Strategic Marketing of Tesco Plc - Assignment Example

Strategic Marketing Executive Summary Business organizations focusing on the marketing of products to the s are observed to enhance the parameter of intangibility in that the same contributes in differentiating the product offering in the competitive market. The paper focuses on the case of a retail organization, Tesco Plc where the company tends to enhance the parameter of intangibility in designing effective and innovative services. Designing of new types of services contributes in generating needed customer satisfaction and in developing an effective market for the different retail products. Table of Contents Table of Contents 3 Introduction 4 About Tesco Plc 4 Applying Goods-Services Spectrum to Tesco Plc 10 Conclusion 14 Reference List 16 Introduction The modern era of product marketing reflects the growing influence of the services parameter contributing in differentiating the products generated by one company over the other in the larger competitive market. Thus, companies operating along the left hand of the Goods-Services spectrum are observed to continually develop intangible offerings which coupled with the product offerings aims to gain a larger consumer space. This aspect is thus observed in gradually narrowing down the differences of the two sides of the Goods-Services spectrum in generating increased space to the services dimension. Based on the above discussion the paper would tend to highlight both on the concept of the Goods-Services spectrum while also reflecting an application of the same in the retail industry. The paper would reflect the manner in which intangible product offerings are generated by an international retail organization, Tesco, to aptly market its products in the global consumer sphere. Potential suggestions would be generated to the management body of Tesco based on the concept of the Goods-Services spectrum to help the company in the designing of innovative service offerings. About Tesco Plc Tesco Plc, located in United Kingdom operates as a multinational retailer based on total team strength of 500,000 people across 12 different markets. The company aims at generating qualitative product and service offerings to its global customer base which aim at compelling the customers to avail products and services from their end (Tesco, 2014). The Goods-Services Spectrum The development of the goods-services spectrum is generated through an effective synchronization of both tangible and intangible elements. The diagrammatical presentation of the Goods-Services Spectrum is generated as follows. Tangible elements relate to such entities that can be felt or touched like the different types of commodities traded by the retail organization, Tesco. On the other hand, intangibles relate to such elements that cannot be touched or felt. These mainly relate to the feelings or beliefs that the customers tend to have for the products traded and generated by the business organization. The left-hand side of the goods-services spectrum, thus, encompass the different varieties of commodities ranging from grocery to food products and also to consumer durables and non-durable products that are marketed by Tesco. Customers however tend to derive considerable amount of benefits and advantages from the use of such products. Benefits and advantages gained by the customers in terms of use of the tangible product are identified as less tangible in nature (Nel et al., 2011). The right hand of the goods-services spectrum in contrary to the left-hand, reflects pure services that are rendered by the business organization to its customers. Relating to the retail organization, the right hand side would relate to the customer services offered by the company to its customers. It would also reflect on the ambience and the store atmospherics that contribute in helping the customers conducting the shopping activities in a very comfortable manner. Other types of intangible products like the insurance and the financial products rendered by the retail organization fall in the right hand side of the spectrum. Business organizations focus on generating differentiation in the level of the product offerings through working on the dimensions of intangibility. Enhancing the delivery mechanisms in terms of reaching the products to the customers within the effective time period contributes in augmenting the level of the product offerings. This feature contributes in enhancing the competitive advantage of the organization in the specified sector or industry. Business organizations related to the right side of the goods-services spectrum focus on enhancing the variety and quality of the services generated by the organization. Improving the product quality and variety thus helps the business organization to effectively position among its competitors in the target market. The above discussion thus reflects the increasing dominance of the intangibility dimension both in terms of differentiating the product offerings and also through enhancing the nature of service offerings. This shows the manner in which the parameter of intangibility is tending to gain needed significance along the whole spectrum (Graham, 2008). The generation and utilisation of the concept of Product Services contributes in enhancing the parameter of comparative advantage of the product companies. Product Services as a concept, focuses on to augment the utility value of a product; buyers tend to associate the utility generated by the product to the physical product while making their purchase decisions amidst large scale competition. The services function or attributes of the product can be enhanced in three different fashions that can be underlined as follows. For engineering or manufactured products the service element relates to the different types of performances like installation of the product, engineering applications and also relating to the generation of training to the different operators. Relating to consumer durables and industrial goods the aspect of services relates more to the long life or performance of the product which in turn generates enhanced customer satisfaction. Services related to the category of maintenance and repairs are generated related to such products to make them stay in operation for a greater period. The product offerings to the customers are also enhanced through the generation of an effective product service like warranties. Generation of warranties contribute in helping the customers bear the risk relating to the purchase of a specific product (Yuen and Chan, 2010). Services like free repairs, refund of money in partial or full amounts and also in use of a no question asked policy in replacing the product contribute in covering up the future uncertainties related to its purchase (Lovelock and Gummesson, 2004). These services are observed to enhance the value of the product offerings generated to the customers and thereby, help in largely satisfying the customers and encouraging them to make repeated purchases. Differences in the level of consumer perceptions are noted relating to the different types of service offerings entailed above which again enhance the cost of the offerings. To avoid the above factor the business organizations are observed to generate a holistic service package which contributes in not only reducing business cost but also in augmenting customer satisfaction. The above discussion is elucidated through the use of the following diagram. The above discussion thus reflects the growing significance of the intangibility dimension to effectively market a product to the target customer base and also in gaining on comparative advantage (Avlonitis and Papastathopoulou, 2006). The concept of Service Product thus rightly contributes in augmenting the parameter of intangibility relating to the tangible product offerings made by the company. Marketing strategies related to the development of service product mix contribute in enhancement of sales relating to the service products of a company. Assessment of the Service Product Mix is made based on four main categories relating to width, length, depth and finally consistency. The width parameter relates to the number of different service lines that can be generated pertaining to a specific product. Assessing the length of the Service Product Mix relates to the sum of the different types of service items that help in constituting the service mix. Depth element relates to the number of service variants generated along each of the different service product lines. Finally, the consistency element is valued in terms of understanding the association of the service product lines to the levels of consumer perception about the product, distribution channels used for reaching the products to the end consumers and others. The generation of the Service Product is also observed to feature a definite Life Cycle that can be elucidated as follows. The introductory part of the Service Product Life Cycle generates pioneering advantage for the company in that the service conceptualisation reflects needed innovation. In the initial stage, the main focus of the company is to largely promote the advantages generating from the rendering of innovative services. This stage thus focuses on creating greater awareness with slow growth of sales. Growth stage of the Service Product Life Cycle is initiated owing to the growth of promotional expenditure made in the introductory stage to help feature the benefits of the services incorporated. This stage reflects the growth of word-of-mouth communication activity which in turn contributes to the enhancement of the business revenues and profitability of the company. Maturity stage in the life cycle of a Service Product relates to that point that tends to portray large scale competition coupled with stabilisation of the sales and business revenues for the company. The company at this stage is observed to generate large scale investments to help promote its product. This feature tends to affect the profitability dimension of the company compared to other competitors. Finally, the declining stage is set in where the life cycle curve of the Service Product counters a steep curve that indicates a loss of potential business. The above discussion can be graphically reflected as follows. (Rao, 2004) Applying Goods-Services Spectrum to Tesco Plc The retail organizations, to aptly market the large variety of products to the target consumers, need to specifically adhere to the generation of needed services. These services tend to serve as add-ons to the marketing of different types of products ranging from consumer non-durables to consumer durables and also related to food, clothing and grocery sector. Generation of services serves as value-addition in the marketing of different types of products through the retail outlets. Value additions can be generated related to the marketing of garments in the company through the creation of changing rooms and also through the generation of different policies relating to free alterations and returns. Marketing of electronic and consumer durable products by the company can be rightly enhanced through the generation of free services based on installations. Generation of warranty relating to the different electronic products contributes in countering the emergence of uncertainties thereby helping in enhancing the benefits obtained by customers. The marketing of furniture and home furnishing products by the company can be rightly enhanced through the generation of effective policies pertaining to assembling and trials. Free assembly of the furniture products at the residence of the customers and encouraging the people to avail free trials contribute in augmenting the benefits obtained by customers. Services related to free delivery, installations, assembling and trials can be generated by the company in the form of effective packages with the sales of the different consumer durables like electronics and home furnishings. The above process would mutually help the retail organization in helping to generate adequate levels of customer satisfaction and also in reducing the amount of cost involved. Generation of services in a packaged form with the products contribute in meeting the consumer demands of total product solutions and also in enhancing the level of sophistication involved (Bhatia, 2008). The aspect of intangibility relating to the marketing of the different products can be further enhanced by the retail organization through the promoting the benefits and attributes relating to new products launched or marketed at the retail outlets. Promotion of information relating to benefits and attributes can be conducted through the generation of mailers and also through the use of televisions and videos in the shopping outlets. Marketing of product benefits and services thus contribute in associating the products to the needs and demands of the customers (Gilbert, 2003). The retail company needs to develop a team of people that would help in installing and assembling the different furniture and other electronic items directly at the residences of the customers. Outsourcing activities can be pursued by the retail company relating to the development of an external team to help in facilitating the customers in making the high end products ready for future use. Other types of installation services can also be provided by the retail company where the external team aims to generate furnishing solutions to the customers in terms of carpeting the floors. The incorporation of an effective service mix relating to the electronics and home furnishing products is taken to successfully contribute in enhancing the market for the specified merchandises (Kamakura and Du, 2012). To help augment the sales of its computer and other digital products the retail company can efficiently focus on generation of a Total Services platform through the use of expert services. A team of experts can be potentially incorporated by the retail company that can not only generate in helping install the computer products but also in providing effective healing solutions to virus attacks. Generation of the above service is taken to rightly help in enhancing the level of customer satisfaction in terms of gaining a useful shopping and user experience pertaining to the computer products. Sales in the Depot and Stationery section of the stores can be potentially enhanced through the incorporation of different types of services related to photocopying, binding and labelling activities. Generation of such intangible products coupled with tangible product offerings at the depot section would potentially contribute in increasing the sales of the related products (Stern and Ander, 2008). The benefits related to the marketing of consumer durables, electronic products and home furnishings would be rightly augmented through the incorporation of a ‘Do it yourself’ toolkit and video CD. The generation of the CD with the product can help the customers to fix and install the products at their individual ends thereby, helping in satisfying the customers and also in providing a new product and service experience (Zentes et al., 2012). The concept of Multi Purpose Shopping can also be significantly enhanced through the creation of the retail outlets as a one stop solution to the customers. Different types of products durables, non-durables, perishable products and also other intangible products can be effectively marketed in an integrated fashion. Marketing of different category of products at a single place would contribute in helping the consumers earn needed satisfaction in terms of shopping experience, accessibility and convenience in selecting effective products to meet their day-to-day needs. The use of multichannel retailing can also be rightly incorporated in the retail sphere through the development and growth of e-commerce and also the use of website and mobile marketing. Generation of such technological applications would help the customers to browse the different types of products online and at their convenience. The customers can rightly make necessary orders relating to the different categories of products while also disbursing payments based on the use of online and mobile applications. Development of applications related to mobile phones and internet would also contribute in generating needed sophistication pertaining to sales and purchase activities on the retail plane. Integration of the physical and virtual marketing and retailing techniques contribute in augmenting the marketing and promotional activities of the retail products to the target customers (Rudolph, 2012). The company can also focus on generating innovative services relating to the infant care and mothers section. Creation of different types of internal clubs would help in generating needed information to the mothers relating to child care. The clubs can help in generating information relating to the queries of the parents relating to their children’s health. Useful parental tips generated by the company through associating the health and lifestyle solutions to the different products would rightly contribute in augmenting the sales. The club can also provide learning solutions to the parents in terms of reflecting on the use of different toy products. The use of the above strategy would potentially help the company in empathising with the needs of the parent communities. This strategy would contribute in enhancing the amount of customer loyalty and thereby encouraging the consumers in conducting repeat purchases (Mitchell et al., 2004). Intangible product offerings can be improved by the company through generating effective collaborations with other services companies relating to the banking and the insurance sector. The same would contribute in generating of consumer loans and EMI schemes from the stores thereby encouraging the growth of sales of its different consumer electronic and other high value products. Similarly, the generation of camps for generating free health checkups ad also in helping the music lovers to gain free downloads of their favoured music from the depot section would also contribute in augmenting the sales of healthcare and music products (Kotler and Keller, 2011). Conclusion The generation of innovative services along with the different types of products marketed by a retail company like Tesco, potentially contributes in attracting larger number of customers and in enhancing the sales of its different merchandises. In augmenting the parameter of intangibility relating to the different forms of tangible product offerings, Tesco is observed to narrow the gap between the right and left hand of the Goods-Services spectrum. The aspect of intangibility, thus, significantly governs the product designing and offering decisions of the company in the target market. Different strategies are enabled relating to the service product dimension where the service products are designed to help in the generation of needed support, information and convenience to the customers in terms of their product purchases. Generation of a total packaged service relating to the installation and assembling of the consumer goods and furniture products is taken to help in enhancing the sales of the related products while also reflecting a control on the cost aspect of the organization. Other types of innovative services like the development of the electronic marketing, website and mobile based marketing is taken to largely help the consumers in conveniently ordering for the products while at home or work. This feature thus contributes in generating needed sophistication while also helping the customers enjoy a favourable shopping experience. Incorporation of the multichannel framework through use of mobile and net would effectively contribute in promoting the products to the customers. Innovative service offerings like generation of healthcare and child care tips to the consumers contributes in developing effective relationship with the consumers and in generating increased customer loyalty. 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