Principles of Marketing

This study material provides insights into the principles of marketing, customer value, SWOT analysis, competitive analysis, customer empowerment, customer satisfaction, customer relationship management, and customer privacy in the context of Lidl. It explores the role of customers in strategic planning and the competitive landscape in the retail sector. The material also includes a calculation of customer lifetime value for Lidl and discusses the importance of customer empowerment, satisfaction, relationship management, and privacy in the supermarket industry.

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Running head: PRINCIPLES OF MARKETING

PRINCIPLES OF MARKETING
Contents
Part 1................................................................................................................................................2
Part 2................................................................................................................................................4
References........................................................................................................................................6
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PRINCIPLES OF MARKETING
Part 1
1. Creating Value for Customers
Lidl is a global discount supermarket chain which is a subsidiary of Schwarz Gruppe. The
company creates value for the customers by offering good quality products at affordable prices.
The company also offers value to the customers by being the go-to shop for any grocery needs of
the customers. As stated by Wicker (2016) Lidl mainly focuses on creating value for the
customers who are price sensitive in nature and those who have a limited budget for shopping.
The main mode of value creation of the company for their customers is to offer products at a
competitively lesser price than other competitors in the market that can suit to their requirements.
2. The role of the customer in the company’s strategic planning
The customers of Lidl play a great role in the strategic planning of the company as the goals,
objectives and strategies of the company are determined based on the needs and requirements of
the customers of the company. Without the customers, the company will fail to be in the business
as their entire business relies on their customers. As stated by Yeh (2016) the customers plays
the most decisive role in determining the pricing strategy of Lidl as well as play significant
decisive role in the product design of the company. Further customers of Lidl act as adecisive
factor in determining the marketing and advertising strategies of the company and therefore the
customers play a major role in the strategic planning of the company.
3. SWOT analysis
The strengths of Lidl are as follows:
 Strong business structure allows the company to sell their products at incredibly lower
prices which implies that there is a high demand for the products of Lidl in the market
 As opined by Yin & Zhang (2017) wide range of product labels of the company implies
that it provides them with exclusivity and security
 Large number of stores of Lidl located across Europe implies that they are subjected to a
high level of exposure.
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PRINCIPLES OF MARKETING
 Strong online presence of Lidl implies that they can easily showcasetheir products and
offerings to the customers.
The weaknesses of Lidl are as follows:
 Lack of effective operation outside Europe implies that the brand value of the company is
only limited in Europe.
 Wrong perception regarding the quality of the products of Lidl because of their extremely
low prices implies that it creates a negative impression of the company in the market.
The opportunities for Lidl are as follows:
 Successfully expanding their operations outside Europe which implies that they can
operate in a more profitable manner and can experience high growth.
 Expanding their websites to accept orders and sell products which implies that Lidl can
offer convenience to the customers that they seek for.
The threats for Lidl are as follows:
 Price war in the retail sector which implies that there is a high level of competition in the
global retail sector.
 International expansion of other retail supermarket brands which implies that there is a
limited scope for the company to succeed in new international locations.
4. Competitive analysis
The major competitors of Lidl are Aldi and Tesco both on domestic and international level. Aldi
and Tesco are both globally renowned established retail brand which ranks among the top retail
supermarket chains in the world. There are various criteria which are important for the target
customers of these supermarket chains when they are making a purchase decision regarding their
preferred product purchase. As opined by Ingene (2014) in case of retail supermarket sector it is
observed that the various criteria which are important for the target customers regarding making
a purchase decision are price, quality and convenience. The comparison of Lidl with Aldi and
Tesco based on the above stated criterions is as follows:
Company Lidl Aldi Tesco
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Criteria
Price 5 4.5 3
Quality 4 3 5
Convenience 3 3 5
Total 12 10.5 13
From the analysis of the above table it can be stated that the competitive rivalry in the retail
sector is very high in nature owing to the presence of large number of companies and also due to
the various benefits and offerings which are offered. From the above table it is even observed
that based on the price criteria Lidl overpowers its competitors, while based on the quality and
convenience criteria, Tesco overpowers its competitors. While adding up the three categories it
can be observed that Tesco overpowers its competitors not onlybecause it offers high quality
products at affordable prices but also it offers high level of convenience to their customers by
offering various benefits and experiences during shopping. Also Tesco overpowers their
competitors because it is easily accessible by the customers through both online and offline
platform.
Part 2
Assumed LTV calculation for Lidl
Customer expenditure per visit (s) = 6.90 (USD)
(Average of 5 customers)
Number of Visits per week (c) = 4
(Average of 5 customers)
Avg customer value per week (a) = 22.30 (USD)
(Average of 5 customers)
Avg Customer Lifespan (t) = 10 years
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PRINCIPLES OF MARKETING
Hnece, LTV = 52(a) X t
= 52 (22.30) X 10
= 11,596 (USD)
1. Customer Empowerment
Lidl empowers their customers by providing information regarding their products and offerings
through both online and offline platforms. As opined by Galán-Ladero& Galera-Casquet (2015)
in the online platform, the company empowers its customers by providing details about its
products and offerings through the website of Lidl long with the prices of the product and their
availability. While, in the offline platform Lidl provides information about its products through
in-store promotional activity and outdoor advertisement. The company also uses social media
platforms to promote their products and offerings to the customers by making interactive and
engaging videos.
2. Customer Satisfaction
As stated by Singhal & Kaur (2017) the rate of customer satisfaction is generally high in Lidl
which is evident from the fact that the customers communicate their satisfaction through the
various surveys which are conducted in the official website of the company and also in the stores
of Lidl. As opined by Solate (2018) the survey conducted by the company indicates that the main
reasons for high rate of customer satisfaction are high quality shopping experience and effective
staff service in the stores of Lidl.
3. Customer Relationship Management
As stated by Kavita (2017) there is no specific approach towards customer relationship
management which is observed in case of Lidl as there is no particular software which the
company utilizes for customer relationship management. As opined by Mahesar, Chaudhry &
Tariq (2017) as Lidl offers high discounts to their customers, therefore the company does not
offer any sort of special rewards and incentives to their customers compared to other competing
supermarket chains such as Tesco and Sainsbury. In order to build relationship with their
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PRINCIPLES OF MARKETING
customers, Lidl focuses on sending direct mails and messages to the customers in order to inform
them about their product offerings.
4. Customer Privacy
Lidl has a strict privacy policy in place in order to ensure the confidentiality of the information
of their customers which they collect through various surveys. The employees of the company
are prohibited to leak or utilize any of the information of their customers for any sort of benefits
and strict actions are taken by the company in case of leak of any sort of customer information
As stated by Plazibat&Dadić (2017) however the customers of Lidl feel that the company does
not utilize the information provided by them to provide customized shopping experience and
seek to receive more personalized benefits from the company. Also the customers of Lidl feel
that their information is not dealt with attentiveness by the company as compared to other
competitors such as Tesco and Sainsbury’s.
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References
Galán-Ladero, M. M., & Galera-Casquet, C. (2015). THE ROLE OF THE RETAILERS IN
CAUSE-RELATED MARKETING. .EkonomskiVjesnik, 28(1), 97-109. Retrieved from
https://search.proquest.com/docview/1695026419?accountid=30552
Ingene, C. A. (2014). Retail evolution. Journal of Historical Research in Marketing, 6(2), 279-
299. doi:http://dx.doi.org/10.1108/JHRM-12-2013-0067
Kavita, A. (2017). Case study: Effectiveness of CRM strategies in global era. Advances in
Management, 10(9), 14-21. Retrieved from
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Mahesar, H. A., Chaudhry, N. I., & Tariq, U. (2017). INTEGRATING CUSTOMER
RELATIONSHIP MANAGEMENT WITH BIG DATA ANALYTICS IN RETAIL
STORES: A CASE OF HYPER-STAR AND METRO. Journal of Business
Strategies, 11(2), 141-158. Retrieved from
https://search.proquest.com/docview/2033627367?accountid=30552
Plazibat, I., &Dadić, M. (2017). Contemporary issues in retail industry. International OFEL
Conference on Governance, Management and Entrepreneurship, 525-536. Retrieved from
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Singhal, P., & Kaur, T. (2017). A comparative study of customer satisfaction in three different
supermarkets. Sankalpa, 7(1), 43-48. Retrieved from
https://search.proquest.com/docview/2178877486?accountid=30552
Solate, A. O. (2018). Customer satisfaction on supermarket retail shopping using web-based
participatory GIS. London: Retrieved from
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Wicker, K. D. (2016). A study of customer value and loyalty in the supermarket industry.
Business Premium Collection. Retrieved from
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Yeh, Y. (2016). Market orientation and service innovation on customer perceived
value. Management Research Review, 39(4), 449-467. Retrieved from
https://search.proquest.com/docview/1986727692?accountid=30552
Yin, C., & Zhang, M. (2017). Research on the key issues of "farming-supermarket" docking
under the background of "internet plus". Management & Engineering, (26), 74-82.
doi:http://dx.doi.org/10.5503/J.ME.2017.26.010
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