Marketing Communication Strategies of UK Supermarkets: ALDI and Tesco

This report provides a comprehensive analysis of the marketing communication strategies employed by two major UK supermarkets, ALDI and Tesco. The study investigates how these retailers integrate online and offline marketing efforts to build their brands and gain a competitive advantage. It examines the marketing communication budgets, including the allocation for online and offline channels, and delves into the market research strategies used to understand consumer behavior and preferences. The report further explores the various forms of advertisements utilized by ALDI and Tesco, including social media, content marketing, and in-store promotions. A key focus is placed on how both supermarkets leverage online content to engage with consumers and build brand loyalty. The role of corporate communications in enhancing customer loyalty is also assessed. Finally, the report compares and contrasts the marketing communication strategies of ALDI and Tesco, using Keller's brand equity model to evaluate their effectiveness. The analysis highlights the strengths and weaknesses of each supermarket's approach, providing valuable insights into the competitive dynamics of the UK retail market.

Running head: MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL
SUPERMARKETS
Marketing Communication Strategy Analysis of UK Retail Supermarkets
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1MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
Executive Summary
In the current report, marketing communications of two UK supermarkets waas analysed for
offering suitable insight on the ways in which the selected supermarkets namely, ALDI and
Tesco have integrated online and offline marketing communications to develop their brands. The
report revealed that digital marketing communications plan of Tesco is observed to be highly
effective in attaing high loyal consumer base in a short span of time along with spreading
promotional messages among its target consumers regarding its offerings on a regular basis. The
brand has attained competitive advantage over ALDI in UK through communicating its
promotional messages that it offers competitive offerings at value end of the market through
maintaining reasonable quality and price.

2MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
Table of Contents
Introduction......................................................................................................................................3
Marketing Communications Budget in Online and Offline Marketing Communications..............3
Marketing Research in Understanding Consumers.........................................................................4
Various Forms Taken by Advertisements.......................................................................................5
Supermarkets Using Online Content for Consumer Engagement...................................................6
Corporate Communications Role in Increasing Consumer Loyalty................................................8
Comparing and Contrasting Marketing Communications of ALDI and Tesco...............................9
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

3MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
Introduction
ALDI is one of the established UK based retailer that has around 8134 stores all around
the world. It offers fresh grocery offerings through its supermarkets in exceptional quality and
low prices (Cr.aldisouthgroup.com. 2019). Tesco is an established UK based retail organization
that majorly offers two main food brands such as everyday value and finest in offering
exceptional consumer offerings. Both the companies are observed to employ online and offline
consumer engagement and advertising strategies for attaining sustainable competitive advantages
in the UK retail industry (Tesco plc. 2019). The objective of the report is to compare and contrast
marketing communications of ALDI and Tesco in analysing the extent to which each UK based
supermarket has employed marketing communication strategies in attaining competitive
advantages. In the current report, marketing communications of two UK supermarkets will be
analysed for offering suitable insight on the ways in which the selected supermarkets namely,
ALDI and Tesco have integrated online and offline marketing communications to develop their
brands.
Marketing Communications Budget in Online and Offline Marketing Communications
The online and offline marketing communications budget of ALDI is developed relied on
certain objectives such as increasing reach in certain regions of UK and for creating a seamless
experience for the target consumers through reinforcing the brand’s core message. Considering
the current market, changing consumer preferences and technological shift, ALDI has decided to
invest a budget of $ 2 million in its online marketing communication strategy and $ 1 million in
its offline marketing communications (Baltes 2015). Budget for online marketing

4MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
communication channels is kept high by ALDI as it will heavily focus on social media
advertising in increasing its brad presence.
The marketing objectives based on which Tesco has developed its offline and online
marketing communications budget includes increasing global brand awareness, consumer
demand increase for its retail product categories and increasing consumer traffic in physical
stores, website and other marketing channels. 70% of Tesco’s online and online marketing
communication funding is derived through cost reductions through consolidating programs and
30% of the budget is derived from the new funding (Blakeman 2018). Maximum budget is
invested within the supermarkets’ online marketing communication channels as from the market
research it is observed that increased brand presence in social media channels facilitates Tesco to
attain new leads than the expensive offline marketing communication channels such as television
and billboards.
Marketing Research in Understanding Consumers
From the market research it has been gathered that the target consumer group of ALDI
includes both men and women that belong to the low and mid-level income group. As the
supermarket brand is renowned in UK in offering exceptional quality foods at low prices the
consumer groups with thrifty mind-set are regular customers of the brand (Dibb and Simkin
2016). The supermarkets industry of UK is highly competitive as it faces strong rivalry from the
major rivals. For this reason, ALDI focuses on serving a niche market segment within the
broader market through offering them specialised benefits. ALDI implements niche targeting
strategy focussed on a “single segment” in order to avoid the direct competition from the
dominant players.

5MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
The target consumer group of Tesco is observed to include consumers those are looking
for low price offerings. Moreover, the company also targets consumers belonging to middle-
income group with young children. As research has indicated that target consumer demographics
are changing were the consumers are looking for cheaper discount supermarkets, Tesco is
targeting the consumers those look for exceptional quality products at a cheaper price. The price-
sensitive grocery shopper segment is targeted by the supermarket as this consumer group is
observed to be in huge numbers in UK. Moreover, mass marketing strategy is followed by Tesco
in which the company ignores the market segment differences and targets the whole market with
one offer. Through targeting this consumer group, Tesco focuses on the common needs of
consumers that include lower price offerings. Additionally, market research also indicates that
the target market of Tesco also includes around 500,000 citizens of UK that has an average
income more than the rural or suburban area (Lancaster and Massingham 2017).
Various Forms Taken by Advertisements
Market research revealed that supermarket industry’s approach to content and media
marketing has drastically evolved for attaining competitive edge in the market. Focussed on such
trend, ALDI focussed on advertising its offerings concentrated on price comparisons. The
supermarket brand focuses greatly on employing Face book and Twitter marketing channels as
their effective forms of advertisement. The supermarket’s Twitter feeds ad Facebook
promotional contents are centred on promotions and competitions. Through positing engaging
content like hash tag competitions, free vouchers and contents on the supermarkets exciting new
offers has increased followers and brand awareness among target consumers (Grewal 2018).
Moreover, ALDI also employs brochures each week for distributing in its stores that promotes its
seasonal and weakly offers available within stores. ALDI makes use of highly innovative content

6MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
marketing in which it makes great use of print, electronic as well as display media for promoting
its supermarket stores. All the promotional offers are communicated by the supermarket through
reaching them via newspaper, direct mail or through its weekly newsletter called “ALDI
Informs” to infirm all its target consumers regarding its new products or “special buys”.
On the other hand, Tesco has transformed its advertisement strategies to include various
forms of media and content marketing strategies for attaining sustainable market position. The
recent content marjting campaign of Tesco is “Tesco Food Love Stories” that focussed on
promoting message on relationship between a person and a special dish. This campaign of Tesco
was also launched by the supermarket brand on TV, radio, blogs, outdoors and social media. The
company also considers in-store promotions that are focussed on improving consumer perception
on the quality of food offered in its stores (Patrutiu-Baltes 2016). Moreover, the supermarket’s
introduction of environment friendly products is advertised through billboard campaigns, internet
advertisement and through direct marketing to known consumers. Additionally, several
marketing and communication channels have been implemented by Tesco that has built effective
relationship between consumers and the brand. Such marketing mediums include email, website,
television and websites. The advertising content of the supermarket is focussed on product offers
such as “buy one get one free” and “half price” that are considered to be attractive for its target
consumers. In order to enhance its brand image, Tesco also develops social media advertisement
contents on offering promotional discounts, sponsoring charitable events along with use of point
of sale strategies (Souza-Monteiro 2017).

7MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
Supermarkets Using Online Content for Consumer Engagement
Market research has evidenced that Tesco makes increased used of Facebook, Twitter,
Google Plus and Pinterest to develop promotional content that is highly effective in engaging
with its target consumers. For increasing high consumer engagement, the supermarket has
developed highly innovative visual content through positing one update each day which is
related to its brand or offerings. Moreover, to attain better consumer awareness the company
frequently incentivises user comments through providing club card points for sharing stories on
several topics. To increase consumer engagement with the brand, Tesco has generated 16
accounts intended for online consumer care, special offers, real food, club cards and wines that
have attracted increasing number of followers each year (Sharma, Kumar and Borah 2017).
Through following such innovative content strategy on Pinterest Tesco has attained attained
increasing number of followers from 32 to 655 over past six months. The boards of the brad on
this social media channel includes innovative content of all sizes and shapes including third party
content in increasing its number of followers.
On the other hand, ALDI has employed highly engaging online promotional content that
has drastically enhanced consumer engagement. The supermarket has made its online
promotional campaign extensive that encompass huge content marketing elaborating the quality
of its new products and value of its brand (Souza-Monteiro and Hooker 2017). Facebook and
Twitter pages of the supermarket encourage two way communications with its target consumers.
Through implementing various forms of promotional campaigns ALDI generates “ALDI
Advocates” and regular new and innovative marketing campaigns that has attained high positive
brand feedback. Use of direct e-mails for promoting its “I love ALDI because .....” campaign has
communicated several messages to target consumers. For instance, the company promotes its

8MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
“Swap and Save” messages along with seasonal product offerings through e-mail marketing
which as increased consumer awareness regarding its products over years.
Corporate Communications Role in Increasing Consumer Loyalty
Market research conducted by Killian and McManus (2015) evidenced that corporate
communications strategy implemented by Tesco has facilitated the supermarket brand in
increasing consumer loyalty towards the brand. In-store communications of the supermarket has
effectively promoted it’s “Exclusively at Tesco” range. Effective corporate communications of
ALDI through efficient media and public relations has facilitated the company in attaining
positive press exposure and also facilitated the supermarket brand to secure record coverage
through innovative media relations. Use of innovative marketing communication campaigns such
as above-the-line and below-the-line promotions with focus on Swap and save” campaigns have
addressed needs of its target consumers (Peeroo 2019). Tis further increased loyalty among
consumers those look for quality products at reasonable prices. Moreover, the corporate
communications strategy off Tesco majorly focuses on developing new advertisement campaigns
such as commercials spreading brad promotional message of “Every Little Helps” that
communicates its consumer focussed philosophy of always doing right by the consumers. This
new marketing communications campaign of the supermarket has increased consumer loyalty
through enhancing positive impression of Tesco among its shoppers.
It has been evidenced by Luxton, Reid and Mavondo (2015) that ALDI implements
effective corporate communications strategy in developing brand loyalty among its target
consumers. The supermarket brand has the objective of increasing its market share and ensured
that its promotional campaigns demonstrated the balance of its promotional messages on various

9MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
marketing media channels. For instance, in increasing consumer loyalty the company
communicated its major qualities and value messages. Moreover, its corporate communications
in television medium in the form of “Like Brands” campaign centred on its specific product
ranges. This communication strategy portrayed the brand as a benchmark for quality through
communicating slogans like “Like Brands Only Cheaper” (Martínez-Ruiz et al. 2016).
Generating humour facilitates the brand in developing trust and emotional connection with target
audiences that further increases their brand loyalty towards the brand.
Comparing and Contrasting Marketing Communications of ALDI and Tesco
Keller’s brand equity model has been used in conducting comparative analysis of
marketing communications strategies employed by ALDI and Tesco supermarkets in UK. Brand
equity for these supermarkets is analysed through analysing the differential impact of brand
knowledge on consumer response to brand marketing communications strategy (Ryan 2016).

10MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
Figure 1: Keller’s Brand Equity Model
(Source: Hastings and Stead 2017)
From analysing the marketing communications strategy of ALDI, it is observed that the
supermarket brand maintains its brand equity through focussing on attaining its components by
its marketing communication strategies. On the other hand, Tesco implements Kellar’s pyramid
of consumer based brand equity model with the objective of communicating promotional
message of offering “cutting edge products at affordable prices to consumers” (Utgård 2018).
Brand Equity Model Components of ALDI
 Salience: The marketing communication messages of ALDI are focussed on attaining
consumer loyalty through promoting its quality offerings with latest product ranges at
affordable process.
 Performance: ALDI has maintained efficient segmentation, targeting and positioning of
its product ranges with exceptional brand personality and recognition. Considering same
the supermarket brand promotes its offerings through communicating message of their
high performance and quality (Valos et al. 2016).
 Imagery: Through marketing communication messages, ALDI attempts to develop a
brand image of high quality, latest offerings along with feature rich products to attain
exceptional brand equity from its consumers.
 Judgement: The marketing communication strategies of the supermarket brand have
facilitated the company in developing its trustworthy name, brand recognition and market
reputation.

11MARKETING COMMUNICATION STRATEGY ANALYSIS OF UK RETAIL SUPERMARKETS
 Feeling: The marketing communication messages of the supermarket brand privies a
feeling of value for money for all its offerings belonging to low and mod-ranged product
categories along with the social status associated with the high end offerings (West, Ford
and Ibrahim 2015).
 Resonance: ALDI has attained a loyal following of consumers through launching
innovative marketing communication strategies on a regular basis.
Brand Equity Model Components of Tesco
 Salience: The supermarket brand is focussed on developing brand identity through
developing its brand salience.
 Performance: Tesco recognises and communicates the meaning of its brand through
effective content and media promotions along with the ways in which it services its target
consumers with tangible needs that facilitates in enhancing performance of the company
(Zook and Smith 2016).
 Imagery: Addressing the emotional and psychological needs is the major focus of
Tesco’s marketing communications strategy that enhances its imagery aspect of
enhancing brand equity.
 Judgement and Feeling: Through its marketing communication strategies the brand is
focussed on enhancing consumers’ positive feelings and judgements towards the brand
and its offerings by analysing their response on social media marketing channels.
 Resonance: Tesco’s marketing communication strategies are centred on developing
behavioural loyalty, sense of community, altitudinal achievement along with active
engagement among its consumers. Moreover, active engagement among consumers is
ensured by Tesco’s promotional messages in developing brand resonance (Wilson 2015).