Marketing Strategy of ALDI and Lidl

This assignment delves into the marketing strategies of discount supermarket chains ALDI and Lidl within the UK grocery market. It examines their sales growth from 2015 to 2017, market share trends compared to major players like Tesco and Sainsbury's, and their overall competitive positioning using frameworks such as the BCG Matrix and Ansoff Matrix. The analysis highlights key marketing tactics employed by these retailers to achieve success in a highly competitive industry.

Introduction To Marketing

EXECUTIVE SUMMARY
Marketing is a tool of communication which a company uses to address large customer
segment with the help of various channels or medium. Marketing involve various tools and
techniques in order to make customer aware about variety of products or services that a company
is offering. Retail industry in UK is vast and has occupied large market segment by exploring
new ideas and innovation to achieve advantage in every aspect. This report portray how Lidl can
achieve success in competitive market along with retaining loyalty of their customer. Also,
recommendations about diversifying in target market by expansion to suppress other retail
brands.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Market Research of Current Grocery Market of UK..................................................................4
TASK 2..........................................................................................................................................12
Identify different consumer segments that influence growth of a company.............................12
TASK 3..........................................................................................................................................15
7P's of Marketing mix...............................................................................................................15
CONCLUSION.............................................................................................................................18
RECOMMENDATIONS...............................................................................................................18
REFERENCES..............................................................................................................................20

INTRODUCTION
Marketing, a tool for business which is implemented using strategies and plan of actions
in order to attain benefit in terms of profit. It is used to influence customer and their preferences
at the time of purchase or sale. Being crucial function of an organisation it require series of
research and studies using which company produces schemes and plans before launching any
product or service in market (Armstrong and et. al., 2011). With help of effective marketing
company can make up, live up and keep up their customers for long-run. It include activities
such as advertisement, promotion, selling, distribution and delivery of product and service to
customers. Marketing team is assigned with duties such as endorsements, media exposure,
advertise, tag lines creation, etc. in order to retain customers and maintain balance between their
needs, wants and demands. To have competitive advantage and survival company must induce
effective marketing strategy to satisfy need of its customers. Lidl is one of the largest retail
sector in UK, that operate in more than 10,000 states across country. It is global discount
supermarket chain with more than 300,000 employees that contribute to business success. Proper
planning and execution helps in getting better results in form of sales, revenues, etc. Aim of this
assignment is to provide understanding of market research, planning, market-mix and its
associated aspects. In this report, market study of Lidl is going to be addressed which will
include factors that impact company and a detailed analysis of marketing data. Further consumer
segments will be identified on the basis of socio-demographic, psycho-graphic and behavioural
variables and their contribution towards company's growth will be examined. At last, on the
basis of proposed market plan 7P's of marketing mix will be identified. This whole study will
fulfil its purpose about marketing and terms associated with it such as selling, buying, goods,
services, ideas, customers, information, promotion, advertisement, etc.
TASK 1
Market Research of Current Grocery Market of UK
Data gathered from research is showing that market share of TESCO is highest in
comparison of other grocery stores like ASDA, ALDI, Lidl etc. Result are showing that ALDI
and Lidl are showing rapid growth and with effect share of ASDA and TESCO are showing fall
by 0.2 basis points (Atwal and Williams, 2017). Investigation is showing that ALDI has
increased its position in industry from 6 % to 6.8%. on the other hand it is clear that Lidl has

increased its market share by 0.6% to 5%. couple, ALDI and Lidl are enjoying best sales in
comparison of other competitors and are making high rate of profit which is £7.9billion.
Above analysis is showing that market share of TESCO is fell down from 2 basis points.
On the other hand market share of Lidl is growing rapidly and it is showing a successful business
operations in market (Babin and Zikmund, 2015). As a pair ALDI and Lidl is showing a
remarkable profit. If ALDI is showing sales growth from £1.1Billion to £7.9billion and Lidl also
have growth in sales which is £800million to £5.8billion. This is easily comprehended by
following diagram.
LIDL
ALDI
Morrison
ASDA
TESCO
Illustration 1: Market share of companies
in Grocery industry in UK in 2015
Lidl
Aldi
Morrison
ASDA
Tesco
Illustration 2: Market share of
companies in Grocery
industry in UK in 2017

(Comparison of growth of profit)
Above is the growth in sales volume that is a concerned topic for other companies like
TESCO etc. Data is showing that success of ALDI and Lidl is a big question on other company's
success and growth. Above charts and graphs are showing actual market conditions of various
companies which are operating their business operations in United Kingdom (Bhattacharya ed.,
2010). Growth shown by ALDI and Lidl separately is a combination of expenses which are
company expensing commonly. Data is showing variation in market share of TESCO and
Morrison which is fell by 0.2% basis points in past two years but it is been recorded that these
two firms are regularly indicating fall since five years.
Main concern of this report is that Lidl want to become main competitor of TESCO
company has desire of increasing retail store chain in overall UK. Lidl wants to compete with
rivals by taking market share to a two digit figure. Above is a research that is showing current
status of corporations in market in grocery industry. Analysed data is collected from secondary
research which is representing that if TESCO is showing fall in market share but it is a largest
company in industry and Lidl is showing a least position in marketplace.
Below are some techniques that are used for analyse present market position of some companies.
TOWS Analysis
1 2
2014
2014.5
2015
2015.5
2016
2016.5
2017
Column
A
Column
B
Illustration 4: Growth in
Sales of ALDI from 2015 to
2017
1 2
2014
2014.5
2015
2015.5
2016
2016.5
2017
Column D
Column E
Illustration 3: Growth in sales of Lidl
from 2015 to 2017

This study is done in context of Lidl company because this is a main problem of case.
Strengths weaknesses
 Lidl company is providing unique
services to its customers (Chaffey,
Smith and Smith, 2013).
 Rapidly growing its market share by
serving good quality products to
customers.
 Inclusion of other brand's products too.
 Online presence and selling is very
strong.
 Also open at Sundays and Holidays.
 Reach of customers is easy with 10000
stores.
 This company is little small in
comparison of other corporations.
 Lidl is still not able in getting place in
customer's mind.
 This firm is not able in making
remarkable position in global market
(Dahlén, Lange and Smith, 2010 ).
Opportunities Threats
 Rapidly growing market share because
people start trusting this firm as a
brand.
 Business expansion in growing
economies like Africa, Asia etc.
 Business expansion of other brand are
increasing competition.
 There are many companies in industry
that is why all corporations are showing
price wars among them.
 Changes in government policies in
different countries.
Above analysis is showing that Lidl has lot of threats and weaknesses but these flaws can
be removed by taking some corrective measures and apart from this these resolutions should be
taken by company for grabbing market opportunities in order to compete with TESCO and to get
two digit market share in company (DesJardins, 2011). As per analysis, it is clear that there are
various opportunities are available in market which can be go through by Lidl company.
PESTLE Analysis

This is an analysis of external factors that company considers for competing efficiently in
market and these points should be taken into consideration while planning and plotting business
operations. Elaboration of these factors are described below:
Political – These factors includes some policies which are made by political parties while
they are in government. These policies could be anything like tax rules, environmental
regulations, liquidisation, privatisation and globalisation etc. When company is going to launch
its products in other countries so tax policies should be considered in order to find expected
profit percentage. If a country allows other nation's firm to come and conduct business
operations then it is called as globalisation so it must be check by Lidl association while making
entry in new country.
Economical – Before enter in new market, it is expected from management that stability
of economy should be checked in order to assure positive results and growth in new nation. This
factor comprises some aspects like rate of gross domestic product, per capita income of
population along with in-equilibrium and demand and supply (Fullerton, 2010). Before entering
in new global country, demands and method of supply should be checked by association. If
demands are high then Lidl can make entry into marketplace.
Social – This factor is related with social life of customers that includes tradition and
fashion trends. This is understood by an example, If company is going to launch its retail store
in UK then lifestyle of people should be checked whether population is making purchases from
retail stores or not. If the answer is yes then entry is successful other wise it will be a failure.
Technological – As it is clear that, Lidl is also running its business operations on online
and for making entry in other country so that all technological aspects must be checked by
marketing team of company for analysis profit and easiness of activities conductions. If online
orders are more than offline demands than association must check all delivery options and these
alternatives should be good in order to make delivery in promised time.
Legal – This factor includes some legalise aspects like employment laws, environmental
act. Firm has to ensure that their business operations should not harm environment of nation and
all legislations associated with employment law must be analysed in proper manner. There are
some employment laws like equality law, health and safety act, discrimination act etc.

Environmental – It should be ensured by company that all operations of firm will not
affect atmosphere and climate in bad manner and on the other hand management should take
care about environment (Gbadamosi, 2013).
So, it is suggested by marketing manager of association that all extrinsic factors should
be analysed for ensuring growth and success in other nation. This is a positive aspect and by
going through them association can expand its business operations in other nation.
Competitor Matrix
This is a technique that provide opportunity to company's management to make
comparison with rival's firm so that Lidl's items and facilities could compete with competitor's
products and services (Gummesson and Mel, 2010). This is a chart which states competition
among some companies:
Particulars Ldli ASDA TESCO
Running From 1930 1949 1919
Price in GBP 4 7 8
Market Share 5% 15.3% 28%
Number of Outlets Approx 10000 21000 35000
Target Age of
Customers
Working people Households Housewives
Customer Loyalty Good Better Sufficient
Taste Rich Perfectly brewed Perfect Taste
BCG Matrix
This is a tool which is given by Boston Consultancy Group. This is about products and
offerings of Lidl company. This is a technique which helps in long-term strategic planning. This
matrix is divided into 4 parts one is cash cows, second is stars, third is question mark and last bit
not the least is dogs. This matrix states that Dogs are those who shows that low growth of
product or lower market share.

Dogs: These are aspects that shows low product growth or lower market share of
company. Yes, Lidl is having least market share but this firm is going rapidly and its products
are becoming trustworthy in the eyes of customers.
Question Marks or Problem Child: This is a situation in which product are been sold in
high growth market with low market share. In this context, Lidl is a misfit firm because this firm
is representing high growth of items and facilities.
Stars: This is a situation which is presenting high growth of products and increasing
market share (Jones, 2010). It is a perfect situation for Lidl company because this has shown
remarkable market growth in recent five years.
Cash Cows: This is a condition which means company's product are showing high growth
in low growth market. Lidl is also belongs to this group as this organisation is working in
household products which is a moderate growth industry but still firm is having rapid growth and
success.
(Source: BCG Matrix, 2017)
Ansoff Matrix
Illustration 5: BCG Matrix, 2017

(Source: Ansoff Matrix, 2016)
This is a tool which is helpful in analysing current market share and actual position of company
in industry (Krishna and Schwarz, 2014). This is a theory which is propounded by Igor Ansoff
who suggested that there is a four aspects which is described below:
Market Penetration Strategy: This is a situation which includes development of existing
product bin existing marketplace. It means company is showing success in present market which
is a low growth marketplace (Levens, 2010). Market penetration is growth of current product in
existing market.
Product Development Strategy: It means when new product is launched in current
market. For example, Lidl is introducing a fresh new item in present market in which firm is
running its operations currently.
Market Development Strategy: When an existing product is launched in new
marketplace. For example, Lidl is going to launch its operations in new countries and this is
perfect fit situation in this segment. Market development tactic is opted by organisation to make
sure success in new marketplace.
Diversification Strategy: When new product is introduced in novel market. This can be
comprehended that when firm is going to start it s new business. For example, when Lidl started
its business operations then it was a diversification strategy but on the other hand association
should have been running its business operations in other industry.
Illustration 6: Ansoff Matrix, 2016

TASK 2
Identify different consumer segments that influence growth of a company
Marketing has a crucial tool to identify needs of different customers which is known as
segmentation. At the same time it is used to create segments which distinguishes need of
different customers and allot a group to them where people of same needs and requirements are
segmented. Lidl is one of the largest grocery retailer in UK and is expanding its business unit in
other parts of the country. This rapid expansion has created numerous competitors such as Tesco,
Aldi, Morrison, etc. in the sector of retailing. These giants have been hitting market since very
long and aim at creating more customer base by implementing innovative strategies. Though
Lidl's market share is small in comparison to other stores but it is again one of the fastest
growing chain in country (Malhotra and Malhotra, 2012).
Segmentation helps marketing managers of Lidl to prepare budgets and strategies that
will be used in target market. It is also known as customer segmentation, client segmentation,
procedures, etc. Company uses this tool to provide their marketing efforts to its relevant
customer. This is used to target group based upon specifications that allow effective allocation of
resources in order to maximize profit and sales. Using this optimum utilisation of resources can
be made which in return will create customer satisfaction. There are numerous methodologies
and techniques are used by experts to reach their ideal customer and provide with them
demanded offerings (McKenzie-Mohr, 2011). Segmentation is made on the basis of three factors;
psycho-graphic, socio-demographic, and behavioural. Lidl has used these factors to determine
their customer needs and offer them their service as per requirements. Evaluation of these factors
to identify consumer segments that are influencing growth of company is given below: Psycho-graphic: In this segment ideal customers are identifies with the help geographic
and demographic segments such as societal status, lifestyle, attitude, values, beliefs, etc.
Using this factor company can manipulate customers and influence them to make their
purchases in bulk. Target consumers are identified on the basis of specific requirement
and later strong relationship is made with them. Major purpose of segmentation using this
factor is to target individuals who are seeking offers under budget. Such customers focus
upon quality of goods or service they are availing. On the other hand seller is responsible
for identifying need of its customer and to fulfil them in required time frame. One of the
main feature of psycho-graphic research is that it helps in delivering information to

specialists conducting study about buyers who are interested in purchase. Lidl has used
this research to analyse significance of retail store in UK market. Though there are
number of stores available for purchasers that provide grocery, clothing, accessories, etc.
but Lidl has analysed needs of its customers and provided them with respective choices.
Analysing psycho-graphic needs it was concluded that people require quality products in
reasonable prices. Also, there is huge demand of local brands that are good in quality and
taste and are preferred by local community. Hence, store provide customers with their
demands and needs. Socio-demographic: In this segmentation study is conducted upon various groups that
are categorised on the basis of living standards, background, preferences and many more
(Molesworth, Scullion and Nixon eds., 2010). It is generally used by business to business
entities and is performed by evaluating elements such as working hours, roles of
employee, etc. Here, target customers are those who have standards of living and can
afford high end products. Using this study information is collected about trends in market
in order to attract maximum number of customers. Lidl has examined demand of exotic
foods in region from particular segment of people. Thus included foods that are high in
prices. Also, variety of wines and drinks have been included in catalogue of store which
was again result of specific demands.
 Behavioural: This segmentation is rarely implemented because it lack facts at the time of
practical use (Morrison, 2013). It is largely related with thought process of customer and
their behaviour. Here, study is conducted on segments such as characteristic, attitude,
pattern, buying practise, etc. This segmentation is used in variety of ways by market
specialist to identify customer demand. For example, while conducting program to
inform people about new product, company will send their trusted employees to arrange
campaign in order to attract more and more customers. Here, marketing plays crucial
role, as it provide strategies to attract customers on global platform. Seller has to maintain
relation with their customers by providing them with quality products as per demands and
to retain them for longer time period. This technique help in addressing large group using
attractive promotional strategies in order to create large customer base. Lidl has
conducted its behavioural segmentation in order to determine buying pattern of their
customers. It was observed that people were going for grocery shopping on week days

and were opting for foods that can retain for longer time period. In UK, there are more
working class people that require packed and canned food in order to save time.
Therefore, Lidl has included canned food in larger quantity to satisfy this segment of
people. This approach helps company to serve large number of people as per their needs
and demands which will again result in company's success and growth.
Segmentation is a necessary tool that help marketing function of an organisation to
satisfy needs and requirements of its target market. Lidl has achieved its growth with the help of
segmentation as it has created large number of customers. With increase in revenue by 9% Lidl
has shown its progress since the day its was established. Major segment of people prefer Lidl at
the time of grocery shopping. People from age group of 20-45 prefer Lidl as it deals with variety
of food chain (Nath, Nachiappan and Ramanathan, 2010). From grocery to costly wine,
everything is available in store of Lidl.
As mentioned above, segmentation depends upon factors such as psycho-graphic,
behavioural and socio-demographic which act as a base for study by marketing expert.
Responsibility of manager is to analyse all these factors by collecting information from
customers. This information is further analysed by experts in order to determine behaviour of
customers. Using behavioural segmentation, manager realises behaviour of its customer and its
buying nature. Growth of an organisation depends upon quality of service or product that
customers are availing. When company provide its customers with good products it help them to
gain large market segment. This not only helps in increasing large market share but also provide
sustainability for long-run. Using short-term targets company fulfil their long-term goals and
objectives by using effective and systematic strategies.
Successful marketing include relevancy which is about delivering right thing to right
customer at right time using right techniques (Palmer, 2012). Consumer segmentation has been
proven as effective tool to achieve market segmentation. Using this practice customer base is
divided into groups that have similar preference and taste. It helps in improving customer service
and result in customer loyalty and preference. It is observed that products that are presented
using customer segmentation tend to be more valued and cherished by consumers. Another
benefit of customer segmentation is to stay ahead of competitors and identify potential customer
those who are interested in product. It is used as a tool for customer management and in
fulfilment of their demands. By considering every customer as individual entity deeper

understanding of their needs and requirements is achieved. By establishing effective
communication and deep understanding of market segmentation can result in overall business
development with high increase in sales and profits. It provide focus upon audience that are
valuable to company and act as attracting tool for them.
TASK 3
7P's of Marketing mix
Marketing is considered as a process which aid to introduce unique or new item at
market; therefore, company will gain attention of numerous individuals towards them. There are
many type of policies or strategies will be formulated by superior to improve production and
sales (Peter and Donnelly, 2011). As a result, desired targets will be attained by them in an
effective and efficient manner.
Product description: Both ALDI and LIDL is providing qualitative goods and services to
people in market. They are selling variety of items to people which help them to accomplish their
needs and requirements. It is required for them to utilize latest techniques and methodologies so
that they will produce innovative products. This enables firm into their success and
enhancement. Product description is related to design, colour, shape, specification etc. of any
specific item which assist to capture attention of many persons. As a result, sales and profits of
ALDI and LIDL get improved.
Brand image: If firm is having an effective reputation at market then they will acquire
loyalty and trust of individual significantly (Proctor, 2014). As ALDI and LIDL both are doing
their business combine, which assist them to enhance market share and position in country. In
order to improve sales across the world, it is must to provide qualitative and innovative items to
people. It will aid them to acquire attention of numerous individuals towards them; hence,
customer base will improved. It enables in improvisation of profits and in addition goodwill. It
has been analysed that strong brand image will influence clients to purchase products and
services of that association.
Pricing objective strategy: It is required for company to select an appropriate pricing
strategy for product as this will aid them to maintain their position appropriately. Price is
considered as foremost factor which will provide impact to individual's choice of an item. It will

cater large affect to other elements of marketing mix. There are various steps in relation to this,
which are stated as beneath:
 Primarily, it is required for an enterprise to develop significant strategies so that they will
segment market and decide their target clients and in addition place of product.
 After that, judgement regarding other factors of marketing mix need to be taken, like
about promotion and distribution as well (Scully and et. al., 2012).
 Then, needs and demands of person need to be assessed because it helps to decide price
of goods and services which is offering by company to clients.
 Intrinsic and extrinsic components also need to be considered before finalisation of price.
Strategies related with retailing and distribution: There are some strategies which will
be utilized by superior for distribution of items and services, these are stated as beneath:
Indirect Distribution: Final goods offered to clients with assistance of many retailers.
Direct Distribution: As indicated by this, company direct sell products to consumers within
limited period of time.
Intensive distribution: According to this, organisation will easily cover higher share of market
and for this, they need to enlarge their business activities though
distribution of product.
Selective distribution: As per, demand or requirement of a specific item is much high.
Exclusive
distribution:
When company wish to offer maximum share of market to a particular
seller.
Marketing communication and strategic objectives: It is more important strategy which
helps business expand their activities in another areas to attract larger number of customers
towards its products and services (Sheth and Sisodia, 2015). With the help of this company build
strong relationship with their customers by satisfying their needs and demands. In this, marketer
evaluate customers demand by offering them features products and services.
7P's of marketing mix: This type of strategy is also more effective which include various
elements to increase company sales at market place. With the help of this, company enhance
their positive brand image in customers mind.

 Product: It is one of the important element for business organization which helps in
satisfying customers needs and demand. In this it is important duty of a manager to
produce quality products as per customers needs which help in satisfying their demands.
In context of ALDI, they produce variety and features products and services to its
customers in order to attain their higher satisfaction and at the same also increase their
profitability level. Pricing: It is significant for business to set right price of their products. Basically it is
more complex so that they effectively calculate all the cost like, transportation cost, raw
material and many more. In this ALDI set their product price affordable so that every
group of people easily buy its services. With the help of this company capture larger
market share form its rivals in effective manner (Smith, 2012). Place: Good and effective location is also important for business organization to serve
their services to its target customers. In this ALDI set their attractive outlets in those
place where number of people are live and visit stores to buy products and services. For
attracting them company set attractive infrastructure of their stores in UK. Promotions: It is important for every business organization promote their products and
services in market place with the aim of increasing their sales. In context of ADLI, hey
also use various promotion methods such as social media, advertisements and many
more. By this they increase customers awareness towards the company products. With
the help of this number of customers get attract by ALDI products which is beneficial for
company to increase their profitability level. People: Workers are the important drivers because overall success of the company is
highly based on them. For attaining better results it is important for ALDI and LIDL to
include skilled as well as experience staff members so that they easily understand
customers demands in effective manner. In this company also provide better raining and
development programs to their workers so that they effectively serve quality services to
their customers in appropriate way. Process: It is more important for business organization to maintain their effective
delivering services to its customers. In this company also set an appropriate guidelines
which follow by the firm and its workers to serve their quality services to its customers in

effective manner. By this firm attain competitive advantage in market place (Smith,
2014).
 Physical evidence: It define an effective outlets and stores by which company serve their
services to its customers. With the help of this company easily increase their customers
by attracting them towards the company stores.
CONCLUSION
From above report it can be concluded that marketing plays an important role in
organisation's success. This function provides opportunity to interact with customers and
influence their buying decision. It is not just about selling product or service to customer but also
about attaining satisfaction by identifying needs of consumer. Lidl has been successfully
operating in this retail sector since past decades and giving tough competition to its competitors
by inducing new techniques and tools. Mainly by implementing discount strategy company has
been sustaining in consumer preferences thus creating large customer base. Using this report
marketing strategy of Lidl has been analysed which based upon various factors such as
competitors, pricing, etc. Further analysis of market segment using socio-demographic, psycho-
graphic and behavioural factors has been successfully completed. Lastly based upon these factors
marketing mix of company is analysed. This successfully concludes study of marketing and its
impact upon business growth and success.
RECOMMENDATIONS
Risk and challenges are the factors which every company faces in their business
operations. This can be characterised in various sectors like social, environmental and ethical and
all these may have a negative impact on the performance of organisation. Some of the factors are
mentioned below:
Awareness of sustainability challenges in business transactions: This can be considered
as one of the reasons of risk which every company should consider before implementing any
changes or alterations in their strategies. Some of the potential consequences can hamper the
performance of the company and to eliminate this company should detect the possible risk.
Make proper strategies: Lidl is a multinational company and it is gaining popularity
across the globe. As the services and facilities provided by them are best in quality, but they are

required to focus more on making and implementing strategies and plans to that their work can
be executed in better ways.
Hire proper skilled person: Employees with better knowledge and accountability can
enhance the performance of a company. So, it is prime duty of Lidl to select suitable candidates
who are right for the job and organisation as well.
Other than this there are lot many challenges that a firm can face in order to perform their
business operations for example: they can set a proper communication process between their
employees or individuals so that the work is conducted smoothly. As Lidl is a huge company that
deals in retail sector so the chances of co-ordination may be effected by this. Thus, it is prime
duty of an organisation to set up a proper way of by which they can eliminate the
misunderstanding properly. Apart form this company can set up a suitable process from the
collecting raw material and than transforming them into final goods which customers can buy
from respective stores or retail shops.

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