Aldi's Marketing Strategies: Analysis and Strategic Recommendations

This report provides a comprehensive analysis of Aldi's marketing strategies, examining its approach from its inception to its current practices. It delves into the marketing mix, cost leadership, and differentiation strategies employed by Aldi to gain a competitive advantage and expand its market shar...Read More

REPORT

EXECUTIVE SUMMARY
Marketing strategy is a process of promoting products and services of the company in
order to earn profits and increase market share by increasing sales. There are different types of
strategies used by company to attract customers. Present report will contain the marketing
strategies used by Aldi company when it started and various strategic marketing options
company need to implement to be on top of the industry. It has been highlighted that company
uses cost leadership, differentiation and marketing mix strategies to expands it business however
company also need to use social media, affiliate and behavioural marketingto expands its
business and customer base.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................2
BACKGROUND OF THE COMPANY.........................................................................................2
MARKET ANALYSIS ...................................................................................................................2
The Nature of Aldi’s Marketing Strategy or Strategies since it began........................................2
Strategic Marketing Options for Aldi moving forward...............................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Marketing strategies is designed to spread awareness or promote products and services of
company in order to earn profits (Ryan, 2016). Companies develop different marketing strategies
to achieve their business objectives. Basically marketing mix is used to make strategies such as
pricing strategy, place, promotion and product. It is important to frame strategies in order to
compete with the competitors and sustain in the market for longer period. Present report is based
on Aldi company which is a retail company. It sells food, household essentials and beverages etc.
the report will include different marketing strategies Aldi has adopted since its launch in
Australia and various marketing options for Aldi to become successful organisation in Australia.
BACKGROUND OF THE COMPANY
Aldi is a retail company established on 10 July 1946. Company has almost 10,000 stores
in 20 countries. In 1960, company was split into two parts Aldi Nord and Adi Sud, Aldi Nord has
35 single regional company and about 2500 stores in Germany. Aldi Sud has 32 companies and
1600 stores. Firm operates grocery business in a retail concept and it has limited to 500 items.
Organization is competing with Australian supermarkets and company has arrived in Australia in
2001. Firm has expanded over Australia and opened 500 stores. Aldi is growing rapidly in
Australia and maintaining 12.6% market share.
MARKET ANALYSIS
The Nature of Aldi’s Marketing Strategy or Strategies since it began
Market analysis is evaluation of market, analysing customer segments, buying pattern,
economic environment and competition, it is beneficial for Aldi to formulate strategies to
overcome these barriers. Management of Aldi develop their pricing, promotion, products etc
(Ottman, 2017). strategies in order to attract customers. From the beginning company has
developed different marketing strategy which has helped them to grow rapidly. The marketing
mix of Aldi is a follows:
 Product: The main objective of Aldi is to provide its products at affordable cost and in
good quality (Marketing mix of Aldi, 2019). Their strategy is to build relation with
selected supplier and increase their brand image by targeting right audience. Company
has 500 items, it does not change its products but experiment on non-food item for
example company offer snow gear and warm-camping gear in winters to change their
product line (Kotler and et.al., 2018).
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 Price: Company has strong customer base due to low price of products among the
competitors. Firm has developed various pricing strategies such as market penetration,
under this pricing strategy company charge its new product at lower cost in order to gain
market share by entering in new markets (Pappas, 2016). Company also uses competitive
pricing strategy where Aldi price its products and services lower than its competitors.
Company buys its products at bulk which is benefit for both customers and organization.
As company was rapidly increasing company has changes its pricing strategy and
adopted unit pricing where customers are able to compare prices with the competitors. It
has benefited company in creating a large customer base. Company also provide discount
coupons to customers in order to create competitive advantage and loyal customers.
 Promotion: Company has also developed its promotion strategies by claiming that it is a
cost saving (Scrinis, 2016). In Australian markets company uses other sources of
marketing such as electronic, print and display media to boost their stores. Company also
uses e-mail marketing to communicate and aware customers. For example Aldi uses BTL
( below the line ) and ATL ( above the line ) promotion strategy to attract customers.
ATL strategy includes advertisements through TV, print media etc. and BTL includes
promotion through social media, target emails and 3rd party support.
Company uses porter's generic strategy to create competitive advantages.
Illustration 1: Porter's generic strategy
(Source: Porter's generic strategy, 2016)
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Aldi uses cost leadership and differentiation strategy to attract customers and gain
competitive advantage to sustain in the market and increase its market share (Cohen and et.al.,
2015).
 Cost leadership strategy: Company aims at reducing cost of operation of supermarkets,
it provides discounts to its customers and sell its products at lower cost. It is beneficial
for firm to attract large number of customers than its competitors. Different cost
leadership techniques implemented by company are they buy products at lower cost and
display on pallets rather than shelves. Companies use this strategy only if they have high
efficiency, low cost labour, resources, materials, high bargaining power and strong
distribution channel (Porter's generic of Aldi, 2016).
 Differentiation strategy: This strategy aims at making differentiation products then its
competitors to attract customers. Organisation using this strategy generally target large
markets and differentiate their products to gain competitive advantage. Aldi is capable to
implement this strategy because it has strong innovation, research and development,
strong distribution channel, superior quality of product and strong brand image and
marketing strategy (Ryan, 2016).
Aldi has also revealed its one of the business strategy that is In 2016 company has
reduced its price by almost 50 % in everyday grocery products. However other supermarkets
offer temporary discounts, Aldi has promise to lower its price permanently. Company is
continuously expanding its business by increasing its product range.
Strategic Marketing Options for Aldi moving forward
Aldi need to improve and implement different marketing option in order to be in top of
the industry (Ottman, 2017).
Social media marketing:
Generally Aldi uses E-mail marketing to communicate and promote its products to the
customers. It is beneficial for company to create loyal customer base through e-mail marketing
but company also need to attract new audience and communicate their products. However
attracting new audience need more investment but through social media marketing company is
able to reduce cost of marketing. Thus, Aldi need to use social media platforms such as
Facebook, Instagram and twitter to reach large number of customers easily (Scrinis, 2016). These
platform will enhance their promotion strategies. It is beneficial for company to communicate
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their products and create brand awareness to attract customers. Through social media platform
company identify market trends, customer needs, competitors strategy which is useful for
company to develop its own strategy. It is also beneficial to solve customer problem easily and
check their loyalty (Kotler and et.al., 2018).
Affiliate marketing:
It is an online sales actions where a product owner increase its product sale by allowing
others to target same customers and earn commission by referring the products top others.
Affiliates earn money on the sale of product of their own. In simple words, affiliate marketing
refers to recommending products and services by social media, blogs and websites. The affiliate
gain commission every time on the purchase through the link connected to the recommendation.
Aldi company can also use this type of marketing to increase their sales and revenue. It is
beneficial for company to increase their audience base, it is cost effective, it is also useful for
company to increase their reputation. It saves time of the company to search potential customers
(Pappas, 2016).
Behavioural marketing:
It is a strategy to attract targeted audience through advertisements or content on the basis
of their behaviour and actions. Under this strategy company collected all the past data from the
sources and analyse them to identify trends, choice and behaviour in order to attract customer's
mind. Behaviour marketing uses web analytics, browsing history, search history, cookies,
purchase history, social data, app data, IP address and login details to gather information about
the customers. After collecting information, they analyse the data and identify insights from it.
Aldi can also use this marketing strategy in order to promote and advertise its products to
customers who are searching for the same or substitute products. Company need to gather
information from these source and present advertisement relevant to user, there is a high chance
that they will respond in positive way and make a purchase (Cohen and et.al., 2015).
Loyalty cards:
Company can issue loyalty cards to customers who are purchasing their products since
past 4 to 5 years. It will be beneficial for company to retain its customer for longer period by
providing discounts, coupons and offers on specific festive occasions. Customers will feel
valued. Company will identify customer purchasing trends and will improve customer
relationship with business (Ryan, 2016).
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These marketing strategies can be beneficial for Aldi company in order to be successful
in the market and attract large customer base.
CONCLUSION
From the above report it can be concluded that marketing strategies play an important
role in promoting the products and attracting customers. Company formulate marketing
strategies according to the nature of business. Aldi company was using marketing mix to attract
customers on initial level and further company has changes its strategies to cost leadership and
differentiation strategy to sustain in the market by providing products at lower cost. Report also
concludes that in order to be successful in new markets company need to use social media
marketing to attract new customers, affiliate marketing to increase sales and behaviour marketing
to sell products and services as per the needs and likes of customers.
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REFERENCES
Books and journal
Cohen, D. A. and et.al., 2015. Store impulse marketing strategies and body mass index.
American journal of public health. 105(7). pp.1446-1452.
Kotler, P. and et.al., 2018. Marketing management: an Asian perspective. Pearson.
Ottman, J., 2017. The new rules of green marketing: Strategies, tools, and inspiration for
sustainable branding. Routledge.
Pappas, N., 2016. Marketing strategies, perceived risks, and consumer trust in online buying
behaviour. Journal of Retailing and Consumer Services. 29. pp.92-103.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
Scrinis, G., 2016. Reformulation, fortification and functionalization: Big Food corporations’
nutritional engineering and marketing strategies. The Journal of Peasant Studies. 43(1).
pp.17-37.
Online
Marketing mix of Aldi. 2019. [online]. Available through
<https://www.mbaskool.com/marketing-mix/services/16807-aldi.html >
Porter's generic of Aldi. 2016. [online]. Available through
<https://mpk732t22016clusterb.wordpress.com/2016/07/24/is-aldi-creating-value-through-
the-marketing-mix/ >
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