Marketing and Management

This study material explores the concepts of marketing and management, focusing on the external environment of Aldi supermarket. It covers topics such as PESTEL analysis, new product development, segmentation, targeting, and positioning, and the marketing mix. Gain insights into the strategies for growth and success in the competitive market.

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MARKETING AND MANAGEMENT
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MARKETING AND MANAGEMENT 2
Contents
Introduction............................................................................................................................................3
PESTEL analysis of Aldi.......................................................................................................................4
Political factors...................................................................................................................................4
Economical factors.............................................................................................................................5
Social/Cultural factors........................................................................................................................6
Technological factors.........................................................................................................................7
Environmental factors........................................................................................................................7
Legal factors.......................................................................................................................................7
Introduction to the new product and justification..................................................................................8
Segmentation, targeting, and positioning..............................................................................................9
Targeting............................................................................................................................................9
Positioning..........................................................................................................................................9
Marketing mix for Afya mixed drink..................................................................................................10
Product..............................................................................................................................................10
Price..................................................................................................................................................11
Place.................................................................................................................................................11
Promotion.........................................................................................................................................11
Conclusion...........................................................................................................................................12
References............................................................................................................................................12

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Introduction
A company developing a new product has to carry out thorough research with the aim of
determining whether the new product is needed by consumers. There are a variety of formulas that
companies use to develop a new product. One of the strategies is to identify the need in the market
and then design a product to fulfill the requirement. The other approach that companies use to
develop new products is the push strategy (Plunkett, Jack &Plunkett, Jack 2009). This is where a
company produces a new product and then creates demand for the product by aggressively
marketing the product. Whichever approach is used, it is essential to carry out thorough market
research to understand the internal and external environment. This report discusses and analyzes the
external situation of Aldi Supermarkets. Aldi supermarket is the sixth largest supermarket retailer in
the UK. A German family owns the company, and it operates more than 10,000 Cities across 20
countries globally. It has an estimated combined turnover of approximately $50billion (Rosenberg,
2018). The products offered by the company include Food, Beverages, Household goods as well as
sanitary products. Aldi launched in Great Britain in the year 1990 when it opened its first store in
Stechford, Birmingham. The supermarket chain operates more than 775 outlets in the UK alone

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(Kumar & Steenkamp, 2016). Aldi The report uses the PESTEL analysis method to analyze the
external environment of Aldi supermarket. The strategy will help in understanding the strengths and
weaknesses of the company. In addition to this, it will assist in identifying and profiling competitors
to keep up with the competition in this industry. The challenges facing the company and the
potential opportunities that can be exploited by the company for future growth are also determined in
this report. The next section of this report defines a new product that the company should introduce
into its UK market. A clear justification on why the product was chosen is provided in the report.
The strategy of launching the product to customers and marketing the product is discussed in this
report.
PESTEL analysis of Aldi
Political factors
There are a variety of political issues that impact operations and performance of Aldi. One of the
political factors is that the company operates globally with its headquarters in Germany. This,
therefore, means that Aldi`s performance and operations are greatly influenced by the political
environment that prevails in the European Union. For example with the decision of the UK to leave
the EU, Aldi will be affected in many different ways. Brexit may mean that a company like Aldi
which is not primarily based in the UK may not enjoy the privileges such as favorable taxes it
enjoyed while the UK was still part of the EU. The EU may also come up with new regulations that
may impact the operations of Aldi after the Brexit.
The UK is a very peaceful country and hence providing a conducive environment for companies
such as Aldi to carry out business. However, in recent years, the state has faced a severe threat of
terrorism just like many other countries in Europe and also globally. Terrorism acts inflict fear in
people, and this may discourage investments and hence interfere with the business environment.

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The government of UK encourages companies to provide a balanced mix of job opportunities
from highly skilled to semi-skilled jobs. The government requires that priority is given to citizens of
the UK when opportunities arise. Aldi understands its contribution to employment in the UK, and it
employs a large number of students, disabled, local and non-local employees without discrimination.
Economical factors
Uk`s economy is robust since the country has the largest GDP in Europe after Germany. The
economy of the country has also been growing at an impressive rate despite the political challenges
that the state has experienced since 2015. The impending exit of the UK from the European Union is
expected to hurt the UK economy. Most economists including the UK Treasury say that being in the
EU has a positive effect on trade and hence leaving the EU would result in a decline in business.
Brexit will reduce the real per-capita income of UK. This is because Brexit is expected to create new
trade barriers which did not exist before. The decision will also affect foreign direct investments and
even immigration. These factors would, directly and indirectly, impact on the performance of Aldi in
the UK.
There is minimal government interference when it comes to the retail industry in the UK.
Skilled and non-skilled labor is available in the UK, and this, therefore, means that the company has
a tremendous opportunity to take advantage of highly trained and qualified employees. The cost of
labor in the UK is high as a result of government legislation. Interest rates by banks are expected to
increase in the foreseeable future because of the increased lending risks. Stability of exchange rates
is another economic factor that impacts on the performance and marketing mix of Aldi. Stable
exchange rates are good for business since companies can plan for the future with some degree of
certainty.

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Social/Cultural factors
The population of the UK is declining at a high rate, and the proportion of the aged people is
increasing. This means that in the future, the country may experience a labor shortage and hence
increasing the cost of labor. In addition to this, the shrinking population means that the target market
will be small and consumption will decline. Therefore, Aldi will experience a decline in sales since
older people spend less compared to young working adults.
The differences in culture of shoppers in the different countries in which Aldi operates could
impact on the performance of the company. Customers in Germany have a different culture from
those of Australia (Krafft & Mantrala, 2010). UK customs have a culture of buying quality goods
without putting much emphasis on price. However, this trend is changing due to the rising costs of
living, and hence the buying behavior of the majority of customers is changing and thus forcing
customers to compromise on quality (Couto, Plansky & Caglar, 2017). Customers in the UK have
moved towards one-stop bulk shopping, and this has forced Aldi to increase the quantity of non-food
items on offer in their stores. In addition to this, research on market trends indicates that most
customers do not have enough time to prepare their meals at home. This, therefore, means that Aldi
should focus on products and services with added value.
The British societal is getting increasingly aware of health issues which are associated with
lifestyle and types of food consumed. Customer’s attitudes towards foods are changing, and this has
led to an increase in demand for organic products.
Aldi is currently the highest paying supermarket in the UK. In the year 2017, the company gave
more than 3000staff members a pay rise in a bid to overtake fellow German discount store Lidl.
(Daft, Kendrick & versioning, 2010) This led to improved living standards for the workers and
hence improving motivation. Aldi aims to benefit more than 1.2 million children in the UK through a
program that was launched to teach children healthy eating habits.

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Technological factors
Technological factors are one of the main factors impacting the performance of any business
recently. This is because, technology contributes to improvement in efficiency and most customers
have embraced technology (Dombret & Ebner, A. (2012). Therefore, to remain relevant in the
competitive business environment, it is essential that businesses stay aware of technological factors
that may impact on their businesses. Some of the technologies that Aldi uses in its stores include
intelligent scale, Electronic shelf labeling and Radiofrequency Identification (Kolster, 2012).
Environmental factors
Aldi stocks products from local British producers and farmers. This helps in supporting
sustainability and encouraging ecological conservation. Part of Aldi`s corporate social responsibility
is to ensure that the company sources its products from suppliers who are known to ensure
sustainability in its production processes.
Legal factors
The UK market is highly regulated and hence making it difficult for other multinational
companies to join the industry. All companies are required to show nutrition facts on their products.
The Food Retailing Commission (FRC) regulates the standards of food products sold in outlets like
Aldi (Hubbard & Galvin, 2014).
Introduction to the new product and justification
The product that Aldi will introduce to the market is a beverage that will be called Afya. Afya is
a non-carbonated drink that will be made by a concoction of highly nutritious organic goat milk and
raw honey. The other ingredients that will be used in making the product include water and natural
flavor of either mango, pineapple of Orange. The product will be made of natural products, and it
will not undergo much processing which could ruin its nutritional value. The raw materials that will
be used in making Afya will be sourced locally and abroad. The goat milk will be sourced from

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farmers who will be contracted by Aldi to ensure that the milk is of the highest quality and it’s very
healthy. In addition to this, the farmers supplying the milk will have to ensure that the animals are
not treated on antibiotics and that there are strict guidelines pertaining to outdoor grazing (Cameron
&Heywood, 2012). The honey used in making the product will be sourced from Argentina and New
Zealand.
The inspiration for introducing The ALDI Afya drink emanates from the increase in demand for
healthy organic products by customers in the UK. Research indicates that customers in the UK are
becoming increasingly sensitive about what they consume (Sreenivasulu, 2017). This is due to an
increase in health complications and illnesses which can be attributed to diet. In the year 2018,
organic food and drink sales in the UK rose by 9.5% to $2.7billion. Organic Market Report indicates
that the demand for organic products is going to increase by 25% by the year 2023(Hitt, 2017). This,
therefore, means that the future for organic products is bright. Introducing the Aldi Afya organic
honey and goat milk drink will offer customers a completely new healthy product which provides
value for their money. From the research on market trends, Aldi expects to achieve sales of
approximately $10 million in the first (Couto, Wiley, Plansky and Caglar, 2017).
Segmentation, targeting, and positioning
The marketing strategy will be very important for the success of the new product in the market.
It is therefore important to identify the strategy that will ensure that Aldi Afya drink becomes a
favorite organic honey and goat milk drink for consumers. For this new product to become
successful in the market, Aldi has to ensure that the market is segmented appropriately (Stengel,
2011). To market the product, Aldi will segment its market geographically. Aldi operates in more
than 20 countries, but this specific product is specifically targeted for the UK market. The company
will advertise and market the product in all Aldi stores in the UK. The company will also segment
the market demographically. Afya drink will focus on children and young adults. Marketing of the
product will focus on people of between 5 and 20 years because they need the nutritional and health

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benefits that this drink offers consumers (Niemeier, Zocchi & Catena, 2013). Children who consume
Afya drink will develop strong bones and immune system while growing up and this will be very
important for the future.
Targeting
Afya beverage will target people who are sensitive to their health and hence are very cautious
about what they eat. This segment of consumers is interested in high quality products which are
healthy and nutritious. Statistics indicate that older people are more cautious about what is consumed
and the health benefits of the food that they consume (Hitt, Ireland &Hoskisson, 2017). The
marketing efforts of Aldi will, therefore, target parents with kids above the age of five years. Parents
will always wish the best for their children and are interested in ensuring that their kids consume
healthy foods.
Positioning
Afya drink will market itself as a high premium quality organic cold beverage which is rich in
taste as well as having unique nutritional and health benefits to consumers. Aldi is a product that is
beneficial to both the young and old due to the health benefits that it has on a human body. Aldi is an
everyday soft beverage which is free from any chemical contamination which may be harmful to the
body of a human being since it’s is made from organic materials, and it contains artificial
components (Zentes, Morschett & Schramm-Klein, 2007).
Marketing mix for Afya mixed drink
Marketing mix will be important for the company to market the new product to help the
company achieve its objectives. Marketing mix involves offering the right product at the right price,
at the right time and right location.

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Product
Customers in the UK are longing for food products that are healthy and have health benefits for
the consumer. This is because customers in the UK have become increasingly sensitive to the type of
food they consume. To meet this customer need, Aldi has introduced a new Afya. A new organic
drink made of a mixture of honey and goat milk. The product will be packed in 500ml and 1ltr
packs. The 500ml will be suitable for one time serving while the 1ltr package will help the
consumers to consume the product in two servings. The product will be branded in color white and.
Pictures of honey and milk will also be in the packets of Afya drinks to convey the contents of
conveying the message to customers and to make the package attractive to customers (Dombret &
Ebner, 2012).
Afya is highly differentiated from it's competitors. Most of the other products in the organic
drinks industry are focused on fruit juices which are not organic (De, K. C. A., & Business Expert
Press. 2010). The other competitors of Afya drink are mainly organic fruit juices. There are no other
companies in the UK which offer customers a mixed drink of goat milk and pure natural honey.
However, there are several organic pure milk and honey brands in Uk. These brands will offer stiff
competition to Afya drink, but our Afya drink has a competitive advantage over rivals since it is the
first one in the market. At the same time, the product offers more nutritious and health benefits than
rival brands.
Price
Price is a critical component of the marketing mix. It is essential to set the right price for our
product since it is one of the most important considerations for every customer (Leinwand, Mainardi
& Kleiner, 2016). One of the critical factors considered when setting the price of a new product is
the price of competitors as well as the cost of production (Dahlén, & Lange, 2008).Afya organic
drink will retail at $4.6 for the 500ml bottle while the 1ltr bottle will retail at $7.2. The price has

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been set while considering the production cost and the fact that the product is premium and hence
the high price.
Place
Afya organic drink will be sold in all Aldi stores in the UK. The product will exclusively be
available in Aldi stores only and will not be sold by any other retailers. Additionally, Afya drink will
be available to customers who shop online and hence ensuring effective distribution of the product
(Dart & Lewis, 2017) The Company will not use any intermediaries in its distribution channel and
therefore ensuring that the cost of the product remains low.
Promotion
Product promotion involves communicating with customers about the products, its benefits, and
features. After the launch of Afya organic drink, Aldi will carry out promotional activities to make
customers aware of the product and entice them to consume the product. Aldi will use fliers and
ABS posters to create awareness at Aldi stores. This will help to communicate about the features of
the product and the price of the product. A promotional campaign will be run, where a customer will
get a discount of 30% every time they buy three 500ml bottles of Afya drink. Aldi will also run
adverts on its social media pages as well as on its website to create awareness of the product.
Conclusion
Aldi discount store is one of the leading retailers in the UK. There is very stiff competition in
the UK retail industry. Customer tastes and preferences have also changed over the years. It is
therefore important that companies keep revolving and offering customers products that meet their
needs. Aldi has come up with a new organic drink which is made of a mixture of honey and goat
milk. The paper discusses the external environment of the company using PESTEL analysis
technique. The article also discusses the growth opportunity for the product and how it is

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differentiated from other products in the market. The report also discusses market segmentation,
target marketing, and positioning. The marketing mix of the product is also discussed in this report.
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Couto, V., Wiley, E., Plansky, J. and Caglar, D., 2017. Fit for Growth: A Guide to Strategic Cost
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