Aldi's Marketing Strategy Analysis

This assignment analyzes the marketing strategies employed by Aldi, focusing on its unique approach to the marketing mix (product, price, place, and promotion). The report delves into Aldi's specific tactics for each element, such as their minimalist store layout, efficient distribution network, and competitive pricing. Additionally, it explores Aldi's segmentation, targeting, and positioning (STP) strategy, examining how they identify and cater to their target customer base.

Introduction to
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describe marketing techniques.........................................................................................1
P2 Describe the limitations and constraints of marketing with reference to legal requirements
................................................................................................................................................2
TASK 2............................................................................................................................................3
P3 Describe the uses of marketing research of the organisation............................................3
P4 Describe the utilisation data and information of marketing research for marketing planning
................................................................................................................................................4
TASK 3............................................................................................................................................4
P5 Explain how and why group of customers are selected....................................................4
TASK 4............................................................................................................................................5
P6 Develop a coherent marketing mix for new product.........................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Marketing is a crucial function in any business or organisation, and is increasingly
important in the modern globalized economy. This report examines marketing strategies of a
German supermarket chain named Aldi, in the UK. The first section gives a brief history about
Aldi marketing techniques and legislations which company follows. Further the report analyses
the marketing mix 7ps of Aldi.
TASK 1
P1 Describe marketing techniques
This report emphasis on different marketing techniques of how the company finds out what a
customer want and when trying to develop the firm for future. Further there are different
concepts of marketing, functions of marketing, Ansoff’s matrix, branding and relationship
marketing and survival strategies and how all of these techniques are used to market products
(El-Ansary, 2006). Two businesses are compared for detailed examining of marketing techniques
will be Aldi and Oxfam (Grönroos, C., 2011).
Production Concept: This is the production concept in which a business focuses on
achieving high efficiency at a low cost and mass distribution. The reason for this is that when the
business produces a high amount of products then this mean that customers will want to buy
more products. Businesses assume that customers are interested in prices which are low and the
availability of the price which attracts customers.
Selling Concept: This is the selling concept in which customers and businesses are left
together then the business not buy enough of the products which means the business will have to
accept a severe selling and promotion effort. It also suggests that the business has a set of
effective selling and promotional tools to inspire more buying.
Marketing Concept: This is the key source for achieving business goals, this consists of
being more effective than competitors when creating, communicating and delivering customers
to meet consumer values. It has seven pillars Place, product, price, promotion, people, physical
evidence, process.
Production concept: This is where the business focuses on creating economies of scale in
production and distribution of product and services. This concept says that customers will favor
those products who offer the best quality and performance.
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Aldi Strategy Oxfam Strategy
Aldi has a well established and reliable
strategy for growth, which has allowed them to
strengthen their business and drive expansion
into new markets. The underlying principle for
the strategy is to expand the range of business
to allow them to deliver strong sustainable
long-term growth by following the customers
into large expanding markets such as financial
services, non-food and telecoms and new
markets abroad, initially in Central Europe and
Asia, and more recently in the United States.
Aldi has grown from selling beans and biscuits
to becoming a major player in almost every
area of the retail market
Charity Oxfam has also launched a poster
advertising campaign called `One Off' to
encourage consumers to visit its charity shops.
The ads suggest that by wearing Oxfam
garments this will help them to spread the word
to different places and people were they can’t
reach. That will enable them to get more
people giving their time and money helping the
organisation.
P2 Describe the limitations and constraints of marketing with reference to legal requirements
Sales Of Goods Act 1979: This is aimed at safeguarding consumers by ensuring that
goods offered for sale are reasonably safe, and meet certain standards of quality to make them fit
for their intended use. Aldi insure their products are acceptable and in good condition for all
customers. If something is not in its best condition, not the right product for the customer or
simply wants to exchange it, company makes sure they provide this. For example, if someone
buys an expired sandwich or a top which has a hole in it, customers are able to contact the Aldi
so they are can replace it with a much higher standard (Jobber, and Ellis-Chadwick, 2012).
Unfair Trading Regulation 2008: This regulation ban traders in all sectors from using
unfair commercial practices towards consumers that prevent them from making free and properly
informed buying decisions. Aldi are very careful and aware of fake and unformed information
which could be published and made up by others which can confuse their consumers.
Consumer Credit Act 1974 & 2006: This act regulates credit card purchases but also
gives customer protection when you enter into a loan or hire agreement. Aldi provides credit
cards to all customers to use when shopping at company. It earns firms points every time buyer
shop with the card.
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The Data Protection Act: It controls how consumers personal information is used by
organisations, businesses or the government. Everyone responsible for using data has to follow
strict rules called ‘data protection principles. Aldi have a strong database where they keep their
customer's information safe and secure at all times.
Consumer Protection (distant selling) regulations 2000 - This law protects the customers
that purchase their goods online. Customers must be able to cancel any of their purchase within 7
days and Aldi must follow this law because otherwise it will not be protecting their customers
and will be selling products online illegally.
P4 Use marketing research for marketing planning
TASK 2
P3 Describe the uses of marketing research of the organisation
Market Research is used by Aldi to help them improve their goods and services. M&S
have made many improvements within their website and international businesses. They have also
increased customers choice by including a variety of products with promotions which are
attracting more customers, therefore increasing their profit (MacInnis, 2011).
Primary internal uses of marketing research: Aldi evaluates opportunities to sell direct,
cost of transporting and warehousing products, price elasticity, customer perceptions of “just or
fair” pricing.
Secondary internal uses of marketing research: The company analyse competitor pricing
strategies, use and effectiveness of distribution channels, extent and effectiveness of sales
promotional activities, effectiveness of sales force (personal selling).
Primary external uses of marketing research: Aldi analyses market potential for existing
products (e.g. market size, growth, changing sales trends), forecasting future demand for existing
products, assessing the potential for new products, study of market trends evaluating competitor
behaviour and performance.
Secondary external uses of marketing research: The company measures customer
acceptance (or rejection) of new products, comparison of existing products in the market (e.g.
price, features, costs, distribution), forecast new uses for existing products, and technologies that
may threaten existing products.
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P4 Describe the utilisation data and information of marketing research for marketing planning
Aldi uses quantitative research such as interviews and surveys to get to know the
different customers choices. This has helps company to improve their goods and services. Aldi
also used qualitative research to help improve their branding, Manager does this by looking over
previous interviews and observations.
Aldi uses secondary research to find out about their competitors, manager use old reports,
surveys and questionnaires to help them promote their business in a way that their competitors
may not have used. By using secondary research company have increased their range of food
products which has introduced many new customers.
Aldi uses sampling to get to know their customers more, firm use questionnaires, surveys,
interviews and promotions to help them understand their customers. The company often give out
food samples to gain their customers opinions this helps them to find out about their customers
likes and dislikes.
TASK 3
P5 Explain how and why group of customers are selected
Consumer market segmentation is a factor that varies among groups within a market, but
that is consistent within groups. The optimal basis on which to segment the market depend on
particular situation and are usually determined by market research, market trends and managerial
judgement. There are also the four primary bases on which to segment a consumer market based
on the individuals (Krishna, 2012).
Geographic Segmentation: Based on regional variables such as region, climate,
population density, and population growth rate.
Demographic Segmentation: Based on age, gender, ethnicity, education, occupation,
income and family status.
Psycho graphic Segmentation: Based on values, attitudes and lifestyle.
Behavioural Segmentation: Based on usage rate and patterns, price sensitivity, brand loyalty and
benefits sought.
Targeting: In this Aldi aims at targeting market where company wants to sell its products
and services, and it includes a targeted set of customers for whom it directs its marketing efforts.
Identifying the target market is an essential step in the development of a marketing plan. With
regard to Aldi, the target market is focused as per the teens and generation.
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The company is presently second in the home broadband market in the United Kingdom.
However, it does not want to be left behind when they come to broadband on the move. The firm
has its own differentiated products and services for customer, so it's was not that much of a leap
for it to add new products into the mix.
Positioning: It is a marketing strategy that aims to make a brand occupy a distinct position,
relative to competing brands, in the mind of the customer. Aldi apply this strategy either by
emphasizing the distinguishing features of their brand or they may try to create a suitable image
through advertising. Once a brand is positioned, it is very difficult to reposition it without
destroying its credibility.
TASK 4
P6 Develop a coherent marketing mix for new product
Product- Aldi offer high quality ‘like brands’. They are known for offering the same
quality food that other household supermarkets are selling however without the price tag. A
consumer obviously wants to spend as little money when it comes to shopping so keeping prices
as low as possible for customers will always be a positive, however when it comes to branding
cheaper products can result in poorer quality; a copy of a certain food can taste different or not
actually last as long as a household product.
Price- The price of Aldi’s products are what have made Aldi so popular, they are known
for very cheap prices but without compromising on the quality. However, for Aldi to offer such
low prices they have to keep costing of other areas down such as the layout of the store; therefore
this could have a negative effect on certain consumers.
Promotion- Aldi use a combination of various promotional techniques such as ‘like
brands’ and ‘swap and save’. An advantage of this promotion is that they will always draw in
more customers however offering these promotion means that products are being sold at a
cheaper price meaning less profit (Barutcu, 2011).
Place- Aldi stores are already in Germany and England and they are currently expanding
at a huge rate. Their stores are placed where land can be bought cheaply so although this is an
advantage as the land is cheap for the company to buy that doesn’t always mean that the stores
are in a place that would be convenient for all customers.
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Process- Aldi have a number of distribution stores and they make sure that they only get
one delivery a day from one specific place therefore cutting the cost of having numerous
deliveries.
People- The Company is known for paying their staff an exceptionally good rate. This
along with a training programme ensures they keep the staff turnover as low as possible.
Physical environment- Aldi keep their stores to a very minimal layout, they don’t have
huge pictures advertising products or expensive shelving this can mean that the stores aren’t
attractive enough for specific consumers.
CONCLUSION
The report concluded that Aldi being on top need to maintain its quality products and
services in order to maximize the needs and wants of the consumers. Report analyses the
marketing techniques of profit and non profit organisation, Further, it evaluates the marketing
mix factors of Aldi, and Segmentation, targeting and product positioning (STP) concept of
marketing which is to be followed by the Aldi. Henceforth, it is necessary for the organisations
to measure market factors and competition to satisfy its customers.
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REFERENCES
Books and journals
Barutcu, S., 2011. Mobile viral marketing. Journal Of Internet Applications And Management.
2(1). pp. 5-13.
El-Ansary, A., 2006. Marketing strategy: taxonomy and frameworks. European Business Review.
18(4). pp.266–293
Fritz, W., 2013. Internet-Marketing und Electronic Commerce: Grundlagen—
Rahmenbedingungen—Instrumente. Springer-Verlag.
Gangeshwer, D.K., 2013. E-commerce or Internet Marketing: A business Review from Indian
context. International Journal of u-and e-Service, Science and Technology. 6(6). pp.187-
194.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial marketing management. 40(2). pp.240-
247.
Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing(No. 7th).
McGraw-Hill Higher Education.
Krishna, A., 2012. An integrative review of sensory marketing: Engaging the senses to affect
perception, judgment and behavior. Journal of Consumer Psychology. 22(3). pp.332-351.
MacInnis, D.J., 2011. A framework for conceptual contributions in marketing. Journal of
Marketing. 75(4).pp.136-154.
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