Tescos Brand and Sales Promotion in the Chinese Market - Essay Example

Executive summary The research studies Tesco’s brand and sales promotion in the Chinese market and how it affects the housewives. The firm is facing several challenges in the market as it is culturally very different form the other markets that the firm has ventured. The research revolves around the brand promotion and sales promotions that the firm uses in the market and how these methods can be improved keeping the current market culture in mind. The market varies in product variety, tastes, preferences and social norms to name just a few. These features cause Tesco to deviate from the norm which makes it more challenging for it. Promotional tools that the firm uses are more traditional like television and print media. Word of mouth is also an essential tool that the firm needs to concentrate upon. Tesco is involved in below the line activities to keep the housewives attracted but it needs to focus more on such activities. The main problem that the firm is facing is that it cannot establish itself as a low priced retailer. This is because the housewives are knowledgeable about the market and know where to get the best price from. Thus Tesco needs to improve upon its promotional tools to face local competition and to alter the image the consumers have of the brand. Conclusion The Chinese market is very different and has a lot of cultures. Thus Tesco has to adapt to the preferences of the different types of people. The firm uses all types of brand and sales promotion mediums, the rational modes of advertisements are still dominating the market. Television is overpowering other communication mediums like print medium and the internet. However, the firm should not only focus on the traditional mode of communication. Rather they should expand their horizon and try to use other mediums the internet and technology based marketing tools. Zhen (2007) explains that this is because it is a futuristic view and at some point such technological advances will become an eminent part of the market. At the same time, to reach the consumers currently Tesco has to focus more on television as it is a more reliable mode of communication with the consumers. The consumers truest the television and thus it will help Tesco get the message across. Print media is another option like magazines to reach particular target markets, especially house wives. Moreover, fliers, word of mouth and below the line activities can also be looked into. Below the line activities may have a greater impact on women and help promote the brand. To encourage sales promotion, in store promotions may also work well with women and help influence their decision making. As per Zhen (2007) Tesco is facing a challenging market in China as it is finding it difficult to understand the culture and to adopt itself with the changing needs of the housewives. How to attract the consumers is difficult for them mainly because their competitive edge of being lowest priced is not working in China. Wheatley (2007). Explains that women there are knowledgeable about the market and are always able to find cheaper substitutes. Thus Tesco either needs to establish its brand image on the basis of quality etc other than price because the price will always be competed away. Or it could find suppliers who would give the firm a very competitive price. Tesco can do the former by working harder on its overall brand image and connecting better with the Chinese housewives. Recommendations 5.2 Recommendations 5.2.1 Loyalty schemes The whole research conducted makes one questions the effectiveness of the loyalty programs given that they don’t work as well as they did previously. The solution to this is that Tesco needs to be more innovative and try to invent some new way of building the customer loyalty instead of such loyalty programs. Perhaps accompany the loyalty cards with personal service etc would keep the customers more loyal. 5.2.2 Improve their loyalty scheme Tesco should make efforts to improve the loyalty scheme. They should make it more different and challenging for other firms to copy their method of attracting more consumers. The loyalty scheme may perhaps be in conjunction with another firm that is from another industry. This will expand the horizon of the use of the loyalty cards and will keep the customers loyal. 5.2.3 Integrate the different products of Tesco. Currently in the Chinese market, Tesco is just concentrating on the food items. However, when it has its range of non food items like petrol, insurance and travel agency etc. the customer will have more places to shop and this will keep them loyal. 5.2.4 Incorporate technology The loyalty cards should be replaced by a computerized system that would work without actually carrying the card. This is because it will rule out the situation of the customers forgetting to carry their cards. Perhaps if the customers could be identified using thumb prints, then the customers would not lose their cards and will appreciate the convenience. This will also be a more convenient way than that of competitors and will be liked by consumers. 5.2.5 Quality/price The housewives of China are very health conscious and they would like to choose food products that are healthier options. The consumers are not so particular about price over health and they are willing to pay a little extra for products that are health related. Thus an option for Tesco may be if it goes organic which means more healthy food and the customers are willing to pay a little extra to purchase products that are healthier. 5.2.6 Human touch The whole process has become so mechanical that the customers have minimum interaction with the customers. The internet etc plays a vital role in conducting the business. This means that there is less physical interaction and relationship building relies on machines. The firm should have more human interaction so that it strengthens the relations and build stronger loyalty among the consumers. 5.2.7 Children, men In China men also play a pivotal role in the decision making of everyday house purchases. Thus the firm should target men also. Children should be concentrated upon too and marketing efforts should also be directed towards them so that they cajole their mothers to purchase particular brands. 5.2.8 Measuring customer satisfaction Tesco should conduct regular researches to measure the customer satisfaction level and try to improve itself in areas where it is lacking. Such research will help the firm in making amendments periodically and it will be able to align itself to the changing needs of the Chinese market. Name of Tesco To be culturally accepted the firm should translate the name Tesco into the local language so that it can be understood and the brand can be closer to the consumers. This is mainly Because the name is western and consumers may like it more if the name is local. Advertising and communication The promotion of the brand should depend upon the old media that is television. This is because the market is overpowered by TV and thus most promotion is carried out through television. Thus the firm should not deviate into technologically advanced marketing and promotion like the internet and instead should be involved in more television and print media etc. Below the line activities Tesco should also be involved in below the line activities for example they can promote their products in school so that the children are influenced and they in turn cajole their mothers to buy the products. Marketing activities at public places like quiz shows at a mall, raffle , stalls etc should be conducted in malls etc so that consumer are attracted and get familiarity with the brand. 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