Marketing Essentials: Comparing Marketing Mix Strategies of Aldi and Tesco

This report analyzes the marketing mix strategies employed by Aldi and Tesco, two prominent players in the UK retail sector. It compares their approaches to product, price, promotion, place, people, process, and physical environment, highlighting how these strategies contribute to their respective business objectives. The report also delves into the current marketing situation of Aldi, including internal and external analysis, SWOT analysis, and a proposed strategic plan for future growth.

MARKETING ESSENTIALS

Table of Contents
LO2: (P3, M3, D2).....................................................................................................................3
Part A.........................................................................................................................................3
P3: Compare the ways in which different organizations apply the marketing mix to the
marketing planning process to achieve business objectives (M3).............................................3
LO3: (P4, M4, D2).....................................................................................................................8
Executive....................................................................................................................................8
Company Overview...................................................................................................................8
Current Marketing Situation Analysis.......................................................................................9
Internal analysis.....................................................................................................................9
External analysis..................................................................................................................10
SWOT analysis.....................................................................................................................11
Objectives.................................................................................................................................13
Strategy....................................................................................................................................13
Segmentation, targeting and positioning (STP).......................................................................14
Tactics & Action......................................................................................................................14
Budget......................................................................................................................................14
Control......................................................................................................................................14
Conclusion................................................................................................................................15
References................................................................................................................................16

LO2: (P3, M3, D2)
Part A
P3: Compare the ways in which different organizations apply the marketing mix to
the marketing planning process to achieve business objectives (M3)
The framework of marketing for any company is its marketing mix. These marketing mixes
has previously been defined for being a list of marketing tools, which the company uses for
reaching the aim and goal set by the organization. Previously there have been four marketing
mix, namely, product, price, promotion and place. Later, they have been extended to seven
from four. They are product, place, price, promotion, people, process and physical
environment (Kotler, 2015).
7ps MARKETING MIX ALDI TESCO
Product ALDI has a large variety of
grocery and home products
of healthy living, ALDI
products under the same
brand name, products for
infants and babies and home
goods. In addition to that,
they have various recipes and
tips. They include main
course, side dishes,
appetizers and snacks,
desserts, beverages,
breakfast, kids’ craving
products, recipes for holiday
and other such aspects.
There is a large variety of
products in Tesco. They include
clothing, food, financial
services, electronics and other
products and services. The
service and product services
expand substantially and so the
company has ventured into the
sector of online marketing as
well. The company offers
delivery services for grocery
and people are able to download
free music too. Apart from these
services, the company has over
forty thousand other lines of
product that are exhibited in
their retail stores. Within each
of these categories, the
company provides a large
variety of choices ranging from
regional produce, type, brand,
overseas food cuisines and

every other service that a
customer may look for in a
retail company.
Place ALDI is a German base
brand, operating since 1913.
It has its headquarters in
Essen and Mulheim, both of
which are in Germany, Aldi
Nord and Aldi Sud to be
specific. Its operations in
Germany have thirty-five
regional companies
individually for ALDO Nord
and have over two thousand
stores in Northern, Eastern
and Western Germany. On
the other hand, ALDI Sud
has thirty-two regional
companies with over a
thousand stores in the
southern and western
Germany. In the overseas
basis, it operates in quite a
number of companies,
France, China, Australia and
Denmark, to name a few.
TESCO has its headquarters in
England, Hertfordshire and
Chestnut. The company has its
stores spread in the rest of the
world. Two primary distribution
channels are employed by their
services and products, offline,
as well as online. There are six
different kinds of stores in their
online forum forums. There are
Tesco Extra, Tesco Express,
Tesco Compact, Tesco Metro,
Tesco Superstore and Tesco
Homeplus. The survey done by
the company shows that all the
customers and consumers are
not comfortable and habituated
with big stores like the ones
that Tesco has and it is also not
possible for setting up so many
stores for them. So the company
uses small stores so that the
people have ease of
accessibility.
Price One of the key strategies that
Aldo has is offering good
quality product at low and
affordable prices, especially
if it is bought in large
quantities. Aldi too buys
large quantities of products
that allows great influence
for negotiating the prices
The company tries to maintain
low and affordable prices
without compromising on the
quality of the company’s
quality’s products and services
that would take them to the path
of losses eventually. Keeping in
mind the price affordability for
its customers and trying to
make them happy and satisfied,

with the suppliers. It is
known as economies of
scale.
the company uses various
measures that include the
economies of scale. The plan of
maintaining low prices by the
company helps them maintain
its customer range and helped
them to expand and be one of
the largest supermarkets of
Britain among many other
potential competitors, one of
them being Sainsbury.
Promotion The advertisement
campaigns through television
consist of a twenty-second
advertisement of “Like
Brands”. Their slogan is
“Like Brands. Distribution of
leaflets is also done within
the store and its localities.
The biggest advantage that
the company has is its
maintenance of low prices,
and this is what keeps the
company differentiated from
the other similar
supermarkets chains and
keeps up its brand image.
The company also adverts in
newspapers and puts up store
posters within the store for
highlighting the message of
“Swap and Save”.
The company also uses
social media, emails, awards
The biggest advantage that the
company has is its maintenance
of low prices, and this is what
keeps the company
differentiated from the other
similar supermarkets chains and
keeps up its brand image. The
main objective of the company
have consistently been the
improvement of the image of
the brand with the reduction of
costs and staying honest to the
values of the company with the
maximization of their profit
scale. For meeting its
objectives, it advertises by
offering promotional discounts,
advertisements through
television, sponsorship of
charitable events, utilizing sale
strategy points and many other
mediums.

and endorsements of third
parties and media and public
relations..
People People are related to the
company by Aldi’s line method
for highlighting the product
quality through the
endorsements of the third
parties. Over a thousand of its
products have been awarded. In
the year 2012, Watchdog has
awarded the company for being
the best supermarket, beating its
competitor, Marks and Spencer.
There have been positive
endorsements in the television
for their products for
confirming the quality of the
products. The people are
attracted with the quality of
products that are offered at low
prices.
The company has excellent
department of sales that has
very efficient employees who
are largely responsible for
bringing in profitability and
success of the company.
different facilities are provided
by the company to its workers
and employees for gaining their
loyalty. There is a high level of
healthy competition among the
employees and their
contributions are highly
compensated by the company.
Process As the company focuses
middle and lower classes of
the society, it surveys the
economic condition of the
people and check the
affordability. After the
assessment, the company sets
the prices. Aldi offers
average quality products.
The improvement of product
quality is a continuous
process in the company for
bringing in innovation, as it
is an integral part of the
The process involves the
methods of keeping its
customers satisfied and happy
by speeding up the billing
services, also the easy
availability of the products in
the online as well as offline
stores. The company achieves
its goal by hiring competent
employees and providing
required attention to the
customer feedbacks and issues
that they have problems with.

management of the business.
Physical environment It is essential for any
business to grow and
distribution is an integral part
of the process. Aldi uses the
strategy of capturing large
shares of the market and
distributing the products to
the customers at large. The
potential customers of the
company are the middle
earning categories of people of
the society. Their supermarket
chain is opened in the whole of
the world including US, U.K.
and Australia (Armstrong, et
al., 2014).
The stores of the company are
not elaborated overly like that
the Sainsbury stores and other
similar grocery stores as Tesco
does not believe in incurring
unnecessary amounts in
furnishing and setting up of
stores that are not required.
However, the stores that
company has are attractive and
clean. The products are finely
segregated so that the customers
find the products easily as
required by them. There are
offers that help the customers in
getting more that what is
required within the affordability
range of them such that the
value for money increases. The
website that Tesco has is also
easy to operate and simple
(Steenkamp, 2017).
Table 1: Comparison of marketing mix strategies between Aldi and its Key Competitor
(Tesco) in the UK Retail Sector
Source: (Created by the Author)

LO3: (P4, M4, D2)
Executive
ALDI has successful supermarket chain with over 10000 stores in all around the world. In
order to research on the given topic, current marketing situation of the company including
internal analysis, external analysis and SWOT analysis is also provided in this report. SWOT
analysis will help to gather knowledge about the overall condition of the company.
Companies objective regarding business achievements and all the strategies that are taken by
the company for attracting the targeted audience has also provided in this report.
Company Overview
ALDI has a long supermarket chain in all around the world (Vorley et al., 2016). The
company has succeeded in reaching a new level of success through serving valuable products
to their customer with more customer satisfaction and reliability. ALDI is a German based
company, which was established in the year 1946, 23 rd June. Karl Albrecht and Theo
Albrecht are the main founders of this successful retail company, who started their journey
many years ago (Brandes and Brandes, 2015). Founders of the company dreamed in the year
1913 of making this such retail company. After 33 years, the founders got succeed to start the
company. The company has products such as foods, beverages, sanitary, articles and
household goods to serve their millions of customers in all around the world. The company
has over 10000 stores in more than 20 countries. The company has a huge numbers of
customers who are belonging from Belgium, Netherlands, France, Poland, Spain and many
other countries from the whole world. Therefore, the company is getting a huge amount of
profit which helps a lot in enhancing their business in all around the world. As per the
recorded data, it can be considered that the company is gaining a large amount of profit
through offering services in all around the world. Last year the company got the turnover of
50 billions of pounds from this retail business. This huge amount is quite helpful in sustaining
their business in the current competitive market. Millions of employees are engaged in the
company for serving the various products to their customers. The company has started his
journey in the year 1913 from Germany. But in the year 1990, the company arrived in the UK
to enhance their business. The company mainly focuses on offering their customers best class
of services with more customer satisfaction and reliability. Nowadays people uses internet

indiscriminately for their daily use. The company is also taking the help of internet facilities
to grab the attraction of internet users (Chianese et al., 2017. The company is connected with
millions of customers through internet for serving various products of their company. In this
process, the e-commerce website helps the company to get the huge number of customers of
different 20 countries.
Current Marketing Situation Analysis
Internal analysis
1. Customer: The company is passionate giving utmost importance to its customers and
service users, them being the focal point of the company. This means that the company
strives to bring about the best of their abilities in the aspect of offering the best products to
the people. For instance, they have a “Super 6” department that offer a variety of fresh
vegetables and fruits. The labels of the company ensure the contents and details of each of the
respective products that are being bought by the customers. the products also ensure that their
food products have a marginal amount of salt and sugar, keeping in mind the health factors of
the customers. their potential customers are from the middle to low economic society and the
prices of each of the products are decided accordingly (Voigt, et al., 2017).
2. Competitor: In 2016, Aldi had a market share of seven percent. Tesco had a market share
of 28.2% in the grocery market of the United Kingdom. Sainsbury had 0.4% and Asda had
5.2% (Gielens, 2018).
3. Supplier: Aldi has a constant requirement of suppliers for their large variety of products
labeled privately. In the US, they are among the retailers who are growing the fastest pace
when compared to others as they have over fifteen hundred stores across thirty five states. It
serves over forty million customers per month. Therefore, there is a constant opportunity of
growth with them as a supplier. The company wants to build healthy and long term
relationships with its suppliers for offering the products at the best of their quality (Maile and
Hanna, 2015).
4. Employee: Aldi has over thirty thousand employees in Ireland and the United Kingdom
and has a target of creating another thirty five thousand and more by the end of 2020. The
employees are their biggest assets and brilliantly efficient. The company works hard to create
a cooperative and friendly atmosphere as a workplace for the employees where they feel

themselves to be an important part of the incredible team. The company offers job security to
each of its employees, along with the investment of effective training courses every year for
developing the personal abilities of the employees (Brandes and Brandes, 2015).
External analysis
Political Factors Based on the origin of the company, there are
high levels of political venerability and conflicts
that threaten the effective presence globally.
However, the countries where Aldi prevails are
free from such political disturbances and Aldi
faces low threats.
As Britain decided to leave EU, the firms situated
in the European countries that are of British
origin are in uncertainty.
Economic Factors Post Brexit, the value of pond has dropped and
the prices in the United Kingdom have risen. This
situation has been favorable for Aldi and the
company has risen since the past two years. As an
effect of inflation, the customers have to spend a
considerable amount for the same product that
they have been buying previously. However, Aldi
being a discount supermarket, the customers have
faced n advantage due to the situation for finding
cheaper products (Sivalingam, 2018).
Social Factors The company is the most paying supermarket in
the current times in the United Kingdom for
raising the wages and salaries of three thousand
employees beating Lidi in this aspect of
providing salary increment. As the company pays
higher wages and salaries to its employees, it
allows the employees to have a better standard of
living with the affordability of better food,
exercise means, healthcare, benefiting society
and other such factors. The company aims at
teaching over a million children in the country of
the United States, healthy food habits.
Technological Factors To aid the service propositions of the company, it

is turning to technology, increasingly. With an
increment in the number of customers who
expect efficient and effective check-outs of self-
service from the providers of grocery. The
company is yet to take in such technological
advancements for being efficient and quick in
providing customer service (Moutinho and
Phillips, 2018).
Environmental Factors Aldi stock their products increasingly from local
farmers and producers in Britain that help in
supporting local producers for ensuring the
sustainability and maintenance of the local areas
where they are in operation. This will help the
expansion of the primary sectors and providing
them with a market for selling their products.
Legal Factors In the previous years, the industry of supermarket
in the United Kingdom has frequently been
affected by dishonor factors that affect the food
products’ content. In the year 2016, the company
had also found itself guilty regarding legal issues
for presenting wrongly the company’s sales of
herbs where Watchdog had found leaves of olives
in the oregano products (Rahman, 2015).
Table 2: PESTLE analysis for Aldi
Source: (Created by the Author)
SWOT analysis
Strengths The sales of Aldi had risen by 19.85% when
compared to the four big supermarkets of the
United Kingdom, Morrisons, Tesco, Sainsbury
and Asda, as their sales grew with a small
percentage of 1.6% merely. The growth of Aldi at
a rapid pace has witnesses the firms market share
altogether to rise by 12% with a result of
approximately 1.1 million customers additionally

who visit the stores. Aldi’s reputation is one that
provides comparable quality with that of the
leading brands at visibly lower prices which is a
very big strengths for Aldi according to its chiefs.
Parents Awards also name the company as the
best supermarket for the year 2017 for the fourth
time in the Loved (Haleem and Jehangir, 2017).
Weaknesses Regardless of Aldi as a discount retailer, there
still had to be an increment in prices of some
particular products that include primary
groceries, of bananas, milk because the decrease
in the value of pound had hit that has deviated
them from their otherwise cheaper prices. In the
process, Aldi had just been one penny cheaper as
compared to Tesco, Sainsbury’s, Morrisons and
Asda having the same price. In spite of Aldi
having a growth in the year 2017, there is still a
large gap between the four leading supermarkets
in Britain with respect to market share. Tesco had
had a market share of 28%, Sainsbury had a
market share of 16%, Asda having a market share
of 15.1% and Morrisons having market share of
10.6% (Grundy, 2017).
Opportunities In recent times, a variety of Aldi products is
named as the best products around the world.
they can also be taken as an alternative for high-
end products. A product called Aldi Gin that is
named as one of the best products in the world, in
spite of the cost being less than £10. Another
product named Lacura exfoliating masks that the
beauty bloggers have being saying time and again
for being a very good product and a replacement
for its costly versions from other brands. Aldi
thus has an opportunity for keeping up the
expansion and development of these products.
Aldi has a planning of creating over four
thousand job opportunities in the United

Kingdom as a part of its plan for business along
with the increment of sales and opening up of
new stores up to a thousand at the end of the year
2022. Aldi can also opt for a strategy that is quite
similar to that of Tesco’s for having a presence at
the main streets and places across the city with
the opening of Express stores that will have
necessary items that are required by the
customers (Swaramarinda and Nurmalasari
2017).
Threats After Amazon taking over, UK’s supermarket
industry there is anxiety about the taking over of
market share of Amazon. As there are only nine
subsidiaries in the United Kingdom of Whole
Foods, Aldi is worried about Amazon taking over
the market and Aldi in losing its share in the
market.
Table 3: SWOT analysis for Aldi
Source: (Created by the Author)
Objectives
The company can aim at innovating more products that could potentially replace the high end
similar products by other brands to provide a great competition in the market as the people
will probably tend to buy products that do not compromise on quality as well as are low in
price when compared to the similar other brands.
Strategy
For implementing the above mentioned objective in the operational plan, the company will
need to hire a research and development team who will study the high end products in the
market and innovate products of the own company that will be cheaper and have quality as
those of the high brands. The team will innovate, promote the product in the potential market,
and provide PR packages to the individuals who have the ability of influencing the society.

Segmentation, targeting and positioning (STP)
Segmentation: The market can be segmented according to the economic, age, and other social
conditions for which the company will be innovating a particular product. This will require a
proper market survey.
Targeting: The target market and potential customers need to be identified through the survey
itself and promotional activities have to done among the identified target market.
Positioning: The distribution of the products will be done through placing and positioning of
the products in each of the segments and in the billing counters so that they are noticeable to
the potential customers. The advertisements also need to be attractive enough for the target
customers.
Tactics & Action
The wise identification of the potential strategies of the other competitive companies of the
brands selling the similar product needs to be done. This will show the driving factors for the
product of the brand that creates craze among the people in the market for the product.
Based on the identification of strategies, the company needs to make an operational plan for
itself to provide a strong competition for them.
Budget
For innovating the new product the company will require £9000, the advertisement team will
incur a cost of £5000, the distribution of the products will incur £4000 and the promotional
campaigns will incur £2000. The amounts are laid down approximately and may vary with a
difference of a small amount.
Control
Definite monitoring team needs to be put in action for assessing the previous activities and
making changes if required. The future activities also needs to be planned out according to
the needs and requirements for innovating the product and bringing in its productivity.

Conclusion
After the assignment it can be concluded that Aldi is a potential retail market that has enough
opportunities of expanding in the market with the implementation of new tactics and
strategies. If the threats and drawbacks are removed with strong organizational plans, it has
the potential of expanding rapidly and providing substantial competition for the other retail
companies in the place.

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