Principles of Marketing: Comprehensive Analysis of ALDI's Strategies

This report provides a comprehensive marketing analysis of ALDI, a prominent discount supermarket chain. It begins with an introduction to the core principles of marketing, including product, price, place, and promotion, also known as the 4 Ps. The report then delves into a detailed PESTLE analysis, examining the political, economic, social, technological, environmental, and legal factors influencing ALDI's operations. This includes considerations of political stability, economic growth, social trends, technological advancements, environmental regulations, and legal frameworks. Following the PESTLE analysis, a SWOT analysis is presented, identifying ALDI's strengths, such as its low-cost strategy, convenience, and customer support, and weaknesses, including its limited online presence and product assortment. Opportunities and threats are also considered, such as market expansion and competition. The report concludes with recommendations based on the SWOT analysis, offering insights into how ALDI can leverage its strengths, mitigate its weaknesses, capitalize on opportunities, and address potential threats. The report aims to provide a thorough understanding of ALDI's marketing strategies and its position within the retail industry.

PRINCIPLES OF
MARKETING

Table of Contents
INTRODUCTION.......................................................................................................................3
Pestle analysis of ALDI......................................................................................................3
SWOT Analysis..................................................................................................................7
Recommendations........................................................................................................................9
CONCLUSION..........................................................................................................................10
REFERENCES..........................................................................................................................11

INTRODUCTION
The basic principles of marketing consist of product, price, place and promotion. Together,
these four principles are known as the 4 P for its marketing, and include the integration
of marketing. For a marketing strategy to be effective, the four components must be used
correctly. This report covers pestle analysis and SWOT analysis of the company and the
recommendations in relation with the threats and opportunities in the SWOT analysis. The
brand is common and owned by two families whose nationalities is German and who is
discounted supermarket chains. The company is a private company and the industry in which
they operate in is retail industry. They have more than 10,000 stores in 20 countries and the
turnover of the company is around € 50 billion. The company was founded by Karl and Theo
Albrecht in the year of 1946. Both of them are brothers and they took after the store their
mother had which was in Essen. In the year of 1960 they split the business into two groups
that changed and became Aldi Nord with its headquarters in Essen and Aldi Sud whose
headquarters was in Mulheim The mission statement of ALDI describes our aspiration to
continually set standards for food retailing and to further expand the market position of the
ALDI North Group. Simplicity, responsibility and reliability are the three core values
embedded in the mission statement. The vision of the company is to enable Australian
shoppers to live richer lives for less. All people, wherever they live should have the
opportunity to buy everyday groceries of the highest quality at the lowest possible price. To
put it simply, we offer our customers a smarter way to shop (Abbas, Zubair and Sarwar, 2018).
Pestle analysis of ALDI
Political Factors-
These factors affect the probability of survival of the company and impact on the
profitability of the company. This is because these types of factors are uncertain and there are
changes in the current political regimes in the decisions taken by the government. Sometimes
these factors not only affect the business of host country but also affect the business of other
countries in which the country is maintaining their operations. Company needs to consider
these factors before they invest into other markets.
 The stability of political factors in the concerned country over a period of time.

 The politicians of the country and their interest such as if or not they will interfere in
the business and lead to corruption, repercussions. This may lead the business to face
impeachments of government employees who work on high level.
 There are some laws such as contract law which strictly guides the company for what
they are allowed to do and what are the restrictions imposed on them. For instance
some countries have restriction on selling alcohol and some asks them to fulfill the
demand of specific condition (Alserhan, Althawadi and Boulanouar, 2016).
 It is necessary that the intellectual property is protected. For instance government of
many countries do not formulate policies for intellectual property of business which
makes the business loose the interest of many of the investors.
 The barriers regarding trade that the host country will help them to protect ALDI.
Many of the companies are affected by these barriers as many of the partners of the
trade will harm the exports.
 High level of taxation will demotivate the companies from earning high amount of
profits,
Economic Factors-
These factors are concerned with the level of inflation, condition of the economy and
rate of interests. These factors are concerned with the aggregate demand and aggregate
investment. These factors can either make a company profitable or make them incur a huge
loss. Before investing company must look for these areas.
 The system and process of the economy and it is required to be assessed that
monopoly, oligopoly is similar to a perfect system of economic competition.
 Growth of GDP rate will help the company to analyze how fast will the company grow
in the future.
 The rate of interest will reflect that how many individuals will borrow and invest in the
business. If the level of investment is high then the probability is more that the
company will achieve success.
 The efficiency of market on the basis of financial aspects will determine that how
easily the company will be able to raise capital from the market in comparison with the
demand and supply in the market (Bowie and et.al., 2016).

 The exchange rate of the country needs to be keep in mind as it plays a role in the
profits of the company specially when the company is concerned or involved in trade
on international borders. Investors will only invest when they will see that the currency
of the country is stable so that there will be less chances of losses.
 If the level of unemployment is high in the country then the supply of jobs will be
greater than the demand which will lead to lower wages and cost low to company to
hire the employees.
Social Factors-
These factors are concerned with the beliefs, culture, attitude and values of the society.
The factors which the company needs to keep in mind are-
 ALDI targets their products on the basis of age and gender. For instance products
which comes under the category of make up are targeted to only women as it is
unnecessary for men.
 It is necessary for the company to divide or segment the marketing so that they can
promote the products to those people who can afford premium products.
 Company also need to assess the educational background of the people between the
market which they have targeted so that they do not loose the interest of the people on
their products and work according to their priorities.
 Other than this company needs to work according to the standards of health and be
aware about all the factors related to it so that they do not have to face any type of
harassment regarding these issues (Cummins, Loe and Peltier, 2016).
Technological Factors-
These factors helps the company to redesign the product or bring innovation into the
market.
 These factors have helped the company to develop their aspects which has helped them
to fight the competition. If any type of new technology is introduced by the company
they need to check and monitor that how much recognition the advanced level of
technology has gained in the market. Other than that they need to analyse that how far
they are as compared to their competitors in terms of revenues. This will help them to
assess the value of the technology and urgency of requirement in the market.

 They need to assess the factors that will bring improvement in the company and if that
change done by the company is drastic then they will be able to make their competitors
suffer more.
 Company needs to reinvest their increased profits in to the department of research and
development so that they can work on future innovations which will help the company
to reach more higher position into the market. Other than this they will be able to
sustain the profits for a long period of time (Palmatier and Sridhar, 2017).
Environmental Factors-
These factors are concerned with the condition of the environment so that factors such
as pollution, global warming and other factors which are harming the environment can be
reduced.
 The current situation of the environment states that ALDI needs to manage the
transportation of both their aspects such as finished product and raw materials. This
will create difficulties for the company to manage the delivery of the product before
deadline.
 Change in climate will make many products useless as seasonal products won't be able
to manufacture them at the time of season.
 ALDI may have to face financial issues as those companies who do not work under the
practices of environmental laws will have to face fines, lawsuits, quotas from the
government (Serrat, 2017).
 If any factors or contributions made by ALDI leads to cause any harm to the species
who are endangered then they will have to face a lot of consequences from the general
people who may boycott the company.
 If the company considers to work for the betterment of these factors then they will
have full support from the government and other than that their consumers will also
support them by paying more premium to their products (Dahl, Gorn and Weinberg,
2018).
Legal Factors-
These factors are concerned with the rules and regulation and the framework of the
country. ALDI do not have that type of policies which can help the employees regarding
protection. Company needs to consider these aspects-

 Laws related to intellectual property and for the protection of the data are needed to be
implement so that they can protect the patents and ideas of the company because of
which they will be able to earn the profits. If the data of the company is not protected
then it is sure that they will loose their position and the competitive advantage.
 Laws which are concerned with the discrimination are placed by the government so
that they can protect the employees and make sure that everyone in the company is
getting treated fairly and offered the opportunity according to their performance not by
discriminating.
 Laws related to health and safety were imposed by the company so that no one feels
that they are working under pressure and unhealthy conditions (Alserhan, 2017).
SWOT Analysis
Strength-
 The low cost of the supermarket is their greatest strength. Many consumers are
switching to their brand from Sainsbury and other competitors due to their low pricing
strategy. The reason behind this is that many of the people are preferring cheaper rate
of products. Cutting of price by Aldi has changed the competition in the sector of food
retailing since the last decade which has benefited them and reduced the power of their
rivals in the market (Lilien, Rangaswamy and De Bruyn, 2017).
 Another strength of the company is that it offers convenience to people. Other than the
fact that they offer low prices they also have stores in almost every corner which helps
them to get more footfall by attracting them. They have around 700 stores in the
country and they are looking to expand more of their operations. Not many of their
rivals has the strength to look after expansion at this stage and this level.
 They enjoy a high level of support from their consumers as they offer them wide range
of choices at discounted prices. Apart from this company also offers different range of
products on rotation which they advertise with the help of pamphlets.
 The products offered by them at low prices helps people to increase their saving. While
offering prices which are low of those products which are offered on rotation. In
comparison with the other stores discount offered by the company helps the consumers
to save up to 50 per cent on their products (Wood and Jobber, 2016).

Weakness-
 Company has a weakness and that is to not have their operations online which is
considered as one of the biggest weakness of the company in the digital area. This
factor is affecting the sales of the company and limiting their share to grow into the
market as all pf their competitors such as Tesco and Sainsbury offers online services to
their consumers (Porral and Stanton, 2017).
 The range of products and its assortment offered by the company is limited. In fact it is
so limited that many of the buyers cannot complete their shopping specially when
people are looking for basic food products at heavy discounts. This pushes the buyer to
one of their competitors who has it all such as more variety and different range of
products (Pererva, Nagy and Maslak, 2018).
 The level of satisfaction that the company provides to their employees is not
considered as up to the mark. They need to work in different shifts and according to
that they are getting paid less for their work as compared to other jobs of similar
nature. This leads to dissatisfaction among employees which affects the working of the
company.
Opportunities-
 It has been come into notice that needs of the consumers are growing with time and
with that they are ready to spend more. They are ready to pay high amount for their
products which opens the opportunity for discounted stores such as Aldi to charge high
prices for their products and offer better quality goods to them. Apart from this
company also has the opportunity to add more range of products to their portfolio.
 Habits of customer are changing and now they are shifting to consume more of those
products which are good for their health which opens up the opportunity for Aldi to
come up with new range of products such as sugar free products and organic goods.
 The company has also planned that by the year 2022 they will open 300 stores in UK.
Threats-
 The issues which the company is facing on the legal aspects are leading to negative
publicity in the market. This is also affecting the conditions of employment which are
poor working.

 Aldi faces a lot of competition from biggest key players in the market such as Walmart
and Amazon as either they are the best buy option or they are entering into online retail
of grocery which is causing a threat to them (Palmatier and Crecelius, 2019).
Recommendations
There are different ways can be used by the organization to improve their performance in the
target market. ALDI Supermarket is a retail store so this is important for them to provide
better purchase experience to the customers. Different processes and technologies can be used
by the organization to improve their operations in order to provide effective and satisfactory
facilities to customers (Jaravel, 2019). There are different technologies can be used in the
organization operations to reduce the complexity of the purchasing process and billing process
in retail store of ALDI supermarket. Technology like Artificial Intelligence can be used in the
organization to reduce the complexity of the sales and billing operations to save time of
customers. This technology also can be used to provide customisation in the purchasing. This
will also improve the data and information management of the organization which will prevent
any kind of data loss and management issue with in retail store. The inventory of the company
also can be improved by implementing automation tools with in the company to effectively
manage the inventory of the retail store. The main challenges that are faced by the
organization is related to the low marginal profit of organization. This issue can be resolved
the operational cost of the company. Automation and Artificial Intelligence technology that
can be used by the organization to provide better and cost effective solution to the company.
This process also can reduce various risk with predictive feature of artificial intelligence.
Poor employee satisfaction is also major issue for ALDI Supermarket. This issue can be
solved with different training and development program that will make them efficient in
organizational operations and improve their capability to grow in organization. This process
will keep them satisfied with the company (Hänninen, Smedlund and Mitronen, 2018). This
also can improve their motivation level to give their best for the organization. Some other
issues that are faced by the organization in penetration of upper class people due to lack of
availability of branded products. This issue can be resolved with providing range of products
of different brands to the customer with effective pricing. This issue also can be resolved with

effective marketing policy and processes. This issue also can be resolved with implementing
digital technology and other promotions processes that can improve the penetration of
organization in different market place with upper class people. This is how different
challenges can be used in the organization that can improve the performance f the organization
in the target market.
CONCLUSION
From the above studies it has been concluded that company has many opportunities such as
taking their operations to online market and add more categories of product to their portfolio
so that they can satisfy their consumers. Other than this they need to improve the satisfaction
level of employees and improve the working condition and offer them pay according to the
level of work they are completing. This will help the company to reduce any lawsuit regarding
discrimination and violation of healthy and safety law. Aldi is facing negative publicity in the
market due to many factors such as quality of their products which they need to change so that
they can meet upto the standards of people. It has been analyzed that if the company is able to
retain the level of profits then they need to reinvest them in the area of research and
development so that they can work up to they can bring future innovation into the market and
gain the benefit of competitive advantage. They also have the scope to offer healthy and
organic products into the market as more and more consumers are shifting to healthy products.
The reason behind that is people are more concerned nowadays for health and company has
the scope to launch a new product and target them.
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REFERENCES
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