Tesco PLC is one of the best known British multinational groceries. It is also a general merchandise retailer with its headquarter in Cheshunt, United Kingdom. It is also known to be the third largest retailer worldwide as measured by profits while second as measured by revenues. It has stores in 12 different countries in Asia and Europe such as Republic of Ireland, Thailand, Hungary, and Malaysia.
How technology has changed pricing and promotional strategies at Tesco
The use of technology in PLC has significantly improved both promotional and pricing techniques in the company. In using in-store communication network, the organization can now advertise its products across the outfitted 100 stores. One of the essential aspects of the communication system employed by the organization in the advertisement is the use of 55 digital signs in every store. As a promotional technique, the 55 digital signs are used to inform the customers, as well as, entertain Tesco’s customers. The technology has made the company to switch from traditional promotional techniques that use elements such as magazine to digital methods (Rajagopal, 2009).
The organization has also employed superior efficient computer-controlled logistics schemes that enable it to provide detailed descriptions of its goods and their prices. The computer-controlled logistics systems have formed effective system for e-tailing marketing, as well as, sales activity for the company. The management of the company can now place grocery order through the website that is operating in the highly automated central system. The automated logistics has made the pricing of commodities accessible because it ensures competent judgment against other groceries found in the same market.
The organization has actually employed various communication technologies in the promotion such as the use of mail, television, email, Website and Digital Radio.
The applications of the above technology in promotional and pricing strategies have several befits to the grocery. For example, the Website of the organization known as Tesco.com was rank in the year 2009 as the world’s most active and efficient online supermarket. In the same year, the group had a total sales of more than 577 million pound. The sale was estimated to have an increase of 29% compared to the year 2008. Tesco is operating online promotion and sales of its products in more than 270 stores found in the UK. The organization is known to cover 96% of the overall online retail market in UK. The benefit of online technology is also seen in the estimated sales of more than one million households throughout UK using the online service during the year 2009. In regard to internet retailing, Tesco is operating various home shopping services via Tesco.com website. (Bickerton & Pardesi, 2010).
The technologies that the Tesco Company is using
There are various technologies that the organization has employed in its promotional and pricing strategies. These include internet retailing, radio and television advertisement and Website. The group has also used superior practical computer-controlled logistics schemes to facilitate sales, pricing and transportation of goods. Mail and email have been widely used to provide prices of goods to customers in different geographical location.
The reasons for choosing these technology systems over other alternatives
There are several advantages that may have made the organization to accept internet retailing, radio and television advertisement and Website. For example, internet retailing has the advantage of reaching different customers online anywhere throughout the world. Shopping through online is easy and comfortable for most customers because they customize their experience that is based on the past sales or preferences. It has the benefit of retaining customer while attracting new consumers. By using online services such as Website, mail and email, the organization can comments and recommendations that explain what customers need from retail (Bickerton & Pardesi, 2010).
The legal and ethical issues pricing and promoting products
One of the legal issues that should be avoided in product promotion and pricing is price discrimination. The organization should avoid the issues of selling the same commodity at different prices to varied groups of consumers. Another ethical issue in pricing of a product surface in hiding small priced items from the customers who are willingness to pay high price. It is illegal to advertise a commodity that hinders public health. There is a need to tell truth and honesty in pricing and promoting a product. An advertiser who fails to tell consumers the truth offends against morality, as well as, the law. Negative advertising techniques that include attack ads also forms legal and ethical issue in product promotion. Such activities should be avoided by any company promoting its products. The advertiser should not develop its commodity by highlighting the disadvantages of its competitor products.
Compliance Tesco to legal and ethical issues pricing and promoting products
Tesco has been ethically promoting is products. For example, through the introduction of ‘Greener Living Scheme’ the organization provides the consumers guidance on the environmental issues on the use of its products. The company provides education during product promotion on how reduce food waste, as well as, food carbon marks whenever one is preparing meals using its products. Tesco is also known to comply with Supplier Code of Practice while holding strict execution on the moral trading, as well as, commercial policies. It also provides conducts of ethical trading by training commercial staffs on issues related to product promotion (Tesco Case Study, 2011).
- Bickerton, P., Bickerton, M., Pardesi, U., & Chartered Institute of Marketing. (2010). Cyber Marketing: How to use the Internet to market your goods and services. Oxford: Butterworth-Heinemann.
- Circus, P. (2002). Sales promotion and direct marketing law: A practical guide. London: Butterworths.
- Rajagopal, (2009). Technology and Retailing and Firms.
- Tesco Case Study: How Tesco Became the UK’s Largest Retailer. (2011). Place of publication not identified: Datamonitor Plc.