Marketing Report: Analyzing LIDL's Performance in UK Grocery Market

This report provides a comprehensive marketing analysis of LIDL, a major player in the UK grocery retail market. The report begins with an introduction to marketing principles and the significance of marketing for organizations. It then delves into a market investigation of the UK grocery retail market, followed by a SWOT analysis of LIDL, highlighting its strengths, weaknesses, opportunities, and threats. A PESTLE analysis is conducted to assess the external factors impacting LIDL's operations, including political, economic, social, technological, legal, and environmental aspects. The report also examines LIDL's competitive landscape, comparing its performance with competitors such as Tesco, ASDA, and ALDI. Furthermore, the report covers the marketing mix and various pricing strategies employed by LIDL. The Ansoff matrix is also included to aid in enhancing sales of products. Finally, the report offers recommendations and a conclusion based on the findings. The aim is to provide an in-depth understanding of LIDL's marketing strategies and its position within the competitive UK grocery market.

Introduction to
marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Market investigation of grocery retail market of United Kingdom............................................1
TASK 2............................................................................................................................................7
Research to ascertain the segments.............................................................................................7
TASK 3............................................................................................................................................9
Marketing Mix............................................................................................................................9
RECOMMEDATION....................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing of products and services is vital for every single organisation. It helps a
company in growing at marketplace. In other words, it means doing promotional activities so that
consumers can know about their goods and services with an aim of hitting targets or objectives
for a longer period of time (Armstrong and et. al., 2011). Marketing sector of a firm needs
proper planning in order to attain goals and mission in an effective manner. It has also been
located that there are many communicative methods that can be used by management of an
enterprise to communicate with targeted people from population. With the help of this, he/she
gets to know about customer’s perspective and market trends through which a company can
make alterations in their products or services.
By this, firm can enhance both; sales and profitability at the same time. Keeping interest
of end users in goods that they are offering at marketplace can be stated as the main aim of
marketing department of a corporation. Some elements like promotions (advertisement), door to
door selling, direct marketing, promotional activities of sales and national relations come in this
type of department (Atwal and Williams, 2017). Along with this, it has been analysed that a
marketing manager of a company makes determination and sets benchmarks of subordinates in
order to lead organisation to a whole new level. By this, firm can give hard competition to its
rivals. Management and executives of corporation formulates slogans and sets motto with an aim
of becoming a famous brand all around the world.
In this project, LIDL which is a supermarket chain that deals in retail sector has been
selected. It has thousands of stores in all over world that are continuously satisfying needs and
wants of consumers related to grocery products. Most of the supermarkets are in Europe and in
USA as well. Assignment is going to include PESTLE and SWOT analysis of LIDL along with
Ansoff matrix that will aid in enhancing sales of products at marketplace across world. Other
than this, factors of marketing mix and various pricing strategies have also been enclosed that
will aid in hitting targets which are related to sale of products and services of LIDL.
TASK 1
Market investigation of grocery retail market of United Kingdom
Information of goods and services of a firm can be provided by a manager by doing
various promotional activities (Babin and Zikmund, 2015). Along with this, it has been analysed
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that marketing is a function or is the only way through which a managing person can interact
with targeted people from ample number of people. Away from this, a manager of firm can use
various communicating options through which he/she can provide information of products and
services to consumers in a detailed manner (Bhattacharya, 2010). In the last few years, a boom
has been seen in retail sector. People are opening their stores individually or in a partnership
which is directly putting positive impact on economic growth of the UK. Every year,
approximately 163.2 billion pounds is the value that can be generated by retail market in United
Kingdom. Almost 24% share was there of LIDL in above given amount. Therefore, it can be
stated that LIDL may put both; positive and negative impact on the growth of UK.
SWOT Analysis of LIDL
Strength:
 LIDL is one of the strongest
supermarket chains of Germany that is
doing their business in all over UK.
LIDL comes on 7th number in the
United Kingdom that is serving quality
grocery products to consumers.
 LIDL is one of the quickest flourishing
brands in UK that are enhancing their
business by doing unique promotional
activities.
 They give discount on products and
services that they are selling which
directly catch eyes of consumers in a
large number. High market share in the United
Kingdom and United states aid LIDL in
giving competition to rivals like ALDI,
Tesco Plc. and so on.
Weakness:
 Customer’s feedback is one of the
issues for LIDL. They do not give
solutions to them right on time because
of lack of employees. This is putting a
direct impact on their profit margins.
 Various problems have been faced by
LIDL which create losses for them and
in 2008, they started spying on
employees because of one incident
where a worker stole money from cash
counter (Chaffey, Smith and Smith,
2013).
 Discounts on grocery products in order
to grab attention of consumers in ample
number has reduced LIDL's profit
margins.
Opportunities:
 Firm has almost 10,000 stores that
Threats:
 Companies like Tesco Plc., ALDI and
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include supermarkets, small shops and
so on in all over world. This is helping
in becoming a brand that sells products
at a wider range (Dahlén, Lange and
Smith, 2010).
 LIDL continuously plans in order to hit
the targets for a longer period of time
where they have aimed for opening
hundreds of stores in all around US
market. Enhancement in needs and wants of
consumers of grocery products where
LIDL can sell grocery goods with
discounted offers.
ASDA are some of the competitors that
are continuously giving rivalry to
LIDL. These firms have captured a
wider area of UK.
 LIDL is a German firm that has lesser
knowledge of consumer’s requirements
and trends of UK. This has put impact
on LIDL's profitability and on
productivity as well.
 Continuous growth of competition like
small stores which has been opened by
a citizen of UK and is offering products
with unique offers can be a threat to
LIDL.
It has been analysed that there are various firms like Tesco Plc., ALDI and ASDA that
are giving hard competition to LIDL. Doing research is one of the aims of marketing department
of LIDL by which they can grab many advantages that may aid them in giving rivalry to rivals.
Profit margins can be enhanced by doing promotional activities in order to hit targets for a longer
period of time.
PESTLE ANALYSIS
This type of analysis can be done by the management of LIDL in order to understand
business environment of outside world. This may aid them in decision making process. Effective
determination can be done by managers by doing proper research of all the current trends,
policies, needs of consumers and other factors that consist in outside world (DesJardins, 2011).
This includes research of political, legal, economic, social and technical through which LIDL can
gain competitive advantages. Political: It has been analysed that retail sector has given support to United Kingdom in
order to enhance economical growth of nation. Therefore, government of UK has also
made rules and regulations which is helping firms like LIDL, ALDI, ASDA to expand
their business. Along with this, some acts has been made by federal government in order
to help these organisations to run their business through legal ways. There are many
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legislations or acts like health and safety, determination, consumers related are being
made by them in order to reduce fraudulent activities (Fullerton, 2010). Away from this,
brown paper bag has been introduced by government of UK in order to reduce harm on
environment. These bags are being used by retailers of the nation by packing products
that have been purchased by consumers. Economical: This type of factor needs to be considered by firm like LIDL in order to
enhance their business at international level. Strategies can be made by this firm by
which they can understand the environment that is related to monitory. Supermarkets
should offer grocery products with less prices by looking at consumers pocket. As then
only they will purchase or show interest on products. Profitability can be maximised by
locating all the requirements of consumers at global level, expanding business at
international level and so on. Management of LIDL faced problem when UK citizens
were going through a bad phase named as recession. Profit margins were reduced to 50%
at that time where LIDL started giving heavy discounts to people of UK in order to
sustain at marketplace. Technological: This element can make or break a firm and plays a vital role within a
company (Gbadamosi, 2013). Updated technology can help LIDL in hitting targets for a
longer period of time in order to grab competitive advantages. Rapid change in this field
has created many issues for firms like LIDL, ASDA and so on. Therefore, it is must for
administration of LIDL to understand those alterations in order enhance sales of goods
and services. Selling products and services to consumers online can help LIDL in
enhancing profit margins and promotions on online websites like Facebook, Instagram
can aid in grabbing attention of customers in huge number. Social: Giving or offering products or services to consumers according to their lifestyle,
behaviour can help LIDL in gaining competitive advantages at marketplace. Alterations
under this factor can put impact in both ways positively or negatively. Therefore, it is
much needed for this company to analyse the market on a regular basis. So that benefits
can be gained by them. Improvising standardisation of citizens of UK should be the main
aim of firm. By this, long relations can be maintained with consumers. In modern era,
every single individual likes to have a healthy and good lifestyle (Gummesson and Mele,
2010). Thus, it has became vital for LIDL to provide or deliver highly quality goods to
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consumers. Providing services like home delivery, discounts and other strategies can aid
in giving rivalry to competitors. Legal: It is important for business organisation to follow all rules and regulation of
government. Which helps in maintaining ethical work environment at workplace. With
the help of this, workers of LIDL can perform with full of efficiency (Jones, 2010). Some
of acts that should be considered at workplace by LIDL and these are: Health and safety
act, determination act, equal wages act and so on.
 Environmental: Government of UK has made some strategies like use of brown paper
bag in order to pack grocery products. So that poly bags do not harm environment. Along
with this, it is mandatory for administration of LIDL to continuously locate areas in
which they can aid in keeping environment reduce harmful effects from. Optimum use of
limited resources, recycling of waste products are some of activities that can be done by
management of LIDL in order to keep environment safe and to keep limited resources
secure for a longer period of time.
Retail grocery industry should also locate into elements that are related to Macro that
may aid in hitting targets for a longer period of time. Therefore, it is essential for LIDL to locate
all the factors through which they can achieve goals and objectives of company for a longer
period of time. This can be done through first identify and analyse these factors.
Competitor's matrix: This type of can help LIDL in knowing about tools, techniques,
technologies in order to make goods and services that are being used by their rivals and
comparison can be done (Krishna and Schwarz, 2014). With the help of this, LIDL can make
effective decisions in order to bring up favourable outcomes. Along with this, data is mostly
being conferred in form of table.
Particulars LIDL TESCO ASDA ALDI
Gross income
which has been
made by different
firms in just 365
days.
900 8543 4995 1501
US stores at live 39 2132 1569 1708
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moment
Current states 10 30 35 41
Boston consultancy matrix: Marketing department of LIDL have an opportunity to use
this BCG growth rate matrix. This type of matrix is divided into four major element. These
factors are being classified by keeping aim of both market share, growth which is given beneath: Stars: Under this element, LIDL should locate those products that are mostly being
purchased by consumers which may aid them in gaining high profits (Levens, 2010).
Along with this, it has been analysed that goods that consists of high demand among
customers. Requires good investment in order to sustain at marketplace for a longer
period of time. Cash cows: This type of element consists of those products which has covered a huge
market level but have limited growth of business. Leaders of LIDL should make
strategies through which flow of these products can be maintained at marketplace. It has
also been examined that these type of goods do not require much investment as they
already have high demand at marketplace. Question mark: Under this factor, those goods comes that do not have high market share
but grabs heavy growth of market. In retail sector, it is mandatory for LIDL to invest high
for these products and they carries high market share. Goals and objectives can get
achieved in this by making strategies.
 Dogs: Under this, LIDL should locate those products that do not grabs high market share
and have lower growth rate. Therefore, these goods do not make much revenue for
company and may create losses as well if firm continuously manufactures them for a
longer period of time.
Therefore, it has been analysed that LIDL can come under question mark element in UK
market as they are facing high competition from big brand names like Tesco Plc and ASDA that
are dealing in same retail grocery sector. As compared to others LIDL have smaller market
share. But, it has also been located that LIDL can come under star as well by making proper
strategies.
Ansoff matrix: Igor Ansoff has propounded this matrix which located all the firm present
and potential products and services (Malhotra and Malhotra, 2012). With assistance of this,
organisation will be able to acquire success and growth. They will develop new product or
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launch existing item at new marketplace. There are many strategies which will comprise into
this, such as market enhancement, market penetration, product development and in addition
diversification. LIDL can grab competitive advantages at marketplace by taking this type of
matrix in proper use.
TASK 2
Research to ascertain the segments
LIDL is a most leading supermarket across international boundaries and famous for its
qualitative product in order to satisfy consumer needs or demands. Basically, this company
operates around 10000 stores around the Europe and USA and get succeeded in maximizing their
profit level. However, managers of an organization is focussing on various marketing activities
for understanding the choice or preferences of different group of customers (McKenzie-Mohr,
2011). Thus, company is following segmentation process to analyse the taste of each or every
clients either children's , youngsters, aged people and so on. Segregation of marketplace is
essential for large organizations because it is not easy to fulfils the demand of every user until
and unless company is not interacting with them.
Segmentation:- One of the most appropriate process which is adopted by marketing
department in which leaders are going to determine the basic requirements of specific individual.
Furthermore, entire team is framing a small-small group whomsoever are sharing a similar
choices or preferences. Then, its time to asses most growing segment in order to attain their set
objectives in a defined time period. After understanding the current situation of marketplace its
time to carry out manufacturing process according to needs of certain group. In fact,
segmentation is helpful for manager while formulating weekly, monthly, quarterly and yearly
budget. Along with this, aids entire department while conducting several promotional strategies
to reach at final targets. As a result, productivity of LIDL automatically get enhanced as well as
get succeeded in gaining attention of consumers in better way. Hence, various methods by which
an organization can classify their marketplace such as; behavioural, socio graphic and
demographic in order to identify the target consumers. After that company may enhance their
existing items as per client requirements (Molesworth, Scullion and Nixon, 2010).
Psycho graphic segmentation:- According to this factor customers are segregated into
various sub-groups which is rely on characteristic. For example; an organization is going to
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divide their consumers on the basis of attitudes, values, personalities, lifestyles and way of
interacting. It helps an organization in creating a positive relations with desired consumers which
is highly beneficial for LIDL in a long term. In fact, these type of users are very conscious
towards their budgets and always purchase goods by considering various factors (Morrison,
2013). Beside this, life style of individuals are playing a very crucial role in their purchasing
decision because few consumers always consider their way of living while buying any product.
Furthermore, every member is carrying a distinct cluster of values which includes cultural vale
and so on. Along with this, purchasing potentiality of clients is get influenced by background,
their income level etc. For example; celebrities always maintain their standard by using
qualitative products in order to raise their living standard at societal place. Moreover, believes in
establishing their standardized image at marketplace. Therefore, marketing manager of an
enterprise needs to analyse the goodwill of certain individual while offering products to them in
order to create long term relations with more or more clients. As a result, LIDL is getting
succeeded in acquiring more or more revenue by offering best suitable goods to needy people as
per their choice or preferences.
Behavioural segmentation:- In this classification larger market is sub- divided into
homogeneous groups based on consumer buying behaviour (Market segmentation, 2017).
Basically, it is done by enterprise through analysing buying patterns of clients such as;
frequency, loyal behavioural towards brand, required advantageous while purchasing on
occasion and so on. Therefore, needs and wants of consumer fluctuates as per their behaviour
whatever they show. However, it is indispensable for company to segment their market as per
user nature because it helps an enterprise in analysing various types of client behaviours. For
example; few customers are very conscious towards their image due to which they only buy
branded products for maintaining their reputation at societal place. Thus, some of the
behavioural characteristic that must be followed by organization are ; occasional oriented, usage,
loyalty and advantageous. These four segmentation is used by company for attracting more or
more customers whomsoever are having very distinct choices as well as habitual of few goods.
For instance; while having burger in MacDonald most of the clients must buy col-drink as they
get habitual to it.
Socio demographic segmentation:- As per survey it has been analysed that multinational
companies are adopting this technology in order to gain attention of maximum community (Nath,
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Nachiappan and Ramanathan, 2010). Thus, this segmentation is based on family structure,
current environment of specific society, educational level and profession. Marketing is all about
understanding viewpoint of individual in order to design product as per their choice or
preferences for maximizing their profit level (Palmer, 2012). However, in a specific society
number of people are living with numerous style, way of living, choices, background hence
forth. Thus, technique of segregating customers is one of most suitable tool which is adopted by
an organization for satisfying needs or demands of distinct clients.
Last but not the least, it has been understood that segmentation techniques is all about
analysing choice of every type of users in order to manufacture as per their need. Along with
this, LIDL is focussing on their user requirements instead of wasting money because it is
beneficial for company in every aspect. Apart from all the above there are various other ways are
also identified by which company can easily maximize their sales volume. As a result, positive
image of selected firm is always depend upon consumer choice or preferences.
TASK 3
Marketing Mix
Marketing mix is a cluster of a traditional and modern P'S which is used by an
organization while promoting their goods or services across international boundaries. Along with
this, it is an appropriate process by which LIDL can easily maximize their sales volume. There
are additionally extraordinary sort of items and basic needs merchandise which is given by the
organization in vast commercial centre (7Ps of marketing mix, 2017). The administrator of LIDL
organization actualize distinctive techniques and arrangements which helps to build the offers of
various items and administrations in powerful way. Basically, with the help of this systems an
organization can easily achieve the objectives and goals of an association in successful way.
Therefore, marketing mix aids an enterprise while attaining short term and long term targets by
accomplishing several business activities in a defined time frame. It advances distinctive items
and administrations in a methodical way. These systems helps to set up practical showcasing
brand in commercial centre. It additionally finds new scope of items to draw in vast number of
client.
Marketing activities is plays a very vital role in facilitating consumers with distinct goods
because users always like unique items instead of regular. Main motive of this is to increase the
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