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Impact of cultural differences in Global marketing and the Issues faced by the Companies: Case Study of Tesco Corporations


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Impact of cultural differences in Global marketing and the Issues faced by the Companies: Case Study of Tesco Corporation According to Clark (2008), Tesco food retailer supermarkets started operations as a grocery store in 1919 with Jack Cohen being the pioneer of the business. The first location of the small grocery store was London East. From a domestic beginning, the business started making profits and in 1924, the brand got first recognition in the market following a shipment from Mr Stockwell. The first store flagship store started in north London in Burnt Oak. In 1930, a warehouse started operations in north London that was also the headquarters of the Tesco. In 1932, the company registered as a private limited venture. In 1947, the company marked a great milestone as they joined the stock exchange. In the 1950s Tesco acquired other rival such as Harrow shops and the Williams stores. In the 1960s the Tesco was a stable chain of stores selling across UK and in the 1970s they the supermarkets managed to cover the whole of UK. Product line extension also attributed to the changing business. Clark (2008) further states that, the supermarket has been expanding in product line reaching different markets in the world. In 2006, Tesco started operations in the USA and presently the supermarket is in 13 nations of the world. According to Ron (2005), marketing of businesses across different societies and cultures in the world is becoming a live business and the world is moving to capture the global economy. He further clarifies that, many of the global companies have been able to succeed in different markets regardless of cultural differences. It is important for a business to understand the different cultures that are prevailing in marketing their products and services into global markets. Political, local and business cultures exist in every market and understanding them is crucial in

the overall performance of a business. Addressing marketing strategies in relation to business across different markets is crucial in running a business according to (Ron 2005). The response of people towards different marketing messages is different and different things drive peoples choice. Cultural considerations are important and if they lack, mediocre responses to marketing and promotions results. This can affect the image of the companys products in the world. According to Kaikati & Kaikati (2013), culture understanding in every market is crucial as it gives clarity of the market. National cultures see accomplishment in lifestyles as a benchmark for measuring success. People meeting the standards prove different and their regards are highly. As a result, the chances of this group of people accepting advertisements and promotions are high. Conversely, people who base their life achievements on the place of birth and influence prove hard and the results of promotions and marketing are very poor according to (Chatterjee 2013). In different nationalities, people fear taking risks as compared to others where a positive attitude of success prevails. Some factors like colors and symbols are very crucial in any marketing efforts as they drive the buyers behavior. In some countries, some colors are appealing while they are not acceptable to other people. For instance, red is a color appealing and reflecting luck to the Chinese. On the other side, red color is a signal of danger to other people. This factor can affect marketing through websites, print as well as media ads. Research is necessary in the understanding cultural differences in order to maximize the advertisement and promotional messages on the international market. The aim of this essay is to analyze the impact of cultural differences on multinational companies. Special emphasis focuses on the operation of Tesco supermarkets. Tesco supermarkets have been on the thriving end and for many days, the company is really changing its business roots. Tesco currently have more than 10 countries of operation and

they are reaching new markets in the world today. Despite the prevailing challenges and competition, the supermarkets are still recording high profits from their extended product lines suitable to different markets. This created a culture of buying within the UK market and many clients gained access to different pricing of the company. The Tesco group has been facing a lot of criticism in different issues of operation. The company has been gaining popularity over the years and they have ventured into different world markets hence creating a great base for their products. According to Palpacuer & Bair (2012), Tesco experiences criticism due to its monopolistic operation especially in the UK. Small businesses have been in tough competition and they are experiencing slow growth since the supermarket chain has taken the biggest market share in the country. Small growing companies find it hard to venture into the market due to tight competition from Tesco. Although this has been a threat to the business, the company is still expanding its operation in the world. Another criticism that challenges the Tesco is the mode of acquiring lands. Tesco has aggressive methods and this portrays a bad image to the overall operation of the business. This is slowing the growth and appeal of the business in new faces of the world. Furthermore, pricing of the products is not acceptable in many markets. Most of the prices are luring and they do not reflect the right business focus. This has been a problem to other supermarkets in the world.