Lidl's Discounting Impact on Customer Satisfaction: A Research Project

This research project analyzes the impact of Lidl's discounting strategies on customer satisfaction within the UK retail market. The report begins with an introduction outlining the importance of customer satisfaction in the retail industry, particularly in the face of increasing competition. It explores factors influencing research project selection, reviews relevant management literature and theories regarding discounting and customer satisfaction, and establishes clear research aims, objectives, and questions. The methodology section outlines a qualitative research approach utilizing primary data collection through surveys. The findings reveal that a significant percentage of customers are satisfied with the quality of Lidl's products and services and agree with the effectiveness of its discounting strategies. The research also identifies that quality is a primary factor for customers when shopping at Lidl, and that the majority of respondents believe Lidl considers customer viewpoints when modifying products and services. The report concludes with recommendations for Lidl to further enhance customer satisfaction through its discounting practices.

Research Project

TABLE OF CONTENTS
TASK 1............................................................................................................................................3
1.1 Formulating and recording possible research outline specification......................................3
1.2 Factors contributing to research project selection ................................................................3
1.3 Management literature and theories.......................................................................................4
1.4 Producing research project specification ..............................................................................4
1.5 Providing appropriate plan and producing for the agreed research specification..................6
TASK 2............................................................................................................................................7
2.1 Matching resources efficiently to the research questions .....................................................7
2.2 Undertaking the research with agreed specification and procedures.....................................9
2.3 Recording and collecting data..............................................................................................10
TASK 3..........................................................................................................................................11
3.1 & 3.2 Using appropriate research evaluation techniques and Interpreting and analyzing the
results ........................................................................................................................................11
3.3 Making recommendations and justifying the areas for further consideration ....................15
TASK 4..........................................................................................................................................17
4.1 Presenting the findings ........................................................................................................17
REFERENCES..............................................................................................................................18
APPENDIX....................................................................................................................................21
Questionnaire.............................................................................................................................21
Reflective...................................................................................................................................22
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TASK 1
1.1 Formulating and recording possible research outline specification
Customer satisfaction is the crucial aspect which is considered by each and every
organization while conducting the overall business activities. Here, corporation are facing issue
while promoting their services because intense competition in in the marketplace. It is very
important for retail industry to address the issues of customers and accordingly provide them
services to resolve the same. It enables them to take frequent purchase decision and enhance the
sales turnover of firm. Furthermore, discounting of food products is the imperative aspect to
retain and satisfy number of consumers who daily access services of stores like Aldi and Lidl.
Present report is based on Lidl discount supermarket chain which operates over 1000
stores across Europe. It provides organic products, fish and eggs as well as other related food
products in order to meet demand of number of consumers. The corporation lays emphasis on
quality and safety of products and services. In this regard quality standards are followed for food
products and consumers goods both. Currently the market share of organization has reached 10
pc for the first time. Apart from this, in 2014 consumer spending on Lidl was 918 million pound
which then increased in 2015 by 1093 million pound. It shows that there is 19% change in the
performance of corporation from previous year. However, other organization are performing
quite better such as Aldi due to 16.5% change in the sales turnover or consumer spending. Owing
to this, company need to focus on level of customer satisfaction by providing them wide range of
products and services (Aldi and Lidl's market share reaches 10pc for first time, 2015).
Furthermore, Lidl adopt effective strategies to create competitive existence in front of other
competitors.
1.2 Factors contributing to research project selection
The selection of present study is based on several factors. It is because in current era
competition has become the crucial task which crate barriers in long run growth and progression
of corporation. In this regard, different strategies like discounting food products and lucrative
marketing strategies are adopted so as to increase the attention of buyers. Even by adopting such
kind of strategies it is quire no easy to retain customer for longer time span. In this regard study
is being conducted to analyze the impact of discounting food items on customer satisfaction.
Thus, the present report will help retail industry of UK to retain customers for longer time span
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by addressing potential issues. Similarly, study will be helpful for those who are doing research
in the same field.
1.3 Management literature and theories
Literature review is the most imperative part of study as it consists of wide range of
information with regards to topic under investigation. Here, the literature review has been written
by formulating themes accordingly the research objectives. This will help to develop deep
understanding regarding the topic. It proves to be effective to provide valid recommendations for
resolving issues which are being faced by retail corporation of UK.
According to Gomez, McLaughlin and Wittink (2004) the concept of discounting food
products is working well in UK because to satisfy the need of buyers and keep the low inventory.
Here, high cost need to be incurred while keeping the foods cost for long time span because of
their perishable nature. In this regards, discounting strategy leads to attract more buyers and
accordingly products and services be provided to them in bulk with less prices.
Pantouvakis and Bouranta (2013) asserted that by pricing strategy has inverse
relationship with customer base. The reason behind the same is preferences of customer towards
quality products with lower prices. Here, they want to purchase those products which are used on
daily basis. Furthermore, sales turnover has to do with pricing strategy because in case prices are
low then sales turnover automatically go high. Apart from this, discounting food products or
items leads to retain buyers and give them high level of satisfaction.
1.4 Producing research project specification
Research aim and objectives
The research aim and objectives for the proposed study are listed as follows-
Aim- To examine the impact of discounting food items on customer sanctification: Study on
Lidl.
Objectives
Research objectives for the proposed study will be formulated according the research
aim. It will assists researcher to access appropriate sources of information so as to reach at the
aim of the study.
 To assess the concept of discounting pricing strategy
 To analyze the impact of discounting pricing strategy on customer satisfaction
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 To provide recommendations to increase the level of customer satisfaction by adopting
discounting pricing strategies
Research questions
The research questions for the proposed study will be formulated as follows which assists
researcher to collect large amount of information and accordingly analyze the collected data.
Further, research questions are prepared in accordance with research objectives-
 What is concept of discounting pricing strategy?
 How discounting pricing strategy affect customer satisfaction? What are different ways to increase the level of customer satisfaction by adopting
discounting pricing strategies?
Research methodology
The present research report will be based on qualitative type of investigation and
accordingly all related methods will be selected to conduct the study. Here, interpretivism
philosophy will be applied to interpret the views of human beings incorporate in the study.
Similarly, inductive approach will be used to gather large amount of data which leads to set the
flow of data (Modell and Humphrey, 2008). Apart from this, both primary and secondary data
will be collected to reach at the aim of the study. Here, number of resources will be selected to
create strong base of the information. On the other hand, simple random sampling is applied in
order to approach number of potential customers and draw valid conclusion from the collected
data.
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1.5 Providing appropriate plan and producing for the agreed research specification
The Gantt chart is the most imperative aspect to show the time line for each research
activity. According to the below mentioned Gantt chart research will be completed in 16 weeks.
For example research project outline is made in 2 weeks whereas there will be one week taken
for assessing the factors which contribute towards selection of the research topic. However, the
major time will be taken in activities like collection of data and analysis of the same. Thus,
below shown Gantt chart represent all the activities to be completed in research project along
with its time.
Activity/
weeks
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Research
project
outline
Factor
affecting the
selection of
topic
Creating a
background
of study
Formulating
research
objectives
and
questions
Adopting
appropriate
research
methodolog
y
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Conduct a
literature
review
Collecting
primary data
Data
analysis
Drawing
valid
conclusion
Evaluating
the business
proposal
Implementat
ion
TASK 2
2.1 Matching resources efficiently to the research questions
Concept of discounting pricing strategy
Pricing strategy is the important element of marketing as it has direct relevance ot profit a
business make. Generally pricing strategy is selected by taking into accounting business or sales
objectives. According to Sohail, Anwar and Rabbie (2012) pricing strategy is the most
imperative aspect which enables corporation to adopt effective strategy for attraction to large
number of customers. This aspect of corporation leads to meet sales objectives of organization. It
is also important for corporation to analyze the costing strategy effectively and accordingly put
efforts to achieve long as well as short term objectives.
The marketing analysis is done at first in order to adopt the effective pricing strategy. The
main motive behind adopting discount pricing is to make out greater profitability by selling
product at low price in high quantity. This aids to create competitive edge in the marketplace as
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customer tend to attract towards low price products which are used on daily basis. According to
Thakre (2015) discounting of foods products are used just to cut down addition cost and sell the
product on right time. With this, company can enhance the sales turnover by increasing customer
base. He further argued that, concept of discounting food products reduces the need of extra
marketing efforts and support corporation to achieve its long as well as short term objectives.
Thomas (2013) explained that discounting pricing strategy also aim at customer loyalty
because such kind of offers do not let the customer switch to other brand. However, small
marketing efforts are continuously made by the corporations in order to increase the consumer
base and accordingly enhance the profitability. He further explained that, during short term
discount company can easily sell more units and decrease the base of unused inventory. Thus,
ultimately it help to reduce the extra cost and ensure optimum utilization of limited resources of
the firm in increasing the profitability or revenue.
Impact of discounting pricing strategy on customer satisfaction
The discounting food pricing strategy has direct relevance with customer satisfaction as it
aids to generate positive attitude among buyers. Visitors of retail supermarket likely to get
attracted with pricing strategy which leads to motivate them to do shopping. However, it depends
on corporation that how they want to adopt the strategy of discount of special offer. In case of
retail corporation or discount supermarket chain usually products are offered at discount. Twing-
Kwong, Albaum and Fullgrabe (2013) there are numerous way to offer discount on continuous
basis by implementing special offers. It can could be; buy three get one free, 20% discount on
shopping of 1500 and minimum 5% discount on every food items. It enables corporation to
attract large number of customers and persuade them to purchase in bulk. This in turn company
can easily cope up with changing scenario.
Wilson (2002) asserted that, consumers frequently visit the discount supermarket chain to
meet their daily requirement. In this regard they like to prefer the discount chain if it offer good
quality of product in low prices. Further, seasonal discount are offered to those who purchase
during off peak time. This in turn enables them to take decision regarding repeat purchase. Also,
it proves to be effective to create competitive edge of the firm in the marketplace (Ma and
Niehm, 2006). Apart from this, during discount period customer get products and services in
bulk with less amount of money. It helps to meet their requirement in an effectual manner. Also,
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consistent discount policy retain them with particular corporation even without getting in-depth
information for the same via different media.
2.2 Undertaking the research with agreed specification and procedures
The research methodology is the most imperative part of research project because it serve
as the base for data collection and analysis process. Following techniques and procedures are
adopted to conduct the study in successful manner- Research philosophy-Research philosophy is based on assumption and beliefs and view
point of researcher regarding the study (Howell, 2013). There are different types of
research philosophies such positivism and interpretivism. For the current research project
interpretivism research philosophy will be used to gather large amount of information.
However, selection of these methods depend on nature of study which in turn deep
understanding can be developed regarding discounting pricing strategy. It to analyze its
impact on customer satisfaction. Research design-Research design used in the current study is descriptive which proves to
be effective analyze the characteristics of population being studied. The reason behind
selecting their research design is to understand the views and ideas of customers with
regards to discounting food items (Bruce, 2009). Research approach- Research approach is another important aspect of research
methodology. Basically two kinds of research approaches are used such as inductive and
deductive. Inductive approach starts with general discussion of the research issue and
then key issue of the problem (Bhattacharyya, 2009). On the other hand, deductive
approach start with specific issue of research and then move towards generalization form.
For the current research project inductive approach has been selected to identity the key
issues of research and accordingly draw valid conclusion. Sampling-Sampling is another imperative part of research methodology because with this
researcher approach to target population. For the current study simple random sampling
has been used to select the respondents (Mok, Sparks and Kadampully, 2013). This
aspect give equal opportunities for all respondents to get selected in the study. Thus, it
represent the population effectively and assists researcher to draw valid conclusion from
the collected data.
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 Data collection methods-For the present research project on impact of discounting food
items on customer satisfaction both primary and secondary data are used (Saunders,
2003). However, secondary data are used from journals, book and online material. It
enables researcher to reach at the aim of the study by developing deep understanding
regarding the topic of study (Dey, 2002). On the other hand, primary data has been
collected by making questionnaire which are then distributed among selected
respondents. These all sources prove to be effective in collecting large amount of
information and deriving valid conclusion from the same (Fiegen, 2010).
 Data analysis-It is another important part of research methodology whereby researcher
analyze the collected data in order to produce meaningful results. In this regard
qualitative data analysis techniques will be used wherein themes of research questions are
made (Ihantola and Kihn, 2011). Along with themes, graphs and tables are also included
so as to present the results effectively. It aids to derive valid outcome and fulfill the
specified research aim.
2.3 Recording and collecting data
Q. 1 Are you satisfied with quality of products and services provided by Lidl?
Highly satisfied 55.00%
Satisfied 30.00%
Neutral 5.00%
Dissatisfied 4.00%
Highly dissatisfied 6.00%
Q. 2 Do you agree that Lidl adopt effective discounting strategy for all its food items?
Strongly agree 50.00%
Agree 30.00%
Neutral 5.00%
Disagree 10.00%
Strongly disagree 5.00%
Q. 3 What is the most imperative factor while doing shopping from Lidl?
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Quality 50.00%
Prices 20.00%
Discount 10.00%
Range of products 20.00%
Q. 4 Are you satisfied with staff services of Lidl?
Highly satisfied 32.00%
Satisfied 50.00%
Neutral 5.00%
Dissatisfied 10.00%
Highly dissatisfied 3.00%
Q. 5 Do you agree that Lidl maintain quality and safety in its product and services?
Strongly agree 40.00%
Agree 40.00%
Neutral 10.00%
Disagree 5.00%
Strongly disagree 5.00%
Q. 6 Do you think that Lidl consider viewpoint of customer while modifying products and
services?
Yes 80.00%
No 20.00%
Q. 7 Do you think that Lidl food store of UK provides quick and best quality of services at low
price?
Yes 95.00%
No 5.00%
TASK 3
3.1 & 3.2 Using appropriate research evaluation techniques and Interpreting and analyzing the
results
Theme 1: Satisfied with quality of products and services provided by Lidl
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According to the collection of primary data, it has been found that 55% respondents are
highly satisfied with quality of products and services. Further, 30% participants are satisfied with
appropriate quality of products and services and this in turn their needs are met in an effectual
manner. On the other hand, 5% respondents are neither satisfied nor dissatisfied with quality of
products. Apart from this, 4% customers are not satisfied and in the same way remaining
respondents are highly dissatisfied with regards to quality of products and services. It shows that
respondents most of the customers are highly satisfied with products and services provided by
Lidl.
Theme 2: Agree that Lidl adopt effective discounting strategy for all its food items
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55.00% 30.00%
5.00%
4.00%
6.00%
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied