Analyzing Marketing Strategies for Aldi Supermarket in Australia

This report provides a comprehensive analysis of Aldi supermarket's marketing strategies, focusing on its operations in Australia and globally. It begins with an executive summary and an introduction to Aldi, a leading discount supermarket chain. The report delves into the background of the company...Read More

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Executive summary
Aldi supermarket is a discount supermarket chain that was started in Germany in the
early 90s. The company operates in more than 19 countries globally. This report
discusses the marketing strategies that have been used by the supermarket over the
years and hence contributed to the global success of the supermarket. The report also
gives recommendations on future marketing strategies that the company should
implement in order to keep increasing its market share in Australia (Zentes, morschett
& schramm-klein, 2007). The final section of this report is a summary of findings and
recommendations of this report.

Contents
Introduction............................................................................................................................................4
Background of the company...................................................................................................................4
Marketing analysis..................................................................................................................................5
Recommended marketing strategies for Aldi in future...........................................................................8
Conclusion.............................................................................................................................................10

Introduction
Aldi is a leading brand in the retail industry globally. The company has more than
10,000 discount supermarket chains distributed in about 18 countries globally. The
company has an annual turnover of approximately$55 billion. This report analyzes the
strategies that the company has applied in various situations and depending on the
environmental conditions that have helped the company to survive and succeed in the
market for a long time(Rosenberg, 2011). The report will focus on the company’s
operations in Australia but will also cite examples from the companies` operations in
other countries that the company operates. The report will be prepared using data
from various sources. The man source of data will be from peer reviewed journal
articles and from the other authentic online sources. Books will also be used to relate
the marketing strategies applied by Aldi to the theories of marketing management.
Background of the company
The company is based in Germany and was formed by brothers Karl and Theo
Albrecht in the year 1946. In the year 1960,the business was separated to become two
distinct business with one located in Essen and the other in Mulheaim. The company
started growing internationally in 1967 by acquiring the grocery chain Hofer in
Austria. Aldi opened its first shop in Australia in the year 2001 and has grown over
the years to attain 310 outlets throughout Australia (Plunkett, jack & plunkett, jack
2009). The discount supermarket chain is famous for offering products at very cheap
prices. In the year 2010, the company reported revenue of 53 billion euros.Aldi is
owned by Siepmann Foundation (Aldi Sud) and Markus Foundation (Aldi Nord). This
report analyzes the marketing strategies that the company has used for the previous

years and has helped it to achieve unbelievable success over the years. The report also
suggests the strategies and actions that the company should take to ensure that the
success continues for many years to come.
Marketing analysis
(i)The Nature of Aldi`s Marketing Strategies
Marketing is all about offering the right products at the right place at the right time
and price. It is important to analyze the marketing mix of the company so as to
understand the strategies that a company uses to reach its customers. These four Ps
include Product, Place, Price and promotion. This tool is important when the company
is preparing its marketing plan and therefore it is important to understand the
marketing mix of the company so as to understand the strategies that the company
uses over the years.
Since Aldi is a discount supermarket chain, controlling of cost is at the top of the
companies agenda. The company’s business model has remained the same since the
company was opened. T
The supermarket chain offers a wide variety of products under one roof. Some of the
products under the portfolio of the company fruits and vegetables, household
consumer goods, electronics and home appliances, milk, packaged grains, chocolates,
coffee, laundry products, Liquor skin care and beauty products(Kumar&
steenkamp,2016). Aldi Australia offers a wide variety of products to customers who
shop at its outlets to ensure that they can accrue all the items that they need under one
roof. The supermarket ensures that all the products that may be needed by consumers
are available at the stores at the right time. Another strategy that Aldi Australia uses in

relation to products is that if new product development. Aldi does not engage in
manufacturing activities but it enters into contracts with its suppliers t help them
acquire products that are unique in the market and at a low cost.(Mueller,2011) Aldi`s
strategy on products also includes acquiring products from different manufacturers
and suppliers in order to offer the customers a wide variety of options to choose from.
This strategy has helped in the growth of Aldi in Australia since consumer choices are
many compared to other supermarket chains in the country. Consumers can are
offered the same product category but the products are differentiated since they are
from different suppliers. This strategy helps to attract more customers in future.
Place. Aldi distributes its products effectively throughout Australia. The company
owns more than 300 stores across the country. The management of Aldi ensures that
all these stores are supplied with all the products needed at the right time. The
company has a wide variety of suppliers and each supplier is responsible of
maintaining the shelves they have been allocated in the supermarket. The company
ensures that it is in constant communication with its suppliers to ensure that no
products run out of stock and hence resulting to customer inconvenience.
Aldi stores are relatively smaller compared to those of competitors. This is one of the
company’s techniques to help minimize the cost of hiring the facilities. However, Aldi
stores have ample parking space which encourages customers to shop as Aldi stores
country wide. The packaging and display of the products on the company’s stores is
also cost effective. Choice of location of Aldi`s stores is also a very important strategy
for the company. Aldi ensures that it opens a store at a location where it will be highly
visible and strategic and the population of the area must be of more than 30,000
people. This helps to create ready demand for products hence cutting on advertising
and promotional expenses.

Aldi avoids branding products using its logo and brand because of the cost involved in
this. Therefore the company is very conservative and unlike many of its rivals in the
market, Aldi is not interested in stocking products that have its own products stocked
in its stores. This strategy helps in minimizing costs for Aldi and hence the company
is able to maintain its costs at a very low level.
Aldi procures most of its products in large quantities so as to be able to enjoy
economies of scale. Buying in bulk helps the company to get discounts from the
suppliers and the company seeks to take advantage of these discounts so that it can
transfer the same to the final consumers.
Every Thursday, Aldi introduces a different range of products such as bathroom
accessories, garden furniture, kitchen appliances and other household items. These
items are not available in the stores on normal days and therefore they help to attract a
higher number of customers on this day and they end up buying many more items.
One of the factors that have been at the core of Aldi`s success is the unique
advertisement techniques and methods that company uses. One of the unique
marketing strategies Aldi adopted is its advertising through brand comparison. Aldi`s
technique is aimed at convincing the customers that Aldi brands are of the same or
even higher quality standards than those of competitors. Aldi conducted blind test
experiments among customers that preferred popular brands. The experiment proved
that the customers could not differentiate the two brands and therefore concluded that
the products are of the same quality. This instigated the popular “Like brands” slogan.
Aldi in all its advertisements and product promotion efforts carries a message that its
products are only cheap but that does not mean they are inferior to those of
competitors.

Aldi designs and distributes more than 1 million copies of brochures every week to
distribute to customers visiting the stores as well as to other people living in the
surrounding areas and motorist (Hitt, ireland & hoskisson, 2017). This technique of
product promotion is very cost effective and enables the company to maintain low
costs while at the same time creating awareness among new and existing customers.
Aldi strategy is to avoid advertising as much as possible. However, sometimes the
supermarket carries out advertisements in the print and broadcast media. Aldi has a
strategy of attracting new customers who were loyal to competitors by demonstrating
to them how much they can save by swapping from the other grocers to join Aldi.
This campaign is known as ‘Swap and Save’.
Aldi also uses social media tools such as Facebook and Twitter to communicate to its
customers. One of the companies popular campaigns in the UK and many other
countries is the ‘Aldi Advocates’ campaign (Cameron & heywood, 2012). This
campaign encouraging consumers to recommend Aldi to other customers based on the
things the customers liked about the supermarket. The supermarket gives rewards in
form of shopping vouchers.
Recommended marketing strategies for Aldi in
future
In order for Aldi to survive and perform better in the Australian supermarket retail
industry which is becoming increasingly competitive, it is important for the company
to come up with new ideas. More and more supermarket chains in Australia are
competing on the basis of pricing and the pricing wars between the retailers may lead
to Aldi loosing the competitive advantage of cost that it currently posses.

Aldi Australia needs to enhance its market position as offering higher quality goods at
cheaper price due to economies of scale and other cost reduction measures. This is
important because, statistics indicate that the behavior of consumers in Australia is
changing. Consumers are becoming less interested on the price of a commodity as
compared to perceived quality of the commodity (Dahlén, & lange,2008) . It is
therefore important that in future, Aldi does not sell its products at very low products
compared to rivals since this may create the perception that the products of Aldi are
inferior and hence leading to loss of customers.
Increasing popularity of the internet and online retailers has become a threat to most
of retail supermarket outlets. Aldi should invest in online shopping to enable
customers to shop while at home and the company will deliver the goods at their
home at a cost. This will help Aldi to increase its market share in the country and to
also offer customers increased convenience since they are willing to pay for the
shipping costs.
Apart from the generally low prices that Alda offers its customers.it would be more
advantageous if the company introduced loyalty programs to reward loyal customers
and to attract new customers(Hitt, 2017). This strategy will help Aldi to snatch some
customers from its competitors.
The swap and save campaign should be carried out on the receipts of customers. After
they have purchased products from the supermarket, customers can be able to
compare and see how much they have saved and hence encouraging customers to buy
from Aldi outlets in future(Daft, kendrick& vershinina, 2010).

Conclusion
Aldi`s strategy of cost and other marketing strategies have enabled the supermarket
chain to acquire significant market share in the Australia retail market. Aldi has a
strategy with its suppliers to ensure that all its suppliers supply Aldi with products at
cheap prices. This helps to ensure that Aldi lives up to its bidding as a leading
discount supermarket chain. The company chooses cheap promotion techniques such
as social media marketing and use of brochures and word of mouth advertising. This
strategy ensures that the costs for the company remain as low as possible. This report
also gives recommendations on future marketing strategies that Alda should
implement so as continue becoming more successful in the market.

References
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