Principles and Practice of Marketing

Principles and Practice of Marketing 1
Principles and Practice of Marketing
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Principles and Practice of Marketing 2
Task 1
Aldi in UK
Aldi began its operations in the United Kingdom in 1946. The business was founded by
Karl and Theo Albrecht from city of Essen in Germany. The two worked for a family business
before they ventured into opening theirs (Schmid et al 2018). From their small operating
location, the two brothers managed to build the biggest grocery retailers in Germany. By 1960,
the business had grown to 300 shops. However, the business split between the two brothers after
an altercation with regards to whether they would sell cigarettes. This was a strategic decision in
a bid to offer customers with benefits (Voigt, Buliga and Michl 2017). As a result, the business
was separated to two entities known as Aldi Nord and Aldi Sud.
Aldi Nord is located in the north while Aldi Sud is located in the south. Karl Albrecht
took control of the south business and he is considered to be one of the richest men in Germany.
Aldi name was coined from the words Albrecht and discount (Thompson et al 2012). The
primary marketing principle that the institution uses is to operate by offering consumers
discounts. The company markets its branded products which accounts for 90 percent of the sales
made in the UK.
Aldi business structure is simple and attested by the fact that consumers know that they
can shop at very competitive prices compared to other stores. This is because customers tend to
compare prices whenever they have little information about differences in a product (Wang et al
2016). The company is considered to be the highest paying supermarket which attracts
employees that are skilled to manage its operations. The marketing strategy that the company
uses is differentiation by making its stores have similar layout. The company depends on small

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stores with minimal staff to attract customers to take less time in shopping. This is a great
strategy of establishing customer loyalty as a result of customers relating to characteristics if
their stores (Filipe et al 2017). Furthermore, the company has smaller range of products
compared to other supermarkets. Besides, the company is known to stock big brands that assist
the company achieve marketing objectives. The company is known to plan for trends implying
that they have new products that go in the middle section of the supermarkets based on the needs
in the market. This is a strategic supermarket offering that contributes to enhance customer
experience (Terblanche 2018). Among other activities that contribute to marketing initiatives
include fresh and local products, ensuring that their staff are happy and maintain cleanliness in
their premises.
The market for grocery retail market in Sweden is increasing making it a viable location
for Aldi. Among the reasons that contribute to viability of expanding is the increasing number of
single-person household and urban dwellers. The millennials are perceived to be most targeted
category for grocery retail consumers (Godderidge, Johansson and Larsson 2016). The
population of Sweden is gradually growing and based on estimates, Sweden population will rise
over the years. The drivers of this particular trend is longer life expectancy, increased
immigration and increased birth rates. Based on these statistics, it is significant that the company
concentrates on establishing new stores in big cities.
Another contributing factor is the widespread digitization that allows consumers to shop
online and have their products delivered. The number of increased users online supports the idea
of Aldi to expand to Sweden and curve a market share in the grocery retail business. A good
economy characterized with higher levels of income increases the number of impulse buyers in
the market (Ek Styvén, Foster and Wallström 2017). Over the years, there has been increased

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focus on prices. As a result, there is a high rate of expansion among competitors. Economic
turbulence has contributed to allowing cautiousness among consumers with respect to price.
Among the convenient markets for grocery retail include Sweden, Norway, Estonia and
Lithuania as a result of the markets scoring high of growth, expansion and competition. As a
result, economic viability of new customers has influenced the needs for growth in grocery retail
market (Eriksson, Nathalie and Ranjan 2016).
SOSTAC
SOSTAC is a marketing tool that was developed by PR Smith. The acronym stands for
Situation, Objectives, Strategy, Tactics, Action and Control. In essence, it is concerned with
where, how and what is required in order to guarantee success (Chaffey 2016).
Situation Analysis
The situation analysis according to SOSTAC model is concerned with the position of
Aldi Company at the moment. Currently, the company offers the market 90 percent of the
products that are branded by Aldi. This helps to market their brand among consumers. Besides,
the goal of the company is to establish a presence in the grocery retail by offering consumers
significant discounts for groceries. The company deals with suppliers that enable the
organization to offer volumes of discounts (Bohner and Minner 2017). The company’s
performance can be attested from the number of stores that it has managed build. So far, Aldi has
more than 700 stores and plans to open up more stores to clock a thousand mark. The company
posted a 16.4 percent increase in profit as at December 31st 2017.
The customers of Aldi prefer the store compared to others because the stores are small
and allow them to make purchases quickly without wasting time moving around the store.

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Besides, the customers enjoy quality and amazing discounts which contribute to making them
loyal customers.
Aldi competitors include Macy’s, Marks & Spencer, Sainsbury and Supervalu. The
completion is viewed in terms of market share, valuation, number of employees, and revenue
among other things.
Objectives
The vision of the company is to ensure that it offers grocery products to consumers in the
UK at discounted prices which will attract more customers and enable the business to curve a
bigger market in the grocery retail niche.
The business looks to expand to Sweden market with the objective of establishing itself
as the preferred grocery store to shop. The competitive advantage of the supermarket is that it
can offer customers huge discounts thereby increasing competition (Steenkamp 2017). The
company has a great opportunity to tap into international market because it offers products that
are regularly consumed by customers, as a result, offering the products at a discounted prices
will assist them to differentiate themselves from the market and gain competitive advantage.
The business aims to set goals that can be measured in order to evaluate its performance
in the Sweden Market. The company aims to set up a framework that will be used to monitor
performance and allow feedback from stakeholders in order to improve on the services and
products that they offer.
Strategy

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Porter’s generic strategy is a business model that is used to gain competitive advantage in
the market. It analyses factors that are used in selection of an appropriate marketing strategy
(Lotayif 2016).
Figure 1: Porters Generic Model (Lotayif 2016).
Cost leadership
Aldi is determined to use cost leadership strategy in Sweden as a result of being the
lowest-cost producer in the UK market. Aldi can achieve this strategy by ensuring that it sells
products on a large scale in order to exploit economies of scale. This strategy is effective because
the market segments in the industry are supplied products with emphasis placed on minimizing
the cost as possible. This strategy is significant to realize the long-term objective of the company
(Bell, Dyck and Neubert 2017). As a result, Aldi will enjoy profits since the achieved selling