Report on Aldi Australia's Marketing Strategies and Market Performance

This report provides an in-depth analysis of Aldi's marketing strategies within the Australian retail market, focusing on its launch and subsequent growth. It begins with an executive summary, followed by an introduction that outlines the significance of marketing strategy. The report delves into the background of Aldi, a discount supermarket chain, and its expansion into Australia. A key component of the analysis is the application of the STP framework (Segmentation, Targeting, and Positioning), examining Aldi's market segmentation based on demographic, geographic, psychographic, and behavioral factors. It explores Aldi's targeting strategy, which focuses on offering high-quality products at low prices, and its positioning strategy as a retailer offering high-quality products at competitive prices. The report also examines Aldi's marketing mix, including product, price, place, and promotion strategies. Finally, the report recommends strategic marketing options, such as market penetration and employee satisfaction, for Aldi to maintain and improve its market position. The report concludes with a summary of the findings and references to support the analysis.

Running head: MARKETING
Aldi
Marketing
9/20/2019

MARKETING 1
Executive Summary
The aim of this report is to provide a brief analysis of the marketing strategies adopted by
Aldi since its launch in the Australian retailing industry. The report has also presented the
discussion related to strategic marketing options that Aldi can adapt to successfully survive in
the market. The analysis has highlighted that Aldi is involved in adopting some of the main
marketing strategies that are important for existing in the market are STP Analysis and
Marketing mix. According to these strategies, the company has defined a clear target market
such that it can target its market efforts towards correct customer group. In addition to this,
the analysis has highlighted that the company has covered the market in such a limited time
due to its low cost strategy. In the end, the paper has recommended Aldi to use market
penetration strategy to grow in the market and to focus on maintaining the satisfaction of its
employees to reduce employee turnover.

MARKETING 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Background of ALDI.............................................................................................................3
STP Analysis – Segmentation, Targeting, and Positioning Strategies...................................4
Market Segmentation.........................................................................................................4
Targeting Strategy..............................................................................................................5
Positioning Strategy...........................................................................................................5
Marketing Mix.......................................................................................................................6
Recommendation of Marketing Options for ALDI................................................................7
Option 1..............................................................................................................................7
Option 2..............................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9

MARKETING 3
Introduction
Marketing strategy is said to be the inclusive plan framed specifically for attaining the
organization’s marketing objectives. It helps in offering a blueprint for attaining these
marketing objectives. It is also considered to be the building block of the marketing plan
(Ferrell and Hartline, 2013). The business frames its marketing strategies after detailed
research this is because it helps it is concentrating on its scarce resources and gaining a
competitive advantage through them to increase the sales. In addition to this, a well-planned
marketing strategy help in presenting the unique selling propositions of the product or brand
along with its benefits and features offered by the business in a most strategic, planned, and
creative way emphasizing that the product and its features are superior in comparison to the
competitor (Proctor, 2014). The intent of this report is to discuss the marketing strategies
adopted by ALDI in the Australian market to compete with rivals and place strong roots in
the industry.
Background of ALDI
Aldi is a famous discount supermarket chain owned by two German Families with over
10,000 stores in 20 nations and a projected combined turnover of €50 billion. The company
expanded its business in the Australian market in the year 2001 and has seen continuous
growth since its establishment. The company is focusing on building its strong presence of
around 500 stores all over the ACT, WA, QLD, NSW, SA, and VIC (Aldi, 2019b). In this
short span, the company has successfully made its way in the list of top retailers of Australia.
The company has influenced the prices of grocery, enhanced the opinions and quality of the
private label products with its own exclusive brand's philosophy and presented numerous
market-leading initiatives that have been never seen in the Australian market (Aldi, 2019a).

MARKETING 4
STP Analysis – Segmentation, Targeting, and Positioning Strategies
Market Segmentation
Market segmentation is said to be the activity used by the business to divide the wide range
of consumers into different sections depending on a few characteristics. The company has
adopted this marketing strategy because it wanted to have a clear segment of the market that
can be targeted by the marketing efforts of the marketing manager. It was known by the
managers of Aldi that Australian retailing market was not so easy to cover due to existing of
a number of key players in the market such as Wesfarmers, Woolworths, Big W, etc. who
have covered the market with their strong strategies (IBIS World, 2019). The criteria that
were used by the business to segment the market are presented below:
Demographic Segment
Gender – The Company majorly targets female consumers because they are the one who is
involved in the management of the household work and caring of every single need of the
family member in the family majorly related to the groceries purchasing and products of the
household from the retail stores. This segment is the major one for Aldi authority.
Income Group – Customers that belong from middle to low-income group are the major
segment of the company. They can easily purchase products from Aldi because it suits their
financial status.
Age – Customers that lies under the age group of 25-45 years are the main customers of the
company because they are the one who is involved in the purchasing of grocery and
household products (Bhasin, 2018b).
Geographic Segment
Aldi targets urban area consumers are the one who purchases products from supermarkets.
These customers can easily visit the retail stores and can even purchase through online

MARKETING 5
medium. Besides this, the company majorly service customers from UK, Austria, USA, and
Australia because Aldi has its stores at these locations.
Psychographic Segment
Customer who desire to purchase daily need products at reasonable and low prices majorly
depend on Aldi. Thus, Aldi concentrates on maintaining the low prices of its products in
comparison to other retailers in the market.
Behavioural segment
People who are responsible to manage the financial balance of their family and take the
accountability to care about all the family members purchase products from Aldi.
Targeting Strategy
Under the targeting strategy, Aldi has differentiated its business in terms of price from other
players in the market in order to give them strong competition and establish roots in
Australia. Generally, people think that low price products are always of low quality, but, Aldi
is working on changing this mentality of people. It is offering high-quality products at low
prices. This strategy of the company convinces customers to switch their regular retailer to
Aldi.
Positioning Strategy
Aldi has grabbed the attention of the Australian people by offering low prices products. It is
giving strong competition to the existing players in the market such as Wesfarmers,
Woolworths, Coles, etc. who offer quality products at high prices. The company is positioned
in the market as the retailer with high-quality products at low prices (Global Agriculture
Information Network, 2017). This has allowed customers to change their perception and
enforced the existing players to drop their prices.

MARKETING 6
Marketing Mix
Product – Aldi has always claimed to offer affordable food products that are of the same
quality that is offered by other branded products. The product sourcing is done from some
selected suppliers and then branded as their own in order to hold control over cost and
production which is the main reason that company is able to sell products at lower prices. In
addition to this, Aldi is also known in the Australian market for offering private labeled
products that have impacted the performance and sales of other similar products in the market
(Allward, 2019).
Price – Aldi has adopted economy pricing strategy where the company is encouraged to offer
low price products to its target audience with high quality. As the Australian retail industry is
highly competitive due to the existing of several famous players who offer high-quality
products to the customers. In order to deal with this massive competition, the company at its
establishment time in 2001 planned to use economy pricing where it can differentiate its
strategies from other retailers (The Conversation, 2018).
Place – Aldi group has around 8000 stores in 18 nations which are due to its strong
distribution network (Kneffel, 2019). The company is encouraged to maintain the simple
layout of the stores in order to incur low maintenance cost which helps in offering low-cost
products to the customers. In addition to this, the company ensures minimum waste disposal
at the time of goods transportation.
Promotion – Aldi claims itself to be the cost-saving retailer and to maintain this it invest the
negligible amount for the marketing or promotion. All that it provides is ‘Super Buys' offers
that changes every week. These offers are communicated to the customers through weekly
newsletter known as Aldi informs that is either provided to the customers at stores or reaches
through newspaper and emails.

MARKETING 7
Recommendation of Marketing Options for ALDI
Option 1
As discussed, Aldi is not involved in the high promotion of its products in order to maintain
the cost balance. However, avoiding high-level promotion is enabling the high-income
customer to think that Aldi offers low quality and cheap products which is not true.
Therefore, in order to avoid these types of rumors in the market, Aldi is recommended to
focus on adopting market penetration as its growth strategy. Under this strategy, the company
can promote its existing products in the existing market over social media platforms.
Promotion on social media platform incurs a low cost in the marketing activities and will
increase brand recognition among existing as well as potential customers in Australia.
Option 2
Further, in order to maintain successful operations in the Australian market, the company is
recommended to try to maintain the satisfaction level of the employees. Aldi is involved in
offering low price products to its customers due to which it has to focus on reducing the cost
of its operations and offer low wages to the employees. This results in highly dissatisfied
employees and increasing employee turnover (Bhasin, 2018a). Therefore, the company must
focus on arranging different quarterly parties and monthly recognition scheme where every
employee will be recognized and rewarded for his/her excellent performance.
Conclusion
The above report has conducted a brief review of the marketing strategies of Aldi, which is
one of the famous discount supermarkets in Australia. From the analysis, it has been
identified that Aldi makes use of STP analysis and marketing mix as its marketing strategies.
STP analysis has supported the company is targeting a clear and definable segment in the
Australian market in order to execute suitable marketing efforts. Besides this, the company

MARKETING 8
has adopted an economy pricing strategy where it charges low prices for is high-quality
products to attract maximum customers in the Australian market. Besides this, the company
invests the negligible amount on the promotion of its products to maintain the cost balance.

MARKETING 9
References
Aldi (2019a) About Aldi [Online]. Available from https://corporate.aldi.com.au/en/about-aldi/
[Accessed 20 September 2019]
Aldi (2019b) Aldi Australia [Online]. Available from https://www.aldi.com.au/en/about-aldi/
[Accessed 20 September 2019]
Allward, L. (2019) ALDI: A private brand powerhouse [Online]. Available from
https://storebrands.com/aldi-private-brand-powerhouse [Accessed 20 September 2019]
Bhasin, H. (2018a) SWOT analysis of Aldi [Online]. Available from
https://www.marketing91.com/swot-analysis-of-aldi/ [Accessed 20 September 2019]
Bhasin, H. (2018b) Marketing strategy of Aldi [Online]. Available from
https://www.marketing91.com/marketing-strategy-of-aldi/ [Accessed 20 September 2019]
Ferrell, O.C., and Hartline, M. (2013) Marketing Strategy, Text and Cases 6th ed. U.S:
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Available from https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail
%20Foods_Canberra_Australia_12-18-2017.pdf [Accessed 20 September 2019]

MARKETING 10
IBIS World (2019) Supermarkets and Grocery Stores - Australia Market Research Report
[Online]. Available from https://www.ibisworld.com.au/industry-trends/market-research-
reports/retail-trade/food-retailing/supermarkets-grocery-stores.html [Accessed 20 September
2019]
Kneffel, P. (2019) Aldi: the incredible story of the German supermarket taking over the
world [Online]. Available from https://www.lovemoney.com/gallerylist/51751/aldi-the-
incredible-story-of-the-german-supermarket-taking-over-the-world [Accessed 20 September
2019]
Proctor, T. (2014) Strategic Marketing: An Introduction 2nd ed. U.S: Routledge, p.1.
[https://books.google.co.in/books?id=VgbtAgAAQBAJ&printsec=frontcover&dq=Proctor,
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The Conversation (2018) The secret to Aldi’s success is choosing what not to do [Online].
Available from https://theconversation.com/the-secret-to-aldis-success-is-choosing-what-not-
to-do-100671 [Accessed 20 September 2019]