Lidl's Market Research and Marketing Mix in the UK Retail Industry

This report provides an in-depth analysis of Lidl's marketing strategies within the UK grocery market. It begins with an executive summary highlighting key findings and recommendations. The report delves into market research, comparing Lidl's performance against competitors like Tesco and ASDA, utilizing data to illustrate market share and growth trends. It identifies key consumer segments influencing company growth, employing techniques such as TOWS, PESTLE, and BCG matrix analyses to evaluate Lidl's strengths, weaknesses, opportunities, and threats, as well as external factors and product portfolio. Furthermore, the report examines the 7Ps of the marketing mix, providing a comprehensive understanding of Lidl's approach to product, price, place, promotion, people, process, and physical evidence. The conclusion summarizes the key insights, followed by recommendations for Lidl to enhance its market position and customer loyalty, with references to support the analysis.

Introduction To Marketing

EXECUTIVE SUMMARY
Marketing is a tool of communication which a company uses to address large customer
segment with the help of various channels or medium. Marketing involve various tools and
techniques in order to make customer aware about variety of products or services that a company
is offering. Retail industry in UK is vast and has occupied large market segment by exploring
new ideas and innovation to achieve advantage in every aspect. This report portray how Lidl can
achieve success in competitive market along with retaining loyalty of their customer. Also,
recommendations about diversifying in target market by expansion to suppress other retail
brands.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Market Research of Current Grocery Market of UK..................................................................4
TASK 2..........................................................................................................................................12
Identify different consumer segments that influence growth of a company.............................12
TASK 3..........................................................................................................................................15
7P's of Marketing mix...............................................................................................................15
CONCLUSION.............................................................................................................................18
RECOMMENDATIONS...............................................................................................................18
REFERENCES..............................................................................................................................20

INTRODUCTION
Marketing, a tool for business which is implemented using strategies and plan of actions
in order to attain benefit in terms of profit. It is used to influence customer and their preferences
at the time of purchase or sale. Being crucial function of an organisation it require series of
research and studies using which company produces schemes and plans before launching any
product or service in market (Armstrong and et. al., 2011). With help of effective marketing
company can make up, live up and keep up their customers for long-run. It include activities
such as advertisement, promotion, selling, distribution and delivery of product and service to
customers. Marketing team is assigned with duties such as endorsements, media exposure,
advertise, tag lines creation, etc. in order to retain customers and maintain balance between their
needs, wants and demands. To have competitive advantage and survival company must induce
effective marketing strategy to satisfy need of its customers. Lidl is one of the largest retail
sector in UK, that operate in more than 10,000 states across country. It is global discount
supermarket chain with more than 300,000 employees that contribute to business success. Proper
planning and execution helps in getting better results in form of sales, revenues, etc. Aim of this
assignment is to provide understanding of market research, planning, market-mix and its
associated aspects. In this report, market study of Lidl is going to be addressed which will
include factors that impact company and a detailed analysis of marketing data. Further consumer
segments will be identified on the basis of socio-demographic, psycho-graphic and behavioural
variables and their contribution towards company's growth will be examined. At last, on the
basis of proposed market plan 7P's of marketing mix will be identified. This whole study will
fulfil its purpose about marketing and terms associated with it such as selling, buying, goods,
services, ideas, customers, information, promotion, advertisement, etc.
TASK 1
Market Research of Current Grocery Market of UK
Data gathered from research is showing that market share of TESCO is highest in
comparison of other grocery stores like ASDA, ALDI, Lidl etc. Result are showing that ALDI
and Lidl are showing rapid growth and with effect share of ASDA and TESCO are showing fall
by 0.2 basis points (Atwal and Williams, 2017). Investigation is showing that ALDI has
increased its position in industry from 6 % to 6.8%. on the other hand it is clear that Lidl has

increased its market share by 0.6% to 5%. couple, ALDI and Lidl are enjoying best sales in
comparison of other competitors and are making high rate of profit which is £7.9billion.
Above analysis is showing that market share of TESCO is fell down from 2 basis points.
On the other hand market share of Lidl is growing rapidly and it is showing a successful business
operations in market (Babin and Zikmund, 2015). As a pair ALDI and Lidl is showing a
remarkable profit. If ALDI is showing sales growth from £1.1Billion to £7.9billion and Lidl also
have growth in sales which is £800million to £5.8billion. This is easily comprehended by
following diagram.
LIDL
ALDI
Morrison
ASDA
TESCO
Illustration 1: Market share of companies
in Grocery industry in UK in 2015
Lidl
Aldi
Morrison
ASDA
Tesco
Illustration 2: Market share of
companies in Grocery
industry in UK in 2017

(Comparison of growth of profit)
Above is the growth in sales volume that is a concerned topic for other companies like
TESCO etc. Data is showing that success of ALDI and Lidl is a big question on other company's
success and growth. Above charts and graphs are showing actual market conditions of various
companies which are operating their business operations in United Kingdom (Bhattacharya ed.,
2010). Growth shown by ALDI and Lidl separately is a combination of expenses which are
company expensing commonly. Data is showing variation in market share of TESCO and
Morrison which is fell by 0.2% basis points in past two years but it is been recorded that these
two firms are regularly indicating fall since five years.
Main concern of this report is that Lidl want to become main competitor of TESCO
company has desire of increasing retail store chain in overall UK. Lidl wants to compete with
rivals by taking market share to a two digit figure. Above is a research that is showing current
status of corporations in market in grocery industry. Analysed data is collected from secondary
research which is representing that if TESCO is showing fall in market share but it is a largest
company in industry and Lidl is showing a least position in marketplace.
Below are some techniques that are used for analyse present market position of some companies.
TOWS Analysis
1 2
2014
2014.5
2015
2015.5
2016
2016.5
2017
Column
A
Column
B
Illustration 4: Growth in
Sales of ALDI from 2015 to
2017
1 2
2014
2014.5
2015
2015.5
2016
2016.5
2017
Column D
Column E
Illustration 3: Growth in sales of Lidl
from 2015 to 2017

This study is done in context of Lidl company because this is a main problem of case.
Strengths weaknesses
 Lidl company is providing unique
services to its customers (Chaffey,
Smith and Smith, 2013).
 Rapidly growing its market share by
serving good quality products to
customers.
 Inclusion of other brand's products too.
 Online presence and selling is very
strong.
 Also open at Sundays and Holidays.
 Reach of customers is easy with 10000
stores.
 This company is little small in
comparison of other corporations.
 Lidl is still not able in getting place in
customer's mind.
 This firm is not able in making
remarkable position in global market
(Dahlén, Lange and Smith, 2010 ).
Opportunities Threats
 Rapidly growing market share because
people start trusting this firm as a
brand.
 Business expansion in growing
economies like Africa, Asia etc.
 Business expansion of other brand are
increasing competition.
 There are many companies in industry
that is why all corporations are showing
price wars among them.
 Changes in government policies in
different countries.
Above analysis is showing that Lidl has lot of threats and weaknesses but these flaws can
be removed by taking some corrective measures and apart from this these resolutions should be
taken by company for grabbing market opportunities in order to compete with TESCO and to get
two digit market share in company (DesJardins, 2011). As per analysis, it is clear that there are
various opportunities are available in market which can be go through by Lidl company.
PESTLE Analysis

This is an analysis of external factors that company considers for competing efficiently in
market and these points should be taken into consideration while planning and plotting business
operations. Elaboration of these factors are described below:
Political – These factors includes some policies which are made by political parties while
they are in government. These policies could be anything like tax rules, environmental
regulations, liquidisation, privatisation and globalisation etc. When company is going to launch
its products in other countries so tax policies should be considered in order to find expected
profit percentage. If a country allows other nation's firm to come and conduct business
operations then it is called as globalisation so it must be check by Lidl association while making
entry in new country.
Economical – Before enter in new market, it is expected from management that stability
of economy should be checked in order to assure positive results and growth in new nation. This
factor comprises some aspects like rate of gross domestic product, per capita income of
population along with in-equilibrium and demand and supply (Fullerton, 2010). Before entering
in new global country, demands and method of supply should be checked by association. If
demands are high then Lidl can make entry into marketplace.
Social – This factor is related with social life of customers that includes tradition and
fashion trends. This is understood by an example, If company is going to launch its retail store
in UK then lifestyle of people should be checked whether population is making purchases from
retail stores or not. If the answer is yes then entry is successful other wise it will be a failure.
Technological – As it is clear that, Lidl is also running its business operations on online
and for making entry in other country so that all technological aspects must be checked by
marketing team of company for analysis profit and easiness of activities conductions. If online
orders are more than offline demands than association must check all delivery options and these
alternatives should be good in order to make delivery in promised time.
Legal – This factor includes some legalise aspects like employment laws, environmental
act. Firm has to ensure that their business operations should not harm environment of nation and
all legislations associated with employment law must be analysed in proper manner. There are
some employment laws like equality law, health and safety act, discrimination act etc.

Environmental – It should be ensured by company that all operations of firm will not
affect atmosphere and climate in bad manner and on the other hand management should take
care about environment (Gbadamosi, 2013).
So, it is suggested by marketing manager of association that all extrinsic factors should
be analysed for ensuring growth and success in other nation. This is a positive aspect and by
going through them association can expand its business operations in other nation.
Competitor Matrix
This is a technique that provide opportunity to company's management to make
comparison with rival's firm so that Lidl's items and facilities could compete with competitor's
products and services (Gummesson and Mel, 2010). This is a chart which states competition
among some companies:
Particulars Ldli ASDA TESCO
Running From 1930 1949 1919
Price in GBP 4 7 8
Market Share 5% 15.3% 28%
Number of Outlets Approx 10000 21000 35000
Target Age of
Customers
Working people Households Housewives
Customer Loyalty Good Better Sufficient
Taste Rich Perfectly brewed Perfect Taste
BCG Matrix
This is a tool which is given by Boston Consultancy Group. This is about products and
offerings of Lidl company. This is a technique which helps in long-term strategic planning. This
matrix is divided into 4 parts one is cash cows, second is stars, third is question mark and last bit
not the least is dogs. This matrix states that Dogs are those who shows that low growth of
product or lower market share.

Dogs: These are aspects that shows low product growth or lower market share of
company. Yes, Lidl is having least market share but this firm is going rapidly and its products
are becoming trustworthy in the eyes of customers.
Question Marks or Problem Child: This is a situation in which product are been sold in
high growth market with low market share. In this context, Lidl is a misfit firm because this firm
is representing high growth of items and facilities.
Stars: This is a situation which is presenting high growth of products and increasing
market share (Jones, 2010). It is a perfect situation for Lidl company because this has shown
remarkable market growth in recent five years.
Cash Cows: This is a condition which means company's product are showing high growth
in low growth market. Lidl is also belongs to this group as this organisation is working in
household products which is a moderate growth industry but still firm is having rapid growth and
success.
(Source: BCG Matrix, 2017)
Ansoff Matrix
Illustration 5: BCG Matrix, 2017

(Source: Ansoff Matrix, 2016)
This is a tool which is helpful in analysing current market share and actual position of company
in industry (Krishna and Schwarz, 2014). This is a theory which is propounded by Igor Ansoff
who suggested that there is a four aspects which is described below:
Market Penetration Strategy: This is a situation which includes development of existing
product bin existing marketplace. It means company is showing success in present market which
is a low growth marketplace (Levens, 2010). Market penetration is growth of current product in
existing market.
Product Development Strategy: It means when new product is launched in current
market. For example, Lidl is introducing a fresh new item in present market in which firm is
running its operations currently.
Market Development Strategy: When an existing product is launched in new
marketplace. For example, Lidl is going to launch its operations in new countries and this is
perfect fit situation in this segment. Market development tactic is opted by organisation to make
sure success in new marketplace.
Diversification Strategy: When new product is introduced in novel market. This can be
comprehended that when firm is going to start it s new business. For example, when Lidl started
its business operations then it was a diversification strategy but on the other hand association
should have been running its business operations in other industry.
Illustration 6: Ansoff Matrix, 2016

TASK 2
Identify different consumer segments that influence growth of a company
Marketing has a crucial tool to identify needs of different customers which is known as
segmentation. At the same time it is used to create segments which distinguishes need of
different customers and allot a group to them where people of same needs and requirements are
segmented. Lidl is one of the largest grocery retailer in UK and is expanding its business unit in
other parts of the country. This rapid expansion has created numerous competitors such as Tesco,
Aldi, Morrison, etc. in the sector of retailing. These giants have been hitting market since very
long and aim at creating more customer base by implementing innovative strategies. Though
Lidl's market share is small in comparison to other stores but it is again one of the fastest
growing chain in country (Malhotra and Malhotra, 2012).
Segmentation helps marketing managers of Lidl to prepare budgets and strategies that
will be used in target market. It is also known as customer segmentation, client segmentation,
procedures, etc. Company uses this tool to provide their marketing efforts to its relevant
customer. This is used to target group based upon specifications that allow effective allocation of
resources in order to maximize profit and sales. Using this optimum utilisation of resources can
be made which in return will create customer satisfaction. There are numerous methodologies
and techniques are used by experts to reach their ideal customer and provide with them
demanded offerings (McKenzie-Mohr, 2011). Segmentation is made on the basis of three factors;
psycho-graphic, socio-demographic, and behavioural. Lidl has used these factors to determine
their customer needs and offer them their service as per requirements. Evaluation of these factors
to identify consumer segments that are influencing growth of company is given below: Psycho-graphic: In this segment ideal customers are identifies with the help geographic
and demographic segments such as societal status, lifestyle, attitude, values, beliefs, etc.
Using this factor company can manipulate customers and influence them to make their
purchases in bulk. Target consumers are identified on the basis of specific requirement
and later strong relationship is made with them. Major purpose of segmentation using this
factor is to target individuals who are seeking offers under budget. Such customers focus
upon quality of goods or service they are availing. On the other hand seller is responsible
for identifying need of its customer and to fulfil them in required time frame. One of the
main feature of psycho-graphic research is that it helps in delivering information to