Market Segmentation And Competitive Analysis: Strategies Used By Aldi Supermarket

Background to the Company

Discuss about the Market Segmentation and Competitive Analysis.

Marketing strategy is the priority of every company aiming to make it in the corporate world. The fundamental purpose of marketing strategy is to maintain and increase the company’s sales while achieving an excellent competitive advantage. The procedures will include all the basics, long and short term activities in the area of marketing dealing with the analysis of first company situation (Zou and Cavusgil 2002). Marketing strategies sometimes differ depending on location and nature of business. However, there are many ways that the strategies can be categorized. People should not confuse marketing strategy with marketing mission or objective (Kumar 2007). The difference between multi-national companies and those that are struggling is having a good strategic plan and implementing as per the agreement. Aldi supermarket chain has for a long time survived because the company has been able to implement a good marketing plan to reach millions of customers worldwide (De Wulf, Odekerken-Schröder, Goedertier, and Van Ossel 2005). Otherwise with a weak marketing plan the company is doomed to fail. The marketing department is essential to the success of every organization because the main aim of setting up the business is to maximize the profit made (Zou and Cavusgil 2002). That the reason many organizations spend more time and resources to make sure the company goals and objective are achieved.

Aldi is a German supermarket chain globalized around Germany, UK and eighteen other countries with its headquarters in Essen. The chain was founded by two brothers Karl and Albrecht who took over from their mother. The supermarket comprises of two groups: Aldi Sud and Aldi Nord. For a long time, the two teams have worked separately both financially and legally while still operating in specific markets (Kumar 2007) .The Company can deal with complicated dynamics and hard challenges in different markets resulting in various outcomes. The group performs all over the world in more than ten thousand retail stores (Whyatt and Koschek 2010). ALDI for the past years has undergone strong and consistence growth and at the moment it operates five hundred and fifty stores across the United Kingdom. ALDI has been known for owning one of the biggest supermarket chain stores selling food products. However, the supermarket has now expanded into other products like healthcare, clothing, electronics, household goods, and beauty products all going at second prizes (Cleeren, Verboven, Dekimpe, and Gielens 2010).

Marketing in simple is described as giving the best product and services at the right time, place and with the best price. In the market world, customers will always go for the best product and the nearest convenient place (Walker, Mullins, Boyd, and Larreche 2005) Management experts will always emphasize on four Ps of marketing more often referred to as marketing mix. Below entails in-depth marketing strategies used by Aldi supermarket.

The first one is Price, Place, and Product Strategies. The philosophy of Aldi business is to focus on those necessary investments mostly and at all cost avoid any superfluous so as to give customers maximum savings. Unlike other companies that extend their opening hours, the company’s stores operate on limited hours mostly going to twelve hours a day (Jain and Haley 2009). At most times one can see almost three to seven workers to manage the entire functioning of the store that is a different strategy from other competitors which have a high number of employees at one place. The selling philosophy of Aldi supermarket is entirely different from other companies as the company has taken a more active approach to promoting and sells its products that are equivalents to other brands. The success of any business is to attract potential buyers and will largely depend on the competing market price (Cleeren, Verboven, Dekimpe, and Gielens 2010).

Marketing Analysis

Another strategy is Promotion Strategy. One of the best and unique strategies Aldi supermarket has adopted is the use of advertisement and brand comparison. The adverts show that all the Aldi brands are of good and equal quality (Smith 2006). In this era of improved technology mostly the social media, it has become easier to communicate with the target customers directly. Advertisement of similar brands gives the enterprise an excellent opportunity to provide more information on the product quality and greater the money value of the product. The company at one time ran a blind taste experiment on different brands in the shopping section (Rust, Lemon, and Zeithaml 2004). The end results showed that many of the consumers that liked the well-known brands also liked Aldi brands.

The next most important marketing strategy used by Aldi supermarket is recommendations. Many competitors are working very hard to increase their market share while still exploiting the resources. The company recommends quality enhancement to give more and tougher competitions to other leading supermarkets (Rust, Lemon, and Zeithaml 2004). However, Aldi supermarket has an excellent strategy to provide value and services to customers. A good example is providing an opportunity for online shopping and free home delivery (Jain and Haley 2009).

For Aldi business to survive well in the current competitive market, I would suggest the company adopts the Porters five forces model. The main reason for Aldi business is to offer best product and services to potential customers while still keeping the client’s loyalty. The company needs to develop unique strategies to overcome trade barriers while still accomplishing the cross-border trade (De, Odekerken, Goedertier, and Van 2005). This model is a system that accesses the level of rivalry in the market while still providing procedure improvement in the business. Apart from the models Aldi uses some of the porter’s general strategy and makes sure the company in a less costly process on leadership strategy on market differentiation. This shows that Aldi business plan gives enough attention on managing the external environment that includes tax regulations and government policies for import and export compliance can be managed well (Rust, Lemon, and Zeithaml 2004).

The company can also adopt the Pestle tool that analysis the external environment of the business. Pestle will also enable the company to know any issue developing while still working on cross borders (Segal and Giacobbe 1994). The company can try what is called joint venture as well as strategic alliance collaborations (Deleersnyder, et al. 2007). This will help the business to form a real alliance that will lower down the competition level. Aldi supermarket to make it needs to consider having an online collaboration with other business minded supermarkets dealing with the same products. Aldi supermarket also needs to look into the issue of a language barrier to penetrate the new market. In business, language barriers play a predominant role in determining whether the company will penetrate the new market or not (Semeijn, Van Riel, and Ambrosini 2004). The company should give full attention to developing a good approach where the customer representative are well trained in a manner that they can speak in language local to where they are doing the business. For a long-term growth of the company, Aldi should focus more on technology to help identify behavior traits so as to manage enterprise change.

Conclusion

Aldi supermarket straightforward and unique approach to marketing strategies has given them a more competitive advantage in the marketplace. The original balance of the company enables it to provide customers with high quality and own branded products and services at a very affordable price in the market (Juhl, et al. 2006). By adopting some lean approaches, the supermarket has continued to offer its customers high-quality products at the best price. Failure for any profit making company develop good marketing strategy will automatically lead to failure of the organization to achieve objectives and goals. The key to this is early planning and being in a position to read to read and interpret the market trends (Walker, et al. 2005). Having done that Aldi supermarket will be at a safe place regarding competition with other competing supermarkets. The primary desire of every business is to make a profit and when the benefits are not realized the company will not be able to sustain itself, therefore, shutting down.

Reference List

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