Aldi: Background, Marketing Strategies, And Essay Recommendations.

Aldi is German based company that is one of leading company in retail industry due to offering a high-quality product at low price. It has entered into Australian retail market in 2001 to increase its market share.

This report exemplifies the background of Aldi and also defines the marketing strategies that are used by Aldi to increase its rivalry since the beginning.

This report also defines that four P’s marketing strategy (product, price, place, and promotion) is used by Aldi since it began. This report describes the strategic marketing option that should be followed by Aldi for moving forward. These strategies would be beneficial to enhance the competition among other key market players in future.

Background to the Company

This report presents the background of the Aldi Company. It also discusses the marketing strategy that it has used since it began. In addition to this, it explains the strategic marketing option that should be followed by Aldi for moving forward.

Aldi has started its first store in 1913 in Germany. It has over 10,000 stores all over the globe. It has more than 60 years of experience to deal in the retail industry. Therefore, it has developed itself as one of the leading and recognized retailers in the global retail business market.  

Recently, the Aldi is known for delivering high quality and exceptional value. It provides customers a great way to buy the products and services. It offers premium quality products at a strongly competitive price. It conducts research and independent laboratory assessment to ensure quality (Aldi, 2017). It also ensures the affordable price and does not use expensive loyalty scheme. This strategy has attracted million of customers towards the Aldi stores.

The Aldi has expansion in Australia in 2001. Company headquarter is based in Minchinbury, NSW but it deals individually in all over the Australia. Its mission is to deal with discount supermarkets and deliver premium quality at the extremely low price. Its key objective is to deal with low-cost competitors that hoard limited range of trendy grocery products and services.  

At the starting, it has opened approximately 470 stores all through the QLD, NSW, VIC, WA, SA, and ACT. In short time, it comes in the list of leading 10 Australian retailers. It has not only influence the grocery prices but also enhances the company’s image among customers by offering private label products with own brand philosophy (Aldi, 2017).

The Nature of Aldi’s Marketing Strategy or Strategies since it began

Aldi has been using different marketing strategy since it began in order to endorse their products and services in the market. In this way, it offers low price with high-quality products to gain the customer’s loyalty (Jenkins, and Williamson, 2015). These marketing strategies are discussed as below:

The business strategy of Aldi is to pay attention towards indispensable investments and decline the excessive wastages. It gives benefit to customers to make maximum savings. It is addressed that Aldi has included the approximately 13% to price of procurement and 2% for rental, logistics, marketing, and overheads as well as include 5% for the workforce. All Aldi stores have opened in limited hours as compared to other key market players in Australia. But, recently, it has extended its opening hour such as it will be opened from 8 am to 8 pm (Borland, et al., 2016). 

ALDI Australia

There are different stores which open in 24*7 hours as it may attract more customers towards their services. However, Aldi does not provide any added value to customers such as lottery terminals, photo booths, dry cleaning, children’s play area, news agent, currency exchange, coffee shop, and a separate customer service counter.  The main reason behind that these services have a high cost which can add up in the end cost for the customers. In an Aldi store, only seven to eight employees are worked to operate the entire functions of the stores as it is not effective strategy as compared to other supermarkets (Chimhundu, et al., 2015). It does not have high staffing level hence it is unable to facilitate high quality of customer services since it began.

Aldi provides a wide range of product categories to their customers but its store size is small as compared to market players who have average floor space such as 650 square meters to 1000 square meters. Aldi has a different layout in which approximately 10 to 20 shopping aisles but the packaging and displaying of the product strategy is cost effective. Apart from this, Aldi stores have free parking space which persuades a large number of customers towards the company. It is also analyzed that Aldi conducted market research before starting the stores. It pays attention to those population areas where more than 30,000 people live (Henryks, et al., 2016). Furthermore, its stores have good visibility due to public transport connectivity.

It is also identified that the sales strategy of Aldi is distinguished from other grocery retailers in the Australia. Furthermore, Aldi has an approach to sell its product which is equivalent to brands. Because, its competitors named Woolworths, Coles, and IGA stores have approximately 50,000 product line at which about 48% of their products are own brands (Fernie, et al., 2015). It can be stated that business can get success by influencing the customers but it is highly relied on the competitive price. Aldi’s core philosophy is to use the competitive price and discount retail chain. Furthermore, Aldi buys the product in high amount hence it has a high power of bargaining with suppliers for the best possible price (Zentes, et al., 2017). As a result, it will facilitate the Aldi to sell the products and services at competitive price.

It is analyzed that recently, Aldi has introduced a wide category of products on Thursday such as bathroom accessories, kitchen, garden furniture and other household equipment. These products and services are distinguished with daily grocery items with respect to its accessibility. These products and services have limited stock hence it is not permanently available in the stores because of the shortage as well as affordability of the products and services (Berezvai, 2015). In order to endorse their products, Aldi uses the posters of the products and services in its stores for upcoming week sale.

Marketing Analysis

Aldi has used advertisement with the brand comparison which is one of the unique marketing strategies. These advertisements depict that Aldi brands are homogeneous quality as well-established brands such as fairy liquid, Pampers diapers, and Heinz tomato ketch up. For this, Aldi takes feedback of the shoppers after shopping. This research proves that a large number of customers give preference to recognized brands and also liked Aldi brands. Along with this, Aldi has started “Like Brands, Only Cheaper” campaign which facilitates the business to speak about its quality (Aldi, 2016). This campaign was beneficial to persuade the customers to fetch their money on shopping with Aldi stores.  

This campaign facilitates the features of the Aldi products because the adverts contain humor, which enables the company to create confidence and emotional relationship with the targeted audience. Moreover, Aldi distributes approximately 1 million copies of brochures to customers in per week in their stores. Together with, it also distributed these brochures to customers who live in nearby areas (The Australian, 2017). As a result, these brochures endorse the products and services of Aldi as well as promote the seasonal and weekly offers available in stores.

Furthermore, another campaign is “swap and save” which promotes the Aldi brands by demonstrating that customers can save the money by swapping from the Aldi grocery stores. In the current business scenario, Aldi uses social media because it is easy to process to communicate with the customers. For promoting their products through online, company is using “Aldi advocates” online campaign (The conversation, 2013). This campaign is only used for those customers who recommend to others for Aldi due to its low price products and services.

From the above discussion, it can be stated that Aldi has ineffective marketing strategy hence it should use effective strategy marketing option for moving forward. It can be recommended that Aldi can expand the graduate plan in which it should recruit only those employees who have a higher education because it may build loyalty among customers (Souza-Monteiro, et al., 2017). Along with this, the company should provide the training to employees to deal with the customers as it would enable the employees to persuade more customers towards their brands.

Moreover, it can be suggested that Aldi should modify the layout of the stores. As a result, its stores will seem organized due to the effective layout. Together with, it should provide more space for self because it will make easier to read and see the products. As well as, the customer would be able to spend more time for looking the product instead glancing to the products (Haleem, and Jehangir, 2017).

Product strategy

Another recommendation is that Aldi should compete with their key market players such as Woolworths, Coles, and IGA. Because, these key market players are strong discounters who have homogenous structure, operation and product line as the Aldi. Woolworth’s uses cost leadership strategy of Porter's that increases its market share. Therefore, Aldi should use effective marketing strategy to increase their market share as compared to its key competitors. Together with, Aldi should use competitive marketing strategy to get competitive advantages in food retail industry in Australia. Along with this, Aldi can merge with Lidl to develop a bigger chain of stores as a result; it will increase its market share (Wenzel, et al., 2017). As well as, it can get more benefits because there is no need to spend too much on renovation due to strongly homogenous stores.

In the last, it can be suggested that Aldi can initiate a customer loyalty program. Because, a reward scheme for customers can motivate them to make continues shopping at the particular stores of Aldi. Further, it can get more benefits from this scheme because it will gain the customer’s loyalty towards the Aldi stores (Steenkamp, 2017). It is stated that building loyalty is one of the important strategies for the retail companies because it increases their revenue as compared to other key market players. In this way, Aldi can facilitate the different scheme to customers like rewards point at each time when a customer buys the products from stores as well as money off scheme for those customers who spends a certain amount (?migielska, and Oczkowska, 2017). Consequently, it would be able to create loyalty among customers.

In this way, it can be stated that if above suggestion will be implemented by Aldi then it can continue growing in the upcoming years.  

Conclusion

From the above discussion, it can be concluded that Aldi is strategically constant organization but recently, it has grown in the Australian retail industry.  It can be evaluated that Aldi uses wide category of the product but it has small space in stores since it began. Further, it can be summarized that Aldi uses different campaign to endorse their product and services. There is different strategic marketing option that should be implemented by Aldi to move forward. These marketing options are customer loyalty scheme, expanding space of the stores, training, and extensive discounting offers as compared to its competitors.

References

Aldi (2016) Aldi continues with “Like brands. Only cheaper” campaign. [Online]. Available at: https://www.adnews.com.au/campaigns/aldi-continues-with-like-brands-only-cheaper-campaign (Accessed: 6 September 2017).

Aldi (2017) About us. [Online]. Available at: https://corporate.aldi.com.au/en/about-aldi/ (Accessed: 6 September 2017).

Berezvai, Z. (2015) ‘The pricing strategies of Hungarian food retail chains during the last recession’, Acta Oeconomica, 65(3), pp. 393-411.

Borland, H., Ambrosini, V., Lindgreen, A., and Vanhamme, J. (2016) ‘Building theory at the intersection of ecological sustainability and strategic management’, Journal of Business Ethics, 135(2), pp. 293-307.

Chimhundu, R., McNeill, L. S., and Hamlin, R. P. (2015) ‘Manufacturer and retailer brands are strategic coexistence the norm’, Australasian Marketing Journal (AMJ), 23(1), pp. 49-60.

Fernie, J., Fernie, S., and Moore, C. (2015) Principles of retailing. UK: Routledge.

Haleem, F., and Jehangir, M. (2017) ‘Strategic Management Practices by Morrison PLC, UK. Analysis, Lessons, and Implications’, Middle East Journal of Business, 12(3) pp. 1-6.

Henryks, J., Ecker, S., Turner, B., Denness, B., and Zobel-Zubrzycka, H. (2016) ‘Agricultural Show Awards: A Brief Exploration of Their Role Marketing Food Products’, Journal of International Food and Agribusiness Marketing, 28(4), pp. 315-329.

Jenkins, W., and Williamson, D. (2015) Strategic management and business analysis. UK: Routledge.

?migielska, G., and Oczkowska, R. (2017) ‘Retailers’ competitiveness on global markets’, Przedsi?biorczo?? Mi?dzynarodowa, 3(1), pp. 175-196.

Souza-Monteiro, D., Souza-Monteiro, D., Hooker, N., and Hooker, N. (2017) ‘Comparing UK food retailers corporate social responsibility strategies’, British Food Journal, 119(3), pp. 658-675.

Steenkamp, J. B. (2017) Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). UK: Palgrave Macmillan.

The Australian (2017) Supermarket wars to escalate with Lidl’s entry. [Online]. Available at: https://www.theaustralian.com.au/business/companies/supermarket-wars-to-escalate-with-lidls-entry/news-story/f2b9106fb9b1e0d0a8c88a45bda417e7 (Accessed: 6 September 2017).

The conversation (2013) FactCheck is our grocery market one of the most concentrated in the world. [Online]. Available at: https://theconversation.com/factcheck-is-our-grocery-market-one-of-the-most-concentrated-in-the-world-16520 (Accessed: 6 September 2017).

Wenzel, M., Wagner, H. T., and Koch, J. (2017) ‘The funeral industry and the Internet: on the historical emergence and destabilization of strategic paths’, European Journal of Information Systems, 26(4), pp. 361-378.

Zentes, J., Morschett, D., and Schramm-Klein, H. (2017) Retail Branding and Positioning. In Strategic Retail Management (pp. 185-206). Germany: Springer Fachmedien Wiesbaden.