ALDI's Marketing Strategies: A Comparative Study with Marks & Spencer

Desklib provides past papers and solved assignments. This report analyzes ALDI's marketing strategies and compares them to M&S.

Marketing Essentials
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Table of Contents
Introduction................................................................................................................................3
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives............................................................................................4
LO3 Develop and evaluate a basic marketing plan....................................................................6
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10
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Introduction
Marketing is the art of exchanging relationships within the service provider and the customer.
It is done by every organisation to create a relationship with their customers. It is the key
component of business development (Baker, 2016). It can be defined as the set of activities
and processes taken by a company to promote their offered services and products to their
customers. The aim of marketing is to demonstrate the fact that the company values for the
customer. In this study a report will be produced that will demonstrate the essentiality of
marketing with respect to a particular organisation. The study will be carried out on ALDI, a
multinational retail organisation who wants to expand their business operations.
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LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives
Marketing mix is an essential kit used to analyse the market position of an organisation. It is
mainly done with respect to four P’s or seven P’s. In this report, the 7p’s marketing mix will
be performed on the chosen organisation named ALDI. In order to better analyse the business
objectives of the organisation, it will be compared with the marketing mix of another
company of the same industry (Bahadir et al., 2015).
The comparative study will be carried out on two companies ALDI and Marks & Spencer.
Theo Albrecht and Karl have founded ALDI in the year 1960 (Aldi.co.uk. 2019). The
organisation has its headquarters in Germany. On the other hand, Marks & Spencer is also
retailer organisation just like ALDI. It was founded in the 1884 by Michael marks and
Thomas Spencer. M&S has its headquarters in UK (Marksandspencer.com. 2019). The
comparative study of marketing mix on both the organisations is as follows:
Product:
The products offered by ALDI comprises of all sorts of products required in daily use. They
sell food products as well. Their main aim is to offer products to their customers at an
affordable rate. They are very conscious about selecting their products from the suppliers.
They sell their products under the same brand name and directly from the suppliers without
any intermediates. It is the reason that allows them to lower their product prices from the
other supermarkets. They sell food, beverages, and other household products to fulfil the
basic requirements of all the customers.
On the other hand, Marks & Spencer is one of the top brands operating in UK. They offer
products for every group of people that is for all age groups. The products offered by M&S
are wide ranged. They try to cater to the needs of all the requirements of the people. They
offer separate range of apparel products for man, women and children along with accessories.
They also offer furniture for home decor. The unique feature about M&S is that they prefer to
sell products of their home brands rather than those of the international brands.
Price:
The organisation has a high recognition due to their huge number of customers. The key
aspect of such customer satisfaction is due to the availability of product at such low prices.
ALDI offers quality products at cheap prices, which differentiates it from other competitors
in the industry. The organisation follows several unique policies such as Market penetration
strategy and Unit Pricing strategy. They use the market penetration strategy for entering into
new markets and gaining shares at a fast rate. Through unit pricing strategy, they enable the
customers to compare grocery products.
However, M&S offers their products in the price range that is affordable by most of the
sections of the society. Usually, they sell medium to high price ranged home brand products
of premium quality. They offer various discounts and offers on seasonal products to attract
more customers remain competitive in the market.
Place:
ALDI have successfully spread their business in more than 18 countries and more than 8000
offline stores spread all over the world. They have several warehouses nearby every store to
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accumulate the products from the suppliers. They try to maintain environment friendly while
transporting their goods through minimum disposal of wastes. ALDI has a feature of
localising its name with the country in which it is operating. They have online presence as
well to enable their customers to access their products from any corner of the world.
In comparison to ALDI, M&S has less number of offline stores across the world but the
business spread is much high from ALDI. They have expanded their business in more than
50 countries and it had helped the organisation to achieve such worldwide fame. They allow
the customers to buy their products online in the local currency of the country in which they
belong.
Promotion:
ALDI invests very minimum amount of money for promotion as they offer their products at
low prices to their customers. The cost efficient approach itself acts as a promotion for the
organisation. Sometimes, they offer attractive schemes to drag customers such as ‘Swap &
Save’ and ‘Like Brands’ that exists till their stocks last. They try to bring innovation in their
offered services from time to time. They communicate with their customers through mails
and newspapers.
Marks & Spencer have chosen a unique marketing strategy where they have aligned their
digital marketing with their promotional campaigns. They promote their brands through
traditional ways of advertisement and through latest ways. They pay rewards to their
customers for future shopping (Toda and Dawson, 2017).
People:
ALDI’s customer service is quite low with respect to other competitors in this field. They do
not guide their customers regarding their product selection. They have planned their business
infrastructure in such a way that they require less number of employees. As the number of
employees is less in number, they are paid high in comparison to other organisations.
On the other hand, M&S has a huge number of employees in their organisation. More than
80000 employees serve the company all over the world. In order to retain their employees,
they provide additional rewards.
Process:
ALDI has made their website and stores very customer friendly, which enables them to find
their required products easily. They have done so to avoid the fact of hiring extra employees
for guiding their customers. They sell products of much selected range of brands as it helps
their customers to avoid becoming confused.
M&S have made them easily available to their customers through their worldwide presence.
Their employees are always ready to help their customers in making their selection.
Physical Evidence:
ALDI is world famous for its price range. They are the only organisation who maintains the
same price of their grocery range in all their stores. They are known for their simple business
operation in the industry.
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However, the main physical evidence of M&S is their wide stretched business operation.
Their premium quality products and well-developed online business marks its presence in the
retail industry.
LO3 Develop and evaluate a basic marketing plan
Executive Summary:
The marketing plan of an organisation provides strategic ideas for their employees to fulfil
the desired objectives of the company. The strategies formulated based on the marketing plan
will help to increase the market shares of the organisation in the local market where they have
expanded their business operation (Shi and Wang, 2019). For ALDI, a market plan has been
formed that will help them better to cater to the needs of the customers that has been
identified through analysis of the internal and external factors of the country.
Situational Analysis:
ALDI is a renowned retail organisation flourishing in several countries of the world. The
company has maintained the customer satisfaction level through their offered products (Voigt
et al., 2017). The organisation is focusing towards its business expansion in other countries
like UK. For achieving it, a business plan will be created.
External Analysis:
PESTLE Factors Analysis
Political Factors ALDI has a global business operation. As a result, they need to
consider the political factors of all the countries. It lays an impact
on the business performance on the organisation. The tax policies,
laws of the country, political stability everything has to be
considered.
Economic Factors While expanding in UK, ALDI needs to consider economic
situations like the impact of Brexit. The performance of the
organisation is highly influenced by the change in economic
policies. These include the taxation rates, annual profits and other
such factors.
Social Factors ALDI should keep a constant track on the current trends and
choices of the customers based on which they need to figure out
their product demands. It has been reported that people of UK
have started favouring bulk shopping which implies that one-stop
stores are in high demand.
Technological Factors ALDI should incorporate technological invasion in their business
processes. They can develop their online websites with the help of
latest technologies (Mullin, 2018).
Legal Factors The organisation should follow up the legal factors minutely as it
influence their pricing strategies, employee rights, and other such
factors which have relevance with the business operations.
Environmental Factors The organisation should enhance their concern of maintain
environment friendliness through their processes opted for
business development and expansion.
Table 1: PESTLE analysis of ALDI
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(Source: Created by the learner)
Internal Analysis:
Strengths
 One of the leading retailers in the
industry
 Hold a strong portfolio
 High customer satisfaction level
Weaknesses
 Relatively small in comparison with
other companies
 Less global impact
 Recognised as cheap store
Opportunities
1. Needs to invest in promotional campaigns
2. Expand business developed countries
3. Re-position itself as a reliable
organisation
Threats
1. Few number of branded products
2. High competition from rivals M&S,
Sainsbury, etc.
Table 2: SWOT analysis of ALDI
(Source: Created by the learner)
Aim and objectives:
The rate of growth of ALDI needs to be enhanced as it has degraded its development rate in
comparison with the other competitors. ALDI needs to improve their promotional strategies
to increase its competitiveness in the market. They need to focus on their marketing strategies
and strengthen to benefit their business expansion processes. Incorporation of latest
technology is another factor that boosts up the process.
Market overview:
The main objective of ALDI is to provide quality products at lowest possible prices. They
maintain their pricing strategy throughout all their stores in the world. They offer products to
cater to the needs of all types of customers. They serve the world with apparels for men,
women and children, household products, groceries, food products and beverages and
furniture. They need to segment their market, target a specific group of customers, and
position them in the market of the country where they are invading. Market segmentation
refers to the demarcation of customers in separate segments based on their needs (Dolnicar et
al., 2018). The segmentation varies from countries to countries. They need to have strong tie-
ups with suppliers and distributors, as it is one of the basic requirements of successful
business development in a new market. Psychological and demographic segmentation is
helpful in this regard. The brand positioning should be effective enough to differentiate it in
the market (Shi and Wang, 2019).
Strategies:
Marketing mix helps in identifying the required marketing strategies. It is as follows:
Product-
They need to introduce new product range for attracting customers of the new country based
on their requirements.
Price-
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ALDI should maintain their feature of providing selected quality products at low prices.
Promotion-
The organisation needs to improve their promotional activities and invest more on it to
enhance their popularity.
People-
They should increase the number of employees and hire qualified employees for promoting
their business operations.
Marketing Budget:
ALDI would require approximately £125000 to amend their existing marketing strategy and
expand its business in a developed country like UK.
Time span:
The organisation would require a time span of about one year to set up their ideal marketing
strategies and achieve their business targets of expanding in developing countries.
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Conclusion
After the complete study, it can be concluded that marketing is very essential for any
organisation to conduct and develop their business processes. The marketing process should
be formulated with proper analysis and evaluation of the internal and external factors
influencing the business development. ALDI needs to improve their business strategies after
proper evaluation of the facts figured out through marketing mix. They need to monitor
constantly the effectiveness of their marketing strategies before planning their business
expansion in any country. In this regard, a marketing plan has been provided that will help
the organisation to formulate their marketing strategies.
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Bibliography
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