Report on Research UK Grocery and Retail Market
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Added on 2020-06-03
Report on Research UK Grocery and Retail Market
Added on 2020-06-03
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INTRODUCTION TOMARKETING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Factors that has an impact on Lidl firm......................................................................................1TASK 2 ...........................................................................................................................................9Which segments will provide “Lidl” Company with a higher yield of consumers....................9TASK 3 .........................................................................................................................................13Approaches to the marketing strategies and 7p's of marketing mix..........................................13RECOMMENDATIONS...............................................................................................................16CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18
INTRODUCTIONThe statistic shows that the market share of grocers in Great Britain (GB) monthly fromJanuary 2015 to March 2017. Tesco and Sainsbury's had the largest share over the period underconsideration, holding 43.7 percent of the market together as of March 2017. Prior to thepopularity of the discounters, the grocery retail market was dominated by the 'big four'supermarkets: Tesco, Sainsbury's, Asda and Morrisons. On the back of the economic recessionand growing inflation, however, consumer behaviour has shifted in favour of cheaper alternativesand discounter stores.Lidl and Aldi increased their sales and profitability by creating a joint venture. With Aldigrowing its sales by £1.1billion to £7.9billion, while sales at Lidl rose by £800million to£5.8billion. In respect to this, Tesco shares slightly fell down from 28.2% to 28%. the firm isnow planning to make a venture with Tesco to increase its market share and profitability.The report will cover research upon UK grocery and retail markets which will be done bymanaging SWOT, PESTLE, Ansoff matix, Competitor matrix and Boston consulting matrix ofgrowth development. Viable marketing opportunities for Lidl and marketing segmentationassociated with driving growth within UUK and EU market to provide higher yield of customerswill be discussed in this report. Marketing strategies and approaches in context to 7p's ofmarketing mix model will be explained in this report. Brand image, product description, pricingstrategies, integrated marketing communication and other theories and models will be discussedin this report. In order to expand the market of Lidl into grocery and retail sector approaches andstrategies are discussed. Recommendations are also provided at the end of report in order tomanage and tackle challenges and risks associated with business effectively. TASK 1Factors that has an impact on Lidl firmGD expects the UK grocery market to be worth £179.1bn in 2016, an increase of 0.6% on2015. The forecast says that the UK grocery market value will be worth £196.9bn in 2021, a9.9% increase on 2016. The grocery market accounts for 50.2p in every £1 of UK retail sales(Ahn, Cho and Han, 2014).1
Illustration 1: UK Grocery retailingSource: UK market and channel forecasts 2016 – 2021The statistical data shoes that the Grocery retail market within UK is increasing day byday and producing profitability and production effectively. Lidl, Tesco, Sainsbury, Morrison andother retail firms are doing well and will enhance their sales in future also. The profits areincreasing consistently and market will expand for the firms (Camerer and Yoon, 2015). Lidl isalso doing well to increase its market share and compete others in the market.SWOT analysis of LidlStrengths: The firm was founded in 1973 and now it is one of the best UK grocery retailfirms. The business is also doing well in Europe. The firm has 5.02% market share andalso the 7th largest super market chain that the business is consistently increasing since1994 effectively. With total number of 20,000 employees and 650 stores and 10distribution centre also the firm is growing its market. Lidl is well knows as discounterand also provide quality services and products to their customers (Chatfield, 2016). Thefirm is mainly focused on making local products that it can be said 70% of the productionif offered in UK and comes from British supplier. Weaknesses: It can be said that the business has a small number of employees ascompared to the other rivalry firms in the market. There are also few people to assistcustomers in the stores and also less than a expectation of customers regarding theirqueries. There were some controversies which decrease the reputation of firm in the2
market. For instance, the company was accused of spying on its employees acrossGermany in 2008. Spying included but not limited to recording the number of timesemployees went to the toilet, and their very personal details.Opportunities:There are a lot of opportunities available for the firm in order to expandits business such as Lidl currently has 10,000 stores in 27 European countries that it canbe said that there are so many potential areas remaining where the firm is able to expandits business and operational activities (Eagle and Dahl, 2015). The firm is fastest growingorganisation within UK in super market chain. The firm has also an opportunity todevelop its business in USA as well. The plan is to open 600 new stores that Tesco isfailed to expand its operations. Some initial steps and strategies will help to grow themarket in USA.Threats: The retail and grocery sector is increasing in UK that there are so manycompetitors in the market such as Tesco, Sainsbury, Morrison and Asda which isaffecting the business of Lidl. Tesco, Aldi and Sainsbury leading the market in Europeand also tough competitors. Changes in consumer behaviour, and any political instabilityin Europe may impact on Lidl significantly. It may sound harsh; however, any increase inminimum wages may also impact on the company profitability effectively and efficiently.The firm should take some necessary steps in order to enhance profitability andproduction.PESTLE analysis of LidlPolitical: Political factors should be managed and controlled by firm in order to manageits operational activities in 10,000 stores within Europe and UK (Ewing and Ramaseshan,2015). Natural assurance law is one of the major components which is affecting thebusiness and operational activities of Lidl. The firm should comply with all thegovernment needs in order to run business successfully and effectively. The UKgovernment vitality advance program to do work of retail products and servicesinnovatively is also affecting the business. Changes in interest rates and other policieswill affect the business of Lidl.Economical: Ecnomical factors such as internal and external affect the business of Lidlthat there are so many rules and legislations formulated by the government in order toimprove the economy level. Consequently, recuperation of GDP and the rising rate in the3
majority of the slowly developing nations from the recessionary period that happened in2008/2009 has a huge effect on the client buying power. The firm also has a stablefinancial system that enables it to communicate effectively and favourably. Changes intax rates, tariff and other policies will affect the business in economical terms.Social: Social factors such as trends, stress, mentality and culture of different peoplewhich affect the business products and services. There are so many people with variouschoices and preferences that the firm should ensure they will accept the product andservices. People living in different societies are the main part for organisation that theirtaste and preferences should be considered by firm in order to expand the business (Filland Turnbull, 2016). The company has also considered a number of cultural elements thathelp in achievement of competitive advantage and in promotion of customer interests.For instance, the company stocks various items used by almost all the religions inEurope.Technological: Technological changes such as latest techniques, innovations and devicesto improve services. This will affect the business of Lidl. The firm should acquire latesttechnologies in order to provide quality and effective services and products to consumersin the market effectively. Technical devices such as credit card machine for cashless andfast transactions should be managed by firm to make purchasing easier for customers.Legal: Legal factors are related to legislations and rules formulated by the government inorder to manage retail and grocery sector within UK and Europe effectively. Changes instrategies, plans and policies will affect the operational activities of Lidl that some certainpolicies and regulation should be implement by firm (Foxall, 2014). Legal factors such ashealth and safety, employees obligations and various laws regarding food industriesshould be managed and controlled effectively. This will help business to manageactivities effectively in the grocery market. Environmental: Environmental factors such as population analysis, culture, trends andchoices of people according to their perception. There are different people from variouscountries and their preferences and tastes are also different from each other. The firmshould evaluate requirements and demands of consumers in order to provide effective andquality products and services (Gillies, 2017). Management of environmental factors willalso help to enhance competitive advantage in order to increase sales and profitability.4
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