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TESCO
Tesco is an international grocery and retail chain dealing in general merchandising based in Britain. It is largest British retailer in domestic market share and global sales with profits more than $2 billion. Tesco has been fourth largest retailer in the world since the year 2003 when it originally specialized in drinks and foods but later dealt with electronics, internet service, clothing and software. In July 2007, Tesco stores in United Kingdom were closed temporarily due to bomb attacks for criminal investigation to be carried out where suspect device was traced in a store making surrounding area to be vacated. (Kotler, 1998 pp23-26)
Effects of a recession on the marketing activities of Tesco using PESTEL analysis
Recession makes Tesco have very slow growth and individuals have limited amount of money for spending in purchasing goods and services. This makes them more careful in making choices on what to buy and what to do without buying there by becoming less extravagant. This is to mean that marketing activities are affected disproportionately by recession. (Thompson, 2002 pp15-17) found that Imported goods in the market are cheaper to buy when pound is strong in comparison with other goods but in cases where pound becomes weak; it is more expensive to purchase foreign goods.
Recession makes financial resources in the market to be less meaning that, there is limited supply of money to carry out marketing activities and marketing manager will have to work hard to ensure advertising is done properly to create awareness about availability of goods in the market. (Porter, 1985 pp12-14)
When analyzing the macro-environment of Tesco, factors that affect vital variables are identified because there is likelihood that they influence supply, demand and costs. The changes that occur in Tesco make the environment to be uncertain and affect all the activities that are carried out. PESTEL analysis helps to know the issues that affect operations and categorize environmental influences. The analysis is involved in examining how economic, social political and technological forces affect the business so that contingency plans can be made in preparing strategic plans. In case of recession, Tesco uses PESTEL analysis to understand decline in the market, its business position and how to carry out its operations. (Cooper, 2000 pp10-13)
Economic slowdown may not put off consumers who are able to pay premium for goods. When ethical brands are available, they trade well during recession because their response to change in price is less. Therefore, if there is increase in their price, customers would not automatically switch to less expensive products. The expectations of consumers is to have brands that are leading with strategies that take care of changes in climate but also help customers to make the right choice of the goods that are available. (Byars, 2001 pp34-36)
During recession, Tesco engage in corporate responsibility so that marketing activities can be run well in order to manage social and environmental impact in efficient manner to manage the risks and outperform other businesses. Economic downturn is dealt with so that it may not have negative impact on marketing activities for Tesco to be more competitive in the market through offering good quality products and advertising its goods and services to create awareness to potential customers. Tesco had promotional campaign and price cut to inform customers on what they deal with and affordable prices are charged for goods and services for the customers to purchase more of the products even when they have limited supply of funds. (Baker, 2001 pp24-26)
References
Porter M. (1985): Competitive advantage, New York: Free Press, pp. 12-14.
Thompson J. (2002): Strategic management, London: Thomson, pp. 15-17.
Kotler P. (1998): Marketing management, Englewood Cliffs: Prentice Hall, pp. 23-26.
Cooper L. (2000): Strategic marketing planning: Journal of marketing, pp. 10-13.
Byars L. (2001): Strategic management, implementation and formulation, New York: HarperCollins, pp. 34-36.
Baker M. (2001): Marketing; Critical perspective on management and business, Chicago: University of Chicago, pp. 24-26.
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