Tesco Aims and Objectives
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Tesco is now a very successful retailer in the UK. Also, it is the second-largest retailer in the world measured by profits and third-largest retailers in the world measured by revenues. Which it is the business that I have selected to carry out my investigations. Tesco
According to the “Business Case Studies”, it has been mentioned that one of Tesco’s aim and objectives are to maximise sales. In order to do this, they will need to maintain their advertising and promotions to the public. For example, new products or services that are brought into the market needs to be advertised such as newspapers, leaflets, TV advertisements and . The media is one of the best way to publicise new released products as there’s a high percentage of the population in the country that watches the TV. As a result, consumers will be informed that there’s a new product brought into the market. Also, considering newspaper ads, magazines, special publications and other forms of marketing will attract more loyal consumers and from this cause, it may increase sales turnovers; could possibly maximised sales.
Moreover, Tesco is willing to Increase its profit and for this to be succeeded, is to increase goods or services price. For example, if Tesco increases the price of a product, it will widen the profit margin and from this cause each products/services sold will generate more profit. This strategy will be particularly effective if the product is a necessity or has no close substitutes as customer will be willing to pay the higher price. However, the strategy of increasing in the price must be treated carefully because if there are many close competitors like Asda, Morrison for a product and the higher price may lead customers to switch to rival products entirely, for example, Tesco, may decide to increase its price, which the price will be £1.20 for a milk, rivals like Asda or Morrison might put the price to £1 and consumers may decide to consume milk from Asda or Morrison as it is cheaper BOGOF = Buy one get one free
Furthermore, the willingness of improving the quality of their products and service is currently at a high percentage rate. This means that Tesco are willing to improve the quality of their products and services. In order to increase the quality of good, Tesco needs to add value to the products/units that are in stock, which means that Tesco have to modify products. For example, as my experience as customer, consuming a product such as milk, made me do a judgement of their packaging of their milk as the cover of the milk is easy to break. Therefore, by modifying the product’s packaging will increase its quality and consumers will be more loyal in purchasing products in store. In addition, improving Tesco’s service quality, will involve training its employees.
The need for training essentially arises when the knowledge and skills required by the firm exceed or differ from those that workers currently possess. By training Tesco’s employees will reach the level of performance expected of experienced workers and it ensures that employees have the necessary skills, knowledge, attributes and qualification for a job in the present and future. Which this includes, providing high level of performance of customer service. This means that employees will be able to deal with consumers complaints or provide service in a friendly matter for example. Maximise sales
Increase Goods and services quality
Sales £m (ex VAT)
Sales area 000′s sqft
Marks & Spencer
John Lewis Partnership
Home Retail Group
Firstly, Tesco marketing is the whole reason of Tesco’s success, regarding how Tesco price policy is effective and up to date. As an experienced customer, I have seen offers and discounts in strategic way and at a planned time. These two factors (time and price) are playing an important part in marketing. Moreover, research showed that customers spent 28% more at Tesco while cutting their spending at Sainsbury’s by 16%. This had a major effect on the market shares of the two companies with Sainsbury’s having a 19.4% share in January 1995 compared with Tesco on 18.1% but by May of that year the former’s share had slipped to 18.8% while the later had grabbed a 19.4% share. This trend has continued to this day and Tesco now commands a 31.3% share against the 16.5% of Sainsbury’s. This means that by controlling the marketplace, it evident that Tesco is very successful in maximising its sales and profit.
This is because the percentage of customer’s loyalty in making purchases at Tesco is at 28% more than its competitor Sainsbury. Consumers are purchasing more and more at a given price, which then it will widen the profit margin and from this cause each products/services sold will generate more profit. This strategy will be particularly effective if the product is a necessity or has no close substitutes as customer will be willing to pay the higher price. Tesco has a team of over 530,000 people bringing the best value to customers over 12 markets and have a strong vision and strategy which is built around customers and colleagues.
Tesco and their strategy focus on the changing customer needs to help drive their success but also to ensure that they deliver a range of information for customers. This indicates the fact that Tesco has invested money in training for its colleagues to provide good quality of services. Which this will then increase their reputation on good quality of product and services. From investing on training for its colleagues will allow Tesco to achieve one of its aims and objective, which is to increase its product or service quality. In addition, “Tesco’s sales growth rate was 4.7%, compared with market growth of 4.4%”. This indicates the fact that Tesco has managed to increase its sales overtime, as Tesco’s is receiving good media publicity reviews will keep consumers informed of the business goods or service. This means that, the populations of people viewing the TV or listening to Radio is at a high percentage, will suddenly hear or see about Tesco’s products and services.
Which then increase Tesco’s reputation and becomes more reliable to use their goods or services. Therefore, there will be more willingness coming from the customers; in other words it will attract customers to purchasing their goods and service as the business becomes more trust-worthy due to the positive reviews given to the public. For example, consumers will be willing to purchase at Tesco, rather than a new opened business in the location where Tesco is located, which means Tesco will be more dominant than other competitors/business. As being dominant in the market, the amount of people purchasing in Tesco will increase which it is beneficial enough to increase/maximise sales. Furthermore, “The latest data from the market research firm TNS shows Tesco’s market share rise to 30.7% in the three months to November, from 30.6% in the same period last year.
This shows that Tesco’s Market share has an increase of 1%, which means that Tesco demonstrates the fact that they have their marketing better by offering customers a product that meets or exceeds their requirements such as products that are necessity. From this cause it will allow Tesco to have more opportunity to gain more control developments in the marketplace, which it is allowing them to maintain their position by providing a good foundation for launching new products to sustain the reputation/ position of Tesco for the long term benefit. From having to fail to meet aims and objectives of Tesco has managed to fail in the US. Which has cost them about £1.2 Billion which it is 51% of their profit in 2013. Which It has given Tesco a very negative effect as they close or sell about 175 stores in Los Angeles. “Tesco’s American experiment, Fresh & Easy, has failed”
They’ve visibly lost the plot, with poorly stocked stores, wasteful but meaningless advertising and an absence of new ideas.