Penetration Pricing Strategy Implementation: A Lidl Case Study Report

This report examines Lidl's implementation of a penetration pricing strategy to gain a competitive advantage in the market. It begins with an introduction outlining the importance of strategic pricing in a competitive environment. A literature review provides context by exploring existing research on penetration pricing strategies, their significance, and their impact on customer behavior and market dynamics. Primary research, including a survey of 40 respondents, assesses customer awareness of Lidl's pricing strategy and evaluates its perceived benefits and challenges. The results section presents the findings, including graphical representations of survey responses, highlighting customer awareness, perceived benefits (such as increased customer interest and brand loyalty), and the potential challenges associated with the strategy. An analysis section interprets the research findings, drawing conclusions about the effectiveness of the strategy. The report concludes by summarizing the advantages of penetration pricing for Lidl, emphasizing its role in gaining customer loyalty. The report includes references to relevant academic and online sources.

Assessment

Table of Content
• Introduction
• Literature review
• Primary research
• Results
• Analysis
• Conclusion
• References

Introduction
In a competitive market, each and every organisation wants to sustain for a longer in which
company’s strategy is a vital ingredient that determine its success story. Price penetration
could be a competitive strategy for an organisation where firm gain rapid growth by setting
price of their products at low price initially. This is one of the leading strategy in which firm
can get a good customers base by influencing their buying behaviour towards own brand.

Literature review
Penetration of pricing strategies in an organisation
As per the views of Patrick Campbell, 2020 Penetration of pricing is basically an acquisition strategy for a
company that help to foothold highly competitive advantages (Complete Guide to Penetration Pricing, 2020).
Significance of penetration pricing strategy for company
In opinion of Matt Ellsworth, 2019 Penetration of pricing strategy will help an organization to gain maximum
customer interest towards the brand, reduce market competition, maximize customer loyalty and so on (What
is Penetration Pricing? Advantages and Disadvantages for Brands, 2020).

Primary research
Q1. Are you aware about the pricing penetration strategy that can be implemented by Lidl?
 Yes
 No
Q2. What are the benefits for Lidl of implementing penetration of pricing strategy for a business?
 Reduce competition
 Increased customer interest
 Brand loyalty
 All of the above
Q3. What are the major challenges associate with penetration of pricing strategy?
 Potential price wars
 Reduce brand goodwill
 Inappropriate benefits for long-term
Q4. Does penetration of pricing strategy assist in gaining long term profits for a firm?
 Yes
 No
Q5. Any recommendations for further improvement…………………………………..?

Results
Theme 1. Awareness about penetration of pricing strategy
Q1. Are you aware about the pricing
penetration strategy that can be
implemented by Lidl?
Frequenc
y
 Yes 30
 No 10
· Yes · No
0
5
10
15
20
25
30
30
10
Chart Title
Theme 2. Benefits of implementing Penetration of pricing
strategy
Q2. What are the benefits for Lidl of
implementing penetration of pricing strategy
for a business?
Frequenc
y
 Reduce competition 6
 Increased customer interest 7
 Brand loyalty 7
 All of the above 20
6
7
7
20
Chart Title
· Reduce competition
· Increased customer interest
· Brand loyalty
· All of the above

Analysis
• Theme 1. On the basis of graphical representation, it has been summarised that
respondents are highly aware about the penetration pricing strategy which is used by
Lidl. As out of 40 respondents, around 30 are in its favour whereas approx. 10
individuals are not.
• Theme 2. From the above graphical presentation, it has been analyzed that by
implementing penetration of pricing strategy an organization can grab benefits as Reduce
competition, Increased customer interest, Brand loyalty and so on.

Conclusion
From the above analysis, it has been summarised that penetration of pricing strategy will
help an organisation to gain higher competitive advantages. As this practice will help to
gain customer loyalty by providing quality products and services to customers at minimal
prices. Through this firm can easily adopt a great customer loyalty by attracting them
towards own brand.

References
• Li, B. and et.al, 2016. Pricing strategy and coordination in a dual channel supply chain with a risk-averse retailer. International Journal of
Production Economics, 178, pp.154-168.
• Geng, S and et.al, 2017. Design for the pricing strategy of return-freight insurance based on online product reviews. Electronic
Commerce Research and Applications, 25, pp.16-28.
• Kalangie, C.I. and Worang, F.G., 2019. ANALYSIS OF THE FACTORS THAT DRIVE CUSTOMER WILLINGNESS TO PURCHASE
AT PREMIUM PRICE OF NIKE’S PRODUCT (CASE STUDY AT NIKE’S SPORT SHOES). Jurnal EMBA: Jurnal Riset Ekonomi,
Manajemen, Bisnis dan Akuntansi, 7(4).
• Online
• Complete Guide to Penetration Pricing. 2020. [Online]. Available through:< https://www.profitwell.com/recur/all/penetration-pricing>.
• What is Penetration Pricing? Advantages and Disadvantages for Brands. 2020. [Online]. Available through:<
https://blog.wiser.com/what-is-penetration-pricing/>.
• How Penetration Pricing Attracts Customers to New Products. 2019. [Online]. Available through:<
https://www.thebalancesmb.com/how-penetration-pricing-attracts-customers-to-new-products-4156762>.

Thank You