Marketing Strategies of Aldi in Australia

The report analyzes the strengths, weakness, opportunities and threats that can be faced by Aldi in Australia. It identifies the strategies of the organization with the help of 4P’s. It determines the cost leadership strategy of Aldi, generic strategies of the company and the positioning strategies of the company in the existing Australian market. Further, the report provides suggestions and recommendations with the help of Ansoff matrix, which can help the business organization to ensure sustainability in the long run.

Running head: MARKETING
MARKETING
Student's Name
University Name
Author note

1MARKETING
Executive summary
The purpose of this report is to analysis the strategy and the strategic practices of the German
based company Aldi Australian discount supermarket chain since its launch. The report analyzes
the strengths, weakness, opportunities and threats that can be faced by the company. It identifies
the strategies of the organization with the help of 4P’s. It determines the cost leadership strategy
of Aldi, generic strategies of the company and the positioning strategies of the company in the
existing Australian market. Further, the report provides suggestions and recommendations with
the help of Ansoff matrix, which can help the business organization to ensure sustainability in
the long run. It recommends the strategies and policies that can be implemented by the business
organization remain successful in the highly competitive business environment. It identifies the
trend of the Australian market in the future and recommends strategy to maintain its
competitiveness. Lastly, it summarizes the main points of the report and concludes the report.

2MARKETING
Table of Contents
Introduction......................................................................................................................................3
Background of the company............................................................................................................3
Marketing analysis...........................................................................................................................4
a) Marketing strategies since its launch.......................................................................................4
SWOT analysis of Aldi............................................................................................................4
Generic cost strategy................................................................................................................5
Positioning strategy.................................................................................................................6
4P’s of marketing.....................................................................................................................7
b) Recommendations to remain a successful organization..........................................................8
Ansoff Matrix..........................................................................................................................8
Recommendations and suggestions.......................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................13
Appendix........................................................................................................................................15

3MARKETING
Introduction
Marketing is considered to be one of the most important elements for promoting and
offering the products or services of any business organization. It can be defined as the right
product being offered to the target customers at the right time and at the right price. The there are
mainly 4Ps of marketing which is commonly known as the marketing mix. The four Ps of
marketing includes price, place, promotion and product. It is considered to be one of the most
important tools for an efficient marketing plan. The purpose of this report is to identify the
marketing strategies of Aldi, the largest grocery supermarket based in Germany. It analysis and
evaluates the marketing strategies and operations of Aldi in Australia. Further, the report
provides marketing options and recommends ways in which Aldi can adopt in order to remain a
successful business organization in Australia.
Background of the company
Aldi is known to be one of the largest supermarket chain based in Germany. It is the
world’s largest privately owned business organization. The company name Aldi comes from the
abbreviation of Albrecht Discount (family name) (Aldi.com.au. 2019). The business organization
was started in the year 2001 with food store in Germany at Essen. Aldi operates on international
levels like Australia, Slovenia, United states, United Kingdom and others. However, the business
organization had to faced various challenges while operating in Australia due to the adverse
effects on the international buyer behavior because of many cultural and language barriers. The
shopping culture in Australia is majorly associated with quality along with reasonable pricing.
The higher level of consumer service is one of the main attribute in Australia (Aldi.com.au.
2019). Aldi is highly a discount oriented supermarket chain and therefore, effective costing

4MARKETING
control is one of the main cultures of the business organization. Due to effective marketing
strategies, the company has been able to gain its market position despite the dominant position of
other major competitors in the Australian retail market such as Woolworths and Walmart.
Marketing analysis
The main vision of the business organization is to provide to its customers quality products and
services at a guaranteed low price (Aldi.com.au. 2019). The business organization mainly
focuses on five aspects of marketing that is huge savings, buy with confidence, super special
buys, outstanding value and excellent quality. The marketing strategies of the business
organization will be explained in detail below.
a) Marketing strategies since its launch
As mentioned by Armstrong et al. (2018), the German based grocery supermarket chain
has gained reputation for its effective costing strategies. The company highly followed a non-
traditional approach towards carrying out its business operations. It set its pricing policies low by
minimizing the bulk of merchandise to the private label brands, the business organization keeps
its selection limited and limited store hours while keeping a small store. The supermarket
grocery chain of Aldi is smaller with limited options. The options provided by the business
organization are of low price thereby ensuring a competitive advantage.
SWOT analysis of Aldi

5MARKETING
SWOT Analysis has been carried out to identify the internal strengths and weakness of
the organization and it identifies the external opportunities and threats that can impact the
organization.
Strengths: Aldi has an international recognition and increased reputation for the quality of
goods and services sold. The organization follows a simple organizational structure and culture
along with an unique operational system. Moreover, they offer limited number of products of
high quality and comparatively lower price (Gürel and Tat 2017). This is one of the biggest
strength of the company.
Weakness: The product range of the company is limited with lack of product differentiation.
Customer loyalty is very low (Gürel and Tat 2017). Lack of advanced technology in the
organization and very few trained sales personnel’s are some of the weakness of the company.
Opportunities: There is an increase in the pace of advanced technology in the Australian
market. Therefore, it can utilize the opportunity to implement new technology and systems in the
organization. This will help the organization to maintain the standard of quality (Gürel and Tat
2017). There are new market trends in the organization; therefore it must crater to the diverse
population in Australia.
Threats: There are threats faced from the established supermarkets like Woolworths and Coles.
There is stiff competition in the market which threatens the profitability of the organization. Due
to the competitive environment, the low pricing strategy would be ineffective in the long run
(Gürel and Tat 2017).
Generic cost strategy

6MARKETING
The two generic strategies implemented by Aldi is high quality and low cost. The
company implements a cost leadership strategy which involves low cost and high quality. This
enables the business organization to get a broad customer base. It focuses on cost leadership. It
targets narrow and a price conscious customer who prefers offers and discounts (Tanwar 2013).
The differentiation strategy of the company is to focus on quality and targets the quality
conscious customers. It ensures that the products and services offered by the company are
unique to its quality and low price (Banker, Mashruwala and Tripathy 2014). This strategy helps
the organization to gain competitive advantage.
Positioning strategy
The private labeled products of Aldi are cheaper as compared to other major competitors in the
market such as Woolworths and Coles. Moreover, it offers satisfied customer service in par with
the major competitors. These factors help the organization to gain unique position in the market.
The positioning strategy is supported by consumer value on the basis of additional benefits and
offers (Tanwar 2013). This helps the organization to differentiate its products from the high
priced competitors.

7MARKETING
4P’s of marketing
Price, place and product strategies
As mentioned by Greenville, Pobke and Rogers (2013), the business organization mainly
focuses on indispensable investments and it highly avoids superfluous for the purpose of giving
its customer maximum savings. The supermarket chains of the business organization have
limited opening hours and limited options unlike other competitors in Australia. On the other
hand, according to Hallbäck and Gabrielsson (2013), the competitors provide 24 hours
availability. Aldi does not focus on extra expenses like its competitors for example, the lottery
terminals, photo booths, lavatory, news agency, tobacco counters and others. The supermarket
stores do not have a separate customer service counter or addition welcome desk (Hatfield-
Dodds et al. 2015). These strategies eventually increase the cost of the commodities and services
provided to the customers as well as increase the operational cost of the organization. Aldi has
limited staffing policy as well for assisting the customers and providing high standards to the
customers of the business organization. This lowers the price of the goods, Grocery items and
service sold to the customers. According to Huang and Sarigöllü (2014), Aldi has a common
layout structure of the supermarket chain, it offers free parking space which helps the
organization to attract customers. Aldi since its launch has taken an approach to offer the
products equivalent to the branded products. The competitive pricing strategies of the business
organization help to attract the customers. Low price is one of the core strategies of the business
organization.

8MARKETING
Promotion strategies
Further one of the core marketing strategies of Aldi is advertisements with brand
comparisons. This enables the business organization to demonstrate the equal quality of products
to the well established brands in the country (Kotler et al. 2015). The advertisements provided by
the business organization speak of the high quality products and its value for money. It uses
various advertising campaigns with attractive slogans like, ‘Like Brands. Only cheaper’ (Kotler
et al. 2015). The advertising strategies include stating the main message with humor in order to
make the content entertaining and attractive for the target customers. According to Pappas
(2016), this helps the business organization to build confidence and ensure an emotional
connection with the target audience. It uses various other advertising campaigns with attractive
slogans. These brochures and effective marketing strategies of the business organization enable
the business organization to promote its products and provide additional discounts and offers in
the stores. Further, Aldi is considered to be an unrivalled hallmark for its discount policies. This
foundation was laid by the company in 1913 (Tiago, M.T.P.M.B. and Veríssimo 2014). The
main principle of the company is the same as it was in the past “The highest quality – the lowest
price’’ (Tiago, M.T.P.M.B. and Veríssimo 2014). The mainly focus on high quality food and
offers it at the lowest price.
b) Recommendations to remain a successful organization
Ansoff Matrix
Aldi implements a market penetration strategy by selling the same products in the
existing market by their special buys, low price offers and additional discounts. This attracts the
customers to the store and increase sales and profitability.
Market penetration

9MARKETING
The business organization must am to increase its market share by increasing its
promotional activities and enhancing a distribution efforts of the company. Through increased
form of advertising and promotional activities, it can introduce the products and services at a
lower cost and high quality. Further, it is recommended to increase the range of products offered
to the diverse Australian population.
Product Development
Aldi must involve in extensive research, expansion of product range and development.
This will help the business organization to cater to the existing market. The firm must conduct
research to have a strong understanding of the customer’s needs and preferences in the
Australian market and respond to it. It needs to invest in research and development for
developing new products and services (Hussain et al. 2013). It can form strategic partnership
with the other firms to gain access to the competitor information. This will help the organization
to provide innovative solutions to meet the needs of the existing market.
Market Development
The business organization must cater to different customer segments and regions. It is
recommended to utilize its proprietary technology to leverage into the new markets, this will
help the business organization to gain new customers and increase the profitability (Hussain et
al. 2013). The consumers in the new market are highly profitable as they have new and
disposable incomes.
Diversification
As mentioned earlier, Aldi must consider increase the range of products and services of
the company. The products range offered can crater to the needs and requirements of the
customers as per the market research. For example, it can offer additional food items apart from

10MARKETING
grocery products such as kitchen items and crockery. Further, it can focus on authenticity and
freshness of the products offered as there is an increasing trend of healthy products (Hussain et
al. 2013).
Recommendations and suggestions
According to Winston and Mintu-Wimsatt (2013), the retail industry of Australia is one
of the highly established and competitive. The consumer tastes and preferences are dynamic and
are changing rapidly. The Australian consumers have many choices over the goods and services;
hence there is tough competition in the market. Therefore, it is recommended that Aldi must
consider the needs and preferences of the consumers and strategize accordingly. As mentioned
by Pappas (2016), the competitors in Australia have a huge market share and are working to
increase the market share by exploiting the existing resources. It is predicted that in future, the
competition in retail industry will be intensified. Therefore, it is recommended to bring
innovation to attract the customers and reach to the level of its competitors like Woolworths and
Walmart and maintain its competitiveness (Kotler et al. 2015). The presence of stiff competition
in the market can enhances the market share. Therefore, is highly challenging to maintain it.
Product quality is considered to be an important determinant in the market share. According to
Huang and Sarigöllü (2014), it is also recommended to maintain the quality offerings of the
products and services along with add on services. This can enable the business organization to
have a high and positive correlation with the performance of the business organization (Kotler et
al. 2015). As per the analysis, it has been identified that Aldi has been following the same
strategy since its launch. However, this approach of the business organization can be highly risky

11MARKETING
as there are constant changes in the tastes and preferences of the consumers in the market. The
lack of effective changes business goals and strategies can face difficulties in targeting the
consumers and control the operations of the business organization. However, according to Huang
and Sarigöllü (2014), Aldi has a scope of offering value added products and services. Therefore,
it is highly recommended to enhance its operations by provided online shopping facility with its
value added approach. Aldi can provide other facilities such as home delivery to enhance service
offerings. This can be implemented at ease especially in today’s context, where customer
satisfaction is main objective of every business organization (Hatfield-Dodds et al. 2015). Apart
of high quality and low price products and service, customer loyalty is also considered an
important criterion for remaining successful. However, customer loyalty is one of the great
issues of concern for the grocery supermarket chain. Australia is culturally diverse country with
various ranges of products and service. Therefore it is recommended by Greenville, Pobke and
Rogers (2013), to offer variety of products and services range than limited offerings. This can
attract more customers in the organization. The campaigns of the organization can be further
enhanced by upgrading the software system and demonstrating the difference of prices on the
advertising channels. This can help the customers to identify the difference of the prices and
attract the customers.
Conclusion
Therefore, from the above analysis, it has been identified that Aldi, mainly focuses on
five key aspects of marketing that is huge savings, buy with confidence, outstanding values,
excellent qualities and super special buys. The internal strengths and weakness of the
organization has been identifies as well as the opportunities and threats which impacts the

12MARKETING
operations of the business organization. Further, the generic strategies of the organization, the
cost leadership strategies and the differentiation strategies of the company have been identified.
The report has identified the costing and marketing strategies implemented by Aldi since its first
launch. The 4P's of marketing has been used to determine the product, price, place and
promotional strategies of the company. It has been analyzed that Aldi's main focus is to offer the
products at a lower cost and of higher quality. However, in today's context, the customer tastes
and preferences are changing rapidly. The report recommends the strategies to be implemented
by the company with the help of Ansoff matrix in order to attain sustainability. It has been
predicted that the prevailing competition in the Australian market will be intensified and this can
impact the profitability of the business. Further, the due to the diversified culture in Australia, it
is recommended to provide variety of products rather than limited offerings. It must consider
implementing online shopping options to attract customers and maintain its competitiveness.

13MARKETING
References
Aldi.com.au. 2019. ALDI Supermarkets - Good Different - ALDI Australia. [online] Available at:
https://www.aldi.com.au/ [Accessed 18 Sep. 2019].
Armstrong, G.M., Kotler, P., Harker, M.J. and Brennan, R., 2018. Marketing: an introduction.
Pearson UK.
D. Banker, R., Mashruwala, R. and Tripathy, A., 2014. Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Greenville, J., Pobke, C. and Rogers, N., 2013. Trends in the Distribution of Income in Australia.
Canberra: Productivity Commission.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Hallbäck, J. and Gabrielsson, P., 2013. Entrepreneurial marketing strategies during the growth of
international new ventures originating in small and open economies. International Business
Review, 22(6), pp.1008-1020.
Hatfield-Dodds, S., Schandl, H., Adams, P.D., Baynes, T.M., Brinsmead, T.S., Bryan, B.A.,
Chiew, F.H., Graham, P.W., Grundy, M., Harwood, T. and McCallum, R., 2015. Australia is
‘free to choose’economic growth and falling environmental pressures. Nature, 527(7576), p.49.
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132).
Springer, New York, NY.

14MARKETING
Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix, environment, and
growth-an interactive triangle. Management and Administrative Sciences Review, 2(2), pp.196-
206.
Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G., 2015. Marketing. Pearson
Higher Education AU.
Pappas, N., 2016. Marketing strategies, perceived risks, and consumer trust in online buying
behaviour. Journal of Retailing and Consumer Services, 29, pp.92-103.
Tanwar, R., 2013. Porter’s generic competitive strategies. Journal of business and
management, 15(1), pp.11-17.
Tiago, M.T.P.M.B. and Veríssimo, J.M.C., 2014. Digital marketing and social media: Why
bother?. Business horizons, 57(6), pp.703-708.
Winston, W. and Mintu-Wimsatt, A.T., 2013. Environmental marketing: strategies, practice,
theory, and research. Routledge.

15MARKETING
Appendix
Appendix 1: Aldi logo
Source: (Pappas 2016)

16MARKETING
Appendix 2: Australian food retail sector
Source: (Tiago et al. 2014)

17MARKETING
Appendix 3: SWOT Analysis
Source: (Gürel and Tat 2017)
Strengths Weakness Opportunities Threats
International
recognition
Lack of product
differentiation
Increased market
penetration
Increase in
competition
High quality standards
Lack of advertising
and promotional
tactics
Change in customer
trends
Limited use of
technology
Cost saving strategy Lack of well trained
staffs
Technological
advancements
Globalization attracts
more competitors
High quality, low
priced products
Inefficient use of
technology
Product
diversification
Threats from
competitors

18MARKETING
Appendix 4: Ansoff Matrix Model
Source: (Hussain et al. 2013)