RETAIL AND SERVICE MARKETING

INTERNATIONAL RETAIL MARKETING ANALYSIS

ON TESCO

UNITED KINGDOM & THAILAND

Submitted by:

Pinky Sewani Vasandani

(7573468)

Submitted to:

Mr. Mahen Ramsurrun

Total word count: 2092

Total character count:

Table of Contents

Executive Summary........................................................................1

I. Introduction..................................................................................2

II. Situation Analysis.......................................................................2

III. Analysis of the Market of United Kingdom and Thailand...........6

IV. Segmentation – Targeting – Positioning (STP).........................8

V. Marketing Strategy...................................................................11

VI. Trends and Innovation.............................................................21

VII. Recommendation...................................................................22

VIII. Conclusion.............................................................................23

IX. References..............................................................................24

X. Appendix..................................................................................30
Executive Summary

Tesco PLC is the largest retailer of the United Kingdom that has expanded its
business operation in Thailand by 1994. The company has entered Thailand
via joint venture with one of the largest retailer which is the CP group and
retained the name and logo Lotus with the combination of Tesco’s name.

In this international retail marketing analysis, the company’s growth in the

online and offline retailing will be evaluated to see the growth of the
company’s profit. The grocery retail of United Kingdom has reached its
maturity and little growth is seen. However, Thailand saw growth for the
grocery retail industry of 4% reaching THB 1.8 trillion by 2016 and to grow by
3.1% by 2017.

On analysing the porter’s five forces, customer has a strong force. In the
United Kingdom with the help of the internet customer can search the cheaper
price and would prefer shopping their grocery with discounter with the Inflation
the country is facing due to Brexit. The company is now focused on being
responsible in the community and building good image to their customers in
all their Tesco worldwide by creating jobs like Tesco Lotus’ project Pracha
Rath providing 2500 jobs for the Thai.

Moreover, the company’s marketing mix is similar but products from Thailand
is focused more on the taste and preferences of the people. Technological I
nnovation is advance in United Kingdom which was be developed and applied
in Thailand.

Lastly, the company is still one of the biggest retailer in the world and
Thailand’s growth can bring benefit to the company.

I. Introduction

International Retail Marketing Analysis TESCO 1

Tesco, Britain’s biggest supermarket, started life in 1919 but became a brand
by 1924 when Jack Cohen bought shipment of tea from Mt. T E Stockwell,
their initials and letters combined to form Tes-co. Furthermore, the flagship
store was built in Burnt Oak, North London (McLoughlin, 2007).

Tesco became successful by acquiring rival shops such as buying 70 Williams

stores and 200 stores in 1950s followed by 97 Charles Philips stores and the
Victor value chain in 1960s (McLoughlin, 2007).

Currently, the company is the number 1 grocery retailer in the United King
with over 3500 stores and 3rd in the world having operation in 10 countries
with 6809 stores in the world and 460,000 colleagues (Tesco PLC, 2017).

Thailand is Asia Pacific’s seventh largest economy. In 1994, Tesco expanded

their business in Thailand and named it Tesco Lotus. The company kept the
name Lotus since it has established its reputation in the Thai market.
Moreover, Tesco now have over 1800 stores.

It is the second highest profit generating branch of the Tesco Company. Aside
from that, it is one of the leading players in offline and online grocery retailing.

II. Situation Analysis

1. PESTLE ANALYSIS

TESCO UK TESCO LOTUS

POLITICAL
 Political Instability  Political Instability
- Global political factors such as tax - Death of King Bhumibol (Thailand’s
rates and the world suffering from King) could cause instability in the
financial instability are encouraged country. People in Thailand is
by the government to create more greatly affected by the loss of their
jobs and source locally. (THREAT) King for 7 decades that can affect
their spending habits due to
 Post Brexit emotional problems. (THREAT)
- Impacts of Brexit will create a
slowdown in purchasing. 38% of the
people in UK believes that it will be  Development on Infrastructure

International Retail Marketing Analysis TESCO 2

 affecting pricing (Mintel, 2016). - The government allocated THB
Pound sterling will depreciate that is 896 billion for development of road,
expected to lead to an increase in railways, ports and airports
both manufacturing and importing (Euromonitor, 2107).
costs (Euromonitor, 2016). (OPPORTUNITY)
(THREAT)

 Threat of Activism and Terrorism

- Recently, UK has been raised into
Critical with ISIS spreading
terrorism (GOV.UK, 2017).
(THREAT)
ECONOMICAL

 Inflation  Inflation
- In March 2017, an increase in - Despite the downward of inflation
1.2% of the inflation rate has by 2016 it is expected to increase
occurred. Wage growth has to 1.6% by 2017 (Euromonitor,
become stagnant making 2017). (THREAT)
consumer look to cut back their
discretionary purchases. High  Growth in GDP
price from convenience store - Thailand’s annual GDP by 2016
may affect sales which has increased by 3.5% increasing
accounted 24.9% of all grocery the purchasing power of
retail sales (Euromonitor, 2017). customers. Furthermore, it is
(THREAT) expected to grow by 3.1% by 2017
(Euromonitor, 2017).
-

SOCIAL
 Changes in eating pattern  Changes in eating pattern
 Increase level of consumer  Increase level of consumer awareness
awareness - Customer are preferring healthier
 Rise in Female workers option that shifts their taste on
- Customer are preferring healthier organic food.
option that shifts their taste on
organic food. Furthermore,
increase in women employments in
increasing growth of food to go.
TECHNOLOGICAL
 Internet of Things and Artifical  Mobile Payment
Intelligence - As the market of Thailand
- Development of Internet of Things developing mobile payment will be
is making the life of the customer soon accessible especially now
easier and dependent on their that smartphones are cheaper
devices. (Opportunity) making it possible for people to
purchase it and increasing online
sales.
-
LEGAL
 Policy for controlling monopoly
 Business rates  Import and Export Tax
 National Living Wage - Despite Brexit being done in UK it
 Tax Framework will greatly affect Thailand which
- The review of Tax framework by greatly supplies the country with
the Government can boost sales vegetable and fruits.

International Retail Marketing Analysis TESCO 3

 since the company has paid the
highest tax in the United Kingdom
that can maximize the company’s
profit (Tesco, 2017).
(OPPORTUNITY) The government
has also increased wage which will
cost the company great amount of
money. (THREAT)

ENVIRONMENTAL
 Global Warming  Un fortuitous events such as flood
- Global warming has caused - Thailand is exposed to heavy rain
disasters such as earthquake, which brings flood in the country.
flood, pollution. Floods can delay company
operation and would affect the
purchasing power of the customer
dealing with loss by the effect of
the event. (THREAT)

2. Porter’s Five Forces

TESCO UK TESCO LOTUS

THREAT OF SUBSTITUES (UK: LOW, THAILAND: MODERATE)
Tesco PLC offers wide range of products The products offered in Tesco lotus can
that makes threat of substitute relatively low have some issues if consumer had a shift
from products from other country rather than
Thai products.
THREATS OF NEW ENTRANTS (UK: LOW, THAILAND: LOW)
Tesco PLC, is the number 1 grocery retailer Tesco lotus should be careful of local
in the United Kingdom and an established retailers that can emerge with lower price.
market leader. The company has However, the company has been doing well
established loyal customer through their in the country and large investment will be
clubcard schemes and delivering low prices needed to beat Tesco Lotus.
with great quality to satisfy their customer.
However, discounters can divert customer’s
attention to their business as what Aldi and
Lindl has done which is growing.
BARGAINING POWER OF SUPPLIERS (UK: LOW, THAILAND: LOW)
Bargaining power of supplier is low since Bargaining power of suppliers has become
Tesco PLC has a wide range of suppliers relatively low due to the significant growth of
and being the largest retailer in the United in modern grocery retailers (Euromonitor,
Kingdom it can attract a lot of supplier if 2017)
someone exits the company.
BARGAINING POWER OF CUSTOMER (UK: STRONG, THAILAND: STRONG)

International Retail Marketing Analysis TESCO 4

 Buying power of customers is high Buying power of customers is high
especially with the emergence of especially with retailers having products
discounters such as Lidl and Aldi preferring with cheaper price. The customers of Tesco
products with cheaper price. Moreover, are price sensitive and with the help of
customers have reduced their spending internet retailing they can see the price
habits due to the possible effect of Brexit difference with Tesco’s price and shift
(Mintel, 2016). The customers of Tesco are towards different grocery retailers
price sensitive and with the help of internet (Euromonitor, 2017).
retailing they can see the price difference
with Tesco’s price and shift towards
different grocery retailers (Euromonitor,
2017).
INDUSTRY RIVALRY (UK: STRONG, THAILAND: STRONG)
Industry rivalry in the United Kingdom is Industry rivalry in the Thailand is strong with
strong with competitors such as Sainsbury, competitors such as Big C and 7 eleven.
Asda, Morrison and the rise of discounters The growth of convenience store has a
such as Aldi and Lidl offering cheaper price positive outlook and 7 eleven is the current
of goods that appeals to the customer leader for convenience store (Euromonitor,
(Euromonitor, 2017). 2017).

Analysing the Porter’s 5 forces, customers play a major role with a

wide range of option for other grocery retailers.

III. Analysis of the Market of United Kingdom and Thailand

International Retail Marketing Analysis TESCO 5

1. Grocery Retailing in UK and Thailand

Thailand
Grocery
Retail

UK
Grocery
Retail

Figure 1 Retail Life Cycle

The grocery retail sector in the UK is now mature. There is little scope for new
store development (Mintel, 2016). In 2016, Current value sales stagnate at
almost GBP164.0 billion. Furthermore, ongoing surge for discounters is
intensifying the price competition in the market (Euromonitor, 2017).

Meanwhile, grocery retailers have seen value growth of 4% reaching THB 1.8
trillion (Euromonitor, 2017). Thailand’s annual GDP by 2016 has increased by
3.5% increasing the purchasing power of customers. Furthermore, it is
expected to grow by 3.1% by 2017 (Euromonitor, 2017).

Internet retailing saw a strong performance in Thailand and an outstanding

value growth in 2016 due to the increasing number of internet users, support
form online store platforms and delivery companies. The decrease on the
price of smartphones has a huge impact since it made it easier for low and
middle income consumers to use it (Euromonitor, 2017).

International Retail Marketing Analysis TESCO 6

2. Mode of Entry

United Kingdom

Tesco PLC started life in 1919 with partnership with its tea supplier Mr. T E
Stockwell. Tesco became successful by acquiring rival shops such as buying
70 Williams stores and 200 stores in 1950s followed by 97 Charles Philips
stores and the Victor value chain in 1960s (The Telegraph, 2014).

Thailand

Tesco PLC entered Thailand in 1994 by joint venture with Lotus Supercenter
which was under Chareon Pokphand group. In 1998, the company divested
its business and sold its shares back to Tesco Plc. In addition, Tesco lotus
continued to operate with the set-up of Ek-Chai Distribution System Co Ltd.
The company acquired 75% of the shares. Thai CP Group retained a 17 per
cent stake and SHV Makro got the remaining 8 per cent (Euromonitor,
2017?).

3. Market Operation

UK Operations

The company has joined partnerships with the apparel and footwear giant
Arcadia, brands such as Dorothy Perkins, Burtons and Evans is available in
Tesco Hypermarkets to make use of their selling space (Tesco PLC, 2017).
Furthermore, Tesco partnered with Holland & Barrett, health food chain, for
customers to have wide range of health and wellbeing products and has done
the biggest merger of Tesco with Booker (Forbes, 2017).

Furthermore, it has focused on developing consumers brand perception

towards their company overcoming its struggle for the past few years by
having 44% of brand trust (Mintel, 2016). The company is also focused on
campaigns to stop food wastage and share some ‘Food love stories’ to

International Retail Marketing Analysis TESCO 7

capture their attention and become more responsible to the society involving
their customers to share their stories. Lastly, despite the loss of -3.6% growth,
the company has reached an operating profit £519m for UK (Tesco Annual
Report, 2016).

Thailand Operations

Tesco Lotus’ over 8000 stores service over 12 million customers each week
(Tesco Lotus, 2017) situated in 73 provinces. Furthermore, the company had
sales of THB218.4 billion (Euromonitor, 2017). Overall, Tesco ranked almost
the second highest market share with almost all their store formats however it
is ranked 8 on internet retailing which will be seeing a growth in the coming
years. (Appendix 4)

IV. Segmentation – Targeting – Positioning (STP)

1. Segmentation

UK Market Thailand Market

Geographic
City & Region All the region of the All the region of the
country country

Density Rural, Suburban and Rural, Suburban and

Urban Urban
Demographic
Age All age categories All age categories

Gender Male & Female Male & Female

Family Life Cycle Young, Single, Young, Single,

Married, Older Married, Older

Religion Catholics, Hindu, Buddhist

Protestant, Muslim,
Buddhist, other.

Race White, Black, Asian Asian

Psychographic
Upper lowers, Lower lowers, Upper
Social class Middle class, Upper lower, Working class
middles, Lower
uppers

International Retail Marketing Analysis TESCO 8

 Lifestyle Strivers, Survivors Strivers, Survivors

Personality Outgoing, Outgoing,

Compulsive Compulsive
Behavioral
Occasions Regular Regular

Benefits Economy, Economy,

Convenience, Speed Convenience
User status Regular First-time user,
regular user

User rates Light, Medium & Light, Medium &

Heavy users Heavy users

Loyalty status None, Strong None, Strong

Readiness stage Aware, Informed, Aware, Informed,

Interested, intending Interested, intending
to buy to buy

Attitude toward Positive Positive

product

2. Targeting

Tesco PLC and Tesco Lotus uses differentiated marketing. The company
segments their product basing on people’s spending habits and divided their
product into categories that will suit the needs of their customer. The company
uses different segments to cater everybody’s need and wants. Examples on
this will be the products under Tesco Finest which targets premium users and
consumers that are willing to pay more for a better quality for both UK and
Thailand.

3. Positioning

UK

Tesco is the biggest retailer in the United Kingdom maintained to have the
highest market share at 27.5% followed by Sainsbury’s, Asda and Morrison
(Appendix 1). However, the big 4 has experienced a decline in market share
due to the improvement of sales of discounters. Aldi and Lidl, despite the low
market shares has seen market growth with cheaper prices they offer that

International Retail Marketing Analysis TESCO 9

attracts the people. 68% of the people in the United Kingdom is concerned
about their future motivating them to spend less and save money which leads
to decrease in market share (Mintel, 2016). (Appendix 1)

High Price

Low High
Market Market
Share Share

Low Price

Figure 2: Perceptual Map of Grocery Retailers for UK

The position of Tesco in the market of United Kingdom is similar with its
position in Thailand. Both Tesco PLC and Tesco lotus have high market share
with the strategy of cost reduction to appeal to different customer segments.

International Retail Marketing Analysis TESCO 10

Thailand

High Price

High
Low Market
Market Share
Share

Low Price

Figure 2: Perceptual Map of Grocery Retailers for Thailand

Tesco Lotus, is one of the key player in Thailand. However, the company is
facing tough competition in the Thai Market (Appendix 3) beaten by 7 eleven
with the highest market share for convenience stores (Euromonitor, 2017).

V. Marketing Strategy

1. Clubcard
Tesco PLC and Tesco Lotus main concentration is on their customer and
delivering low priced products. Clubcard, a frequent shopper card that collects
points that can be used by their consumers to that gathers data and tracks the
purchases of their customers on every shopping occasion. The data collected
from the purchase history is used to reclassify every customer every week
which allows the company to understand the changes in consumer behaviour
towards purchasing the product (Tesco Lotus, 2017).

International Retail Marketing Analysis TESCO 11

2. Corporate Social Responsibility
Tesco PLC and Tesco Lotus is always aiming to be responsible in the
company to maintain the trust of their customers by giving importance to their
suppliers, employees, environment, and customers.

Tesco PLC has started to minimize food waste by community food connection
used by their colleagues that notifies charity and community groups and they
can give it to people in need (Tesco PLC, 2017).

Tesco Lotus has launched 22 Pracha Rath project which boosts income for
2,500 families in 20 provinces. It is including farmers and small business
operators to serve as a supplier for the giant retailer. The company is also the
first Thai grocery retailer which Zero carbon store that uses little energy.

3. Partnership and Retail Mix

Tesco PLC and Tesco Lotus has been making its partners wide which can
retain their customer. Recently, Tesco PLC has merged with Booker deal at
GBP3.7 Billion (Mintel, 2017). The merger is Tesco’s way to cope up with
grocery market of UK which is slowly growing which will expose Tesco into a
new market which is dubbed as out-of-home food market. Convenience stores
will rocket around 7,500 stores greater than their competitors (Mintel, 2017).

Tesco Lotus is maximising their retail mix with their hypermarkets by creating
space for tenants such as KFC and Boots to maximise their mix and achieve
3.5 – 4% group operating margin by 2019/20 (Tesco PLC, 2017).

4. Marketing Mix (7PS)

4.1 Product
Tesco’s core business is retailing in packaged food. However, the company
has diversified over the years into a general merchandiser offering wide range

International Retail Marketing Analysis TESCO 12

of products includes financial services, electronics, clothing, home appliances,
etc. adding profitability in the business.

The range of products categories depends on the type of stores (Lamb,

2009). The company has also established their private labeled products such
as:

Tesco Organic: products produced for customers that are concerned with
the environment which requires high welfare standards using traditional
farming.

Tesco Free From: over 350 products that meets specific demands of
consumers having allergies and food intolerance.

Tesco Goodness: product for children’s nutritional needs

Tesco Healthy Living: for consumers who wants to have live a healthier
lifestyle which is lower in calories/fat and nutritionally balanced.

International Retail Marketing Analysis TESCO 13

 Tesco Every day value: products that are sold to their price sensitive
customers that prefers products with good quality at a cheaper price

Tesco Finest: These products are considered as the premium private-label

products of Tesco which is for customers willing to pay higher prices for
premium products with prized ingredients.

On the other hand, Tesco Lotus has classified their Tesco product into
Tesco finest and Tesco everyday value just like the Tesco PLC and addition
of Tesco.

Tesco: Equal quality to premium brands, but at lower price.

Products available in Tesco Lotus focuses more on the taste and

preferences of the local people compared to Tesco PLC which provides
products used by different region.

International Retail Marketing Analysis TESCO 14

4.2 Price

Tesco practices different pricing strategies like market penetration and

competitive pricing. It believes in the strategy ‘every little counts’, the
company attempts to maintain low price without sacrificing quality or losing
profit. Furthermore, the strategy is to compete with discounters such as Aldi
and Lidl for Tesco UK and Big C for Tesco Lotus to provide a cheaper price to
their customers.

Prices varies in store type and product range. Tesco express, convenience
store, increased their price slightly for the same product in Tesco Extra due to
the geographical location and rent expenses that are relatively high
(McLoughlin, 2007).

4.3 Place

Tesco UK and Tesco Lotus applies intensive distribution strategy. Tesco PLC
is the offline and online market leader. An estimate of £3.05 billions of sales
were online, about 7.5% of UK turnover (Mintel, 2016).

Offline Online
Click and Call
Tesco has over 1800 Tesco Lotus
a service where the customers can
store located in 73 provinces (Tesco
order from online shop and pick it at
Lotus, 2017).
a Tesco Lotus branch. Furthermore,
the company has joined partnership
with ShopBox24 and HappyFresh to
facilitate their online business. The
company’s partnership with
ShopBox24 made it possible for
customers to receive their products
at their condominium locker.

International Retail Marketing Analysis TESCO 15

 However, it is only available in some
parts in Bangkok. Meanwhile,
HappyFresh delivers products within
two hours at the price of THB60
(Euromonitor, 2017).

Tesco Lotus is one of the leading players in Thailand for their offline and
online grocery retailing. The company has two online channels which is its
own website, www.tescolotus.com, which offers 20,000 of products and
partnership with Lazada, Southeast Asia’s leading e-commerce portal, with
5000 products (Tesco Lotus, 2017).

The practice of Omnichannel, Tesco PLC has developed a digital platform

IFTTT which stands for ‘If This Then Than’ that helps customers automate
their shopping experience by informing them if the price has been reduced
(Inside Retail, 2016).

4.4 Promotion

Tesco PLC and Tesco Lotus uses above the line promotions and below the
line, the company aims to spread information of low priced items they offer.

Below the line

Clubcard

(TESCO PLC) (TESCO LOTUS)

International Retail Marketing Analysis TESCO 16

 Tesco PLC and Tesco Lotus uses clubcard, a frequent shopper card that
collects points that can provide customers with additional discounts.
Moreover, the company has developed an application for their clubcard for
IOS and Android users. Tesco Lotus have more than 11 million Clubcard
members (Tesco Lotus, 2017).

(TESCO PLC) (TESCO LOTUS)

Digital Marketing

Tesco PLC and Tesco lotus uses different social media platform to promote
their campaigns and products. Currently, Tesco has over 2 million followers
on Facebook 130,000 followers on Instagram and almost 500,000 followers
on Twitter which is also high for Tesco Lotus having 3 million for Facebook.
However, Tesco Lotus uses Line with nearly 14 million fans (Euromonitor,
2017).

Brochures and Catalogue

International Retail Marketing Analysis TESCO 17

 (TESCO PLC) (TESCO LOTUS)

Tesco PLC uses catalogues to promote their new campaign of ‘Food love
stories’ which showcase different recipes for healthy living and to minimize
food wastage. Meanwhile, Tesco lotus uses brochures to inform people
regarding discounts on their product.

Above the line

Tesco PLC and Tesco Lotus uses TV Advertisement on the main TV

channels focusing on lower price and the highlight promotion.

International Retail Marketing Analysis TESCO 18

4.5 People

Tesco PLC uses programs such as Colleague Privilege card, save as you
earn and Buy as you earn for their employees to gain loyalty. Furthermore,
the company has continued to expand training programs to help colleagues
understand compliance policies. It has employed over 350,000 colleagues
(Tesco PLC, 2016).

Tesco Lotus has employed over 50,000 people and 500,000 jobs have been
created through the network of 9000 suppliers. In 2014, 162 Tesco Lotus
stores has been awarded as the Best workplace for Labour Relations and
Welfare (Tesco Lotus, 2017).

4.6 Process

Centralized Decentralized Combinative

Tesco PLC Tesco Lotus TESCO LOTUS

Tesco PLC uses both centralized and decentralized buying structure. The
company using the combinative structure allows the head office for Thailand
to decide for their local store. For instance, CEO of Tesco PLC and Tesco
Lotus has decided for expansion of stores in Thailand sourcing more on the
local farmers at 97%. Tesco’s approach was Polycentric with the whole
operation driven by Thai (Lamb, 2009).

4.7 Physical Evidence

Tesco UK and Tesco Lotus applied multi-platform with their stores. Tesco
Lotus uses color green for their store color while Tesco UK uses blue and red.
Both Tesco UK and Tesco Lotus applies the grid layout as their store layout
since they want to maintain the simplicity of the store and places discounted
products near the check-out applying the hotspot technique. Furthermore,
Tesco Lotus company created pink parking which is for women to practice

International Retail Marketing Analysis TESCO 19

their safety and stores are designed to lessen the loss if flood occurs (Daily
mail, 2017).

Tesco UK has 4 different store formats under Tesco Extra, Tesco

Superstore, Metro and Express. Firstly, Extra is the biggest at 20, 000
square meters that offers food and nonfood lines including electrical
equipment, clothing, pharmaceutical products. Secondly, Superstore is
7,000 to 16,000 square meters and offers both food and nonfood products.
Lastly, Tesco Metro and Tesco Express are the smallest type of stores
focused on selling food products.

§ into Hypermarket, Tesco Lotus Valued, Talard Lotus, Plus Shopping mall
and community mall.

Firstly, Tesco Lotus Valued and Talard Lotus shares a similar concept but
the later mostly focuses on fresh grocery. Furthermore, Tesco Lotus
Express is the smallest store size and it is more like a convenience store
than a super market. Meanwhile, the focus on Plus shopping mall is more
on the rental space within their mall. They want to create a shopping mall
atmosphere with clothes shops, restaurants, cafe etc with a full-sized
supermarket. Lastly, Community Mall, the concept is like villa market but the
stores are placed closely to community household having many types of
store are to serve the right products at the right price and place for
consumers in those demographic areas that the stores are situated in.

International Retail Marketing Analysis TESCO 20

VI. Trends and Innovation

United Kingdom

Tesco PLC’s focus is their customer, on how to make their shopping

experience more convenient that in any other store. Trends on healthy
selection of products has increased by 55% (Mintel, 2016).

Tesco innovated products such as Payqwiq and has focused on reformulating

their products (Tesco PLC, 2017).

1. Payqwiq

Tesco, developed an application for IOS and Android which enables its
customers to pay purchases and collects points in one application. The use
of payqwiq allows customer to purchase until 250 pounds. Moreover, it

International Retail Marketing Analysis TESCO 21

 provides customer list of their transaction history and Clubcard points
(Tesco PLC, 2017).

2. Reformulation of their product

The company aims to reduce sugar, salt, fat in own label products to
produce healthier products desired by the customers and to imply with the
Children obesity plan of the UK government (Mintel, 2017).

Thailand

Market Trends in Thailand focuses on increase in importance of digital and

mobile retailing (Euromonitor, 2017).

The company has innovated iBeacon, which is a local notification via

Bluetooth that notifies the customers with special privileges when they pass
on the iBeacon having the Tesco app (The Telegraph, 2016).

VII. Recommendation

1. Customer Retention and Acquisition

International Retail Marketing Analysis TESCO 22

Tesco PLC and Tesco Lotus should focus on retaining their customers to
maintain profitability. Tesco PLC’s merger with Booker will increase
convenience stores of Tesco with the use of different brand that can reach
rural places in the United Kingdom. The company should continue building
trust with their consumer to maintain their brand reputation and loyalty despite
the rise of discounters. Tesco’s expansion in Thailand must be given focus by
locating it with accessible places and flood free. Aside from that, Tesco Lotus
should focus on their online retailing since it is ranked 8 and that sector has a
large growth in the coming years.

2. Innovation

Tesco Lotus and Tesco PLC should focus on building new technological
device that would help customer gather more data regarding the product with
chat robots. Furthermore, virtual reality that would entertain their customers
giving them a whole new shopping experience (Euromonitor, 2017).
VIII. Conclusion

Overall, Tesco PLC and Tesco Lotus is generating profit for the company. The
company’s focus on their providing cheaper price for a good quality product
increases customer loyalty with the economic problem the world is facing. The
company’s corporate social responsibility addresses its concern in the society
that builds the trust of their employers, suppliers and customers in the society.

Tesco’s expansion in Thailand still has room for development and growth.
Furthermore, online retailing where Tesco Lotus’s target market which
belongs in the lower and middle class can purchase a smartphone now
exposing them for online marketing. The company should invest more in
learning the culture and local activities before

International Retail Marketing Analysis TESCO 23

IX. References

Aaker, D. and McLoughlin, D. (2007) Strategic Market Management: Global

Perspectives, West Sussex: John Wiley & Sons Ltd.

Bangkokpost. (2017). Tesco Lotus plans another 100 stores [online] Available

at: http://www.bangkokpost.com/business/news/1243170/tesco-lotus-plans-
another-100-stores[Accessed 27 May. 2017].

Business insider. (2015). Tesco just launched a 'game-changer' in the

supermarket price war [online] Available at:
http://uk.businessinsider.com/tesco-launches-brand-guarantee-money-off-at-
the-tills-2015-10 [Accessed 24 May. 2017].

Business insider. (2016). Tesco's 'game changing' price strategy is working

[online] Available at: http://nordic.businessinsider.com/tesco-first-half-2016-
results-show-show-sales-growth-2016-10/. [Accessed 25 May. 2017].

Daily Mail. (2017). Tesco's Thailand stores introduce pink women only
parking spaces amid customers' fears they'll be attacked while loading their
shopping. [online] Available at: http://www.dailymail.co.uk/news/article-
4227110/Tesco-Thailand-introduces-special-lady-parking-zones.html.
[Accessed 27 May 2017].

Emerald Insight (2005) "The secrets of Tesco's expansion success: How

the UK's largest supermarket is creeping up on Carrefour and Wal‐
Mart", Strategic Direction, Vol. 21 Issue: 11, pp.5-7, doi:
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X. Appendix

International Retail Marketing Analysis TESCO 29

 Appendix 1: Grocery Market Share in UK
Source: Kantar

Appendix 2: Attitudes towards effect of Brexit on pricing.

Source: Mintel

International Retail Marketing Analysis TESCO 30

 Appendix 3: Grocery Retailers Company Shares (Thailand)
Source: Euromonitor International

Appendix 4: Pink Parking Lot

Source: Google

International Retail Marketing Analysis TESCO 31