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Introduction:

According to the statistics, UK’s retail sector the The employer in the country from the private sector employing over 3.1 million people by the third quarter of 2011 which make up for almost 12 percent of the total workforce in the country.

The contribution of the retail sector in the GDP is also significant in explaining the reason behind the sector being the focus of the policymakers and public. Over the years, due to internal and external factor, the sector has been becoming extremely competitive(Dunne, et al, pp. 85-86, 2010). The economic forces, recession and the European debt crisis, have been decreasing consumer confidence and rivals are not ready to give up.

The business model of the retail industry is characterized by high fixed costs and lower profit margin per sale thus forcing the retailers into more cut throat rivalry. The bargaining power of suppliers and customers has been increasing due to the forces of information technology and globalisation(Boone & Kurtz, pp. 98-99, 2012).

The fact is the retail industry needs to employ strategic and tactical promotional plans more than ever. Promotion, one of the four p’s of marketing, deals with communicating the value in the absence of which the entire value creation process may not have any significance.

Furthermore, considering the high dependence of retailers on constant and high sales, the promotional strategies become even more important for the retailers(McLoughlin&Aaker, pp. 63-64, 2010).

This research would make an attempt to explore and evaluate the effectiveness of various promotional strategies in the UK retail market with a special focus on Tesco.

Research Question:

Following is the research question for this research
“To explore and evaluate the promotional strategies use by UK retailers: A case of Tesco”

Research objectives:

Following would be the research objectives for this research
• To explore and analyze the promotional mix of leading UK retailers such as Sainsbury, Morrisons, Asda and M&S
• To critically evaluate the effectiveness of the promotional mix currently employed by Tesco in relation to that of the competitors
• To make recommendations for future promotional strategies of Tesco in order to gain competitive advantage over the rivals.

Literature Review:

According to the marketing literature, the promotional strategy or promotional mix will contain four important entities which would be advertising, public relations, sales promotion and personal selling(Humby, et al., pp. 74-4-75, 2008). The promotional strategies use by UK retailers Tesco has been focusing greatly on the former three and considering the retail business, the last one is not that applicable.

Over the years, Tesco has created some very catchy advertising campaigns that have attracted people from all walks of life. For example, in the fall of 2007, Tesco appeared on the TV screens with an ad featuring the spice girls that aimed…