Retail Marketing

Marketing Elements for Retail Sector Organizations

Introduction To Retail Marketing

Retail sector is one of the fastest growing sectors due to its wide product range and most importantly it provide opportunity to customers to shop for various items under one roof. It is very unique aspects of this sector that’s why it becomes so much acceptable by customers. In this report the various elements of retail marketing has been taken into special consideration (Chernev, 2006). It includes retail marketing mix and its elements along with the explanation of benefits of retail marketing mix with the sustainable competitive advantage. At last in current scenario the environmental challenges for the retail industry have been shown in very articulated manner. In this report the retailer that has been used is Tesco (Chadwick, 2000).

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This organization is basically UK based organization and has its operations all across the globe. Tesco is one of the largest retailer chain stores in entire UK and serve millions of people every year. Sainsbury, ASDA and Morrison’s are the major competitors for the company (Pretious, 2003). Tesco has created its huge brand value among customers and delivering the world class services to their customers. In current study the retail mix for Tesco in India will be studied so that proper understanding about the retail marketing could be developed at very large scale. For operating in India Tesco has selected growth strategy for retail marketing mix.

Assessment of Retail Marketing Mix:

Here in this assignment the retail marketing mix of Tesco in India has been analyzed. Tesco has commenced their business in India with the help of Tata group. In India Tesco is yet to open their stores at very large scale. Right now the cited group is having very limited operations within India. It will definitely help in gaining the knowledge about retail marketing mix. This factor is definitely helpful in developing the market share if implemented in proper manner. There are various elements of retail marketing mix which are required to be followed in very stringent manner (Sumner, 2004). Tesco is very giant organization but in India the level of competition is very huge and it may affect the business operations. The marketing environment of India is completely different and elements of retail marketing mix could be helpful in establishing the business within India. It is to acknowledge that retail mix is a term which includes various aspects of any retail store that can provide leading edge to retail sector organizations and improve the operational efficiency (Kent and Brown, 2006). The description of each element of retail mix with the perspective of India is given below:

Merchandise range: The major factor which is required to be analyzed is the merchandise range. It must be prioritized by every retail sector organization. It includes the product range or types of services that has been provided by any retail store to its customers. It is to acknowledge that in India people generally like the more utility product rather than fancy range. If company wants to attract the people of India then the major element of product quality of that it must provide full value to its customers else high level dissatisfaction can be faced (Spillecke, 2013). They are required to operate as per strategy of product life cycle. It is commercial technique which attempts to list the stages in the lifespan of commercial and consumer product.

Ahead it is also clear that in this process a retail store can manage their product life cycle and develop differentiation within the market. Offers and discounts are also required to be different than the competitors (McDonald, 2000). Tesco has to ensure that they have high quality products and innovation should be their major objective. If company gains success towards this factor then it will definitely helps in developing their business. In India the number of customer is very huge so it provides lots of opportunities to any company. Tesco should be committed to put such kind of items and products that can provide full value to the customers and must be fitted on the expectations level of the customers (Piercy, 1987). The quality of merchandise or products must be high and should be able to gain the attention of customers. Product innovation should be the major aim of any retail sector organization. It is to acknowledge that product is something that helps in gaining the attention of customers and if Tesco lacks on this feature then definitely Indian market will hamper their profitability ratio. In improving the merchandising mix the Tesco is supposed to understand the mindset of Indian residents and need to arrange their shelf accordingly (Birtwistle, 2007).

Retail communications: In India Tesco can survive only if they have good relationship with their suppliers and other related associations. It will help in nourishing the network for Tesco and most importantly they can definitely improve their market situation. Tesco is supposed to create very good communication and network with their suppliers. It is to acknowledge that retail sector companies have to have strong and concrete network with their suppliers and customers. Retail communication is something that can help in avoiding the kiosk level within the organization. It also includes the promotion strategies that could be adopted by any organization. It gains huge priority with respect to improve the brand image and level of brand awareness (Velayudhan, 2014). Smooth flow of communication could be helpful in various ways. The track of items could be kept in proper way and orders can be placed very frequently. Further with the help of proper communication with various stakeholders the company can definitely build stronger relationship with them. Customers can be attracted through various promotional campaigns. As mentioned above that Tesco is just at commencement stage in India so they need to rely hugely on appropriate advertisement campaigns with respect to cater the attention of customers.

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Location: It another factor that must be prioritized by Tesco at very large scale. It is to acknowledge that store layout has direct connection with the geographical location of the store. The Tesco needs to understand that it is one of the beneficial aspects in the India (Sivakumar, 2008). The population is very high and density is also very huge so Tesco has to ensure that store location must be appropriate and reachable. Further while working location strategy the company is required to focus towards the segmentation process. They need to understand that what kind of market they are targeting in India. Accordingly they can set their locations and open their outlets. Other than this it is also required to understand that the number of competitors should not be very high into that location. The element of location involves the location of the store that has been selected by any organization. It must be perfect on two parameters; first the store should be in reach of customers and second is whatever segment of market the company is targeted that must be available in particular selected region or area. If company is clear with these two aspects then location strategy could be designed in appropriate manner (Hallbauer, 2008).

Store layout: It refers to internal design or structure of the store. Tesco is supposed to ensure that store must be big enough so that the element of kiosk and haphazardness can be avoided in case of rush. Further the store layout is related to the various other arrangements with regards to the departments. The category of items and products should be well organized and systematic. It is clear that the layout of the store is something that must be appealing. The products should be arranged in systematic manner. The category must be defined by retail store, it enables customers to find the product and they can place their query as well. The retail mix of store layout laid down emphasize on the fact that every product must be in reach of customers when they enter inside the retail outlet or store. The products should not be misplaced or arranged in haphazard manner (Oner and Larsson, 2014). It is essential to focus on this factor that the set up of billing counter is also required to be organized and appropriate. In the time period of festive seasons or discount season the store should arrange extra billing counters. Thus these are certain significant elements of store layout. Tesco has already given priority to this factor and their stores are highly convenient (wherever the company has their stores) and shelf arrangement of Tesco (In other countries) is also tremendous.

Customer services: Like any other retail sector organization Tesco can also get established their business with the help of customer satisfaction. They need to provide satisfactory services to Indian customers. It will definitely help in improving the profitability and competitors can be outrun in Indian market (Gilbert, 2003). For the improvement in customer services in India the Tesco is supposed to understand the behavioral aspects of Indian residents and through this factor they can properly bring transformation in services. Customer service is most significant factor that should not be neglected by any retail sector organization. It is something that can help a company to outrun their competitors and distinctive brand identity can be created. Tesco has got hold on this factor and there customer dealing facility is excellent and it has become their main objective as well. Retail mix is completely dependent on the satisfaction level of customers and that could be developed through improvement in customer services (Koontz and Gibson, 2002). The cited organization needs to bring variety of services to their customers so that they can avail the benefits of shopping and their experience of visiting Tesco stores must be good.

Pricing strategy: Ahead pricing strategy is last factor that gains huge consideration in the retail mix. With relevance to retail sector it is very general concept that they provide the material at very reasonable and competitive prices (Noad and Rogers, 2008). It is to acknowledge that Tesco is supposed to pay huge attention on this element that they need to put competitive prices for their product. The price of the products must be reasonable and fit as per the utility of product. Reasonable pricing will definitely help them at commencement stage and Indian market can accept Tesco as new emerging retail sector organization. Thus these aspects of retail mix must be followed by company. Tesco has already, up to some extent, got the privilege of these aspects and they have developed huge market share by showing their adherence to the various elements of marketing mix in various other regions (Koontz and Gibson, 2002). India has huge growth potential and making proper alignment between various aspects of retail mix the opportunities can be grabbed.

Benefits of Retail Marketing Mix:

The major benefit of showing adherence to the retail marketing mix is that it work as guideline for the companies and most importantly it helps immensely in bringing the improvement in their operations (Doole and Lowe, 2005).

Merchandising- As mentioned above that merchandising is one of the major qualities of the retail marketing mix. If company is following the various aspects of merchandising mix then the organization can definitely get hold on their product range and footfalls of the customers can be improved. For the purpose of sustainable competitive advantage the company is required to maintain good communication with their stakeholders. It is one of the essential elements of retail marketing mix (King, 2009).

Retail promotion- Proper promotional strategies always lead towards the brand awareness and most of the people come to know about the unique aspects of the company. Through this factor the store will always be having proper abundance of products and items and they can definitely meet out the expectations level of the customer. However procedure of retail promotion may be difficult to terminate certain promotions without adverse customer reactions. Promotion strategy can be cost consuming which will affect the profitability of the entity.

Store location- As per the segmentation and targeting process the retail store can definitely prepares their appropriate buying environment. In order to improve merchandising strategy the company can definitely introduce different product range and stock can be maintained. Ahead it is also clear that in this process a retail store can manage their product life cycle and develop differentiation within the market. Offers and discounts are also required to be different than the competitors (McDonald, 2000). If store location is not at appropriate place then sales of the organization will be reduced. Apart from this if company is having good location strategy then it will be helpful in becoming the first alternative for the customers. It is essential that the store or outlet should be at reachable distance so the customers found it easier and convenient to visit at retail store. Thus it also leads towards the sustainable competitive advantage.

Pricing- Through reasonable pricing the company can definitely win the trust of customers and it could be helpful with a view of developing mindset among the customers. It is a best way to develop relationship with customers. Thus the major benefit of retail mix is that it helps in eradicating the loop holes into the business operations and guide in proper way towards right direction (Doole and Lowe, 2005). Tesco is operating in competitive business environment thus the expediency of retail mix will be very high for them as they can fulfill the customer expectations and the standard of their services could be improved. The pricing will be reasonable and communication will be proper so the customers will be retained for the longer period of time (Chernev, 2006). Other than this it is also clear that with the help of retail marketing mix customer loyalty can also take place. The company will focus only on the targeted market and their strategies will be completely customer centric so it will automatically make customers loyal. Next customer retention is also one of the significant results of the retail marketing mix.

Challenges of Continued International Growth:

It is to ascertain that in the process of international expansion the companies generally faced lots of challenges that put its adverse impact at the continued international growth. At international platform it is never easy for companies to ensure their long term sustainability. In India also Tesco might face lots of operational issues and it can hamper their efficiency (Samli, 2012). Major challenges in international expansion are the unpredictable consumer demand and restrictive market entry strategies. Assessing the demand of customers is somewhere biggest challenges for the Tesco and they need to understand the political environment as well. Further another very major challenges is the development of various retailers those who has developed their market and huge brand image (Kent and Brown, 2006). The number of competitors at international platform will be high and it will definitely put excessive performance pressure.

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Tesco at International Level.

The challenges could be understandable through PEST factors:

Political challenges: It could be major challenges for the cited organization as in India there are restrictions of foreign investment into the retail sector. But Tesco has make alignment with Tata; an Indian based organization and is one of the most influential organizations in India, and has entered into the Indian market. Further some kind of political interventions could be faced but in India these kind challenges won’t be very much. It is to ascertain that the level of corruption is very high India so Tesco need to get rid of these factors else it can definitely affect their brand image. On the ground of taxation and legal formalities also some sort of problems could be occurred but JV with Tata will help them in dealing with these political challenges (Stern, 2004).

Economic factors: In current stage the Tesco has taken a decision to open their stores in the metro cities and highly economically stable cities. This decision could be helpful with respect to improve the sales ratio. India is a developing economy and people have started to earn well. Now the economic situation has been improved hugely and its right time to invest into the Indian retail market. The currency of India is also depreciated as compare to pounds so investment cost will be low for Tesco. The return could be gained rapidly if strategies will be implemented painstakingly. So it could be said that on the ground of economic aspects the challenges are not so huge (Noad and Rogers, 2008).

Social environment: On the ground of social and cultural aspects the major challenge is related to the traditional shopping habits if the customers. It is to acknowledge that in India the retail sector is still unorganized so shopping trends towards stores and outlets is very low. However the situation is changing slowly but still there is requirement of implementing the concrete marketing strategy. Tesco has to wait for the positive change in cultural aspects of Indian market (Rosenbloom and Dimitrova, 2011).

Technological factors: The level of technology in India is comparatively low as compare to foreign countries. Bringing the advanced technology in India could be the major challenge but it can be easily handled through proper integration of technological environment. Thus in this way it can be said that in India the company won’t face much challenges as they already have JV with Tata who understand the local culture and market along with the past glorious history in corporate world of India (Rosenbloom and Dimitrova, 2011). International growth can be affected through market selection process as well. It is not easy to assess the market trend in any particular country due to diverse culture and unpredictability between customers. India has lots of cultural diversities that make the segmentation process much tougher for any company.


The major outcome of above report is related with the proper knowledge about retail mix. However there is not much difference between actual marketing mix and retail mix. Both these marketing terminologies revolves around the basic 4P’s but in retail mix two very significant element that must be prioritized by retail sector organizations are store layout and location of the store. It becomes clear with the help of this report that India the growth potential and opportunities are very high. Tesco can definitely gain competitive advantage in Indian market. Another outcome of this report is related to the identification of various environmental challenges that could be faced by Tesco in Indian business environment. Overall this report is centered on the retail industry and various aspects of the retail industry have become clear in very articulated manner.


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