Global Marketing and Sales Assignment Sample 2023
1. Introduction
The present study is going to shed light on the suitable business expansion strategy of Tesco in the Canadian marketplace. In order to understand the characteristics of the retail sector of Canada, a micro and macro-environmental analysis will be conducted in the present study.
Besides, the study will include the most appropriate segmentation, target and positioning (STP) for the business development of Tesco. Certain recommendations of market entry strategy will further be provided in the present study. Apart from this, recommendations based on marketing mix elements such as products, price, promotion and place will be given for expanding the business of Tesco in Canada. Moreover, the study will include a reflective analysis of teamwork.
2. Report
Marketing audit: Macro and Micro Environmental Analysis
Tesco is aimed to expand its business in the market of Canada for improving the business development process. The macro-environmental analysis of the Canadian market will be developed based on Political and Legal Factors, Economic Factors and Socio-Cultural Factors. Besides, the micro-environmental analysis is going to be done based on the evaluation of Customers and Competition.
Macro Environmental Analysis
Political and Legal Factors
The political climate can become a significant challenge for a company to adjust to the competitive environment. The government parties in Canada are considered liberal. However, there are other leading parties switching among the conservatives and the liberals, which are followed by the New Democratic Party (NDP) (Palmer, 2016).
The political climate of Canada is developed on the ideology of democracy. The Canadian government runs based on parliamentary processes having parts such as Federal, Provincial and Municipal. The government structure of the country makes it one of the politically stable countries in North America. Stability in the political climate will be beneficial for Tesco to expand its business in the Canadian market.
Canada is considered one of the least corrupt countries in the world. However, an official report of 2020 has suggested that the country has slipped out of the top ten lists of least corrupt countries (McClelland, 2020). The present rank of the country in terms of transparency is 12th, which is still significant for supporting the business of Tesco.
Corruption is considered as a significant component that can affect the foundation business in Canada. Everything associated with business from lawsuits to contract can be affected due to corruption.
The lack of corruption in Canada is a positive sign for the business development of Tesco. However, the biggest constraints, which will affect the business expansion strategy of Tesco, are the rules and regulations of Canada. According to Wyonch (2017), the business rules and regulations of Canada do change based on the province of the country. It is important for Tesco to comply with the federal Goods and Service Tax law in order to do business in the country.
Based on the GST/HST Regulations of Canada, companies do not only have to comply with the federal taxes but also with the providential taxes (Brousseau, 2017). As an example, the providential law of Canada illustrates that employees of Quebec should now communicate and write in the French language. In terms of taxes, it is important to pay the Quebec Sales Tax on the top of Goods and Service Tax.
On the other hand, Labour Code Canada, 1985 can be problematic for sustaining business in the country (Quesnel, 2016). It will be difficult for Tesco to comply with laws because the labour law of Canada changes based on different provinces. Hence, the rules and regulations related to employees’ contracts will need to change according to the chosen province of business expansion.
Economic Factors
Economic factors are one of the most essential factors that influence the business development process. The economic growth and status of every country are not the same. Canada is one of the most developed economies in the world. The country is the 11th largest economy in the world in terms of Gross Domestic Product (World Bank, 2020).
The economic stability of the country is one of the finest in the world having a GDP USD of approximately 1.8 trillion as of 2018. However, the major aspect, which plays an important role in business progress, is the unemployment rate. Countries having high rates and low per capita income have low spending power.
It is important for Tesco to analyse the economic factors such as per capita income and employment rate of Canada for developing business in the country. As per Plecher (2020), the unemployment rate of Canada in 2019 was reported 5.67%, which is significantly dropping since 2009.
Figure 1: Unemployment Rate in Canada
(Source: Pletcher, 2020)
However, due to the emergence of COVID19 pandemic, the percentage has been increased to 7.41% in 2020. Despite that, it is estimated that the unemployment rate of the country will drop again in 2021. It can be understood from the given data that the employment circumstances of the country are in a good position.
Apart from this, the per capita income of Canada is considerably high and almost similar to the United Kingdom. Per capita income of Canada has been reported in 2019 is 46,194.7 USD, while the UK has the per capita income of 42,300.3 in the same year (World Bank, 2019).
The high per capita income of Canada illustrates that there is a strong capacity of the country in terms of spending money, which will be extremely important for Tesco. Therefore, the pricing strategy of Tesco is needed to be developed following the strategy of the local British market.
Socio-Cultural Factors
The reflection of society is illustrated in the socio-cultural factors of an emerging market. Some of the major socio-cultural aspects that influence the business development process are culture, beliefs and values of society and people.
The organizational culture of Tesco will be significantly influenced by the social patterns of Canada. One of the most significant social factors that would influence the business of Tesco will be demographic patterns such as population and migration trends of the country. The social patterns of Canada are significantly influenced by the prevalence of migration. As mentioned by Zaman (2020), migration patterns of Canada have changed in rapid speed having significant growth of temporary migration in the past decade.
Prevalence of migration in a country changes the overall values, behaviours, beliefs and attitudes of the overall society.
As people from different cultural and religious backgrounds live in this country, it is important for Tesco to develop business strategies by respecting the cultural and religious norms of each community. Apart from religion and culture, language could be a significant aspect that will influence the marketing and sales strategies of Tesco. As cited by Davis et al. (2019), the two official languages of the country are French and English. Majority of Canadians speak English to communicate with each other.
However, the Quebec province of the country is full of people who speak the French language. Therefore, in order to develop strategies of customer services, marketing and advertising, it is important for Tesco to consider both of the languages as a priority.
Micro-environmental Analysis
There are two factors such as Customers and Competition are undertaken to help Tesco to analyze its internal capabilities. The micro-environmental analysis is crucial to deal with Canadian competitors and customers.
Customers
The population of Canada is considered as moderate as compared to its neighbouring country the USA. As per the latest report of 2020, it has been found that the population of the country is around 37 million which is increased from 35 million in 2015 (Trading Economics, 2020).
The main reason for the population growth of the country is migration. However, the growth in population is a good sign for Tesco as it can get the opportunity to develop a huge customer base in the country. However, in order to expand business in the Canadian marketplace, it is important for Tesco to understand the consumer behaviour of the country.
The median age of the overall Canadian population is around 40 years (Duffin, 2019). It illustrates that the majority of the Canadian customer will be between the ages of 24 to 65 years old.
Figure 2: Mediate Age in Canada
(Source: Duffin, 2019)
Besides, the population of the country is highly diverse and multicultural. The diversified population of the country results in high levels of mass consumption. As cited by Sans and Combris (2015), 80% of the population lives in Montreal and Ontario cities of Canada.
Hence, the consumption rate in populations of urban areas is higher than in small regions like London or different areas. The purchase of consumer goods in the country is mainly dependent upon the malls and retails parks. Hence, there is a huge scope for Tesco to gain customer attention as their buying behaviour is in favour of the company.
The business development strategy of Tesco is highly dependent upon the e-commerce business. As per Clement (2020), the present trend has suggested that the e-commerce market of Canada is going to be increased from 3.53 trillion USD in 2019 to 6.54 trillion USD in 2023 due to huge demand among customers. This trend of consumer demand poses a huge opportunity for Tesco to develop business using e-commerce strategies.
The retail sector in Canada is full of competition due to the presence of companies such as Empire Company Ltd, Weston Group, Wal-Mart stores and Costa Canada.
According to Cozzolino and Rothaermel (2018), the presence of strong competition in an existing market can be critical for new entrants to survive. Hence, Tesco may find it difficult to survive in extreme competition as the above-mentioned companies have a stronghold in the retail market of Canada.
In order to survive in the extreme competition of the retail market, Tesco should develop more effective strategies as compared to existing companies. As an example, the business strategy of Weston Group is entirely dependent upon the quality of products and services. Based on an enhanced process of quality management and packaging, Weston Group has developed the differentiation strategy.
On the contrary, the primary focus of companies such as Wal-Mart stores and Costa Canada is based on pricing strategy.
These companies are mainly focused on attracting customers based on competitive pricing along with the high quality of products. In order to develop business expansion strategies in Canada, Tesco is needed to pay attention to the effective implementation of marketing mix strategy.
There is a huge scope of business development of Tesco by focusing on aspects such as price, product quality, distribution process and promotional activities.
Conclusion
Based on the analysis of macro and micro-analysis of the business environment of Canada, it can be concluded that Tesco has a decent opportunity for business development. Analysis of political and legal factors has illustrated that political stability present in Canada will be helpful for Tesco to support in the business development strategy.
However, the laws and taxes associated with business can be challenging for Tesco at certain times. Economic factors such as employment rate, GDP growth and per capita income of Canada is in the favour of business development of Tesco.
However, it is important for the company to pay attention to the socio-cultural aspects of Canada in order to develop effective strategies related to marketing, sales and customer service. In the micro environmental analysis, it has been found that high consumption is a major characteristic of the consumer behaviour of the company.
Factors such as high population and high consumption can be used by the company to gain a strong base in Canada. However, high competition created by companies such as Weston Group and Wal-Mart will be a major challenge for Tesco.
Recommendation on Segmentation, Targeting and Positioning
It can be observed that Tesco is one of the biggest names in the retail sector and it also has a solid customer base that has helped to expand the business to achieve success.
As mentioned by Camilleri (2018), the major reason behind the solid customer base of this company is its excellent segmentation, targeting approach and positioning strategy that helps to attract the customers to compete with the existing competitors. The STP strategy of Tesco will further be beneficial for business development in Canada.
The following recommendations of the STP strategy will be crucial for business expansion of Tesco.
Segmentation
The segmentation of the customer is required to be developed based on certain criteria such as demography, psychographic, behaviour and geography. However, the segmentation of the business is required to be focused on essential factors such as population density, age income rate and occupation (Bian et al. 2019). As Tesco mainly deals with retail products, customers of both rural and urban areas of Canada should be considered.
Besides, the segment of the marketing is needed to be done based on all the age groups of 24-60 as it is the mediate age of the customers of Canada. Apart from this, the per capita income of Canada is significantly high; hence, the price will not be a major problem in the country.
Hence, segmentation should be developed for the income groups of the country. In the perspective of psychology, the company is required to target the youth of the urban and semi-urban regions. According to Al Adwan (2019), the youth are more likely to prefer the quality of to quantity. Therefore, focusing on the quality of service, the attention of young customers can be gained.
Targeting
Based on the segmentation of the overall customer base, Tesco will have to identify the most attractive customers that can be turned into loyalists. According to Jan and Victor (2019), the targeting of customers is generally done based on three aspects namely size, profitability and ease of reach. Size is a key driver of targeting a particular segment depending upon its potential growth in terms of size.
Profitability is determined based on the expected lifetime value of the selected customer. The final component is the ease of reach, which ensures accessibility to convey messages to the target customer.
As the chosen segmentation for business expansion of Tesco is young customers, hence, all the three aspects of targeting will be met. The young customer base has the potential to become larger in the upcoming years. The lifetime value of young customers can be ensured by meeting their requirements. Moreover, it will be easy to connect with this customer through social media and online platforms.
Positioning
Positioning refers to the process of designing the offerings of Tesco in order to get a distinctive place in the mind of customers. As per Moges (2017), the main goal of positioning is to develop a strong brand image to ensure the potential for the business in an emerging market.
Traditionally, the positioning of Tesco is developed based on the low pricing strategy in the domestic marketplace of the UK. The strategy has helped Tesco be a stronghold in the domestic sector and attract new customers.
It has been found from the analysis of competition in Canada that the business strategies of companies have been developed based on an effective pricing strategy.
Hence, the positioning of the business of Tesco needs to be done with an effective pricing policy to attract the target of young customers. However, it is important for the company to pay more attention to the quality of services to ensure the long-term sustainability of the business.
Existing loyalty programs of Tesco could be extremely beneficial for developing a strong customer base in the Canadian retail market.
Recommendations for the market entry strategy
Tesco is one of the largest food and grocery retailers in the world, which was founded in 1919 (Tesco Plc, 2020). The company is considered as the fourth largest retail chain in the world after Wal-Mart, Carrefour and Metro. The main reason for expanding the business in Canadian marketing is the high consumption of customers in the country.
Based on a strong networking channel, Tesco can effectively expand its business in the retail sector of Canada. As argued by Zou and Yu (2020), in order to develop a market entry strategy, it is important to consider micro and macro-environmental analysis. It has been found from the microanalysis of Canada that there is huge scope for the business development due to economic and political stability.
Besides, macro-environmental analysis has illustrated that the consumer demand is high in Canada, which can provide a huge mileage to the business expansion process of Tesco. However, there is a huge competition for the president in the retail sector of Canada. In order to enter the Canadian market without facing any hassles,
Tesco should use the partnering strategy initially. Canada is considered a major destination of foreign direct investment. An official report of 2019 has demonstrated that Canada is the 11th major destination of FDI in the world (Standard Trade, 2019). Different agencies and embassies of Canada are providing support to MNCs foreign direct investment in the country.
Tesco can utilize the opportunity and enter the market through the partnership strategy. Weston Group is an established retail company in the Canadian marketplace, hence, Tesco can develop partisanship with the company initially to gain hold in the market.
The partnership strategy will be effective from the company to gain market knowledge regarding the current trend of retail business. Besides, it is essential for gaining additional customer insight, which will be helpful for meeting customer needs (Heikkilä, 2018).
It has been found from the analysis of customer trends that e-commerce is going to rule the retail market of Canada in upcoming years. In order to utilize the trend of online shopping, Tesco is needed to gain the trust of customers.
The partnership strategy will help Tesco to gain a positive image and increase popularity using the brand value of existing companies. As argued by Min et al. (2017), the entry in a new market is always challenging for a company, as they are unaware of the customer requirements and market trends.
The risk of business failure is significantly high in the process of business expansion. The alliance or partnership strategy will be less risky for Tesco as the support of an established company will be present. Apart from this, in adverse conditions, the risks of business failure will be equally shared between the partners.
However, the management of Tesco will require developing conflict management strategies to reduce misunderstanding among partnered firms. As cited by Heikkilä (2018), information sharing and trust building are considered as the major pillar for establishing a long-term strategic alliance.
As long as the objective remains common, that is to be the leading telecom sector, the strategic alliance will remain beneficial for the affiliated companies.
Recommendation on Marketing Mix elements
4Ps Marketing Mix strategy is essential for a business to understand the potential for product and service to meet the customer demand. It can be used by Tesco to plan, develop and execute most significant marketing strategies to expand its business in the retail industry of Canada.
According to Arab (2018), marketing mix is defined as a set of different adjustable marketing tools that helped to create a strong mix of product, price, promotion and place.
Product
Product is the core component that is required for the business development process of Tesco. In order to meet the requirements of the customers of Canada, Tesco is needed to understand their demand and meet it with the help of its products.
In order to attract the customers of Canada, Tesco is needed to include value added service with the producers such as free packing, enhanced customer services, baby room in malls and others. Apart from this, trust of the customer can be gained by allowing them extra facilities that competitors do not provide (Khanta and Srinuan, 2019).
As an example, Tesco can conduct sampling activities for non-food products which will allow the customer to test the product before buying.
These types of activities are crucial for Tesco to emerge as a reliable brand in the competitive environment. Above all, the company is needed to enhance the quality of products and customer service to make a positive impression in the mind of people.
Price
Pricing can be a determining factor for ensuring the success of Tesco in Canada. Companies such as Wal-Mart and Costa Canada are heavily dependent upon provisioning differential strategy for business development.
In order to remain competitive in the market, Tesco should also pay attention to competitive pricing strategy. The most of the products available in Tesco can be found in the other retailers as well.
In order to deal with this, it is needed to follow the cost-plus strategy. As opined by Bhattacharjee and Dhaygude (2019), cost plus strategy is an effective pricing strategy that adds standard mark-ups to the products’ cost. As an example, manufacturers sell soup powder at a price of 5 USD; however Tesco marks it up to 7 USD.
It means that 2 USD is marked up on the actual cost. This cost plus strategy will be helpful for Tesco to stabilize the pricing level in the market.
Place
Place refers to the place of distribution of products within a particular market. According to Alqahtani (2020), distribution includes all the activities of business that makes the product available to customers.
Some of the major components associated with the distribution process of Tesco are channels and intermediaries. Tesco needs to follow a multi-channel distribution strategy to make the products available to the customer.
3. Reflective statement on teamwork
The work was divided among four individuals where I and another one of my teammates have worked in a group project earlier. However, the rest two were novice in this field, which could have caused a lot of trouble. Nevertheless, the interaction and group work between the individuals was quite good that served as our main strengths for completing the assessment.
As some of the members had less experience in working as a group, thus, I and my other teammate helped them to cope up with the situation and motivate them to complete the task. As cited by Omar et al. (2016), a cooperative display can ensure greater motivation for the team to perform its best.
The team members were very co-operative and constantly talked about their problems and asked for solutions, which helped us to void critical mistakes. I would say, the strong communication channel was the key to complete this assignment on time.
It would be a false claim that there were zero ethical dilemmas in the work. The new members were often confused and made silly mistakes, tackling the problem head-on in which a more subtle approach was required.
However, the problems were minor and through effective communication, the problem was solved very soon. There was no harassment or bullying of power and authority, therefore, our team coerced quite well even in offbeat situations.
The team cohesion reflected our strong trust between each other and helped us to solve issues. The delegation of the task was done according to the Belbin roles so that each individual can select the role they are most comfortable in it.
As commented by Ruch et al. (2018), Belbin team roles can be very effective in acknowledging the hidden potential in the individuals and bring the best out of them. I picked the role of an implementer, as I am good in setting the task fairly to avoid any ambiguity in the group.
The assignment was very beneficial to upgrade my knowledge on global expansion, growth and sales of the business.
Tesco was taken as the company and researching the market of Canada to come up with strategies was intriguing and fascinating. The assignment helped me to polish my knowledge of marketing and environmental analysis.
Moreover, the assignment also helped me to understand the value of teamwork, responsibility and shared vision. In the future, I would like to perform better as an implementer, so that there is no ethical dilemma in the team at all.
4. References
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