1.0 Executive Summary
This report examines the marketing strategies of Tesco, the market leader in the retail grocery industry in the UK. Analysis has shown that in this oligopolistic market, Tesco is following different marketing strategies to remain market leader. Tesco has been doing extremely well in focusing on different marketing strategies by constantly sticking to its principles “very little helps”.

Subsequently the report highlights the different marketing strategies adopted by Tesco, specifically market penetration, product development, market development and diversification have been analysed in order to see in which ways Tesco is competing profitably in the retail grocery market.

The following section discusses how Tesco …show more content…

Also its online business “Tesco.com” is an example for diversification as new products such as clothing are targeting to people who shop online (Jobber 2007; Hooley et al. 2004).

After having discussed which marketing strategies Tesco is pursuing, it is moreover important to look at the competitive environment in order to identify how Tesco and major competitors are reacting in this market.

4.0 The battlefield
The market leader Tesco dominates the battlefield (Figure 4.1) in the UK retail grocery industry. Figure 4.1 Taylor’s Triangle by Taylor (2007)
The battlefield for market share has two ground rules: to gain market share and to be able to keep market share. These can be achieved either through offensive or defensive strategies (Drummond and Ensor 2002).

4.1. The market leader – defensive strategies
A leadership position is attractive as it offers benefits in terms of economies of scale and higher return on investments. It also provides the opportunity to influence others. In order to remain market leader Tesco has to engage on three fronts (figure 4.1.1) (Wilson and Gillian 2005; Kotler and Keller 2006). Figure 4.1.1 Strategies for market leader adapted by Kotler and Keller (2006)

It has been stated that when the market expands, the market leader