Marketing Essay Example | Topics and Well Written Essays - 2500 words

Marketing - Essay Example The company’s gross turnover for the 2008/2009 full year was reported in February 2009 as ?59.4 billion. The retailer has over 4308 stores in 14 countries worldwide, over half a million employees and it was estimated in 2007 that over ?1 out of every ?7 of UK retail stores was spent in Tesco (Dennis and Perrey, 2011, p.52). Tesco PLC Established by Jack Cohen in London in 1919, it began as a stall in East London before gradually growing to include markets all over London. Cohen thereafter began wholesale trade and within five years, the first Tesco brand appeared, and, in 1929, the first Tesco store was opened. The key to Tesco’s growth over in the XX century lies in its change of image and strategy. Aaker and McLoughlin (2010, p.127) document that from the onset, Cohen’s approach was to sell it cheap a strategy that had caused the company to overstretch itself thereby having dwindling profitability. Prior to 2006, Tesco had faced a number of challenges such as l ow food price inflation, increasing difficulty in getting permission especially for the large Greenfields sites, three strong competitors Sainsbury, Safeway and Asda, being in number two market position and the arrival of two new store formats; the assortment stores and the warehouse clubs. Nonetheless, the store used a number of strategies and a range of innovative schemes to develop its brand name and grow to become a leading supermarket chain by 2006 (Aaker and McLoughlin, 2010, p.52). Retail theory Tesco’s retail format can be analyzed through the Retail Accordion Theory which recognizes the wide-narrow-wide pattern of the dominant retailing which forms the market (Baker and Saren, 2000, p.356). Tesco has continuously changed its strategy and image with the first major feat being able to appeal to all segments of the market, the lower, the middle and the upper classes. The inclusive offer strategy was based on the vision of selling high-quality products at reasonable pric e, a vision that was achieved by offering four different levels of its products. There were the finest range of premium products introduced in 1998, followed by the Tesco Organic rage introduced in 2006 and the Tesco Healthy Living range and, finally, the Value range to attract the price conscious customers was rolled out in 2008 and 2009. This focus on customer’s service lies in the company’s belief in continuously improving the standard of services provided and responding to customer’s needs (Fernie and Sparks 2009, p.49). The retail format Tesco’s retail format is interesting having six different store formats differentiated by the range of products sold and their size, but all branded as variants of the Tesco Umbrellas (Baker and Saren, 2000, p.356). The six formats include the Tesco Extra or the Hypermarkets, Tesco Superstores or the large supermarkets and Tesco Express or the convenience stores, Tesco Home plus, Tesco Metro and Tesco One Stop. Evide ntly, Tesco’s retail outlets range from small local stores often attached to petrol stations to one stop stores with an average of 1,300 square feet providing customers with essential products on a 23/7 basis to the extra stores which are 70 times bigger and cover all the major consumer goods including furniture and entertainment, foods,