Marketing Strategy for LIDL in the UK Grocery Retail Market

This report analyzes the UK grocery retail market, focusing on LIDL's marketing strategy. It examines market trends, competitor analysis, and consumer segmentation. The report then proposes a detailed 7P's marketing mix model to target identified segments, addressing challenges and risks. Recommendations are provided to enhance LIDL's market share and drive growth in the UK.

INTRODUCTION TO MARKETING

EXECUTIVE SUMMARY
Marketing in the business is the important technique that supports in bringing more revenue to the
businesses. The report marketing include marketing strategy, models, concepts, key components that are
important for the business sustainability and managing market share. The LIDL is the organization that
is been making efforts to move as quickly as possible to reach till the competitors like Tesco, Sainsbury
and Morrisons. The key result of the summary is brand quality product offering with reasonable pricing,
improvement in official websites of LIDL and restricting the new entry so market share did not reduce.

TABLE OF CONTENTS
Introduction..................................................................................................................................................1
Task 1...........................................................................................................................................................2
Conduct the market research on the current UK grocery retail market...................................................2
Task 2.........................................................................................................................................................10
Conduct research on the UK population to determine which segments will provide “Lidl” Company
with a higher yield of consumers...........................................................................................................10
Task 3.........................................................................................................................................................16
Proposed market plan develop a detailed 7 P’s Marketing Mix Model to target the identified segment
covering.................................................................................................................................................16
Recommendations in tackling the challenges and risks........................................................................19
Conclusion.................................................................................................................................................21
References..................................................................................................................................................22

LIST OF FIGURES
Figure 1: Grocery retail store.......................................................................................................................3
Figure 2: BCG matrix..................................................................................................................................8
Figure 3: Demographic segmentation factors............................................................................................11
Figure 4: Psychographic segmentation factors..........................................................................................12
Figure 5: Behavioural segmentation factors..............................................................................................13
Figure 6: Marketing mix............................................................................................................................16

LIST OF TABLES
Table 1: Market share of different UK supermarket chain..........................................................................4
Table 2: SWOT analysis..............................................................................................................................5
Table 3: Competitors matrix........................................................................................................................7

Introduction
Marketing is the activity, institution sets and procedure for developing, sharing, exchanging and
delivering that includes customer value, partners, clients and society at large. It is also the study and
supervision of relationships exchange. Further, marketing is used to develop, keep and customer
satisfaction is done. As the customer main focus, it can be summarised that marketing is one of the
important element of business management the next is being innovative. In this, the term marketing
concept is also important that supports in meeting the organizational objectives and considers the needs
and wants of the customers. In the marketing concept, the three basic points has to be considered that are
needs, wants and desires. Marketing research is also carried out in marketing so as to bring the new
product improvement and development with determining the consumer not achieved demand.
In the current report, the study will focus on the retail grocery market of the UK by taking LIDL
evaluation. In the next task, consumer segmentation is done which will based on socio-demographic,
psychographic and behavioural variables for carrying out the target market for LIDL. The next task will
provide the marketing model along with the theories of product description, brand image, pricing
objective strategy, integrated marketing communications objectives along with retailing and distribution
activities as well. At the end of the report, the study will also provide the recommendation for
improvement in marketing activities to meet the determined challenges and risks presented in the
marketing system.
1

Task 1
Conduct the market research on the current UK grocery retail market
Market research supports the organizations to know about the current opportunities and threats along
with the taste and preferences of the customers. The marketing manager and team can collect the
information about the current trends, statistics, SWOT, PESTLE, competitor’s matrix, BCG and Ansoff
matrix for the UK retail industry (Sheth and Sisodia, 2015). The market research can be done from both
the resources that are primary and secondary research. The primary research will be done through
collecting the real information and statistics by going live into the UK market while secondary is simple
and consumes less time as compare to the primary market research. In secondary market research, the
information is collected through online journals, books and articles. The below market research includes
the following points such as:-
Overview of the UK retail grocery market
The UK grocery sector is the most primitive market around the world. The four leading chains in
supermarket fight fiercely in search of customers with the growing fame for the discount chain. Thus the
grocery sectors consistently document the strongest growth in UK moved by latest and advance grocery
retailers. Convenience stores, online grocery retailing and discounts are the latest formats that are
showing the strong global expansion. Till 2020, the entire value of the grocery market UK will grow
from 9.9% to 196.9 billion pound. In the next five years, the online shopping on account of grocery will
raise to 68%. The food prices in UK have been lowered down due to the fact on competition and
discounts (Hood et.al. 2016).
Further in the last few years, the UK has seen an outstanding shift is that how the customers buy’s the
products by the discounters and online which is ruling in the market. In 2016, ALDI introduced the
“Special Buys” and “wine online” and in UK the Amazon Fresh was also launched.
Current trends and statistics
The UK grocery market was valued at $239.8 billion in 2017 June. It is the enhancement in the 0.3%
from 2016 and grocery stands for 9% of the entire spending of the household in UK which makes third
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greatest area of expenditure after housing and transport. There are total 87141 grocery stores of the UK
and it is divided into four sectors:-
Supermarket chains: The main sales area of supermarkets is 3000-25000 square feet and sells the big
range of items of grocery. Superstores are means as the store that includes area above 25000 square feet
that sells the big range of grocery and non food product.
Convenience stores: less than 3000 sq ft area and remain open for longer duration and sale out the
products for minimum eight different grocery categories (Tomczak et.al. 2018).
Traditional retail and developing convenience stores: It also has less than 3000 sq ft and involves green
grocers, stores of liquor, gas stations and new stands.
Alternative channels: It involves big range of outlets such as catalogue home, shopping, internet, market
for farmers and other produce.
Grocery retail structure
Figure 1: Grocery retail store
(Source: UK grocery retail stores, 2018)
3

After identifying the structure of UK grocery store, the next is to identify the major market segments
that includes supermarket chains, discounters, and internet or online shopping, click and collect
convenience store and many more. In UK around four supermarket chains dominate the UK food
retailing which accounts around 70%. The first is the Tesco stands at 28% market share, next is
Sainsbury with 16% market share, then ASDA with 15% market share and last Morrisons 11% market
share. In addition, there are other supermarket chains that include The Coop, Aldi, Lidl, Iceland and
Waitrose (Babin and Zikmund, 2015).
The ALDI and LIDL discounters continue to meet the market share and in last 12 weeks of the 5
November 2017, it reaches to 11.8% for the first time of the grocery market of British. The statistics also
reflected that four in five shoppers said that they visit to discount stores in past month. It also been
shown that around 77% of the households with revenue above 50000 pound consistently buy from
retailers that are budgeted as in comparison with the 73% of the customers that makes 15000 pound or
less as per the market research. One of the major reasons is quality that reflects that 66% of the discount
shoppers said that the premium ranges are just as better as in superior outlets.
The market share of the UK’s supermarkets chains is shown in the table below:-
Table 1: Market share of different UK supermarket chain
Retailers UK market share (%)
Tesco 28.0
Sainsbury 16.2
ASDA’ Wal-Mart 15.3
Morrisons 10.4
ALDI 6.7
The Coop 6.1
Waitrose 5.3
LIDL 5.1
Iceland 2.0
Others 1.7
Symbols and Independents 1.8
Ocado 1.3
4

Except the market statistics and trends, there are additional factors that create the stronger influences
over the organization than other. These are as follows:-
SWOT analysis of UK grocery retail industry
Table 2: SWOT analysis
Strengths
 Brand recognition for top players
 High rate of exchange of AUD
 A good knowledge of local markets,
seasons and customers
 Large power of bargaining (Grundy, 2017)
 Suppliers squeezing
Weaknesses
 Confined only to UK
 The common price war in the absence of
fixed prices of retails
 High cost for labour and occupancy
 Trading hours and others
Opportunities
 Global expansion
 Social commerce
 Mobile commerce
Threats
 Threats of new entrants
 Increase in private label brands
 Increase in e-commerce (Kurnia et.al.
2015)
PESTLE analysis for UK Grocery Retail Industry
Political: The political factor impacting the UK supermarket industry are the main causes resulting from
real politics that can also influence the entire country. The major political issue is the chance of Scotland
being the independent in future. The retailers of UK has already taken actions that it can result into
supply chain issues, laws of pension and the incremental cost of administration that will be required and
can outcome into consumer high prices. A Scotland independence will therefore increased price and that
can result into profit loss in UK supermarket. This can be prevented through the reformed tax structure
to create the switch more seamless for supermarkets as Scotland is the country that gives low labour and
land cost which can be beneficial for the UK grocery stores to operate in Scotland (Business Analysis of
UK Supermarket Industry, 2018).
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The next political factor is the chances of leaving the UK with EU. All the countries that have been
imported the products to the UK will become hesitant to sell the product to the supermarkets of UK due
to high taxes.
Economical: In this factor; the issue related to inflation, increases in fuel prices and high value of the
real estate has to be seen by the grocery market of UK. This factor will directly impact the consumer
behaviour as rise in price of the product will lower down the demand of the customer for the product
(Kew and Stredwick, 2017). Although analysing the consumer behaviour are the social factors but this
behaviour directly impact the economic situation and thus presented in economic factor.
Social: In this factor, the general buying behaviour of the consumer is being analysed along with the
customer loyalty related to buying the product from specific grocery market only. The next factor
impacting the grocery stores are corporate social responsibility. By the research, it is shown that positive
CSR responses of the organizations will improve the financial positions of the UK grocery industry
(Business Analysis of UK Supermarket Industry, 2018).
Technological: The innovation in the technology is the main factor influencing the UK grocery
industry. The use of social media provides the opportunity and allows the customer as well to give the
feedback on the services offered. The next technological influence is on the loyalty cards offered so that
customer remains retained for longer time.
Legal: It includes laws and regulations that influence the grocery market of UK. Competition law etc
gives the fair trading rules that the businesses has to follow and it does not permit the organizations to
use the anti-competitive agreements (Metzger, 2014). The next legal factor is Planning Policy Guidance
that the supermarkets have to use for their business expansion. The last is rights of the consumers that
will also influence the grocery industry.
Environmental: The weather also influence the UK grocery industry as can result into the delay in
supply chain that will directly impact the UK grocery pricing and at last making the food quite
expensive for the customers (Business Analysis of UK Supermarket Industry, 2018). Thus, weather is
major factor as it can stop supermarket for service delivery to the consumer in terms of online deliveries.
Competitor’s Matrix
6

This matrix is applied to compare the LIDL organization with the other grocery organization such as
TESCO, ASDA and Sainsbury. It is the analytical technique that supports the LIDL to develop the
competitive advantage is the most convenient manner. At one point the LIDL may be in position to see
the organization landscape, position in the market and likely opportunities to give out the uniqueness in
the products from the competitors (Rothaermel, 2015). The matrix is prepared in chart by giving the
ranking in comparison with the competitors from 1-5 in which 1 is low and 5 is high. The below is the
matrix prepared:-
Table 3: Competitors matrix
Factor LIDL Tesco Sainsbury ASDA
Low price 5 4 3 4
Superior quality 4 5 4 4
Customizable
product
2 3 2 3
Market share 1 5 4 3
Unique features 4 5 4 4
International
Expansion
2 3 3 3
From the above matrix it can be said that LIDL has opportunities for business expansion in Asia and
Africa along with increasing the market share in comparison with its competitor’s that are mentioned
above. Moreover, the UK grocery stores are considerably lacking in factor of customisable product as
the organizations concentrate more on entire customer demand rather than singular demands of the
customer.
BCG matrix for LIDL
This matrix evaluates the products or services in two dimensions. The first dimension relates to the
general level growth of the market and the second dimension with the market share of the product
related to the biggest competitor of LIDL. The below is the BCG presented for LIDL:-
7

Figure 2: BCG matrix
(Source: BCG image, 2018)
Star stage: LIDL decides to meet the business operations for long term perspective. In the stage of
growth, LIDL has entered into the star position and public has began addressing reputation and brand
name. Distribution networks are also strong by bringing innovation in services and products (Shanbhag
et.al. 2016).
Problem child: low market share for the products but has high market growth. But creates drain on cash
flow for low share market product.
8

Cash cows: LIDL products show high profits with low investment and includes greatest market share
with low growth market. LIDL uses the generated funds into the star and problem child.
Dogs: It includes the weaker products to meet the market dominance in low growth market. It will
generate negative cash flows (Guta, 2017).
Viable marketing opportunities for “LIDL”
 LIDL in existing has 10000 stores in around 27 countries of Europe. Thus, growing in Europe is
the good viable opportunity as it is one of the fastest supermarket UK grocery chain.
 In the USA, LIDL has wider opportunities and it can also have the plan to introduce the outlets
around 600 in the country. But in this case, LIDL must make sure to take the necessary steps as
some of the brand retailers failed in US like Tesco as well.
9

Task 2
Conduct research on the UK population to determine which segments will provide “Lidl” Company with
a higher yield of consumers
Market segmentation is the procedure of categorizing the broad range of customer or market share,
normally includes current and capable customers, and into the sub division of the consumer depends on
some of the shared characteristics. In the current task, the role of customer segmentation is to be
discussed. Customer segmentation refers to the general practice of categorizing the customer base into
the individuals groups that are same in particular ways important to marketing. It includes age, interest,
gender and habits of spending. Further it is also the strong mean to determine the unmet needs of the
customers.
The key consumer segments for the LIDL are important to identify so that maximum revenue can be
generated.
Socio demographic segment: This segment is dependent on the age, income, size of the family, socio
economic status and many more. In this segmentation it is predicted that customers with same profiles of
demography will carry out same buying behavior, interest lifestyle and motivations. It is further
translated into same brand perspectives (Panzone et.al. 2016). In practice demographic is capable to
employ as many variables that are used in nation’s census collectors.
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Figure 3: Demographic segmentation factors
(Source: Author, 2018)
According to the research, it is being identified that the ALDI has maximum shoppers from AB
demographics. It means this section of society is explained as A (upper middle class) or B (middle class)
and also includes higher or moderate managerial, professional and administrative individuals (The
Telegraph, 2018).
Psychographic segment: This segmentation is also called as lifestyle segmentation that is calculated on
the basis of activities, thoughts and interest of the customers. It include how individual spend their
earning and by which men they are influenced by external factors. Thus, this segmentation is custom
designed and is used for particular time only (Gunter and Furnham, 2014). However, it can be used by
LIDL as it support in identifying the market segments which are defined and will have easy
understanding on the customer motivations for the brand choice.
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Figure 4: Psychographic segmentation factors
(Source: Author, 2018)
Behavioral segment: The behavioral segmentation categorizes the customers into groups as per their
seen behaviors. Many of the marketers trust that behavioral segmentation is more outstanding and
premium in comparison with the demographic and geographic segmentation. And in the research it is
also be suggested that this segmentation is removing off demographic segmentation (Griva et.al. 2016).
It variables includes purchase occasions (special occasion, festive occasion or regular occasion), benefits
received (quality, convenience, economy and many more), status of the user (regular, first time or non
user), frequency of purchase (heavy, medium or light user), status of loyalty (non loyal, switcher, lapsed
or loyal), readiness of the buyer (aware, intentional, unaware), attitude towards the product (hostile,
enthusiastic, quality consciousness) and status of the adopter (early or late adopter).
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Figure 5: Behavioural segmentation factors
(Source: Author, 2018)
As stated according to the research, LIDL is using the demographic segmentation as they can earn
profits from the upper middle class and middle class income group from UK population. As the
organization is famous for being discounters in UK and is regarded as the fastest chain in gaining the
market share and impacting the major competitors even like Tesco, ASDA; the demographic
segmentation is appropriate (Kumar and Smith, 2018). Thus it is also recommended that the next
segmentation like behavioral can also be used by the LIDL. The reason for this is because now the
customers are quite knowledgeable they purchase the products just to maintain the standard in use or
purchase the products at festive time.
For example: At the time of Christmas and New Year the LIDL can target the customers which they
want to. It depends on them whether they want to target indoor or outdoor customers. As the
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supermarket, LIDL can target indoor customers at the time of Christmas where the requirements of
grocery are needed due to festival celebrations and family visits. Thus, the organization like LIDL can
be categorized as gifts can market heavily at that time. This is the example of purchase occasions of
behavioral segmentation that can be used to attract and earn revenue to raise the market share.
In the behavioral segmentation only, one more category such as benefit sought can also be applied by
LIDL as it deals in daily products. For example: the organization can divide the customers who seek the
particular product needs like for the product Colgate focus on the sensitive teeth while other toothpaste
focus on teeth whitening. It means LIDL can create the small behavioral segmentation which is based on
various categories.
Segments that drives the growth in UK Grocery Retail Market:
There are various market segments such as supermarket, discounters, online grocery, convenience stores
and traditional retailing. The UK grocery stores are moving towards the path of major online grocery
segment where the people from any customer segmentation can purchase the product. The use of online
grocery segmentation is becoming famous due to the facts such as home delivery, uniqueness in the
product, curiosity, time saving, economic pricing and attractive promotions. Thus it is also been
suggested to LIDL to entire into online grocery stores so as to give the maximum convenience to every
targeted segments of the customers (Kotabe and Helsen, 2014). Thus, online market segment is also
suitable as it reduce the needs of the particular customer segmentation as all the segments of customers
can be promoted by the LIDL only by categorizing the prices according to the income, behavior and
living standards.
Moreover, socio demographic is also effective segmentation which is beneficial for every market
segment as it is the traditional segmentation in use. Currently LIDL is having the online presence and
sell its products. But with that it also has the opportunity to expand its business more in Europe which
can be possible through online means (Omar, 2018). In online segments different price levels are
created and accordingly customer segmentation falls in the respective categories. According to their
income, the price level will be taken, as per their living standard the product brand will be chosen and on
their behavior and choices the best one is selected.
However, the study shows the behavioral and demographic drives the success and growth for the LIDL
to attract the customer targeted segment with the online grocery channel. Further, the main UK
14

population is upper middle class and middle class that focus on purchasing the products from the
reasonable supermarkets either through online or traditional means (Chen et.al. 2015). The study shows
LIDL is increasing at the great speed from 2016 to 2018 in comparison with the Tesco, Sainsbury,
ASDA and Morrisons.
15

Task 3
Proposed market plan develop a detailed 7 P’s Marketing Mix Model to target the identified segment
covering
A market plan is the comprehensive outlay that gives the business advertising and marketing efforts for
the upcoming period. It describes the business tasks that include meeting particular marketing objectives
with the set time framework. Further, in order to have successful analysis a LIDL marketing strategy
shall be considered which also includes important issues. Actually prior to 7 P’s there were only 4 P’s
that concentrate on several issues which enable the enterprises to have enhanced development in the
internal business operations (McDonald and Wilson, 2016). The 4 P’s include product, price, place and
promotion but due to restricted application of 4 P’s but three more were also added to create the 7 P’s
that aims to focus on additional qualities that 4 P’s has not included.
Figure 6: Marketing mix
(Source: Marketing mix image, 2018)
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Product: It includes factors such as quality, name of the brand, service line, capabilities, tangible clues,
warranty, service delivery processes, physical environment and personnel. The organization is having
one of the solid brand names and regarded as the cheapest retailers in UK grocery industry. In
comparison with the value the main competitor of LIDL is ALDI. The product offered to the customers
are same as supermarket sold like Sainsbury or Tesco, the only differentiation will be the different brand
name of the product of LIDL stores. The major limitation of the product of LIDL is that consumer can
feel the organization is offering the inferior product due to its cheaper pricing.
Price: It includes factors such as level, payment terms, discounts, allowances, differentiation, quality or
price comparison and perceived value by the customers. The major key advantage of LIDL is that it uses
the clever pricing approach. It takes entry into the market by being as one of the fastest value driven in
grocery industry. As per the analysis, at the checkout points of the store payments were made before
only leaving (Kotler, 2015). Further, as the organization serves the goods at the low price, customers
might trust that the products they sell is of inferior quality, thus it is general sense not to particular case
of LIDL.
Place: It includes factors such as location, accessibility and distribution coverage and distribution
channels. The organization has many stores across the Europe and UK. Thus, based on the country they
function into various segments of the grocery industry that ranges from value to high goods end. Further,
the organization has several distribution hubs in UK and Europe to enable the stores that manages the
consistent stock level. The organization business model is to sell the products in the short time to create
the sale and due to this it is important to ensure the level of stocks. It means that it is crucial to have the
outlets in reasonably close proximity to centre of national distribution.
Promotion: It includes factors such as advertisement, physical environment, sales promotion, personal
selling, personnel, publicity, tangible clues, facilitating goods and service delivery process (Khan, 2014).
In the UK, LIDL did not have any current loyalty schemes as they think that their pricing strategies are
sufficient to have consumer’s incentives. Thus, LIDL effectively works on in store promotions but they
did not offer their goods at discounts as they already have low pricing strategy from the competitors.
People: It includes factors such as commitments, training, discretion, interpersonal behavior, incentives,
appearances, customer behavior, involvement degree and attitudes. In LIDL, employees are basically
paid good and attractive wages but they have to work hard on the business jobs. The quantity of the
17

scanned item is generally applied as the performance indicator in LIDL. The organization also gives the
training to ensure high standard meeting in the market so that customer needs are fulfilled. But the
limitation is that sometime in LIDL the customer feels that they did not receive attention of the staff as
they are always in rush mode to finish their jobs on time with fulfilling all the responsibilities assigned
by the seniors to them.
Processes: It includes factors such as policies, mechanization, customer involvement, procedures,
employee discretion, activity flows and customer direction (Fine, 2017). The major procedure of the
LIDL is to sell and buy as much products as possible at cost reduction or low cost basis. It is also been
analyzed that customers are not involved in the procedure and they did not have any power over the
organization business activities and operations.
Physical evidence: It includes factors such as furnishings, noise levels, environment, tangible clues,
layout and facilitating goods as well (Rowley, 2016). The major stores of LIDL are presented in the
traditional and linear way. This is done to support the customer in identifying the products as quick as
possible and it can also have simple access to leave and purchasing the product. Furthermore, LIDL
generally show their brand symbol in yellow and blue color in the entire stores or areas of surrounding.
It will support the consumer knowing that LIDL organization is near only.
Moreover, since the organization operates in highly competitive environment, it products are exactly
identical to the other organization which is even available at the cheaper prices. The cost cutting is
managed as they various distribution channels along with the online store of its own to manage the quick
demand. The organization puts focuses on daily needs of upper middle class and middle class; therefore
they have to always manage the inventory level to meet the all time demand (Lovelock and Patterson,
2015). The promotional methods are also not much expensive used by the LIDL as they think that low
pricing is the only strategy of attracting the customers. The physical process is also fast of the LIDL that
also gives the advantage of cost reduction and people involved in the businesses are also well paid to
maintain their long term sustainability in the LIDL business operations. Its physical stores across the UK
and Europe highlighted with the brand symbol and color is enough to show their physical evidence and
existence in the eye of UK population.
However, for further expansion as they business opportunity the organization has to maintain the same
speed but with managing the superior quality as well. Otherwise it can lead to bad impression on UK
18

population. The overseas expansion is also been taken to make sure that organization to increase their
market share in the high competitive environment and can also impact the competitors like ASDA,
Tesco etc.
Recommendations in tackling the challenges and risks
In the current case study, the UK grocery industry has been highlighted and how it impacts the UK
economy. The number challenges and risks has been given such as the organization weaknesses is that
they have less online presence in comparison with the other competitors, they can also focus on
behavioral segmentation as well. At the end, LIDL always focuses on selling rather than giving high
branded product to ensure an increment in their existing brand.
Based on the analysis of the marketing strategy of LIDL and grocery market industry of UK, the major
three recommendations that identified are as follows:-
 The organization should increase the use of online presence by putting the usability of the
website by offering accept, click and collect and even make the delivery arrangements. It will
bring greater expansion and presence in the UK market and they can go for further expansion as
well (Deng et.al. 2015). As the major competitors like Tesco, Sainsbury have highest market in
e-commerce business, the same efforts are needed by the LIDL management as well.
 The second recommendation is that it has to develop and execute the upper class products brand
on account of targeting latest demographic so as to compete with the main grocery market
retailers on more supportive environment. As the organization is still targeting only middle class
income group, they need to target the new segment such as behavioral segmentation and it will
be possible only when they fulfill the needs of every segment (Keller, 2017). High quality brand
will give more profits and revenue along with increase in brand reputation of LIDL. The reason
for this is because it has faced the allegations of inferior quality products as they have offer
products at low pricing.
 The third recommendation is that LIDL should develop firm barrier entry to restrict the other
organizations in entry in UK grocery market and likely dilute the market share of LIDL.
Although, entry of new firm in this industry is not an easy task as it requires huge funds to
maintain the large variety of product range but then too efforts on firm restriction has to be made
(Surdu and Mellahi, 2016).
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Moreover, in respective of remaining competitive in UK grocery industry and to maintain the
consistency and increase in market share, LIDL should make use of the mentioned recommendations.
Furthermore, it can also result by collaboration of general strategies as the development of brand for
upper class with the merge of existing business structure will give out the place to new differentiation
strategy. Thus, if the LIDL takes the other strategies they should make sure that existing customer base
is not impacted or they can lose even the current existing market share as well (Malhotra and Peterson,
2014). Moreover, LIDL should consistent to introduce more outlets in the UK in respect of expanding
their accessibility and presence which enable their functions to have same exposure to other main
supermarket retailers of UK.
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Conclusion
In the current study, the report had analyzed the current UK grocery retail market that had included the
real statistical data of the UK grocery industry, the SWOT analysis, PESTLE analysis, competitor’s
matrix and the BCG matrix. In the next task, the report had shown the importance of market
segmentation that basically involves customer segmentation by highlighting various factors such as
socio-demographic, psychographic and behavioral segmentation. Further, the recommendation is also
provided for the use of behavioral segmentation. At the end of the report, the study has been concluding
the 7 P’s of marketing mix model for LIDL in which some limitation has also been shown such as quick
process ignores customer involvement, cheap pricing can bring poor quality product etc. The
recommendation is also offered in the report which shows that LIDL should use so as to maintain the
existing marketing share and raise the business to the international expansion by continue applying
discounter strategy in their business operations as well.
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