Comprehensive Market Analysis and Strategies for Lidl in UK Retail

This report provides a comprehensive analysis of Lidl's marketing strategies within the UK grocery market. It begins with an introduction to marketing principles and Lidl's position as a leading discount supermarket chain. The report delves into market research, employing tools such as SWOT analysis to identify Lidl's strengths, weaknesses, opportunities, and threats in the competitive UK retail landscape. PESTEL analysis is used to examine the political, economic, social, technological, environmental, and legal factors impacting Lidl's operations. The Boston Consulting Group (BCG) matrix is also applied to assess Lidl's product portfolio and strategic options. The report also covers marketing mix models and relevant strategies to expand Lidl's business in the UK. The report concludes with recommendations for Lidl's future growth and market positioning, based on the analysis and research conducted. This report is a valuable resource for students and professionals interested in understanding marketing strategies and market analysis within the retail sector.

INTRODUCTION TO
MARKETING

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Market research on grocery market of UK by different tools..........................................................3
Task 2............................................................................................................................................12
Segments which affects the growth of Lidl................................................................................12
TASK 3 .........................................................................................................................................15
Marketing mix model and relevant strategies ...........................................................................15
RECOMMENDATIONS...............................................................................................................19
CONCLUSION..............................................................................................................................20

INTRODUCTION
Marketing is a management process through which company distributes their goods and
services to target customers and market. It is related to various activities, set of institutions and
process for creating, communicating, delivering and exchanging offerings that serve value to
customer, clients, stake holders, etc. It helps to satisfy needs and requirements of customers
(Wilson, 2012). It is essential for marketing department to manage their marketing strategies
effectively so that they can reach to their customers as well as fulfill their demands on time. By
using appropriate distribution channel, company can provide their goods and service to their
customers on time. Marketers can also apply different marketing concept and marketing mix to
make their strategies more productive. Lidl is leading discounted supermarket chain based in
German. Company was founded in 1930 with its headquarters in Neckarsulm, Germany. It has
been operating in more than 10,000 stores especially across Europe and USA. This company is
biggest competitor of Aldi. This assignment will mainly focus on expanding Lidl business in UK
retail market to compete their rival teams. They provide low cost and affordable goods to their
customers. This is the reason Lidl has a strong reputation in market with such a large number of
loyal and satisfied customers. Appropriate research on retail industries is done to provide critical
information about rivals to Lidl. Models like PESTEL, SWOT, Ansoff Matrix, Boston
Consulting Group Matrix, etc are used under this project to analyze opportunities, threat,
weakness, strengths, political, economical, social, and legal and other information factors that
can influence Lidl business and growth. Research on UK population has been given which can
provide maximum benefit to Lidl Company and encourages their sales and profits. Different
marketing model and marketing mix are used to provide relevant approaches to marketing
strategies are covered under this assignment.
TASK 1
Market research on grocery market of UK by different tools
Following are some tools which are used to identify growth opportunities of Lidl.

SWOT ANALYSIS: It is a strategic tool which is used to identify internal factors such
as strengths and weakness of company as well as external factors like opportunities and threats.
These factors help company to find out core strengths of company to deal with other competitors
in market and stay ahead of their rivals whereas what are the weak areas which company should
pay attention to improve those areas, so that they can come up in effective manner (Tomczak,
Reinecke and Kuss, 2018). What are the different opportunities which a firm can get and some
threats while competing in market? This helps in better comparison of internal and external
factors with business objectives and goals and gives precise idea about favorable and
unfavorable situations. Before formulating any strategy in relation to business expansion,
growth, new product launch, etc, managers use SWOT Analysis to find out the chances of profit
and loss to company.
Retail market of United Kingdom is a very large platform where numerous competitors
are present and this main strategy is to attract as many customers towards their products and
service as possible. Retail companies are using SWOT analysis to identify better opportunities
and threats of their company form other competitors. It is really a tough task to manage
everything and achieve success. With the help of this analytical tool, various strengths,
weaknesses, threats and opportunities of retail market of UK can be identified who can influence
sales and marketing of Lidl. Following is the SWOT analysis:
STRENGTH (Internal factor of organization)
It is an internal factor which is very crucial for Lidl to identify. As it is one of the leading
supermarkets, they have to continuously upgrade their strengths areas to retain their position. To
expand their business in markets of United Kingdom, they have to make whole lot of planning to
make the expansion successful (McDaniel and Gates, 2013). As Lidl has a strong reputation in
market, it can be easy to start their new business in UK. They have to focus on target customers
and market areas where they can get maximum profits and sales. This company has strong online
presence and is available online. This is a greater strength of Lidl to enhance their market online
as maximum number of people buy products online and digital marketing has a great scope in
present as well as in future.
WEAKNESS (Internal factor of organization)

If Lidl wants to achieve maximum growth in retail market, then they have to focus on
weak areas also because these factors can prevent company to achieve desired success. Managers
and superiors should pay attention to their weakness and try to improve it as soon as possible. If
they are proficient and talented in their functioning then they can their followers in effective
manner. Weakness of Lidl Company is that they are relatively small as compared to other brands
like Aldi, TESCO, etc. They have not expanded their business globally and are limited to United
Kingdom and USA. They should try to open up their stores globally so that they can give tough
competition to other rivals companies. As they have large number of store in UK but they lack
sufficient employee workforce to attend customers and answer their problems at the stores. This
decreases customer satisfaction and tend to prefer other rival companies for better assistance.
Above were some weaknesses, which the company needs to focus to achieve desired success.
OPPORTUNITIES (External factor of organization)
It is necessary for companies to overcome all their weaknesses to become a successful
leader. As retail sector is ever growing market, so company has great opportunities to expand
their business. They can shift their business to countries which have growing economies.
Managers can formulate effective market strategies to grow their business and acquire large
market share in retail market.
As they have strong hold on online marketing, they make it more effective and customer
friendly by doing some modification and making unique products available in their website.
With the help of Search Engine Optimization, they can register their websites with famous
search engines (Smith, 2012). This will customers to reach the company within a shit time
period. Organization can focus on great opportunities lying in front of them and start their
actions in that direction of getting success.
THREAT (External factor of organization)
There are challenges which company has to face on daily basis. Lidl has a growing
supermarket chain and many competitors are already present in the market which have well
established business and have a large market share. This can impact on growth of the company.
Many changes can occur in government rules and regulation, policies, guidelines related to retail
industry. If any global brands expand their company international, then it might pose threat to

Lidl and this will become more difficult to expand their business. Manager can identify what
factors can be dangerous for them and will prevent them from growing their business. In that
case they need to analyze all those factors and formulate best strategies to encounter all their
threats.
Retail sector involves much threat and is unpredictable. Even a single change in shopping
habit of customer can cause major threats to retailers. It is necessary to keep company updated
with regular changes in market and modify their plans according to that.
Above was the SWOT Analysis which represents strength and weakness of company and
some opportunities and threats which firm has in the market place (Gibbs and Knapp, 2012).
Below is another tool to analyze external environment and its influence on Lidl enterprise.
PESTEL Analysis
This analysis of retail industry provides company with relevant information about factor
which can influence the growth and success of industry.
Political factor: It mainly includes laws and regulation of country which affect revenues
and profitability. Retail industry is ever growing sector and have been concerned with
employment laws which are set by government. Political stability is necessary for business as
their disruption can lead to supply chain and sales problem. Over some years, organizations
which are dealing in UK retail industry have to face policies and regulation. It has been noticed
that, companies which have strong hold in market, tend to dominant and exploit employees due
to larger market share (Dávila, 2012). The government has then responded back by
implementing some laws against employee’s safety and competitiveness of industry. Some
political factors which greatly influence retail industries are as follows:
 Tax policies.
 Government regulations and policies.
 Corruption level.
 Government stability and instability.

 Political action committees.
 Completion regulations.
 Government involvements in trade union and agreements.
 Trade control.
Economic factor: UK supermarkets are greatly influenced by economic conditions of the
country. A company has to consider all economic factors while making their strategies as a
single change can lead to huge loss or profit to them. There is a continuous swing in external
environment which leads to instability of retail industry. Various factors like inflation rates,
unemployment policies, and monetary policies greatly influence economic condition of Lidl.
Some of key economic factors are as follows:
 Inflation rate.
 Interest rate.
 Growth rate.
 Availability of credit.
 Exchange rate.
 Unemployment trend.
 Price fluctuations.
 Stock market trends.
 Gross Domestic Products trend.
Social factor: Buying patterns of UK customers pose great impact on Lidl Company. As
they manufacture goods which have affordable prices, consumer prefers them over costly retail
supermarkets. This increase their profits and sales (Fill and Turnbull, 2016). But sometimes
customers can have the perception of bad quality as products are available at very low cost, so

they might not prefer them. Some of critical social factors which influence growth of company
are as follow:
 Population size and growth rate.
 Birth rates.
 Death rates.
 Immigration and emigrations rates.
 Life expenditure rates.
 Wealth distribution.
 Social classes.
 Per capita income.
 Buying habits.
 Ethical concerns.
 Cultural norms and behaviors.
Technological factor: There has been a great advancement in technology in past decades. It
is crucial for retail industries to have recent equipment and technology to compete in the market.
They can execute innovative ideas by taking help of equipment and produce unique products.
This also increases quality and productivity of goods and services. Following are some
technological factors which are necessary for the company:
 Automation.
 Level of innovation.
 Technological awareness and incentives.
 Access to new technology.
 Research and development activity.

 Internet infrastructure.
 Life cycle of technology.
Environmental: Various factors have influenced the supermarket industry. For example,
weather conditions greatly effects growth of crops, fruits, vegetable, etc or possibly destroy them
(Anda and Temmen, 2014). This sometime led to shortage of supply and increases the prices in
supermarket. Company also produces so much of carbon discharge which harms nature, so they
should minimize and manage their waste and effluents. Some crucial environmental factors
which affect business activities of company are as mentioned below:
 Weather.
 Climate.
 Environmental policies.
 Climate change.
 Pressure of NGO’s.
 Air and water policies.
 Natural disasters.
 Recycling standards.
 Support for renewable energy.
Legal: These factors are very important for retail industry. There are many laws
which effect the functioning of companies. Legal scenario of UK is really complex and
retailer has to be very cautious as any violation can lead to huge fine. Some of the legal
factors are mentioned below:
 Discrimination laws.
 Employment laws.
 Consumer protection laws.

 Copyright and patent laws.
 Health and safety laws.
 Consumer protection laws.
 Data protection laws.
Illustration 1: PESTEL Analysis
BOSTON CONSULTING GROUP MATRIX
BCG is a global management consulting firm and is world’s largest adviser on business
strategy. They connect with clients which are from various sectors like public, private, non-
profit and give them advice about their opportunities in market. They help companies to achieve
sustainable competitive advantage, build more and capable firms and maximize their
productivity and profitability (Christopher, Payne and Ballantyne, 2013). BCG matrix helps
organization to achieve desired success by planning effective long term strategies by reviewing
its portfolio of products where to invest, to discontinue or develop products. The matrix is
mainly divided into four sections and is known as, Star, Question mark, Cash cow and Dog.
These elements are described below:

 Star: In this those companies or products are included which earn huge profits and are
most popular in market. They ensure high sales and maximum revenue as they have
strong market share and high growth rate. If a company is in this stage, then they have to
invest huge amount of funds to maintain their position. Aldi is one such company who
has high sales and is highly powerful in retail industry.
 Question mark: This includes those company or products which are in growing stage
and require huge investment to get stability. They have low market share that is why they
earn less revenue. Question mark is also referred to problem child and these companies
have the potential to gain market share and become a star. Lidl comes under this stage as
it is in growing state and have high capacity to become a star.
 Cash cow: These companies have high growth rate and generate more cash then they
consume. They help company to become market leader.
 Dog: These companies have low market share and low growth rate. They neither generate
cash nor do they consume cash.
ANSOFF MATRIX
This tool represents corporate growth strategies and present potential markets and
products. Company uses this tool to grow their business in new and existing market with their
new and old products (Turnbull, and Valla, 2013). They provide four different growth strategies
and are given below:
Market penetration: In this company try to achieve success through existing products in
their current market and aim to increase its market share.
Market development: Firm focuses on achieving growth by targeting its existing products to
new market.
Product development: Company develops new products for existing market segments.
Diversification: Firm expand their business by developing new products for new markets.

Task 2
Segments which affects growth of Lidl.
Market segmentation is one of the most efficient and effective tool for business to fulfill
needs and requirements of target group. It is so because market segment make it easy for firm to
customize their market strategies and campaigns by to focus on capturing the attention of
consumers in most appropriate and cost effective manner (Belch and et al, 2014). It leads to
specific planning and thus gives out better outcomes. Segmentation is done by dividing
population into various sections and sub sections on the basis of certain characteristics such as
such as age, gender, income, place, occupation, usage, lifestyle etc and then selecting target
audience for business. IT ensures that business draft better products according to needs of
segment there are certain way factors on the basis of which segmentation is carried out in order
to analyze and search out most ideal set of requirements and behavior of selected customer
group. Key point to be emphasized upon while grouping segments is that they should be
homogeneous i.e. there needs to be some similarity among the people of sections that can
capitalize by firm. Also as every individual is unique marketer need to ensure that people
belonging to same segment should have identical reactions in similar way as other individuals of
same segment have for stimulus. Mentioned below are some of the prominent types of market
segmentation:-
Socio- demographic factor: - Socio- demographic segmentation is one of the most
significant marketing divisions since information is easily available and drastically affects
buying behavior of customers. This segmentation divides market on the basis of customer
personal characteristics such as age, family size, gender, income, religion, race, occupation,
nationality, etc. The marketing department of almost every industry like beauty products,
mobile phones, automobiles etc. conduct this segmentation as customer’s buying behavior is
largely influenced by these factors.
Behavioral Factor: - It is the practice of dividing consumer’s group on basis of attributes
like usage, loyalty, preference, knowledge, choices, purchase patterns and decision making. It
can be utilized in number of ways as in case segmentation is based on awareness an enterprise
might send influence customers behavior through customized ad campaign or in case it is based