shopping. This strategy is strongly supported by the employees who are place in all the sections of the retail outlet. These employees assist the people with disability to pick the product they need and then assisting them to carry the product to the counter and to their vehicles. According to Rosenbloom (2011), most in-store promotions are short-term events that are designed to create added interest and excitement for manufacturer’s products and thus increasing sales of those products. The managements of these retail outlets are very keen when allowing a manufacturer to stage an in-store promotion in these retail outlets. This was indicated by the selective in-store promotion I found taking place in those retail outlets. Regardless of the type of in-store promotion that a specific manufacturer want to stage in these retail outlet the manager of these retail outlets have to analyze the impact it will bring to the shop before giving the manufacturer a go ahead. I found this out by talking to the manager of those retail outlets who outlined some of the procedures that a manufacturer has to follow before being allowed to stage an in-store promotion in their retail outlets. An in-store promotion can involve elements like product discounts, customized point-of-sale display, and in-store product use demonstration (Kaiser 2005). Most of these elements I found them in practice in the two retail outlets I visited but they were not many which showed that they were regulated. According to Kraffti& Mantrala (2010), in-store promotions can increase both brand loyalty and customer loyalty that can result to increased long-term and short-term sales. This is why these retail outlets do not always bar manufacturers from staging these promotions in their stores. As the managers of those two retail outlets told me they experience a lot of sales of a particular product when that product has a promotion. The reason why the management of this organization always encourages its managers to be very cautious when allowing in-sale promotions is that if these promotions are not well managed they can negatively affect customer loyalty. When price reduction is used in an in-store promotion, it can decrease consumers’ reference prices thus making the brand or store to appear expensive the next time a customer visits (Kraffti & Mantrala 2010). This can cause a reduction in the customer loyalty or even make some customer to shift to other retail outlets. Since this organization is not ready for such an impact, it has to control the in-store promotions that are staged inside its stores. According to Rajagopal (2009), the key to buying and selling process in reference to an in-store promotion is the nature of customer retailer relationship. I found out that this retail organization puts very big effort in maintaining a high and good relationship with its customer especially through quality service delivery. This has enabled most of the in-sale promotion held in those stores to be successful in terms of brand promotion and customer loyalty promotion thus making more and more manufacturers to ask for chances to hold in-store promotions on these retail outlets. Time-pressured consumers to simplify their buying process since they provide easily recognizable cues for simplifying the buying processes (Kitchen 2006) can use in-store promotions. As one of the customers state, when he has little time for shopping, in-store promotion assists him to get what he wants without going all around the retail shop. He also stated that the bad thing about these in-store promotions is that they sometimes make him to buy some products that he had never planned to purchase. This indicates how in-store promotion can result to impulsive buying thus increasing sales made in a retail outlet. The two theories that explain how consumers can learn from buying from promotions are the attribution theory and behavior learning theory. Attribute theory is centered on causes which are evoked to explain outcomes (Jarvela 2011). According to Snowman et al (2011), behavior-learning theory focuses on environmental factors that influence the types of behaviors people exhibit and the extent to which they are likely to exhibit those behaviors in the future. As stated by the management of these two retail outlets they have been applying these two theories to understand the consumers’ behavior and thus decide when an in-store promotion can be both appropriate and effective. A disadvantage with these two theories is that they cannot predict whether consumers learn to buy a certain brand/ in a certain store or whether they learn to purchase on promotion (Krafft & Mantrala 2010) and thus the organization is forced to survive on assumptions. Another in-store marketing strategy that I found the two retail outlet using is the display of the product. These two retail outlets have arranged their shops into sections each sections handling a particular type of products. There is not any intermix of displays of different product in the same shelves or even in the same section. This has resulted to a very neat arrangement that actually motivates the customer to shop in them. Moreover, the kind of arrangement of products that these two retail outlets have adapted improves the accessibility of the products by a customer especially when the customer is shopping. According to Sullivan & Adcock (2002), this kind of presentation of products to shoppers can act as a form of promotion and it can improve sales greatly According to Londhe (2006), customers’ perceptions one certain products are greatly influenced by the manner in which the products are displayed and arranged on shelves. These retail outlets is been using several display strategies to display product in this store. One of the outlet managers told me that they consider the type of product and the target customers when choosing a method of display for that product. From my observation I also found out that most displays which were on those outlets obeyed the key principles of a good display. These displays were simple with encouraging reminders, eye level and size wise and had best quality products at the top. We can say that they were perfectly designed to act as promotion for those products and thus improve the sales experienced. A company can adapt several pricing policies for its customers. As the management of these two retail outlets told me they use different pricing policies for different products. They said that when selecting a pricing policy for a product they consider the nature of the product and the target customers of that product. According to Furtwengler (2009), organizations that follow and established policy of increasing prices tend to be value sellers while those that do not tend to be price buyers. However, due to the nature of the product that these retail outlets deals with to be both a value seller and a price buyer. For perishable product, the retail outlets objective is to be a value seller and thus it is sometimes forced to increase its prices in order to maintain a high quality for their products. For other types of products where quality is not very much desired the retail outlet tend to act as a price buyer buy ensuring that its prices are competitive compared to the prices of their competitors According to Kumhof et al (2003), the purpose of price policies is to keep the company as close as possible to its price optimum even when price changes occur. As we understand very high prices can reduce the number of customers and thus reduce sales. Moreover, a very low price reduces profit margins and can sometimes result to the company making losses. It seems this organization understands this very well and that is why they have decided to formulate pricing policies to ensure that they are operating on their optimum prices where both sales and profits are maximized. Actually, this organization can be regarded to be having the best price policies since so far there is no price complains coming from the customer. This has enabled this organization to compete well especially in the UK market thus making it to hold the largest market share. Another marketing strategy that these two retail outlets use within their retail outlets is the employing of the sales persons. According to Lamb et al (2011), the retail sales people can be used to persuade customers to buy more of what they are selling by explaining and convincing them that they need those products. As I found out from my visit to those retail outlets, persons employed in each of the outlets several retail sales. However, this retail sales people in addition to their mandate of persuading the customers to buy products they also explain to customers on how those products can be used and also how they should be kept to maintain value. Furthermore, they also assist the normal personnel of this retail outlet in guiding the customers on where to obtain certain products that they need. The retail sales people are trained on two common selling techniques that are the trading up technique and the suggestion selling (Lamb et al. 2011). From my encounter with the retail sales people, I found out that those retail outlets I could say that they are competent in these two selling techniques. Another aspect that I observed is that these sales people are only placed to promote products that the company suspects that its competitors might be selling it at a price lower than their price. The company has used these products as value seller price policy. From my research finding, I can conclude that Tesco has integrated information computer technology very well enabling it to be able to compete with its competitors. It has also employed the in-store promotion in its attempt to increase sales although it has been very cautious in this area. Moreover, the retail outlets of Tesco retail outlets have very nice display thus enabling customers to access the products they need more easily. Furthermore, Tesco has adapted a very good pricing policy where it considers the nature of the product and the target customers when designing the price for their products. In addition, the retail sales people that it has employed are effective in performing sale and thus they influence the business positively. However, this organization has no model or framework to following in managing its marketing strategy mix and thus they can easily find themselves spending more than necessary on certain marketing strategies. As a result, I recommend that the department responsible for marketing in Tesco organization design a model of framework that can assist them in allocating resource in their different marketing strategies. Reference Cant, MC 2004, Introduction to Retailing, Juta & Co Ltd, Cape Town. Dahlen, M et al. 2010, Marketing Communications: A Brand Native Approach, John Wiley & Sons, West Sussex. Furtwengler, D 2009, Pricing for profit: How to Command Higher Prices for Your Products and Services, AMACOM Div. American Mgmt. Assn., New York. Jarvela, S 2011, Social and Emotional Aspect of Learning, Elsevier, Oxford. Kaiser, HM 2005, The Economics of Commodity Promotion Programs: Lessons From California, Peter Lang Publishing, New York. Kitchen, PJ 2006, A Reader In Marketing Communications, Routledge, Abingdon. Krafft, M & Mantrala, MK 2010, Retailing in the 21 st Century: Current and Future Trends, Springer, Heidelberg. Kumhof, M et al. 2003, Pricing Policies and Inflation Inertia, International Monetary Fund, Washington. Lamb, CW et al. 2011, Essential of Marketing, Cengage Learning, Mason. Londhe, BR 2006, Retail & Distribution Management, Nirali Prakashan, Pune. 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