Tesco Research

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The large-scale company I have chosen is Tesco because it is a large and a global supermarket. It is categorized as a large-scale business as it has over 472,000 employees worldwide. Tesco has spent over £34.6m on TV and internet advertising. This gives it a massive boost on sales figures because it reaches out to a wider range of customers not just locally but nationally and internationally. I have chosen Tesco because I want to find out how they promote themselves and if they do any similar pricing and promotion strategies like the small businesses. The two small- scale businesses I have chosen are Tennessee Express and Pineapple Pizza because they are local and I regularly shop there. These two businesses are categorized as a small business …show more content…
Tesco uses competitive pricing (appendix 2.1) to tempt customers for other businesses. Competitive pricing is when someone sets the price of a product based on what the competitors are charging. It is mainly used by businesses selling similar products. This shows that Tesco researches its competitors’ prices for a certain product and they put a price on their product, which either matches it or is lower than their competitors’. This is also shown by their use of the price comparison page (appendix 2.1). This shows their customers that they are the best, therefore, helping them attract more customers, which may lead into a sales boost. The advantage of competitive pricing is that you can tempt other competitor’s customers. However, the disadvantage of competitive pricing is that businesses may have to attract the customers in other ways if this pricing strategy will not grab the customers’ attention. Another pricing strategy Tesco does is a loss leader. A loss leader is when a certain product is below the cost price and, therefore, it is making a loss on that product. An advantage of Tesco doing this is that it will attract customers to buy these products along with other products that are not making a loss. However, Tesco could be in trouble if the customers keep on buying the loss leader products. Also, Tesco has the finest range store (appendix 2.2) which is similar to price penetration, where they target high-income segments. They increase their price because they know the customer will buy, as they perceive the product to be of high quality. Tesco Everyday value (appendix 2.3) is a pricing strategy that they used to target lower class people. They decrease the price because they know lower income customers will be able to afford

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