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Tesco PLC – British Multinational Retail Company

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Tesco PLC


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Every company that that operates in a given environment must be able to achieve its objectives and at the same time be able to deliver value to its customers. Delivery of customer value by a company will ensure success of the company in the long run since it will be able to maintain and keep its customers who will remain satisfied by the services or products that the company offers. The company of choice to be discussed in this report is Tesco PLC.


Tesco PLC is a British multinational retail company that deals in grocery and other general merchandise. This company was found in the year 1919 by one Jack Cohen, as a chain of market stalls that dealt in groceries and general merchandise (Haerifar, P. (2013, p.10). The name of the company Tesco was first used in the year 1924, due to the purchase of tea shipment from T.E Stockwell, whereby the initials of the first two letters were combined to the surname of Cohen.

The first store that belonged to Tesco was opened in the year 1929 in the Burnk Oak area, Middlesex. By the year 1939, the company had over 100 stores across the UK due to its rapid expansion.

Originally, the company dealt in groceries retail but from the early 1990s, the company diversified into various areas of business such as clothing, books, electronics, furniture, and software. In addition, the company expanded its business into petrol, financial services, telecommunication, music downloads, DVD rentals and providing internet services.

Fifteen years later, the Tesco company became very successful and grew from the 500 stores to 2,500 stores by mid- 1990s (Channer, P., & Hope, T. (2001, p.31). Tesco has its headquarters in Chesnut, Hertfordshire, in England UK. Currently, it is rated as the second-largest retail stores across the world, after the Wal-Mart, when measured according to its profits. It is also the third-largest retail store in terms of revenue, behind Walmart and Carrefour companies.

In addition, Tesco has quite a number of stores in various countries across the world, in total 14 countries. These countries are found in Asia, North America and also Europe, Malaysia, Republic of Ireland and Thailand, and in the UK, Tesco holds nearly 30% of the grocery market share. Currently, Tesco PLC is listed as a public Limited company, and the 15th largest company in the London Stock exchange market, where it constitutes the FTSE 100 index in the stock market.

Aims and Objectives of Tesco PLC

Organizations have various aims and objectives in the conduct of their business. Tesco PLC as a profit making company has various objectives that it aims at accomplishing in all its outlets across the globe. The main objectives that Tesco PLC has are to retain loyal customers through the lowering of the prices of their products and services. This will help attract more customers and at the same time retaining the ones that the company has already gained. By doing so the Tesco Company is also able to overcome stiff competition from other companies such as Walmart.

Another objective that Tesco PLC has is to maximize the sales of its products and services, hence maximize the profits of the company. The company also has an objective of growing and remaining the number one retail company and a market leader by outshining its competitors in the UK.

Product & Brand portfolio

The Tesco PLC operates under a policy of good, better and best for all its products which forms quite a wide range of product category from food, homes, mobile, financial services and even beverage. The product brands that Tesco PLC deal in described below:

Tesco Brand, encompasses products which are standard which are mid rage and have store prices which are own label. Tesco Finest are the products that only the superior quality ingredients have been used to make the products. In addition, Tesco brand of products include Healthy Living light choices which contain very low fats and sugar than the standard brand of Tesco. In addition, product brands such as Organic, Tesco Kids, Best Of British, World Foods, and Tesco Wholefoods make up the portfolio of Tesco PLC. Tesco Bakery, Free From, Tesco Christmas, Clothing at Tesco, Tecnika/Digilogic, Tesco Mobile and Cocopi are some of the other product brands that Tesco PLC has in its portfolio.

Pricing strategies

The pricing strategies that Tesco PLC have applied in its business to ensure that it remains competitive and overcomes competition from various competitors, are putting up 500 million pounds that will go into price cuts of up to 30%  on food stuffs that people purchase every day. This will apply to only the brand products that belong to the company in case there is a reduction.

By applying this pricing strategy, Tesco will be able to compete with other competitors in the market and help it to remain relevant in the market. Another pricing strategy that Tesco aims to apply is offering of vouchers to customers when a comparison is made on shopping prices at Asda, Sainsburry and Morrisons. If the prices in those three stores are cheaper, then the customer will be given a voucher for the difference in prices of up to 10 pounds.  If customer shops in-store, the customer will be given a voucher when checking out and when a customer makes purchases online, an email will be sent after the delivery has been made.

 A customer will only qualify for this offer if they have at least 10 different items which one of them must include a grocery item. Another pricing strategy that the company applies is the sell-off strategy in poorer areas, where the company faces strong competition. In addition, Tesco limited applies the strategy of tailoring its prices depending on the income of the population that lives within the area where the stores of the company are located. This pricing strategy will ensure that the people living within the locality of the chain store are able to afford the products of the company and do not need to look for other alternatives, since the prices are within their reach (Mills, 2002, p.5).

Distribution strategies

Tesco applies various distribution strategies in the distribution of its products across all its chain stores and to all its customers. Through market survey, Tesco PLC discovered that customers prefer a one-stop shop where they can find all products and even services under one shop.

Therefore, the distribution strategy that Tesco has put in place is through stocking of all its stores with all the products and services that their customers want under-one roof. In addition to that, Tesco has come up with a strategy of distribution that will see to it that delivery is made to their customers within the shortest time possible. For example, if an order is received by 12pm, it is to be delivered to the customer by 6pm.

Another distribution strategy is through online channel, where customers orders are picked online and the delivery made to the customers within the shortest time possible. This has helped increase accuracy, quality, and effectiveness of service delivery to customers within the company’s chain stores. Decentralization of its storage facilities also has been one strategy that Tesco has applied by making sure that every chain store has the main center of storage within its reach to avoid unnecessary lack of items or delays in distribution of the products.

Promotional mix

Tesco has applied various methods in its promotional mix strategy which include:

Direct marketing

Under this strategy, when a customer registers on the website of the company and starts shopping at the company’s stores, the company keeps an interaction channel with the customer through phone, emails and even text messaging. The website of the company stores information relating to a customer and this helps to keep track of the buying behaviors of the customer from time to time.

The company sends customers promotional information on various offers that the company has in its stores, information about new products and any special deals that may interest the customer. This information is more personalized depending on the customers buying behavior.

In addition, Tesco sends out forms for feedback and survey to the customers through emails which help in keeping updated with the changing needs and preferences of the customers.  The company also uses text messaging as a promotional mix whereby the company sends information that is useful to the customers about the various new products and offers that are in existence. Through this, Tesco ensures that its customers do not miss out on anything they offer. This helps to develop a place in the customer’s life for the company hence improving the relationship and views of the customer about the company (Payne, & Frow, 2013, p.252).

Media Campaigns

Tesco Company involves in various media campaigns since the media creates a huge platform for any business that wants to grow and expand (Lamb, Hair, & Mcdaniel, 2012, p.515). Investment in media campaigns have been made by this company to help reach as many customers as possible since the media is the most powerful element of promotion that has high influence on the decisions that customers make concerning what to purchase and were to purchase it.

To create a difference from its competitors, Tesco has organized TV commercials, which focus on the accessibility of the stores of the company. Through the TV shows, the company also highlights on the healthy eating and other products that it offers to customers in all its stores.

Interactive Websites

Through the creation of a comprehensive and interactive websites and web pages for customers, which include Tesco Apps, Tesco Diet, and the Talking Tesco website among others, the company has been able to interact with its customers on regular basis.

This has enabled the company to obtained helpful information that has helped in shaping the company for the better delivery of services to the customers (Lamb, Hair, & Mcdaniel, 2009, p.495).

Sales Promotion

Due to cut throat competition faced by Tesco, the company has applied sales promotion as one of its promotional mix strategy. This has been done through very innovative promotional designs that help to achieve customer satisfaction while at the same time giving the company a competitive age among its competitors. Keeping in mind the increase in the level of inflation and the period of recession, the company has come up with a rewarding system for customers who make purchases in their stores across the worlds.

The other promotional mix strategies that Tesco has applied to combat the increasing competition in the market is through the introduction of items such as Club Card Points. These cards offer discounts and help customers save money, and the Tesco Apps which allows customers to shop from anywhere through their mobiles, hence saving customers a lot of time involved in physical shopping.

Public Relations

This is an important aspect affects businesses and must be observed with great concern. Tesco has come up with various ways that help in building, maintaining and strengthening its connections with its customers across the globe.

This has been done through methods such as Talking Tesco, a website where customers air their views and give their feedback. Tesco encourages its customers to use this site to address the complaints and any other issues that their customers may have concerning the company.

 In addition, the web page has personalised email address that customers can use in case they have any form of inquiry or any complaints that need to be addressed urgently. The Tesco diet is also another website that the company uses to interact with its customers by giving them free information on health issues and offering fitness programme to the customers. This has helped build the relationship between the company and its customers hence overcome the stiff competition.


Tesco PLC is a great company that has come quite a long way since its inception. Although there is stiff competition, the company has managed to remain one of the best retail stores in the UK and across the globe. This is due to the various strategies that the company has put in place that has helped it achieve its goals and objectives while satisfying their customers and gaining profits, which is the main objective. Tesco plans more technological developments in the future to help boost their customer experience and to increase the sales of the company.


Channer, P., & Hope, T. (2001). Emotional impact passionate leaders and corporate        transformation. Houndsmills [England], Palgrave.     .

Haerifar, P. (2013). Knowledge management within tesco. [S.l.], Grin Verlag.10

Lamb, C. W., Hair, J. F., & Mcdaniel, C. D. (2009). Marketing. Mason, Ohio, South-Western    Cengage Learning.495

Lamb, C. W., Hair, J. F., & Mcdaniel, C. D. (2012). Essentials of marketing. Mason, Ohio,        South-Western Cengage Learning.515

Mills, G. (2002). Retail pricing strategies and market power. Melbourne, University Press.5

Payne, A., & Frow, P. (2013). Strategic customer management: integrating relationship marketing and CRM.

Cite this Tesco PLC – British Multinational Retail Company

Tesco PLC – British Multinational Retail Company. (2016, Apr 23). Retrieved from https://graduateway.com/tesco-plc-british-multinational-retail-company/

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