Retail Marketing - Assignment Example

Retail Marketing Table of Contents Part 3 Retail Strategy 3 Competitive Differentiation 5 Design 6 Advertising/ Promotions 9 Segmentation 11 Convenience of Collection/ Delivery 12 Other Important Areas 13 Part 2 14 Changes to Remain Successful 14 References 18 Part 1 UK retail industry has become highly competitive as several leading multinational and domestic retail chains are implementing unique strategies in the business operation process in order to gain potential competitive advantages. Tesco Plc. can be considered as one of the leading UK based multinational retail chains. The organization gained huge popularity and growth rate due to the implementation of several unique strategies in the business operation processes. This part of the assignment will try to analyze how well Tesco’s online and offline offerings are consistent in their presentation to the customer. Retail Strategy It is true that Tesco Plc has developed several unique strategies and has implemented these strategies in the business operation processes quite effectively and expertly. Most importantly the organization has expertise in both online and offline retailing strategies. The demand for high quality and differentiated products has significantly increased among the consumers in UK (Bacon, 1991, p.27). In addition to this, the concept of consumer market started to change due to the introduction of globalization and technological advancement right after the Second World War (Bacon, 1991, p.27). Several organizations started to include the concept of retail marketing in global market places in order to meet the market demand and satisfaction level of the target customers. Each and every consumer was seeking to consume all the necessary products from a single market place or a store in order to save their consumption time and effort in their daily busy life schedule (Coe and Lee, 2006, p.17). Looking into these needs and demands, several organizations have started to enter into the potential and emerging retail industry in UK. In UK, shopping and consumption can be considered as a social tradition of the consumers (Knox, 2000, p.7). Tesco is one of the leading retailers in the United Kingdom. The organizations developed retailing strategy and implemented those strategies in the business operation processes according to the needs and demand of the target customers. The adoption and implementation of multi-channel strategy in the business operation process has helped Tesco to gain potential competitive advantages. The organization has adopted both offline and online retailing strategy. Effective implementation of cost leadership strategy can be considered as an example of its offline strategy (Smith and Sparks, 1993, p.11). On the other hand, online marketing and purchasing strategy can be considered as its online retailing strategy. Tesco is the first organization and traditional retailer that has positioned it as digital media company (Palmer, 2005, p.9). It helped the organization to gain huge support from its customers. However, it is true that the organization is the first retailer that has introduced online retailing strategy in the business operation process. In terms of online strategy, the organization has installed advanced information communication technology software in the business operation process in order to increase the efficiency of overall business operation process (Palmer, 2004, p.9). The organization always tries to develop and implements strategies in the business operation process to meet the market demand and enhance customer value. These advanced software applications helped the organization to increase the efficiency of its overall business operation activities (Lewis and Thomas, 1990, p.7). In terms of offline retailing strategies, the management of Tesco Plc has developed customer centric strategies in order to meet high customer value. Introduction of club cards and customer loyalty cards for the potential existing customers for their frequent shopping activities has increased the level of customer preferences. In addition to this, effective leadership strategy, unique training and orientation process for employees, low turnaround timing process helped Tesco Plc to get enormous success within the industry through its offline retailing strategies (Burt, 2000, p.21). Competitive Differentiation It has been mentioned earlier that UK retail industry is highly competitive as well as saturated due to the presence of several potential domestic and multinational small, medium and large retail chains. Tesco is one of the leading and largest UK based multinational retailers. It is true that several organizations within the UK retail industry try to implement unique competitive strategies in their business operation process in order to gain potential competitive advantages over its potential competitors. The management of Tesco Plc also thought about the changes in current market demand and needs of target customers. Therefore, the traditional retailer developed and implemented several competitive differentiation strategies in order to reduce the impact of intense market competition over its business performance (Zenties and Morschett, 2007, p.23). The organization has implemented unique strategies in both online and offline business operation processes. Recent financial crisis and economic recession affected the economic environment of the United Kingdom. Low disposable income and affected purchasing power are the negative consequences of this economic downturn. The management of Tesco has adopted and implemented cost leadership and differentiation strategy in its business operation processes by looking into the recent economic environment of the United Kingdom. It helped the organization to offer quality and differentiated products in economic price level (Palmer, 2004, p.6). Consumers of United Kingdom were seeking for consumption of high quality and differentiated products in economic price level in order to support their affected purchasing power (Lewis and Thomas, 1990, p.18). Most significantly, the organization has ensured the reduction of its overall business operation cost in order to offer products at competitive price level (Lewis and Thomas, 1990, p.18). This strategy helped Tesco Plc. to gain potential competitive advantages over its competitors. In addition to this, adequate implementation of product and service differentiation strategy helped Tesco to meet the market demand of the target customers by providing variety of differentiated goods and services to the consumers. These unique offline-retailing strategies helped Tesco Plc. to maintain its competitive position in UK retail market (Guy, 1996, p.17). Several retail organizations in UK try to implement advanced online retailing strategy in business operation process in order to gain potential competitive advantages and secure high market share growth rate. But, Tesco Plc. is the first retailing organization that have introduced the concept of online marketing and online business operation activities in business process in order to meet the change in market demand and level of customer satisfaction (Rowley, 2005, p.11). The organization has installed advanced information communication technology in business operation process to reduce the time of overall business operation activities (Rogers, Ghauri and George, 2005, p.15). Moreover, these online activities help the management of Tesco to reduce its overall business operation cost (Palmer, 2004, p.9). As a result, this aspect could help Tesco Plc. to adopt and implement both cost leadership and differentiation business level strategy in business operation process. Design It has been mentioned earlier that Tesco Plc. has expertise itself in its both online and offline retail offerings. It is vital for an organization to attract the global customers through effective and attractive online and store environment. In terms of store environment, the management of Tesco Plc. always maintains unique physical evidence for each and every store in order to attain the level of high customer preference comparing to its competitors (Dawson, 20001, p.3). The organizational leaders have developed customer centric business operation strategies (Lewis and Thomas, 1990 p.7). Moreover, the organization always provides effective training to the employees in order to meet the customer demand and level of customer satisfaction (Lewis and Thomas, 1990 p.7. Each and every employee in the stores of Tesco welcomes and treats the consumers as important organizational stakeholders and individuals. The organization believes that the customers are real assets of the organization (Nicholls, 2002, p.5). Therefore, the organizational leaders always motivate the store executives and employees to take care of the needs and satisfaction level of the customers in the stores. The employees are effectively trained in handling of each and every advanced technological communication tools to give effective and spontaneous replies to the answers and quarries of the customers (Dawson, Larke and Mukoyama, 2006, p.14). In terms of offline retailing, the organization has introduced several offers and facilities for the potential customers. Offering plans like club cards and customer loyalty cards help the customers to enjoy their shopping activities in the stores. Most decisively, these services are introduced for the customers in stores in order to enhance their memorable shopping experience. In addition to these, these customer loyalty services help the organizations to gain potential customer preference aspect (Nicholls, 2002, p.5). Emergence of Internet or online marketing has helped several organizations to reduce their overall business operation time and cost (Lewis and Thomas, 1990 p.7). Most crucially, it helps the organizations to meet the developed market demand and needs of potential target customers. Tesco always tries to offer best possible online and offline retailing services to its target customers in order to gain potential competitive advantages. The organization has invested a large amount of its business profit in the development of its company website (Birchall, 2011, p.19). Effective and attractive website helps the customers to get to know about the plans, policies, and information about several key products or services that are offered and presented by Tesco Plc. In addition to this, the organization uses several popular and leading social media platforms in order to promote their products and services (Birchall, 2011, p.19). However, the aspect of advertising or promotion has been discussed in the next part. The management of Tesco has installed advanced ICT technology in its online business process (Dawson, Larke and Mukoyama, 2006, p.14). Inclusion of PDA service, advanced navigation process and online security applications ensure the effectiveness of online business operation activities. Recently, the organization is planning to strengthen its customer relationship management process by integrating Big Data application tool in CRM process. Inclusion of Big Data in CSR will help Tesco Plc to enhance the communication process between the employees and the customers (Palmer, 2004, p.6). The organization has developed unique online order processing and online payment option for the customers in which the customers can select the products, process the order and make payment through their credit or debit card (Harrison, 2004, p.4). It has been possible due to the expertise of the strong and effective technical team of Tesco. Moreover, the customers can find information of several products according to their budget and preferences. It is a key aspect of Tesco’s customer service management process. (Palmer, 2004, p.6) Furthermore, the website of Tesco Plc has been developed in such a way so that the possibility of the customer complaints gets minimized (Birchall, 2011, p.19). In terms of dissatisfaction, the organization has developed feedback and frequently asked question section in its website. It helps the organization to answer to the asked questions and quarries by the users. (Rogers, Ghauri and George, 2005, p.15) Moreover, the valuable feedbacks of the customers help the organization to develop more unique strategies and improve the business operation process based on the feedbacks of the customers (Guy, 1996, p.17). Advertising/ Promotions Promotion or advertising can be considered as an important strategic marketing element that helps an organization to promote its products or services through several mediums to the end-customers by displaying the features and characteristics of those products and services. Promotional strategy can be divided into two elements, such as traditional promotional strategy and contemporary promotional strategy (Smith, 1996, p.12). Print medium promotional strategy and digital promotional strategy can be considered as traditional promotional processes (Zenties and Morschett, 2007, p.23). On the other hand, word of mouth promotional strategy and modern online or social media promotional strategy can be considered as contemporary promotional processes (Smith and Sparks, 1993, p.11). It has been mentioned earlier that Tesco Plc. considers both offline and online promotional strategy in its retailing business operation process. In terms of traditional promotional strategy, Tesco Plc has developed and implemented print media and digital media promotional strategy. In addition to this, promoting through large billboards beside highways helps the organization to attract the concentration of the customers towards the organization (Smith and Sparks, 1993, p.11). Additionally, road shows and several unique promotional campaigns help the organization to create significant awareness among the target customers. Word of mouth strategy, club cards and customer loyalty cards can be considered as other forms of promotional marketing activities that have been developed by the organization. Effective word of mouth strategy helps the organization to generate significant customer preference aspect. On the other hand, offering facilities like club card and customer loyalty card influence customers to increase their consumption activities in Tesco (Reynolds, 2004, p.10). These mentioned facts could be considered as Tesco Plc.’s effective traditional and offline promotional and advertising strategies. It has been mentioned earlier that the organization has effectively adopted and implemented online marketing strategies in its overall retailing business operation process. Both website and social media promotional strategy helped the organization to create significant brand awareness among the people of young generation. However, it is true that several organizations within UK retail industry are trying to develop and implement unique promotional strategy to gain potential competitive advantages (Smith, Cuthbertson and Bell, 2004, p.26). But, Tesco Plc. has created a benchmark within the retail industry by developing effective and unique online promotional strategy (Rowley, 2005, p.11). Effective use of several leading and popular social media platforms, such as Facebook, Twitter and YouTube helps the organization to attract the kids and teenagers towards the products and services of Tesco. It is true that number of Internet and social media users in UK is increasing day-by-day (Burt, 2000, p.21). Therefore, demand for online or social media promotional activities and advertising is increasing significantly among the retailers in UK. Tesco plc has targeted people of young generation and several young adults through its online promotional strategy in order to increase its market share within UK retail industry (Haynes and Allen, 2001, p.7). Therefore, it can be stated that the organizations uses both offline and online promotional strategy quite effectively in its business operation process. These help the organization to create significant brand awareness among the target customers. Customer Segmentation Customer market segmentation also can be considered as an important strategic marketing element. It helps the organizations to segment their products and services according to the nature of target market and products or services (Lewis and Thomas, 1990, p.7). Tesco can be considered as one of the leading retail chains in UK. The organization is popular among the consumers in UK die to its offering of high quality and differentiated products in low price level (Smith, Cuthbertson and Bell, 2004, p.26). However, the management of the organization has segmented its differentiated products depending upon several segmentation categories (Haynes and Allen, 2001, p.7). Tesco Plc. mainly follows demographic and behavioural segmentation in its business operation process (Wilson, 1998, p.2). The organization has strongly adopted and implemented cost leadership strategy in business operation process to offer high quality and differentiated products and services to the target customers in economic price level (Haynes and Allen, 2001, p.7). Therefore, it can be stated that the organization generally segments its products and services for the people of middle class and lower middle class income group. In addition to this, the organization mainly focuses on the online social media marketing and promotional activities that helped the organization to increase its brand awareness among the target customers (Dawson, 2007, p.9). This particular online promotional strategy has helped the organization to target people of young generation and middle aged young adults. In terms of behavioural segmentation, the organization generally targets young and busy executives who try to reduce their consumption effort and time (Kim, 2008, p.14). The online promotional strategy has helped the organization to target people who love to consume differentiated retail goods or products through online platforms (Dawson, 2007, p.9). This can be considered as an example of Tesco Plc’s behavioural market segmentation. Convenience of Collection/ Delivery It is clear from the above mentioned facts and aspects that the organization is mainly focusing on its online business operation activities in order to meet the market demand and satisfaction level of the target customers. Supply chain and distribution can be considered as a key department of a retail organization. It is true that, Tesco Plc. has effectively developed its supply chain network. In addition to this, the management has developed some unique supply chain and distribution strategies in order to increase the efficiency of its overall business process (Wringley, 2007, p.22). The organization has implemented advanced PDA process and navigation system in its supply chain and distribution strategy (Lowe, 2012, p.28). In addition, consideration of fuel efficient long headed trucks has enhanced its green supply chain and distribution activities. However, the advanced PDA service helps the organization to track its collected and stored inventory within a quick period of time (Lowe, 2012, p.28). The inventory manager and stuffs do not have to offer huge effort in the inventory and stock management due to the effectiveness of this advanced PDA service. This aspect helps the organization to enhance its collection activities (Sternquist, 1998, p.8). On the other hand, installation of advanced navigation process helps the logistics truck drivers to deliver the ordered products and services to several business clients and end-customers (Lowe, 2012, p.28). These advanced navigation process helps the drivers to guide themselves towards the final and recommended destination quite accurately. Therefore, it can be stated that the implementation of advanced technology in the logistics and supply chain management process has helped the organization to enhance its overall supply chain collection and delivery process (Bell, Davies and Howard, 1997, p.7). Other Important Areas The above mentioned facts and aspects can help the readers to know about how the effective implementation of both offline and online retailing strategy helped Tesco Plc. to become one of the leaders in the UK retail industry. Apart from all these things, the centralized decision making model of Tesco also needs to be mentioned as it helps the management of the organization to control each and every business operation process. It is highly imperative for a leading retail chain like Tesco to control each and every business operation process quite effectively so that the organization can maintain its competitive edge in market place. The centralized decision making model helps the management of Tesco Plc. to gain potential competitive advantages as the management and organizational leaders can monitor each and every implemented strategy and their outcomes (Reynolds, 2004, p.10). In addition to this, recently the organization has diversified its business operation practices in several sectors. Food retailing and clothes retailing can be considered as Tesco’s effective business diversification strategy that has helped the organization to increase its market share within the UK retail industry. It is required for an organization like Tesco to understand the market demand and develop strategies according to the needs of target customers (Nicholls, 2002, p.5). However, the organization has effectively considered these aspects in the business operation processes that helped to maintain its competitive position in UK market place. Part 2 This part of the study will try to discuss the possible changes that need to be incorporated by Tesco Plc. These recommended change management processes will help Tesco Plc to maintain its competitive position within UK retail industry. Changes to Remain Successful It is clear from above discussion that Tesco Plc. has developed and implemented centralized decision making model in its business operation process in order to control its each and every business operation process. Moreover, the organization effectively focuses on customer value and customer satisfaction aspect in order to gain potential competitive advantages. It is true that there are several advantages of this centralized decision making model in order to enhance positive customer value (Reynolds, 2004, p.10). But, at the end of the day the management of Tesco needs to understand the significance of the employee motivation aspect. However, it is true that the management of Tesco Plc. is failing to retain its competent and potential employees due to long working hours and immense workplace stress (Smith, Cuthbertsonand Bell, 2004, p.8). Therefore, it is highly essential for the organizational leaders of Tesco Plc. to motivate the potential employees in order to enhance workplace as well as business operation performances. Consideration and integration of multicultural workplace diversity in employee management process will help the management of Tesco Plc to motivate the employees of different cultural background to perform effectively and collaboratively. In addition to this, the organizational leaders and managers should try to ensure effective and in-detailed training process of the employees. It will help the employees to gain potential self-confidence and motivation level to do hard work (Sternquist, 1998, p.8). It is true that UK retail industry has become highly competitive as several leading organizations within this industry are competing with each other to grab each other’s market share (Haynes and Allen, 2001, p.7). Employees can be considered as essential assets for the organizations in this competitive business environment. Therefore, being one of the leading retail chains, it is the responsibility of the management of the organization to take care of both the professional and personal needs of the employees (Sternquist, 1998, p.8). Then only the motivated employee will try to give their full potential in order to meet the objectives of the organizations. The leaders of the organization should always try to take care of the physiology, safety and social needs of employees in the organization. First of all, it is significant for the organization to keep motivating the employees to do hard work. Motivational factors of the employees can be fulfilled in two different ways, such as social recognition and financial reward distribution (Wringley, 2007, p.22). These strategies will help the employees of the organization to perform effectively (Wringley, 2007, p.22). In addition to this, it is also essential for the management of the organization to motivate the employees of different cultural backgrounds to work and perform collaboratively. Installation of public relationship management applications can help the management of the organization to improve the performance level of employees as this aspect will help to increase the self confidence level of the employees (Guy, 1996, p.18). Secondly, it is the major responsibility of the management of Tesco Plc. to introduce decentralized decision making model in the strategy development process in which the management of the organization should integrate the experienced and competent employees in the strategy development process (Dawson, 2001, p.4). This aspect has several benefits. Firstly, it can enhance the social recognition factor of the employees (Dawson, 2001, p.4). Secondly, it can help the organization to develop more structured and valuable business operation strategy so that the organization can maintain its potential competitive edge within the UK retail industry (Reynolds, 2004, p.10). It is clear from the above mentioned facts and aspects that Tesco Plc has adopted and implemented cost leadership business level strategy in business operation process in order to offer quality products in competitive price level. But, it is also crucial for the management of the organization to consider the significance of the implementation of differentiation business level strategy in business operation process in order to offer differentiated products to the target customers (Zilani and Bellini, 2004, p.2). It is true that globalization and technological advancement are influencing the consumers of the United Kingdom to consume high quality but differentiated products in economic price level. Therefore, the management of Tesco Plc. needs to consider this product or service differentiation strategy in business operation process in order to meet the market demand and needs of potential target customers. In recent days, several leading organizations in different industries are trying to introduce the mixture of cost-leadership and differentiation business level strategy in business operation process in order to provide high quality and differentiated products in economic price level (Rogers, Ghauri and George, 2005, p.15). The management of Tesco Plc. also can consider this strategy in business operation process in order to meet the market demand for differentiated products and services. On the other hand, consideration of the cost leadership strategy will help Tesco Plc. to offer products at economic price level (Sternquist, 1998, p.8). As a result, it can help the organization to support the low disposable income and affected purchasing power of the people of United Kingdom. Last but not the least; it is vital for the management of Tesco Plc. to follow the methods and rules of traditional marketing and promotional aspect. It is true that current market demand for online consumption activities is influencing Tesco Plc. to develop and implement online marketing strategies (Zenties and Morschett, 2007, p.23). But, the demand may change in future. On the other hand, demand for offline and traditional promotional and marketing activities will remain for long-term time period. (ibid). Therefore, the organization needs to consider the option of traditional marketing and promotional activities in business operation process. It will help the organization gain potential competitive advantages over its competitors for a longer period of time. Despite the several unique promotional campaigns, it is also imperative for the management of Tesco Plc. to contribute some money from the business profit in the CSR activities (Bell, Davies and Howard, 1997, p.7). It will help the organization to increase its brand image among several key external and internal stakeholders. 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