ALDI And COLES Supermarkets: Marketing Mix, Target Customers, Recommendations - An Essay.

Marketing Mix of ALDI and COLES

Question:

Describe about two supermarkets ALDI and COLES of their target market and the Changes that they should make in their stores?

This report is about two supermarkets – ALDI and COLES. In this report we have tried to study the marketing mix of these two stores and have discussed about their target market and the changes that they should make in their stores.

From this report we have found out that while on one hand COLES is an idle super market catering to the needs of upper class people, on the other hand ALDI is a store that caters to the needs of the middle and lower middle class people and tries to keep its prices down.

ALDI should also to focus on the structure of its store and should try to improve the ambience of the store to attract more customers.

For this task we have visited the stores of ALDI and COLES and have studied the buying behavior of the target customers in these stores.

The purpose of the report is to study about stores of ALDI and COLES, find out their target markets, identify the influences on the buying behavior of these customers and recommend the changes that can be made to improve stores.

This is a report in which tables are used to comprehend the data and also behavior of the customer is studied by visiting the stores.

Price – In an ideal supermarket the first section will be of fruits and vegetables because they are everyday high purchase items.  It will place products of big brand at eye level so the customer never misses them and they are the first choice, and those being expensive will help the store.

Product – An ideal supermarket will place its most profitable products at eye – level on the shelves. In most of the idle shops, fruits and vegetables are placed in the first section, so that they can make a good impression on the customers who can see how fresh and clean the fruits and vegetables are.

Promotion – An idle supermarket will have promotional activities going on it like – a section offering a free sample of wine or goodies. These promotional activities help the customer in staying a bit long in the store which in turn ensures that the customer will buy some other things from the store.     

Place – An ideal supermarket will place chocolates, biscuits and other goodies on prominent place, so that the customers visiting the store cannot miss them and buy the things they don’t intend to. These supermarkets also place flowers on the entrance as flowers are appealing to customers and also have a soothing effect.  There will be no clocks, so the customers not hurry. These stores will place tempting products at the outer wall were the foot traffic is high. These stores will also have good light (Beaven, and Scotti, 1990).

Price – All kinds of items are available in ALDI stores but for short duration of time and in limited numbers. ALDI does not spend much money in designing strategies for the store rather it believes in providing customers with as cheap product as possible.

Target Customers

Product – Many of the ALDI stores don’t even accept credit cards and neither do they offer shopping bags free of cost.

Promotion – ALDI offers discounts on its fruits and vegetables which help in getting more customers in this segment. ALDI does not offer loyalty cards or vouchers to its customers. There is no such section where free sample of wines or goodies is provided.

Place – Layout of the stores of ALDI is very simple, they don’t spend much on techniques and rather try to costs as much as possible.  ALDI stores are dimly lit, aisles are narrow and shelves are sparse.

Price – From placing products in COLES stores shelf layouts are designed. COLES places its products keeping in mind and making decision about shelf layout of each and every of its product.

Product – COLES places all its products according to shelf layout, it places the products that it wants to sell at eye level of the customers.

Promotion – COLES stores keep introducing promotional schemes like - ‘Down Down, Prices are Down’ and ‘Feed Your Family for under $10’,

Place – The stores of COLES are highly lit, spacious and are like what an idle store should be. It places the products like chocolates near the counter (Akroush, 2006).

From the above table we can conclude that COLES is more like an idle store as its marketing mix is like an ideal store, whereas ALDI is not an ideal store, as it does emphasis more on reducing costs of its products and does not emphasize much on its marketing mix. ALDI caters usually to middle class customers for whom price is a very important factor.

Budget conscious customers can be target market for ALDI.

Budget conscious consumers are the customers that are restricted to a set budget for their shopping As a result, be inclined to try to discover lower priced or on sale items. These customers have a tendency to be somewhat faithful to less-priced brands, which frequently are private label brands. However, though they are pleased to lever for on sale brands. These customers are mostly from the low-income or middle class or are retirees (Al-Khateeb, 2009).

This market segment is extremely price receptive and seeks out stores who offer huge discounts and accepts something similar to  everyday low pricing (EDLP).People of this segment are less likely to visit premium stores and value money over time. They have a propensity to be major users of loyalty programs and coupons.

This segment usually consists of pensioners and middle class people, who usually shop in evening, these people are not at all concerned about the ambience and facilities in the stores and are only interested in choosing the lowest priced product. These customers usually buy only utility products that are very necessary and are seldom interested in products like chocolates and goodies as they know that such kinds of products can imbalance their budget and burn their pocket. These customers usually come with their partner or are alone and leave immediately after buying the utility products. These type of customers buy products in small quantities (Akroush, Shible,  and Khawaldeh, 2005).

Buying Behavior of Customers

From the above we come to know that the design of ALDI is sufficient to attract its segment customers defined above, the only thing that ALDI need to introduce is to introduce vouchers and loyalty cards for its customers so that it can attract more of its target customers.

Gourmet focus customers can be target market for COLES

People in this target market are looking for superior value products and are willing to pay a premium price for the products. These customers have a propensity to associate “price” with higher quality and a number of of these customers obtain societal position from their buying behavior (Baker, 2000).

Characteristically, these customers are from upper middle to upper collective class, underpinned by superior power of both culture and employment status. This possible target market section has a penchant for superior status brands. These target markets are normally not price receptive and are less concerned with loyalty programs. They enjoy range of products and frequently experiment with purchases (Akaah, and Riordan, 1988).

These target customers usually visit the stores on weekends and are normally accompanied with their partners or friends. When they come with their friends they spend a quality time at the store and try to buy all the products that will satisfy their needs. When not in an hurry they idly roam around all the sections of the store and buy what are they like and are tempted to without thinking much about the price or even its utility. They shop only on weekends and don’t visit stores on regular basis; they buy large quantities of the product at a single time as visiting to stores is a wastage of time for this segment group. Whenever they come to shop they consider it as an entertainment and try to visit each and every section (Aaker, 1996).

From the above, we come to know that there are many things that influence consumer behavior. Budget conscious customers are the target markets whose living is simple, they don’t have high lifestyle or needs are more attached to their culture, for them place which is a factor of marketing mix is not at all important, neither are that much concerned about the product. They don’t care if the product is branded or not, the only thing about which they care is price, they just want that the price of the product should be low and there should be enough promotional schemes in the store, like – discount, by one get one free etc. For them quality of the product is also not a big issue, quality of the product is also a market concept.

Gourmet focus customers  are the target markets whose standard of living is high, these people usually live in nuclear families and for them culture is not that important, for them place which is a factor of marketing mix is a very important factor, these type of customers are brand conscious. They don’t care much about the price or promotional activities in the store. They just want to have a good time in the store. For them quality of the product is a big issue, quality of the product is also a market concept, these people usually think of shopping as a status symbol (Aaker, Kumar, and Day, 2001).

Although target customer of ALDI are Budget conscious customers, who don’t care much about the place, but still ALDI should try to make itself a ideal store for its customers. It should chose bright lights for its store, as it brightness is associated with cleanliness. It should try to start a system of giving vouchers and loyalty cards to its customers, so they become more loyal to the store. The store should bring in other promotional strategies in addition to discount pricing. ALDI should give some attention to its ambience and try some new things to engage its customers and make them buy products which they don’t intend to. ALDI should also design its shelf in such a style that branded products are at eye level o the customer. ALDI follows these steps then it would able to attract both middle and upper class people.

References

Aaker, D. (1996). Building Strong Brands, The Free Press.

Aaker, D., Kumar. V. and Day, G. (2001). Marketing Research’, Seventh Edition, John Wiley & Sons, Inc.

Akaah, I. and Riordan, E. (1988). Applicability of Marketing Knowledge in the Third World’, International Marketing Review, 5(1):41-55.

Akroush, M. (2006). The Services Marketing Mix Paradigm: Is It Still Appropriate for Today’s Service Businesses? AL-Balqa’ Journal for Research and Studies, 11(2), June):49-74.

Akroush, M., Shible, M. and Khawaldeh, F. (2005). The Effect of Services Marketing Mix Elements on Customers Satisfaction in the Comprehensive Motor Insurance: An Empirical Investigation of Customers Perspectives in Jordan, Journal of Financial and Commercial Studies/Managerial Sciences-Cairo University, 2/3(32) July-December):439-472.

AL-Dmour, H. and Ayesh, H. (2005). The effect of the marketing mix elements of five star hotels on the perceived image by Tourists: a comparative study, Jordan Journal of Business Administration, 1(1):101–120.

Al-Khateeb, F. (2009). Factors influencing malls selection from Jordanian customer point of view, Jordan Journal of Business Administration, 5(1): 46–68.

Bagozzi, R.P. (1980). Causal Models in Marketing, Wiley, New York.

Baker, M. (2000). Marketing Strategy and Management, Third Edition, Macmillan Business.

Beaven, M., and Scotti, D. (1990). Service-Oriented Thinking and Its Implications for The Marketing Mix, Journal of Services Marketing, 4(4):5-19.