Marketing Strategies for Lidl's Discount Supermarket Chain in the UK

This report presents a comprehensive marketing analysis of Lidl's planned launch of a discount supermarket chain in the UK. It begins by outlining the competitive landscape, highlighting key players like Tesco, Sainsbury's, and ASDA. The report then delves into primary data collected through a survey of 50 customers, analyzing their preferences regarding price, location, convenience, and other factors. The survey data reveals insights into customer demographics, spending habits, and shopping frequency. Secondary data analysis includes an examination of financial performance metrics such as sales revenue, gross profit margin, operating profit margin, net profit ratio, and market share of Lidl's competitors. The analysis compares Lidl's performance against rivals like Tesco, Sainsbury's, and Morrison's. The report concludes with recommendations for Lidl, emphasizing the importance of competitive discounting strategies, sales promotion activities, and cost control to improve financial position and maximize profitability. The report suggests that Lidl should focus on providing a wide variety of products and brands to attract both existing and potential customers.

PROBLEMS SOLVING AND DECISION
MARKETING

INTRODUCTION
 In the current times, business units are required to take significant decisions about operations by
evaluating market growth opportunities and competitor’s activities. Manager is assigned with
accountability to make optimum utilization of funds by doing assessment of investment opportunities.
 The present report is based on the case scenario of Lidl which is planning to launch discount
supermarket chain. However, in this regard, high level of competition takes place in UK as there are
several retailers namely Sainsbury, Morrison’s Tesco, ASDA etc are offering products or services at
discounted prices.
 In this, report will shed light on the customer’s preferences with regards to the supermarket chain in
terms of price, location, convenience etc. Further, report will also highlight the extent to which
financial performance and position of Lidl good in comparison to the competitors.
 By this, firm would become able to take significant measures for performance improvement and
maximization of profitability.

Primary data collection
 In order to assess customer’s needs, wants and preferences with regards to discounted
supermarket chain primary data will be gathered by Lidl through the means of survey via
questionnaire.
 Hence, survey will be conducted on 50 customers of Lidl to identify their preferences
pertaining to product, price, place and promotion.
 Through this, Lidl can set appropriate marketing mix and thereby would become able to
gain competitive edge over rivals.

Analysis of primary data set
Theme 2: Age Theme 3: Gender
25-35
years
26-45
years
45-55
years
56 years
and
above
0%
5%
10%
15%
20%
25%
30%
35%
% of responses
% of responses
Male Female
0%
10%
20%
30%
40%
50%
60%
70%
% of responses
% of responses

Contd..
Theme 4: Education Theme 5: Income
Diploma
Graduation
Post-graduation and diploma
No higher studies
0%
10%
20%
30%
40%
50%
60%
% of responses
% of responses
£3000-
5000
£5000-
7000
£7000-
9000
£9000
and
above
0%
5%
10%
15%
20%
25%
30%
35%
40%
% of responses
% of responses

Contd..
Theme 6: Working status Theme 7: Customers spending
Part time Full time Student
0%
10%
20%
30%
40%
50%
60%
% of responses
% of responses
£300-500 £500-700 £700-900 £900 and
above
0%
5%
10%
15%
20%
25%
30%
35%
40%
% of responses
% of responses

Contd..
Theme 8: Customers do shopping from
Lidl’s store more frequently
Theme 9: Both the modes are preferred by
the customers for shopping purpose
Often Weekly Twice in
a week
Monthly
0%
5%
10%
15%
20%
25%
30%
35%
% of responses
% of responses
Visiting of physical
store
Online mode
0%
10%
20%
30%
40%
50%
60%
% of responses
% of responses

Contd..
Theme 10: Price and quality factor comes
under priority when customers do
shopping
Theme 11: Customers agreed that location
factor influences customer’s purchasing
decision?
Price
Quality of products
Availability of brand or varieties
0%
20%
40%
60%
% of responses
% of responses
Agree
Strongly agree
Neutral
Disagree
Strongly disagree
0%
5%
10%
15%
20%
25%
30%
35%
% of responses
% of responses

Contd..
Theme 12: Discounting offers influences
shopping decisions of customer
significantly
Theme 13: Tesco and Lidl click in
customers mind first when they go for
groceries
Tesco
Lidl
Asda
Sainsbury
Morrison’s
0%
5%
10%
15%
20%
25%
30%
35%
% of responses
% of responses
Agree
Strongly agree
Neutral
Disagree
Strongly disagree
0%
10%
20%
30%
40%
50%
60%
% of responses
% of responses

Contd..
Theme 14: Lidl products or services offer
high value for money to the customers Particulars Responses % of
responses
Agree 12 24%
Strongly agree 17 34%
Neutral 13 26%
Disagree 4 8%
Strongly
disagree
4 8%
Total 50 100%
Agree
Strongly agree
Neutral
Disagree
Strongly disagree
0%
5%
10%
15%
20%
25%
30%
35%
40%
% of responses
% of responses

Collection of secondary data
 With the motive to evaluate position and performance of Lidl in against to the other leading
companies of UK retail industry data has been gathered from annual reports.
 In this context, evaluation of gross, operating and net profit margin has been done. Through this, Lidl
can assess the extent to which it is performing better over the competitors in monetary terms.
Sales revenue Gross profit margin: GP / net sales * 100
Year/
companie
s
Lidl Tesco Sainsbur
y
Morrison
’s
2017 418.6 55,917 26,224 16,317
2018 474.5 57,491 28,456 17,262
2019 63,911 29,007 17,735
Year/
companie
s
Lidl Tesco Sainsbur
y
Morrison
’s
2017 5.2% 6.2% 3.7%
2018 5.8% 6.6% 3.7%
2019 6.5% 6.9% 3.4%

Contd..
Operating profit margin: OP / net sales * 100 Net profit ratio: NP / net sales * 100
Year/
companie
s
Lidl Tesco Sainsbury Morrison’
s
2017 2.1% 2.4% 2.7%
2018 2.7% 1.8% 2.5%
2019 3.2% 1.1% 2.2%
Year/
companie
s
Lidl Tesco Sainsbury Morrison’
s
2017 -0.07% 1.37% 1.87%
2018 2.10%% 1.02% 1.80%
2019 2.07% 0.69% 1.38%
Year/
companie
s
Lidl Tesco Sainsbury Morrison’
s
2017 5.2% 27.8% 15.8% 10.4%
2018 5.5% 27.4% 15.5% 10.4%
2019 5.9% 27% 15.4% 10.1%
Market share