Marketing Report: LIDL's Strategies in the UK Grocery Market

This report provides a comprehensive marketing analysis of LIDL, a major retail grocery chain, focusing on its strategies within the UK market. It begins with an executive summary and introduction to marketing management, emphasizing the importance of marketing activities for business success. The report then delves into a market research analysis of the UK grocery market, utilizing tools like PESTLE and SWOT analysis to assess LIDL's strengths, weaknesses, opportunities, and threats. It explores key market segments impacting LIDL's growth, followed by an examination of the marketing mix model and relevant strategies. The analysis includes competitor analysis, Ansoff Matrix, and Boston Consulting Group Matrix to evaluate LIDL's market position and growth strategies. The report concludes with recommendations and a summary of findings, providing a detailed overview of LIDL's market position and strategic approaches.

INTRODUCTION TO
MARKETING

EXECUTIVE SUMMARY
Marketing can be defined as the process of manufacturing goods or services
and provide the same to the targeted audiences. Management of marketing activities is
very important to each and every ventures in order to gain wished income and benefits.
The present report is formulated on the ground of LIDL which is one of the largest
retailing organisation that provide grocery material to their customer's. This report
represent SWOT, PESTLE analysis, Competitor, Ansoff and Boston Consulting Matrix
to analyse market condition of organisation easily. At last it represent marketing
segments that affects the growth of LIDL as well as Marketing mix model and relevant
strategies to getting effective analysis of organisation in target market.

Table of Contents
...................................................................................................................................... 2
EXECUTIVE SUMMARY .................................................................................................2
INTRODUCTION..............................................................................................................1
TASK 1.............................................................................................................................2
Market research on grocery market of UK by different tools.........................................2
TASK 2.............................................................................................................................7
Segments which affects the growth of LIDL..................................................................7
TASK 3........................................................................................................................... 11
Marketing mix model and relevant strategies..............................................................11
RECOMMENDATIONS..................................................................................................14
CONCLUSION............................................................................................................... 15
REFERENCES ..............................................................................................................16

INTRODUCTION
Marketing management refers to activities, set of institution, and processes that
creates, communicates and delivers goods and services to the end users, that have
certain value for them, clients, partners, and society as well. Marketing renders some
tools, which is used enhance availability of products, that user can easily buy that to
consume, it aid to fulfil their needs and requirements. Marketing department manages
all activities and task that put stuff to consume by the end user by supplying it to retail
grocery market. These retail stores provides products to satisfy customers demand
within time (Palmer, 2012). To accomplish marketing operations there are several things
to do, it includes developing, production, process, finance, etc., It needs to maintain
communication among these different sections, so that it can manage all operations
efficiently. Marketing department establishes some strategies, that are applied to
distinct marketing ideas and marketing mix that consists of creativity and 7P's to indulge
customers. Lidl is a retail grocery supermarket , originated in Neckarsulm, Germany, 88
years ago in 1930. It has more than 315,000 workers, across European countries and
the United States. It has so many rivals like Tesco, Carrefour and Aldi which are serving
in same field and working well enough. That' why Lidl needs to perform far better than
other firms, to stay in market, though it is already performing well, but improve to more
increasing sales is lifeblood of marketing, because it strives to make a hike through
selling products for every business, inclining in sales is the lifeblood for marketing. Lidl
adopt some strategy models such as PESTEL, SWOT, Ansoff Matrix, Boston
Consulting Group Matrix, etc., to internal and external factors to promote company. It
will examines its political, environment, social, technology, economic and legal factors
that externally affects a firm whereas strength, weaknesses, opportunities, and threats
have internal impact (Fullerton, 2010). Lidl commenced a research on the UK
population that gives maximum chances to gain benefits by using different marketing
models and strategies, that are followed in this assignment.
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TASK 1
Market research on grocery market of UK by different tools
According to the view point of Malhotra and Malhotra (2012), there are large
number of companies which are operating under UK Retail Grocery market. These
ventures are dealing especially with sector of food, vegetables, grocery items,
cosmetics, beverages and many more. In addition to this, different other merchandises
like domestic goods, home appliances, etc. are being manufactured & delivered by
them in order to fulfil the basic requirements and demands of civilians. LIDL is
considered as one of the largest German international chain of discount supermarket
which is located in Neckarsulm, Germany. This company is running more than ten
thousand stores across USA and Europe. It is owned by Dieter Schwarz. In addition to
this, owner is also having control over some another store chains named as
Handelshof and hypermarket Kaufland.
(Source : IGD Grocery Retailing 2005 )
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Illustration 1: IGD Grocery Retailing 2005

As per Molesworth, Scullion and Nixon eds. (2010), LIDL is now wished to
emerge as the key rival of TESCO so that they can enlarge their grocery hypermarket's
chain in the United Kingdom. In order to attain this target, it is very important for them to
know about assorted aspects of existing business environment. They need to analyse
key factors that would give influence on their business activities. This task can be
accomplished successfully by taking help of special tool known as PESTLE analysis.
Apart from that, it is also vital to conduct SWOT analysis for discovering the ability and
capabilities of referred organisation. Additionally, it aids in finding out weak points,
threats as well as opportunities of the LIDL. By doing this, they will easily realise their
positioning and could create strategies for eliminating their weaknesses and threats.
Numerous of opportunities for growing current commerce can also be grabbed by
mentioned form in efficacious style. SWOT analysis of LIDL is explained below :
Since LIDL is one of the leading corporation in retail industry, it comprises of
many strengths that assists in thriving in existent market location. Its major strength are
listed as follows.
Strength :
 Reliable suppliers : They are comprising of powerful base of trustworthy
supplier which used to cater huge quantity of raw materials. This makes able
them to manufacture varieties of products or services in very less time interval.
Thus, they could easily overcome from any kind of bottlenecks associated with
supply chain.
 Good presentation in new marketplace : LIDL has gained expertness in taking
entry to various new marketplaces and are also receiving successfulness in the
same. By this way, they are enlarging their business actions in numerous of
countries and are generating high sum of profitability.
 Strong Brand Portfolio : This has been recognised that mentioned company is
investing more & more revenues in creating a stronger brand portfolio. This is
proved to be beneficial for them since they wish to grow by designing different
types and categories of newer merchandises or services.
 Higher range of consumer contentment : LIDL is making large number of
goods and services in order seek attention of numerous of customers. They are
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also trying their best by delivering best quality merchandises to them. They
usually focus on manufacturing innovational as well as unique products as per
the request of potential users. Hence, it has been observed that very less
complainants are coming from the side of citizens as most of them are satisfied
their services. Different other companies like Aldi, Sainsbury's, Asda, etc. are key
competitors of LIDL which is not able to quench their possible consumers.
Weaknesses :
Besides that, LIDL are also having some weak factors which they should improve
by adopting proper schemes (McKenzie-Mohr, 2011). This would aid them gaining
competitive advantages and building impressive image in the eyes of customers. Some
of the main weak areas of this firm are discussed below : Organisational Structure : LIDL is having such an organisation framework
which is compatible in nature. Therefore, it can be said that they are having
constricted enlargement in adjoining production sections. Gaps in varieties of products : There has been also discovered some gaps in
the ranges of products which is being sold by venture. Thus, such a lacking of
choice may assist their newer challengers in making a good foothold in
marketplace. Work of consolidation : LIDL is being extremely successful at work of
consolidation with different companies having contrasting working tradition. Even
though they are fast growing in terms of integration with small or medium sized
ventures; they are facing failures in context to shares at the time of merging with
corporations which are having different work culture.
Threats :
Some of the threats and opportunities of LIDL is also recognised which is stated below :
 Increase in competitors : Due to the development of modern technology,
numerous of rivalries has been emerged in retail market. This is treated as
serious threat for LIDL since its customer base is getting reduced day by day. Legislations of different country : As referred firm is operating in various countries
and because of this, it is very important for LIDL to obey all rules and regulations
linked with liability laws. But it has been seen that government of different nation
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imposed contrasting policies in this regard. Hence, it can be stated that LIDL
might exposed to several claims of liability as norms are being modified by legal
bodies on continuous basis.
Opportunities : Newer tax affiliated policies : This could significantly effect the mode of running
commerces and may also open fresh opportunities for good players like LIDL in
increasing its net income.
 Tendency in behaviour of consumers : It has been noticed that new
tendencies in the behaviour of civilians are opening larger new market for the
LIDL. Thus, it is providing golden chance for this enterprise in order to generate
new streams regarding revenues. Besides that, they could also modify or
diversify themselves into different new classes of merchandise too.
Pestle analysis
The impacts of different factors on the business of LIDL are represented below :
 Political factor & Legal factor : This comprises of all laws and regulations that
is being imposed by government bodies. Since LIDL is dealing globally thus they
have to follow antithetic policies designed by higher authorises of different
nations (Sheth and Sisodia, 2015). This some times impact negatively whereas
also give positive effects. For example, rise in taxes, instability in political
situations, trading related norms, etc. are some of the elements which are giving
adverse influences on business of LIDL. On the other hand, different rules like
prohibition of child labour, distribution of equal wages and many more legislations
helps in running commerces in smooth as well as ethical manner.
 Economic factor & Technological factor : Economical factors comprises of
inflation rates, growing and interest rate, fluctuations in prices, trends associated
with stock market, etc. are some components that impacts greatly on the working
of mentioned venture in both positive as well as negative ways. On the other
hand, technological factors influences affirmative manner since improvement of
technologies contributes in increasing production and profit. On the contrary,
development of technological prospects are giving rise to large number of
competitors. Thus, affecting adversely too.
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 Social factor & Environmental factor : Society is also effecting LIDL as needs
and demands of people are changing day on day. They are requesting best
quality goods at cheap prices. Thus, pressurising refereed company to do so. If
they will not offer them same, then consumers would surely migrate to other
firms. At the same time, LIDL should focus on environmental changes which
occurs randomly. Modification in weather and another natural disasters such as
heavy rainfall, flood, earth quake might destroy entire stock of LIDL randomly.
Thus negatively impacts it. Besides this, it is the responsibility of organisation to
save or protect environment so that pollution can be reduced effectively. For
doing this, they need to minimise the level of carbon foot print in order to trim
down the ranges of global warning (Armstrong and et. al., 2011). This will
contributes in well being of both common public as well as venture itself.
In addition to above mentioned things following matrix should be considered by LIDL :
Competitor Matrix
This is nothing but the technique of evaluating various challengers that are
existing in current business world. There are numerous of companies which are dealing
in same sector as LIDL do. Aldi, Asda and Tesco are considered as three main
competitors of LIDL. Thus, their presence is impacting adversely on them since
consumer's base are decreasing on regular basis. Therefore, they need to design
innovational goods or services and cater these on affordable prices.
Ansoff Matrix
This matrix helps in taking decision regarding making new strategies and
spending of money for the same according to the market location. It includes four
growth strategies which is presented as follows : Market penetration : According to this, referred organisation would attempt to
enhance its penetration of the market by utilising present merchandises. The key
motto is to increase overall sharing in marketplace.
 Product development : Herein LIDL can do modification in their products by
innovating it but present it for the existent or current market.
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 Diversification : When company can expand business in entirely newer place with
a new merchandise, then they can take use of this scheme which is very risky in
nature.
 Market development : This helps in discovering additional regions wherein
commercial activities may be started. It is to be noted that existing goods and
services are applied for the same.
The Boston Consulting Matrix
This tool is used in designing longer term strategical planning so that
development can be done appropriately . At the same time, it assists in making decision
in in terms of investment and discontinuation of similar for the specific productions. This
matrix involves four quadrants which is presented as follows : Dogs : Such are goods having lower growth as well as minimum market share. Stars : These are products in higher growth markets and are also having more
market sharing. Question marks : Such trade good falls under category of high growth market
along with lower share of market.
 Cash cows : These merchandises are having lower market sharing and thus
treated as of low growth markets.
Therefore, LIDL should concentrate on these categorisation and act accordingly
(Gbadamosi, 2013). They ought to invest their funds in correct products as well as
services so that no conflicts may emerges in future. Any type of wrong investment
would create danger for them. Thus, it is vital for LIDL to consider above discussed
conceptions so that they can make proper decisions band reach at correct conclusion
at the end.
TASK 2
Segments which affects the growth of LIDL
Market segmentation is considered as one of the suitable process for dividing
large number of population into specific users on the basis of some special
characteristics. This aids organisation in categorising possible clients who will purchase
their products and services. But for this, they need to design goods according to the
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demands and needs of customers. This in turn supports LIDL in launching food or
beverages related commodities in effectual way. This to be noted that strategies of
implementing merchandises and services should be done by keeping the construct of
marketing segmentation. There are mainly four kinds of strategies :
Socio - demographic Segmentation : This is considered as one of the easier
and most popular type of scheme which is used to divide users. This is utilised by
numerous of ventures for getting attraction of more and more population towards their
goods and services. The main motive of this is to manufacture products according to the
taste of the potential age group people. Thus, it can be stated that demographic
segmentation commonly used to split consumer base on the ground of certain factors
such as gender, age, income, religion, size of families members, occupations, race,
nationality and so on. LIDL can utilise this conception in doing the identical thing of
dividing population. Workers of given company should conduct surveys and find out the
number of people which are having different races and regions. On the basis of that,
they can manufacture deliverables for them. For example, they should create assorted
food products for Muslim community, Christians, Hindus, etc. This in turn generates a
special feeling in their customers as they think that their company is focussing on them
properly. As a result, purchasing rate will increases drastically. On the other hand, LIDL
ought to make goods according to the age of people. Children like chocolates, biscuits,
junk foods, ice – cream and many more (Smith, 2012). On the other hand, adults and
old citizens mainly like basic food since they are more conscious towards their health.
Thus, prefer better quality of cereals, pulses, vegetables, fruits, milk, butter, etc. These
all things should be supplied by LIDL in adequate manner. This would also assists them
in seeking attention of all kind of persons either they they are old, adult or child. In
addition to these aspects, various other factors which is mentioned like occupation,
income, nationality, etc. ought also be considered by LIDL in order to increase the gross
range of profitability.
Behavioural segmentation : This kind of market segmentation used to segment
the population on the ground of their behaviour, pattern of taking decision or
judgements, usage of goods , etc. For instance, youngsters would always like
fragmented and good quality soaps like Dove. On the other contrary, individual who
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