Market Research for Tesco
Market research considers the acceptability of products, and the development and exploitation of new markets.
Some of the most important methods of market research include:
- projecting past sales forward
- surveying consumer attitudes and product preferences
- experimental introduction of new products.
Many analysis techniques can be employed, including:
- Pestle Analysis
- Porter's five forces analysis
- SWOT analysis
Detailed market research is a twentieth century invention, which underwent rapid development in Europe, America and Japan after the second world war.
Market research is crucial to large department stores like Tesco. The vast range of products that Tesco provides necessitates detailed analysis if the company is to have any hope of "knowing their market". Using the methods outlined above Tesco can perform the following market research:
- By looking at past sales Tesco can project future sales and, by projecting the sales of competitors, ascertain if they are likely to retain market dominance.
- Surveys show that customers prize price above everything , closely followed by quality. They also show which supermarkets score highest in these categories. Tesco used these results in a brilliant advertising campaign by suggesting their products had the quality of Waitrose products and the cost effectiveness of Asda products. To stress their concentration on keeping prices low Tesco offer a price survey comparing the prices of essential, frequently purchased products, to the prices of similar products in other supermarkets.
- Tesco have also been clever in experimenting with the introduction of new products. They have introduced high volume items, like best-selling CDs and jeans, where they can compete on price with traditional providers. After successful experiments, they continue adding new products of a similar nature.
Tesco have applied state-of-the-art market research to achieve market dominance in the UK, and significant inroads in other part of the world. Other companies can observe their advertising campaigns, web sites, and store layouts to draw key lessons of how they might proceed.