Marketing - fainal essay- Essay Example | Topics and Well Written Essays - 500 words

Marketing - fainal - - Essay Example The competition in the retail industry is tough. Especially in the grocery sector where Tesco is competing because margins continue to shrink with more and more players entering the industry that intensified the already competitive environment. In order to survive and thrive, retailers have to add value to their customers otherwise perish in the competition. To add value, discounting for product does is not that potent work anymore. This marketing implement has its limits also because if frequently used, retailers will enter in a destructive cycle of cutting each other’s throat with the diminishing margins wrought by excessive discounting. In addition, excessive discounting might negatively affect the image of the retailer as â€Å"cheap† and thus, undermining its position to sell at a premium. In the case of Tesco, they employed several unique approaches in adding value to their customers. First is differentiation, or creating new selling proposition that would be differentiate the retailer from its competitors and be successful in the market. Second is the strengthening of the infrastructure of its customer service delivery to enable the retailer to better satisfy its customer as a value adding proposition. With differentiation, Tesco concentrated on the â€Å"white space market† when it entered the United States retailing industry. Many experts predicted that Tesco cannot replicate its success in the US retail market because the industry is already saturated. But instead of competing head on with the established retailers such as Walmart, Tesco differentiated itself by offering the added values of good food, good value, convenience and environmental sensitivity to the American consumer (Lowe and Wright, 2010). Also, Tesco invested in intangible value adding facilities that would enable it to better serve its customers with enhanced customer service as a value proposition. It invested heavily