Macro environmental factors that are impacting Tesco are identified through the process of the environment Dibb Et Al (2005). Dransfield et al (2004) states that a PESTLE analysis is a very detailed study of political, economical, social, technological and environmental change, using a range of published sources such as government surveys, statistics about the state of the economy, social trends as well as some primary analysis.
Political: following the European free trade Agreements, the market has opened up for British companies to invest in Asia. Tesco already has a dozen of stores in Asia. Tesco also need to give each employee the right and teach employees about anti-discrimination law. Failed to do this Tesco will be prosecuted and fined.
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age & lifestyle, geography and gender. Dibb, S, et al (2005). Companies can choose one or several variables, as Appendix I shows segmentation can be grouped into four categories demographic, geographic, psychographic and behaviourist. Demographers study aggregate population characteristics such as the distribution of age and gender, fertility rates, migration patterns and mortality rates. Marketers rely on these demographic characteristics because they are often closely linked to customer’s needs and purchasing behaviour, also can be measured. Dibb, S, et al (2005). For example Tesco have two market segments, first one is customers looking for value and second one customers looking for quality. Tesco (2014). Geographic segmentation is clustering people according to postcode areas and census data. Dibb, S, et al (2005). Tesco will need to take the different languages spoken into account when labelling goods. Tesco has opened Metro and Express stores to make it easier for customers to shop. (http://stores.tesco-careers.com/). Marketers sometimes use psychographic variables such as personality characteristics, motives and lifestyles to segment markets. Dibb, S, et al (2005). Tesco use age and gender segmentation to offer different products and use different marketing approaches for different age and gender groups. Tesco (2014). A programme called the Stanford Research Institute’s Value and Lifestyle Programme (VALS) surveys consumers to select groups with identifiable values and lifestyles. Initially VALS, identified three broad consumer groups, which are outer-directed, inner-directed and need-driven consumers. Behavioural segmentation means dividing the market into groups based on consumers behaviour towards products. Purchase behaviour can be a useful way of distinguishing between groups of customers, giving marketers insight into the most appropriate marketing mix. For example brand loyal
Tesco PLC's Expansion in North Bracknell Introduction: Tesco PLC is an international supermarket not only selling high quality goods but has now also become one of the biggest job markets. As well as this Tesco has been running sub-projects to increase the level of customer care. [IMAGE] Tesco's main aims are shown by the steering wheel provided by their website (www.tesco.com). Tesco want to have good quality for value to earn their customers loyalty while still making a profit. I will be investigating the Tesco Superstore, petrol station, pharmacy and coffee shop in North Bracknell (Warfield).
Online Stores Tesco wants go into other markets because they would be bringing in more customers, which are going to increase profit. They also have another aim which is to expand internationally because they already operate within the Europe. They have to set themselves new aims and objectives that are harder to achieve as it’s the expanding further.
Segmentation variables can be classified into four major classes; geographic, demographic, psychographic and behavioural. The use of these categories either individually or in combination assists companies to identify and establish market segments which is relevant to the product or service they are offering. This in turn helps these organisations to evaluate the relevant segments to choose the pertinent target market.
Many factors should be addressed when defining a target market. These factors include market segmentation, product life cycle, and the four "P's" that make the marketing mix. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product wants and needs. There are four major segmentation variables: geographic, demographic, psychographic, and behavioral. Geographic segmentation includes world region, country region, city, density, or climate. Demographic segmentation can consist of age, gender, income, occupation, education, race, religion, or nationality. Social class, lifestyle, and personality fall into the psychographic segment. The behavioral segment divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product (Bethel, 2007). Once the market segment is identified, that market can be targeted.
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
There are a range of segmentations that allows a company to target potential customers effectively.
Over the years, Tesco has recorded growth which has been achieved through different strategies. The company has adopted its growth strategy which has been implemented in four different parts. One has been emphasis on the growth of Core UK business in order to expand internationally. This growth has allowed that company to position itself in food and nonfood sectors based on retailing services. Over the years, the company has witnessed financial fortunes which have been reflected in its growing sales.
This part of the report will highlight the problems within the external environment that affect Marks and Spencer. Before planning and decision making can take place an organisation must be aware of these issues. The key factors that impact upon all organisations are Political, Economic, Social and Technological. These factors are commonly referred to as PEST factors. Political changes like change of government could affect the minimum wage that M&S workers are paid. Economic factors such as inflation could affect the pricing of garments. The Social factors that would need to be taken into account are lifestyle changes and demographics, M&S would need to consider where their target market stood. Technological advances could also affect M&S sales just recently their website has been updated from a corporate site to a new website offering online buying. Globalisation is a huge environmental factor affecting M&S. Globalisation is the increase in cross-border economic, social and technological exchange. For organisations it increases competition and the search for cost advantages.
This segmentation variable combines the elements of the consumer’s demography and geography. These are the measurable characteristics of the consumer’s age, gender, cultural diversity, occupation, income level, family life cycle and their physical geographical location. (Gabbott, M., 2004, p. 159-160).
Pestle analysis is the tool to analyze the external environment of the business. It takes the different factors according to which the opportunities and threats can be analyzed and the actions plan can be made.
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
Even environmental and social link in this case study of PESTLE Analysis factors. For the example of CO2 emissions, is an Environmental ingredient which has Political & Legal influence, it has an Social impact in the UK culture where the customer is more Green consumers they like to use the goods and services which are more eco-friendly which also have less impact on the environment study case
Demographically we can segment the market into groups based on age, gender, family- size, income, family life cycle and occupation.
The first phase of a strategic analysis, Macro Environmental Analysis, commonly referred to a PESTLE framework, is the assessment of opportunities and threats to the industry where the firm belongs that is outside the control of our industry. The PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal and Environmental (Pestle-Macro environmental analysis, 2012), describes a framework of macro-environmental factors used in the environmental scanning component of strategic management, forming part of the external analysis when making a strategic analysis; it basically gives an overview of the different macro environmental factors that the company has to consider. Strategic PESTLE Analysis helps us identify the growth or decline tendencies, business position, possible threats, and direction for operation.
Technological change, change in economic climate, natural occurrences and such-like are matters that concern the macro-environment of a business. These external, uncontrollable, influences can and will impact hugely on the success or failure of a business. One of the tools that are applicable in considering these factors is PESTLE. Political; Environmental; Social; Technological; Legal and Economic considerations will need to be engaged in order to prepare the business for macro-environmental influences. For this reason, PESTLE will be the most appropriate tool to use to identify and outline the main macro-environmental factors that may affect my business.