MKT00720 Assignment 2: Analyzing Aldi Australia's Marketing Strategy

This report provides a comprehensive analysis of Aldi Australia's marketing strategy, examining its evolution since its launch in 2001. The report delves into Aldi's core strategies, including its focus on low pricing, cost management, and customer loyalty. It explores the company's strengths, such as its strong ecosystem and positive customer support, while also acknowledging weaknesses like lesser margins. The analysis incorporates a SWOT model to evaluate opportunities and threats within the competitive landscape. Furthermore, the report discusses Aldi's strategic marketing options, including entry strategies and the importance of customer service and subordinate activities like human resource management and technological advancements. The conclusion emphasizes the importance of customer relationship management and the need for continuous improvement in areas such as procurement and infrastructural management to maintain a competitive edge in the discount supermarket sector. The report highlights Aldi's contemporary marketing approach as a key driver of its success in the Australian market.

Running Head: MARKETING STRATEGY OF ALDI
MARKETING STRATEGY OF ALDI
Name of the Student
Name of the University
Author Note:

1MARKETING STRATEGY OF ALDI
EXECUTIVE SUMMARY
The aim of this paper is to analyse the marketing strategy of Aldi. It is a German-based
company focusing on the German market and European market as its target market. Aldi is
following a different contemporary marketing strategy instead of following the traditional
strategies. The paper also mentions the areas Aldi must focus on in terms of betterment of the
business growth. This analysis recommends improving human resource management for the
overall growth of the business.

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TABLE OF CONTENTS
Introduction................................................................................................................................3
Background of the company......................................................................................................3
Marketing Analysis....................................................................................................................4
1. Strategies inhibited from the beginning..........................................................................4
2. Strategic Marketing Options...........................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................9
Appendix..................................................................................................................................11

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Introduction
The marketing strategy of Aldi is the factor to drive high the sale rate of the business
organisation along with its sustainability and advanced competence. The business strategy of
Aldi involves some general functionalities that involves a strategic description of the
organisation condition. This initiative leads to generate a market-oriented strategy for the
company to reach the desired goal. Hence, the existed marketing strategy of Aldi brings a
positive upshot in terms of the industrial goal. They have no constructed department to
monitor the operational functionality to cut down the cost. They have thinned the budget of
marketing almost point three per cent in regards to the entire company revenue. They are not
willing to spend much money on building customer relationship management. This strategy
paves the path of maintaining a low cost in terms of sales. This is the way, Aldi is making a
profit out of the sales procedure and increasing company revenue at the same point of time.
Background of the company
Aldi considered being a brand comprising two popular discount superstore chain
belonging to eighteen countries all over the world. It has more than a thousand physical stores
and approx. turnover is fifty billion pounds. The more profound of this German-based
company is the brothers named Karl and Theo Albrecht in the year 1946 (Schmid et al.
2018). Initially, their mother owned the store and Aldi took over it for the business purpose in
the year 1913. They took the initiative to split the chain of the stores into two parts namely
Aldi Nord and Aldi Sud. The headquarters of these two store chains are Essen and Mulheim
chronologically. These two stores are located in a completely different geographical location
for the operational purpose(Aldi.us, 2019).

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Marketing Analysis
Aldi selected the strategy of minimising the cost as their core technique to generate
company remuneration (Christopher 2016). As mentioned earlier, the strategy does not
involve any operational marketing department along with the thinned budget marketing of
more or less zero point three per cent in respect to the entire company remuneration. It has
been also noticed that they involve very less amount for the purpose of customer relationship
management theory. However, they continuously providing some offers to their customer
known as ‘super buys’ that goes on changing according to the client niche (Chernev 2018).
This culture of cost-saving is a valuable feature of this company that is reflected by the
company as a whole and its employees. As an instance, the employees are sensible enough
not to use the electricity with a sufficient supply of daylight. Hence, it is evidently clear that
the supermarket chain of Aldi deliberately lessens the expenditure of marketing through
impressing the effective strategies of cost as a cultural practice on the staffs. According to the
SWOT model of strategic analysis, the strength, weakness, opportunities, and threats of
Aldi’s marketing strategies are discussed below.
Strengths
 Low pricing strategies.
 Strong ecosystem
 Positive customer support
 Positive product mix
Weaknesses
 Lesser margins
 Poor staff satisfaction
 Poor penetration

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Opportunities
 Preference of the customers
 Human resource management
 Infrastructural management
Threats
 Competition
 Funding
 Reliability
1. Strategies inhibited from the beginning
The management team of the company implements many strategies and techniques
for survival in the competitive corporate industry. This is only possible for the Aldi discount
chain of the supermarket to infuse these types of strategies mentioned in this paper (Burch,
Dixon, and Lawrence 2013). The technique of competitive advantage increases the capacity
of the agency to improve the profits with the offering of better prices. It also mentioned that
the quality of the pricing method of the company is astoundingly comparing to the similar
types of business agencies. The macro-environment of Aldi’s marketing strategy according to
the model of Porter’s Five forces are discussed below
 Differentiation of the products
 Leadership Cost
 Stress on cost management
 Discrepancy
Leadership Cost

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The main agenda of Aldi’s business strategy refers to investing moderate production
amount and selling the goods at a reasonable price. It is the way, Aldi is making a profit out
of the sale of the products with providing attractive purchase discounts for the customers
resulting in a positive outcome (Kotler et al. 2015). As mentioned, the company believes in
minimizing cost strategy that helps the company to manage the transportation cost by keeping
the products directly in the stores in case of buying a single product or products in the bunch.
They infuse a very simplistic way of designing the organisational structure of the stores to
communicate with the customers without any hazards. Unlike the queue system followed by
the rivals of Aldi, they opt for selecting the check-off procedure to bring efficiency in the
performance of the employees (Connolly 2013). Hence, this cost reduction procedure
accelerates their strategy of competitive advantage.
Discrepancy
It is worth mentioning that the term customer satisfaction refers to knowing actually
the need of the potential customers. A business industry needs to know the culture of
shopping and offering attractive discounts accordingly. The main targeted customer of Aldi is
the group of people belong to the middle-class society. These collective groups of people
purchase goods measuring the pricing rather than measuring the quality of the products.
According to the study competitors of Aldi including ASDA and TESCO also offering
quality products at a reasonable price as a way of providing value to the customer’s niche.
Hence, the term discrepancy is introduced as a means of providing emphasise on the
innovativeness of goods and the business institution as well.
2. Strategic Marketing Options
Entry Strategy of Aldi

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As an entrance strategy, Aldi provides more focus on maintenance of customer
loyalty. For this, Aldi sells the products at a very low cost to the existing customers as well as
the fresh customers (Berman 2015). However, attracting the fresh market has always been an
important factor for all the business agencies. Aldi invests an extra amount to attract the new
targets of the market to maintain customer loyalty and be loyal to the agency. There are
certain areas that Aldi needs to focus more in terms to improve their existing marketing
strategies.
Customer Service
The primary aim of any business agency is to satisfy customer needs. Aldi must
inhibit outstanding strategies to ensure customer satisfaction to survive in the competitive
market assisted by the implausible courtesy headed for customer on a regular basis (Voigt,
Buliga and Michl 2017). Regular monitoring of the customer handling issues and providing
probable solutions maintaining the jurisdictional regulations made for the mangers of local
stores.
Subordinate activities
Apart from the services made for the customers, Aldi must provide an equal eye for
several secondary areas (Dunwoody-Kneafsey 2016). However, these services are not
directly linked to the manufacturing process. Subordinate activities can have a direct link
with the marketing strategy of Aldi that may involve acquirement, human resource,
advancement in technology and structure. A well-maintained procurement procedure helps to
collect the resource for the business at an affordable price (Inman, O'Sullivan and Murton
2014). The human resource department will recruit efficient employees for the business
organisation for greater organisational goal. Technology can bring forth good management

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and monitoring of the efficiency of the management team and infrastructure. Infrastructure
provides overall support to the business in terms of planning, executing, and management.
Maintaining the low-cost products is only possible for the presence of well-organized
resources administration team. Recruiting educated staffs for the customers leads to build
strong customer loyalty and customer retention. Being a supermarket Aldi should follow the
natural feature of the non-bureaucratic method in dealing with senior executives. However,
Aldi displays a superfluous nature in dealing with the customers (Ododo, Mulholland and
Turner 2015). According to the researches, Aldi follows the concept of a limited assortment
approach in their business organisation. To introduce the infrastructural information of the
store it can be said that the floor space comprises of six hundred fifty to thousand square feet
in an average. Aldi should focus on the sales philosophy that is way more different from its
rival companies. Aldi should pay more focus to the strategy of advertising in comparisons
with other brands.
Conclusion
As a conclusion, it can be said that the principle of Aldi’s business strategy is an
operational reduction of the cost. This is a strategy for having marketing strategies without
any monitoring body to reduce the organisational cost. The paper goes on describing that the
company speaks about the simplistic way of targeting customers with low investments and
offering an attractive discount to the existing customers as well as the fresh market. All the
marketing strategies of Aldi demonstrates manufacturing goods at a comparatively low price
and reach to the ideal customers at a very reasonable rate. Following these strategies, the
company is gaining a good amount of company remuneration. However, there are certain
opportunities for Aldi to focus on in terms of betterment for the entire business growth. The
factors that need much attention from the business organisation are acquirement, proper

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technology for manufacturing process and betterment of the infrastructure. These areas of
opportunities will raise the market position of the business organisation along with that, it
assures customer retention and customer loyalty. However, the only area that Aldi needs to
focus on is the maintenance of customer relationship with better strategic procedures. This
German-based supermarket is popular mainly for the cost management following a
contemporary strategy instead of the traditional one. The European market is the other
targeted market than Germany for Aldi to perform all the business activities to generate
company revenue.

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References
Aldi.us (2019). ALDI Grocery Stores - Quality Food. Everyday Low Prices.. [online] Aldi.us.
Available at: https://www.aldi.us/ [Accessed 22 Sep. 2019]. (Aldi.us, 2019)
Berman, B., 2015. How to compete effectively against low-cost competitors. Business
Horizons, 58(1), pp.87-97.
Brandes, D. and Brandes, N., 2015. Bare essentials: The Aldi success story. Linde Verlag
GmbH.
Burch, D., Dixon, J. and Lawrence, G., 2013. Introduction to symposium on the changing
role of supermarkets in global supply chains: from seedling to supermarket: agri-food supply
chains in transition. Agriculture and Human Values, 30(2), pp.215-224.
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Connolly, K.B., 2013. Private Label Packaging Playing an Essential Role in Retailer Brand
Strategies.
Dunwoody-Kneafsey, M., 2016. What electronic Customer Relationship Management (e-
CRM) measures should Grosvenor Casinos Ltd use to strengthen their Customer
Relationship Management (CRM)? (Doctoral dissertation, Cardiff Metropolitan University).
Inman, M., O'Sullivan, N. and Murton, A., 2014. Unlocking human resource management.
Routledge.
Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G., 2015. Marketing. Pearson
Higher Education AU.

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Ododo, C., Mulholland, G. and Turner, J., 2015, November. Can Discount Pricing Be A
Comeptitive Brand Strategy? An Evaluation of Aldi. In International Conference on
Marketing and Business Development (Vol. 1, No. 1, pp. 241-251). Bucharest University of
Economic Studies Publishing House.
Schmid, S., Dauth, T., Kotulla, T. and Orban, F., 2018. Aldi and Lidl: from Germany to the
rest of the world. In Internationalization of Business (pp. 81-98). Springer, Cham.
Spence, L.J. and Rinaldi, L., 2014. Governmentality in accounting and accountability: A case
study of embedding sustainability in a supply chain. Accounting, Organizations and
Society, 39(6), pp.433-452.
Unser, F., Report on Aldi’s potential international expansion.
Voigt, K.I., Buliga, O. and Michl, K., 2017. Business Model Pioneers. Management for
Professionals.
Wei, L., Wang, S., Zhang, J. and Ao, Y., Strategic Analysis For.

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Appendix
Strength Weakness
 Low pricing strategy
 Strong ecosystem
 Positive customer support
 Positive product mix
 Lesser margins
 Poor staff satisfaction
 Poor penetration
Opportunity Threats
 Preference of the customers
 Human resource management
 Infrastructural management
 Competition
 Funding
 Reliability