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Tesco Marketing Case Study

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Evaluate the Tesco marketing (distribution) channels

Marketing-channel decisions are one of the most critical decisions that Tesco needs to make because the chosen channel could profoundly affect all other marketing decisions. Intensive market research would need to be performed by analysing customer needs, establishing channel objectives and identifying and evaluating the major alternatives to be able to decide which type of channel is suitable.

Tesco uses their Club Card to retrieve customer buying habits to tailor their marketing channels more effectively. For example to get customers into the store, Tesco gives out vouchers to targeted individuals and their product interests.

Three of the most important trends are the growth of vertical marketing systems, horizontal marketing systems and multichannel marketing systems. All marketing channels have the potential for conflict and competition resulting from such sources as goal incompatibility, poorly defined roles and rights, perceptual differences and interdependent relationships.

Horizontal Conflict:
Occurs among firms at the same level of the channel. For instance, some Toyota dealers might complain the other dealers in the same city steal sales from them by pricing too low or by selling outside their assigned territories. Or one hotel franchise might complain about other operators overcharging guests or giving poor service, hurting the overall franchise image.

Vertical Conflict:
Conflicts between different levels of the same channel, is even more common. For example, H&R Block franchisees complained when the parent company began using the Internet to deal directly with customers. Similarly, McDonald's created conflict with some of its California dealers, when it placed new stores in areas that took business from existing…...

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