Aldi's Marketing Communication Brief: NZ Market, Competitor Analysis

This report provides a comprehensive marketing communication brief for Aldi's strategic expansion into the New Zealand market. It begins with an executive summary outlining Aldi's history, organizational structure, mission, core values, and product portfolio. The analysis includes a detailed examination of potential rivals in New Zealand, such as Foodstuffs and Countdown, evaluating their strengths and weaknesses. A thorough SWOT analysis is conducted to assess Aldi's position, followed by a discussion of segmentation, targeting, and positioning strategies. The report delves into Aldi's marketing mix, including product, price, place, and promotion strategies. Furthermore, it explores the 6C model of social media engagement and concludes with recommendations for effective negotiation tactics based on Hofstede's Cultural Dimension theory. The report aims to provide valuable insights into Aldi's marketing approach and its potential for success in the competitive New Zealand market.

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Title – Marketing Communication Brief of Aldi, New Zealand
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Executive Summary
This report outlines about business and marketing communication of Aldi based in its
tactical marketing decisions to expand into New Zealand markets and in line with the
strategic marketing theories. Aldi was incorporated in 1946 as a leading supermarket chain
known for its discounted approach in the marketplaces. To expand successfully into the New
Zealand market, Aldi required to strengthen its marketing mix and segment the market
appropriately according to the needs of consumers. The company also required to identify
competitor base in the New Zealand markets such as New World, PAK’nSAVE and Four
Square. However, to recognise Aldi potential to successfully expand into the new market,
SWOT analysis is also being practised signifying company strengths, weakness, opportunities
and threats. This reports also discuss 6C model of Social Media Engagement for the
development of promotional strategies in a multicultural context. Ultimately, significant
recommendations are being presented relating to negotiation tactics based on Hofstede
Cultural Dimension theory.

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Table of Contents
Task 1.........................................................................................................................................3
History of Aldi.......................................................................................................................3
Aldi Organisational Structure................................................................................................3
Mission and Vision Statements..............................................................................................4
Core values and beliefs..........................................................................................................4
Product Portfolio....................................................................................................................4
Task 2.........................................................................................................................................5
Possible Rivals in New Zealand and their Strengths and Weaknesses..................................5
Task 3.........................................................................................................................................6
SWOT Analysis on Aldi........................................................................................................6
Task 4.........................................................................................................................................8
Segmentation, Targeting and Positioning Strategy............................................................8
Task 5.......................................................................................................................................10
Aldi Product Strategy...........................................................................................................10
Aldi Price Strategy...............................................................................................................10
Aldi Place Strategy...............................................................................................................11
Aldi Promotion Strategy......................................................................................................11
Task 6.......................................................................................................................................12
6C Model of Social Media Engagement..............................................................................12
Task 7.......................................................................................................................................13
Recommendations of important negotiation tactics.............................................................13
References................................................................................................................................15

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Task 1
History of Aldi
One of the leading discounted supermarket chains i.e. Aldi incorporated in Germany
in 1946 and presently running 10000 stores in 20 nations. Aldi is comprised of two German
separate entities as Aldi Sud and Aldi Nord, operating both in different parts of the globe
(producebluebook.com, 2019). From its origin, both of Aldi founders focused on what they
considered to be essentials and since entering the Australian market in 2001, Aldi has shown
a commitment to its customers, through the introduction of national pricing, unit pricing,
release of all products prices on their webpage and so on.
Aldi Organisational Structure
Source: (careers.aldi.us, 2020)

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In terms of organisation structure, Aldi simple management processes combined with
decentralisation agrees for a very lean management structure and therefore, facilitate in
sharing of best practice across the group. The responsibility and authority are mostly retained
by the store and regional managers take necessary decisions relating to merchandising and
also for the hiring of employees as the company believes on customization and tailoring its
practices as per the local markets.
Mission and Vision Statements
Aldi vision aims to empower shoppers to live comfortable and wealthier lives for less
and to put it purely, the company propose its consumers an effective approach to shop
(aldicareers.com.au, 2019). On the other hand, the mission statement of Aldi defines their
goal to constantly fixed criteria for food retailing and to further develop the marketplace
position. The mission and vision of Aldi help the company to achieve its objectives by
showing right direction and offering a platform to the company employees to showcase their
talent and competence for the achievement of established vision.
Core values and beliefs
Considering company core beliefs and values, Aldi practices are built on simplicity,
accountability and consistency. The company continuously develop its business model on
simple structure, efficient processes and attempt for strong and binding solutions for the value
of consumers, personnel and corporate associates. Aldi also assure for the excellence and
takes on accountability for all their actions and on behalf of employees, suppliers and
business partners as the company believe it as a criterion for continued success. Aldi pursues
reliability and this builds trust so that customers can have faith upon company value
proposition.
Product Portfolio
Aldi offers wide range of groceries products under different categories such as Super
Savers, Fresh Produce, Baby, Beauty, Freezer, Health, Liquor, Pantry, Laundry & Household
and Recipes. The company also has various subsidiaries such as Aldi Mobile, Aldi Liquor,
Aldi Talk and Diskont. The company has upheld its discount supermarket repute with
offering goods at up to 50% rebate in comparison with the competitors (Pahwa, 2019).

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Task 2
Possible Rivals in New Zealand and their Strengths and Weaknesses
Competition has been a long time coming on the New Zealand supermarket with a
growing retail sector in New Zealand. In addition, e-commerce is also continuously evolving
likely to poses threat to both superstores as well as brick and mortar stores (Caro et al, 2020).
With an expansion to New Zealand, the two potential competitors for Aldi may include
Foodstuff and Countdown. However, it will be hard to crack this New Zealand market
duopoly as they both have dominated the marketplace in the country.
The first strength of Foodstuff (NZ) is the dominance in the New Zealand retail and
grocery market. Foodstuff owns the retail franchises New World, PAK'nSAVE and Four
Square. This strong brand portfolio helps the organisation to attain competitive edge in both
the markets i.e. Australia and New Zealand. The second strength of the company is
innovation where the company deploys pioneering innovations across all of their
supermarkets. In 2016, Foodstuffs innovation wins national award for waste reduction
(foodstuffs.co.nz, 2016). However, there are some weakness also like with increasing
business in the e-commerce segment, a firm also needs to develop its online channel
effectively, however, in case of Foodstuffs, it’s come out as a challenge as according to the
company, online delivery is too challenging to manage from franchised stores and big scales
of businesses were required to make home deliveries of food products work to cover the
extremely high costs involved. The second weakness of the company includes incompetent
practices and policies related to employees. For instance, in 2017, Foodstuffs has supposedly
threatened temporary distribution centre employees that they could lose their jobs if they
express to the union (Clayton, 2017).
In relation to Countdown first strength, it is the subsidiary of Woolworth NZ and
Countdown stores are typically larger than the regular New Zealand superstore with the Big
Fresh stores were bigger and average size of 51, 000 sq ft. It helps the company to offer wide
range of product at the cutting edge of retail innovation. The second strength of the
Countdown is its focus on undertaking retail operations in a personalised fashion via the
generation of customised product offerings and loyalty cards. The onecard of Countdown can
be used by the shopper in relation with food rewards, smart fuel discounts, club prices mailer
and many more (countdown.co.nz, 2020). On the contradictory side, there is some weakness

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too like Countdown supermarkets faced potential issues associated to failure of operations of
the EFTPOS machines that made the customer face various issues in relation to checking
counters and billing of merchandise. It also happened recently in Jan 2019. The second
weakness of the company is poor relationship with the supplier as like in 2014, Countdown
was accused of asking money from native suppliers below threat of blacklisting goods
(weeklytimesnow.com.au, 2014). Indirectly, this leads to the increased cost of products to the
customers when not get the right supplier.
Task 3
SWOT Analysis on Aldi
 Strength – The first strength of Aldi is its low price business model. Most of what
consumers use on a daily basis are sold in these provisions at prices that are
considerably lower than top of other typical retailers making them greatly effective in
their business. The company uses set of strategies to keep its price low like 90% of
the products are offered from its own exclusive brands, waste minimization with
listing only 1300 items in each stores everyday (low in relation to other superstore
chains) and also keeping the size of stores small as well as limiting store hours. The
second strength of the company is customer support and satisfaction. In 2017, Aldi
was the top scoring supermarket with a CSI rating of 84.3
(instituteofcustomerservice.com, 2017).
 Weakness – The key weakness of Aldi is its low margins and this makes the
superstore chain to heavily depend on the sales volume. The operating margin also
fell from 2.6 % in 2017 to 1.75% in 2018 (Davey, 2019) and the lower margin drives
then the sooner the point will be extended when it challenging to validate so many
SW
OT
Streng
th
Weakne
ss
Oppor
tunitie
s
Threat
s

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new store incorporation. The second weakness of the company is poor employee
satisfaction as there is no work life balance while working in the company and they
are also pushed to scan at least 1000 items an hour for faster checkout or they will
potentially lose the job.
 Opportunities – The preference for customers is the first opportunity for Aldi as
the desires of customers are rising and so is the proclivity to spend. This also
stimulates the customers to pay a premium for services and so even discount stores
can go with higher price together with posing better quality service. The next
opportunity for Aldi is to expand in emerging markets such as India and Brazil where
people are massive and more price sensitive and there is present of greater
opportunities in the economy. For instance, there is a 1.0% annual positive change
(2017) in Brazil (Lewis, 2018).
 Threats – The biggest threat for Aldi is the stiff competition from the number of big
companies such as Tesco, Woolworths, Walmart and Lidl. However, in New Zealand,
the major competitor includes Foodstuff and Countdown and the New Zealand solid
retail segment doing better than Australians with now worth $92.3 billion a year
(Shaw, 2018). The next threat is for the Aldi private label brands which can be stirred
away by recognised brands. Some of its private label brands include Clancys,
Choceur, Priano, Sea Queen and so forth.

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Task 4
Segmentation, Targeting and Positioning Strategy
Segmentation allows a clear focus on groups of customers who are more favourable to
the brand. In relation with customer demographics, the company offering products to all age
groups and for both males and females. Aldi relies on competitive prices and targeted the
middle income group globally and position itself as the most economical retail store. For
example, when comparing the price of 34 items at Aldi stores and same nearby Walmart
stores, it was found that the Aldi basket was about 30% cheaper than the total at Walmart. In
terms of lifestyle, Alid presents products for both working class, lower middle class, skilled
working class and middle class. The purchasing behaviour includes frequency of purchase,
benefits sought and attitude. Lidl offers mainly grocery products that are purchased on a
regular basis benefitting customers in terms of variety and cost advantage. The attitude
signifies here is optimistic and sceptical.
In relation with targeting, the company is targeting the part of the market that highly
prices sensitive and therefore, willing to purchase at a less than desirable location. Targeting
strategy of Aldi is differentiated to capture the market internationally and the process of the
product can be said to be major differentiator for Aldi. In 2019, Aldi claims its prices are up
Demographic
Gender Male and Female
Age All age categories
Income Group Middle and Low Income
Category
Social Position lower middle class, middle
class, working class, skilled
working class
Behavioural
Occasions Regular
Benefit Sought Variety and cost benefit
Attitude Sceptical and Positive

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to 50% low-priced than conventional supermarkets (Meyersohn, 2019). Similarly, Aldi has
positioned itself as a low price product corporation and the strategy used to keep the price
low as possible is a true EDLP. The company new positioning “Good Different”, reinforces
all aspect of its business – from sourcing of product to supply relationship and the customer
experience. Below, it is given the conceptual map of Aldi –
High Price
High
Quality
Low Quality
Low Price

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Task 5
Aldi Product Strategy
The primary objective of Aldi was to deliver quality products and at economical
prices. Considering the three products level (Core Benefit, the Actual Product and the
Augmented Product), Aldi core benefits delivered in New Zealand can be the convenience
and accessibility of vast range of products in its stores as well as the low price in comparison
of the competitor such as Countdown and other retailers. The actual products that Aldi can
offer in the New Zealand market include bakery, fresh foods, household, health and beauty,
whole foods and some other main categories in Aldi. Furthermore, the branding, quality and
packaging of Aldi products also comprise of actual product. On augmented level, it can
include their clear arrangement and display of goods, provision of shopping bags, activated
trolleys and confined access to shop-floor roaming Aldi employees. Considering all three
product level, Aldi can expand into New Zealand marketing in a more viable way and
provide their customers what they are seeking for in one way.
Aldi Price Strategy
From its incorporation, Aldi mission is to offer their consumers with “products they
buy often and ensure that those products are of highest quality possible together with a
guaranteed low price”. With expansion into New Zealand, Aldi requires a competition based
pricing strategy together with analysing the behaviour of the customers in New Zealand as
well as the business model of its top competitors such as Foodstuff and Countdown. Aldi
requires to pick the right strategy for the products responds otherwise to changes in price. For
instance, some goods need a “fewer but deeper discount” strategy as they are further subtle to
promote price than they are shelf price. Considering here the category level, biscuits perfectly
match to this strategy whereas products relate to greatly sensitive to price comes into more
elastic groups such as alcohol, sweets, snack foods and coffee. For Aldi to successfully
expand in the New Zealand markets, it is recommended to go with ELDP (Everyday Low
Price) strategy.

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Aldi Place Strategy
Presently, Aldi as a supermarket chain spread over several parts of the globe. The
company is operating its 1900 store in 20 countries (Redman, 2020). The company is
generally described as a no-frill outlet that showcases products at discounted price while
keepings its layout simple so as to cut down its costs. Continue with expansion in New
Zealand, it is recommended to Aldi that it should find location with good visibility with a
minimum population count and ensure that they also offer reliable accessibility to allow
people to reach in an easy and comfortable way. In addition, Aldi can also search for most
postal area in New Zealand and evidently, with minimum need for spending for delivery. In
relation with Aldi, it can be said that selective distribution network strategy has been
embraced as the products they provide can be multifaceted and may needs of personal
assistance at the time when consumer in prepared to buy.
Aldi Promotion Strategy
As per the independent study, it was identified that shoppers in the New Zealand
grocery market are the most promotion-driven world-wide. In 2017, nearly $6 in every $10
expended on groceries in New Zealand were sold on promotion—well ahead of other
advanced markets globally (Miller, 2018). The two traditional mixes that can be used by Aldi
includes – advertising and sales promotion. Aldi can pursue advertising on different channels
such as on billboard such as – “Blow Your Budget”, “We can help with that”. Here, the
‘logos’ as the one model of persuasion to be used as it will also communicate the brand in
New Zealand peoples mind. Similarly, sales promotion can be done in the way like – “10 %
OFF Aldi New Zealand Coupon”. Here, Aldi can use “Pathos” as Aristotle model to
influence the audience emotional state.

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Task 6
6C Model of Social Media Engagement
 Company and Contents – Here, Aldi can bring New Zealander's attention via
internet. Simply, Aldi required to develop attractive content including
localised taglines, messages and posts and this can take the form of its
Facebook brand page or with YouTube Video presenters to the different and
targeted viewers and make their interest drawn towards the company. Taking
an example, a video can be developed of family members shopping in an Aldi
store and how they are pleased with their services such as faster checkout and
availability of products and same to be posted on FB page and YouTube
video. Ultimately, it will act as a catalyst for their model of engagement or
involvement.
 Control – Here, Aldi must ensure that the message and content it created for
the New Zealand market must be appropriate by the community of interest and
is free to be taken, altered and remarked on. The promotional team of Aldi
must keep control of brand image and message. For example, the above video
that has been developed must check and assess completely that it should not

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harm community interest of New Zealand in any way or else it should be
modified.
 Community- The content presented in the markets of New Zealand must
match the customer behaviour and this requires Aldi to proactively engage in
discussion with other online community associates so as to diffuse and spread
the content. Taking an example, clubsnz.org.nz is a platform where Aldi can
found a lot of information pumped out in the media.
 Customers and Conversation – Here, the Aldi must ensure to raise
willingness among community and customers to involve with them that ranges
outside just purchase decisions at the point of the scale. For instance, through
social media, Aldi can collect necessary feedback about their services and
products and hence, gains necessary insights into behaviour of non-consumers.
This social sharing will enable Aldi exploit to tailor their offerings to better matches’
preferences of the New Zealanders and the community.
Task 7
Recommendations of important negotiation tactics
In most situation when expanding into new markets, improvement in products, price
negotiation or promotional strategies works, however, it is also necessary for the company to
emphasis on cultural understandings of the countries in order to match organisations values,
strategies and practices to that of new market. The three important negotiation tactics include
–
 In relation with Uncertainty avoidance, New Zealand is on an intermediate
position implying the extent to which individuals in a culture feel endangered
by ambiguous or unknown situations. Hence, it is recommended that the
company before opening a store in New Zealand should promote their
message well on different online and offline channels that makes Aldi
perceives as a discounted stores with offering of quality products. The
message can be related to Aldi before campaigns such as – “Smarter
Shopping” and “Good Different”. It will help in reducing uncertainty and draw

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the interest of customers from New Zealand retailers i.e. Foodstuff and
Countdown to Aldi.
 While observing long term orientation dimension, New Zealand denotes to be
a normative country while having low in score and this requires Aldi to exhibit
greater respect to their values and beliefs in comparison with Germany. It
requires Aldi to check on core values of the other big competition in the New
Zealand markets such as Countdown, who is committed offering their
consumers with value, choice and convenience and complying with that, Aldi
can raise overall shopping experience in the New Zealand stores.
 New Zealand also has high score in Indulgence in comparison to Germany and
this represents an advantage for Aldi. Aldi has an opportunity to raise their
products' prices here in new market together with its private label brands and
ultimately, raise their profit margins in comparison to the German and
Australian markets. Like in Germany, Aldi at a time stuck on 2-3% profit
margins and same in New Zealand, the company can increase it to 6-7%.

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References
aldicareers.com.au. (2019). About ALDI. Retrieved from
https://www.aldicareers.com.au/About-ALDI
careers.aldi.us. (2020). ACTUALLY, OUR STORY IS JUST BEGINNING.. Retrieved from
https://careers.aldi.us/our-story
Caro, F., Kok, A. G., & Martínez-de-Albeniz, V. (2020). The future of retail
operations. Manufacturing & Service Operations Management, 22(1), 47-58.
CHOOSE YOUR REWARDS. Retrieved from https://www.countdown.co.nz/onecard
Clayton, R. (2017). Foodstuffs allegedly threatens to fire workers who speak to union.
Retrieved from https://www.stuff.co.nz/business/industries/95442895/foodstuffs-
threatens-to-fire-workers-who-speak-to-union
countdown.co.nz. (2020). Make the most of your Onecard
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https://www.reuters.com/article/uk-aldi-uk-results/aldi-focused-on-british-sales-with-
1-billion-growth-plan-idUKKBN1W10ES
foodstuffs.co.nz. (2016). Foodstuffs innovation wins national award for waste reduction.
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innovation-wins-national-award-for-waste-reduction/
instituteofcustomerservice.com. (2017). Aldi named top supermarket for customer service.
Retrieved from https://www.instituteofcustomerservice.com/media-centre/customer-
service-news/article/aldi-named-top-supermarket-for-customer-service
Lewis, J. (2018). Brazil’s GDP Expands After Two Years of Contraction. Retrieved from
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contraction-1519908523
Meyersohn, N. (2019). How a cheap, brutally efficient grocery chain is upending America's
supermarkets. Retrieved from
https://edition.cnn.com/interactive/2019/05/business/aldi-walmart-low-food-prices/
index.html

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Miller, B. (2018). THE $470M OPPORTUNITY: CHANGING THE GAME WITH PRICE
AND PROMOTIONS. Retrieved from
https://www.nielsen.com/nz/en/insights/article/2018/the-470m-opportunity-changing-
the-game-with-price-and-promotions/
Pahwa, A. (2019). ALDI Business Model | Why is ALDI so Cheap?. Retrieved from
https://www.feedough.com/aldi-business-model-aldi-cheap/
producebluebook.com. (2019) Aldi and Trader Joe’s: Are they related?. Retrieved from
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https://www.supermarketnews.com/retail-financial/aldi-expand-presence-new-york-s-
long-island
Shaw, A. (2018). New Zealand's 'solid' retail sector doing better than Australians: report.
Retrieved from https://www.nzherald.co.nz/business/news/article.cfm?
c_id=3&objectid=12147091
weeklytimesnow.com.au. (2014). Australian-owned New Zealand supermarket chain
Countdown accused of demanding money from local suppliers under threat of
blacklisting products. Retrieved from
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zealand-supermarket-chain-countdown-accused-of-demanding-money-from-local-
suppliers-under-threat-of-blacklisting-products/news-story/
40af84a6b29cd0420f0f2eab1e9d96be