Branding and Reputation of Tesco Supermarket - Essay Example

Topic: Tesco Supermarket Strategic Improvement Following the competitive business operations today in the food industries, it is imperative that a number of recommendations are taken into consideration for strategic improvement of Tesco Supermarket. As such, the organization should embrace customer involvement through carrying out cooking demonstrations using healthy ingredients sold in the supermarket (Zentes, Morschett & Schramm-Klein, 2007, p. 81). This is one of the most important strategies proposed in Porter’s Model of strategic improvement. This move will deal with the bargaining power of clients so that clientele retention is attained in the supermarket sector. On the other hand, the supermarket should look into the switching cost to ensure that it is as low as possible. This may be accomplished through loyalty card or otherwise smartcards (Zentes, Morschett & Schramm-Klein, 2007, p. 85). In this case, loyal customers will earn discount points whenever they shop in the Tesco supermarket and in that case strive to shop more. The supermarket hence, should introduce more incentives to consumers. Similarly, motivation for customers can be achieved through the involvement of an upcoming sport which serves not only as a promotional strategy but also as a social responsibility. Every initial purchase in the food products should go hand in hand with discount vouchers to retain clients. On the other hand, the supermarket should consider bargaining power of competitors. It should be noted that the supermarket sector has grown significantly and therefore dominance goes with large players in the business sector. For this reason, the supermarket sector of Tesco has to move into greater store and increase retailer concentration. This has to use a wide range of formats to gain the required dominance in the market scale. Since the purchasing power in the food industry today is concentrated on small numbers of retail buyers, the corporation should operate in a mature market. This implies that the supermarket should move into gathering important data on client preferences so that they can handle the increasing sophistication among consumers (Zentes, Morschett & Schramm-Klein, 2007, p. 94). Branding and reputation is as well an imperative idea to be embraced by the company. In such a case, Tesco supermarket should strengthen its brand through quality services to consumers. Branding has to maintain quality throughout their packaging activities. This will reduce competition as well as confusion among buyers (Zentes, Morschett & Schramm-Klein, 2007, p. 99). Similarly, there should be product and service re-engineering to enable better management of the food product lifecycle and efficiency in delivery. Based on this activity, the sector should focus on enhancing core ranges as well as introduction of quality products to clients. It is also recommended that the sector integrates IT in its operations. This follows the fact that contemporary business operations are in an increasingly dynamic and complicated environment. Innovation in the supermarket will be of great help to move the company from one level to another. In any section of the business, systems of control stock, inventories and delivery records are core to profitability of the business (Zentes, Morschett & Schramm-Klein, 2007, p. 100). The supermarket should therefore, focus on extranet systems to enable the sector utilize the internet in creation of proprietary and personalized information dissemination between the section and its partners. The last thing this supermarket should consider is supplier management. Research indicates that Tesco relies on goods from overseas in which case suppliers are competitive on prices. The company should therefore, use many suppliers from around the world to reduce chance of shortage in supply. The relationship with suppliers, however, should be unique to gain their trust. Budget Distribution Summary Because of the ever increasing completion in the “supermarket” market, Tesco should concentrate most of its budget in reducing the gap between clientele perception and satisfaction. As such, 40% of its budget should be channeled on product quality and branding. In any business activity, products and services are the driving force for profitability. As such, the company has to carry of a market survey and establish customer preferences for constant improvement. The supermarket section should concentrate on purchasing goods most preferred by consumers to cut down on overstock or stock turnover. Secondly, the section should put 30% of the budget on promotional and marketing operations. This will include live advertisements on social media and newspapers. In addition, the 30% will cover creation of loyalty cards for clients so that retention is increase at clientele level. Good services are crucial for continuous improvement within the supermarket operations. As such, the company should channel 15% of its products on training of employees. This will increase their product knowledge, and in turn assist them in providing better services to clients. In addition, consumer knowledge on usability of some of the product is important (Zentes, Morschett & Schramm-Klein, 2007, p. 12). As such, the budget should incorporate leaflets on the packages to inform clients on how the products are used as well as their important for a healthy lifestyle. Lastly, employee satisfaction is paramount to better customer services. As such, the company should set aside 15% of its budget for employee motivation purposes. This will increase performance as it encourages competition among employee to offer better services to customers. The ultimate thing will be attraction of more customers as they seek for better services and quality products in the Tesco supermarket. Flow Chart for Budget Target Audience Segmentation Focus For purposes of profitability and competitiveness, the supermarket should target a large audience. In such a case, goods sold in the supermarket should be affordable to a wide range of individuals. The company has to carry out a marketing campaign focusing mothers who have children below fives years (Zentes, Morschett & Schramm-Klein, 2007, p. 37). This is because, such clients are in need of more food products to provide to their young ones. The corporation can accomplish this through educational campaigns on the products sold within the supermarket, highlighting the benefits to young children. This will encourage mothers in offering their children a healthy lifestyle using food from Tesco supermarket. Due to cultural diversity, the company should carry out a survey to establish products that go along with cultural orientations of the local community. This will ensure that conflicts of cultural practices are gotten rid of through the selling of desired products to clients. On the contrary, the company should focus on social class issue in which complexity of food disorders like obesity are prominent. As such, products sold in the supermarket have to promote a healthy lifestyle for clients to ensure clientele retention (Zentes, Morschett & Schramm-Klein, 2007, p. 22). Bibliography: Zentes, J., Morschett, D. & Schramm-Klein, H. 2007. Strategic Retail Management: Text and International Cases. London: Gabler Verlag. Read More