Essay, 6 pages (1400 words)

Budget allocation for internal communication marketing essay

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1. Introduction

Jack Cohen founded Tesco in 1919 when he began to sell surplus groceries form a stall in the East End of London. The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea from T. E. Stockwell. He made new labels using the first three letters of the supplier’s names (TES), and the first two letters of his surname (CO), forming the word TESCO. The first Tesco store was opened in 1992 in Burnt Oak, Edgware, Middlesex. Tesco was floated on the London Stock Exchange in 1947 as Tesco Stores (Holdings) Limited. The first self service store opened in St Albans in 1951 and the first supermarket in Maldon in 1956.

Tesco is Britain’s leading retailer. It is one of the top three retailers in the world, operating over 3, 700 stores globally and employing over 440, 000 people. Tesco operates in 13 countries outside the UK- Republic of Ireland, Hungary, Czech Republic, and Slovakia etc. It has its headquarter in Chesnutt, It has many types of stores and include Tesco Extra (24 hour), Tesco Metro (located in +town centres) and Tesco Express (attached to garages). It sells many things including food and non food items. These item include food, drinks, toiletry, CDs, DVD, books, medicine, clothes, organic food. The type of ownership that my company has is public limited company. This means it is a large company with many employees. It has shares on the stock exchange and anyone over 18 can invest in a share.

Currently it is estimated that 88%of all UK food is sold through a small handful of supermarkets with Tesco being the market leaders. This equals to market sales of over £62bn per annum clearly highlighting the buying power the supermarkets have over the supply chain. The mail players are Tesco, Sainsbury, ASDA and Morrison who compete on price and quality. Tesco has recognized that their customers are motivated primarily on price and have positioned them self’s in the market as a value added supermarket.

3. Budget: A budget is generally a list of all planned expenses and revenues. It is a plan for saving and spending. A budget is an important concept in microelectronics, which uses a budget line to illustrate the trade-offs between two or more goods. In other word budget is an organizational plan stated in monetary terms. The purpose of budget is to provide a forecast of revenues and expenditures and enable actual financial operation of the business to be measured against the forecast. So for this communication plan we have allocated a budget according to the category and nature of the communication.

The budget allocation shows that more amount of money will be spend on advertising in TV/ Radio, Newspaper, Outdoor add. It is clearly sheen form the table that more amount of money will be spend on external communication than in internal communication with the help of which the company will communicate with its costumer more time to lunch its product and gives information and different offer to its costumer.

4. Target Market

A target market is the market segment which a particular product is marketed to. It is often defined by age, gender, and/or socio-economic grouping. Market Target is the process in which intended actual markets are defined, analyzed and evaluated just before the final decision to enter is made. Target market is a strategic approach to creating a marketing mix for a specific, target market segment and set of buyers. Target marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. It can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. It provides a focus to all of your marketing activities.

Targeting can be done by the firms by adopting a logical and systematic methodology/ steps. Which are as follows:-

Identify the potential buyers: – Through proper market research and market segmentation. (It is the process of pulling apart the entire market as a whole and separating it into manageable disparate units based on various demographic, political, economic and social factors; it can also be customer/ product/ competition related segmentation).

Select the target audience: – The factors that influence Targeting are the Internal and External Environment. Internal environment includes the mission, vision, values and objective of the firm; where as External factors are the social, cultural, economic, global, demographic etc. Through appropriately compiling the customers profile to decide the 4 P’s Product Price, Place and Promotion and obtain the demographic, psychological, geographic and behavioural information of the buyer. Targeting is deciding the potential buyers, product to be offered and appropriately positioning each product to the segment.

Proper Positioning of the Product: – After developing an appropriate segmentation and target strategy; positioning strategy can be worked out effectively. Positioning enables the firm to create a positive image, gain competitive advantage and place the brand in the customers mind to enhance their goodwill and become the most preferred brand. Positioning can be in the form of product, price, promotion, service, distribution channel, image, people, advertising, publicity.

5. 1. Internal Communication

Internal communication is a generic expression for all communication (formal and informal) that an organization undertake with its stakeholders. The main purpose of formal internal communications is to inform employees or members of the direction and performance of the organisation to which they belong.

Phone allows Tesco to contact local Tesco branches, which is ideal for brief messages but could be a problem for Tesco to phone foreign branch due to frequency, expensive phone bills & misunderstood messages. Texting from mobile would only be appropriate for the branches which are locally situated. To this problem it is preferable to follow another means of communication methods.

Fax: It is ideal for Tesco to sent urgent documents and contracts. The problem of sending a fax is that you would not be sure who would be reading your fax, you can’t send thick booklets and physical barriers such as lack of paper may occur.

Memoranda: Memoranda are perfect for employees working in the same branch who want to write quiet informal messages.


Email is good for the company to communicate with local and national branches because they can send quick messages to any body quickly and in efficient way. This method is widely used now days in any organization for developing the internal communication. The problems are that you can’t be sure that your message will be read.


Club-cards are a form of internal communication because Tesco stores every item that you have bought when your card is swiped; this means that they know what’s been selling the most and the least in that certain Tesco. This information is stored in a database and used for many things such as knowing what items to stock extra of & finding ways of promoting the least selling items.

Letter: – A letter is written in formal languages, usually used when writing form one branch to another for sharing the ideas and giving information about the changing situation of the market research. It is mostly preferable in local as well as to all other types of branches. This will be used for transforming of giving promotions to the staff of the company.

The exchange of information between within an organization, with other organizations, individuals outside of its formal structure is external communication. The goals of external communication are to facilitate cooperation with groups such as suppliers, investors, and shareholders and to present a favourable image of an organization and its products or services to potential and actual customers and to society at large. A variety of channels are used for external communication, including face-to-face meetings, print or broadcast media, and electronic communication technologies such as the internet. External communication includes the fields of PR,

To sum up the idea and the communication plan following strategy are applied for the internal as well as external communication. To get better achievement of the company by following the strategic plan with better utilization of allocated budget communication plan is developed. In internal communication we have used different modes of communication like Letter, Telephone/Mobile, Fax, Email, Report with the help of which communication between different branches will be connected. For external communication also there are different means of communication channel chosen according to the situation and requirement for communication between customer and the company itself. Hence this plan will help to develop good relation between different department of the company as well as with the company and customer of the company.

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