Discuss about the Marketing Communications for Health and Welfare.
Aldi is a leading brand in the retail industry globally. The company has more than 10,000 discount supermarket chains distributed in about 18 countries globally. The company has an annual turnover of approximately$55 billion. This report analyzes the strategies that the company has applied in various situations and depending on the environmental conditions that have helped the company to survive and succeed in the market for a long time(Rosenberg, 2011). The report will focus on the company’s operations in Australia but will also cite examples from the companies` operations in other countries that the company operates. The report will be prepared using data from various sources. The man source of data will be from peer reviewed journal articles and from the other authentic online sources. Books will also be used to relate the marketing strategies applied by Aldi to the theories of marketing management.
The company is based in Germany and was formed by brothers Karl and Theo Albrecht in the year 1946. In the year 1960,the business was separated to become two distinct business with one located in Essen and the other in Mulheaim. The company started growing internationally in 1967 by acquiring the grocery chain Hofer in Austria. Aldi opened its first shop in Australia in the year 2001 and has grown over the years to attain 310 outlets throughout Australia (Plunkett, jack & plunkett, jack 2009). The discount supermarket chain is famous for offering products at very cheap prices. In the year 2010, the company reported revenue of 53 billion euros.Aldi is owned by Siepmann Foundation (Aldi Sud) and Markus Foundation (Aldi Nord). This report analyzes the marketing strategies that the company has used for the previous years and has helped it to achieve unbelievable success over the years. The report also suggests the strategies and actions that the company should take to ensure that the success continues for many years to come.
Marketing is all about offering the right products at the right place at the right time and price. It is important to analyze the marketing mix of the company so as to understand the strategies that a company uses to reach its customers. These four Ps include Product, Place, Price and promotion. This tool is important when the company is preparing its marketing plan and therefore it is important to understand the marketing mix of the company so as to understand the strategies that the company uses over the years.
Since Aldi is a discount supermarket chain, controlling of cost is at the top of the companies agenda. The company’s business model has remained the same since the company was opened. T
The supermarket chain offers a wide variety of products under one roof. Some of the products under the portfolio of the company fruits and vegetables, household consumer goods, electronics and home appliances, milk, packaged grains, chocolates, coffee, laundry products, Liquor skin care and beauty products(Kumar& steenkamp,2016). Aldi Australia offers a wide variety of products to customers who shop at its outlets to ensure that they can accrue all the items that they need under one roof. The supermarket ensures that all the products that may be needed by consumers are available at the stores at the right time. Another strategy that Aldi Australia uses in relation to products is that if new product development. Aldi does not engage in manufacturing activities but it enters into contracts with its suppliers t help them acquire products that are unique in the market and at a low cost.(Mueller,2011) Aldi`s strategy on products also includes acquiring products from different manufacturers and suppliers in order to offer the customers a wide variety of options to choose from. This strategy has helped in the growth of Aldi in Australia since consumer choices are many compared to other supermarket chains in the country. Consumers can are offered the same product category but the products are differentiated since they are from different suppliers. This strategy helps to attract more customers in future.
Place. Aldi distributes its products effectively throughout Australia. The company owns more than 300 stores across the country. The management of Aldi ensures that all these stores are supplied with all the products needed at the right time. The company has a wide variety of suppliers and each supplier is responsible of maintaining the shelves they have been allocated in the supermarket. The company ensures that it is in constant communication with its suppliers to ensure that no products run out of stock and hence resulting to customer inconvenience.
Aldi stores are relatively smaller compared to those of competitors. This is one of the company’s techniques to help minimize the cost of hiring the facilities. However, Aldi stores have ample parking space which encourages customers to shop as Aldi stores country wide. The packaging and display of the products on the company’s stores is also cost effective. Choice of location of Aldi`s stores is also a very important strategy for the company. Aldi ensures that it opens a store at a location where it will be highly visible and strategic and the population of the area must be of more than 30,000 people. This helps to create ready demand for products hence cutting on advertising and promotional expenses.
Aldi avoids branding products using its logo and brand because of the cost involved in this. Therefore the company is very conservative and unlike many of its rivals in the market, Aldi is not interested in stocking products that have its own products stocked in its stores. This strategy helps in minimizing costs for Aldi and hence the company is able to maintain its costs at a very low level.
Aldi procures most of its products in large quantities so as to be able to enjoy economies of scale. Buying in bulk helps the company to get discounts from the suppliers and the company seeks to take advantage of these discounts so that it can transfer the same to the final consumers.
Every Thursday, Aldi introduces a different range of products such as bathroom accessories, garden furniture, kitchen appliances and other household items. These items are not available in the stores on normal days and therefore they help to attract a higher number of customers on this day and they end up buying many more items.
One of the factors that have been at the core of Aldi`s success is the unique advertisement techniques and methods that company uses. One of the unique marketing strategies Aldi adopted is its advertising through brand comparison. Aldi`s technique is aimed at convincing the customers that Aldi brands are of the same or even higher quality standards than those of competitors. Aldi conducted blind test experiments among customers that preferred popular brands. The experiment proved that the customers could not differentiate the two brands and therefore concluded that the products are of the same quality. This instigated the popular “Like brands” slogan. Aldi in all its advertisements and product promotion efforts carries a message that its products are only cheap but that does not mean they are inferior to those of competitors.
Aldi designs and distributes more than 1 million copies of brochures every week to distribute to customers visiting the stores as well as to other people living in the surrounding areas and motorist (Hitt, ireland & hoskisson, 2017). This technique of product promotion is very cost effective and enables the company to maintain low costs while at the same time creating awareness among new and existing customers.
Aldi strategy is to avoid advertising as much as possible. However, sometimes the supermarket carries out advertisements in the print and broadcast media. Aldi has a strategy of attracting new customers who were loyal to competitors by demonstrating to them how much they can save by swapping from the other grocers to join Aldi. This campaign is known as ‘Swap and Save’.
Aldi also uses social media tools such as Facebook and Twitter to communicate to its customers. One of the companies popular campaigns in the UK and many other countries is the ‘Aldi Advocates’ campaign (Cameron & heywood, 2012). This campaign encouraging consumers to recommend Aldi to other customers based on the things the customers liked about the supermarket. The supermarket gives rewards in form of shopping vouchers.
In order for Aldi to survive and perform better in the Australian supermarket retail industry which is becoming increasingly competitive, it is important for the company to come up with new ideas. More and more supermarket chains in Australia are competing on the basis of pricing and the pricing wars between the retailers may lead to Aldi loosing the competitive advantage of cost that it currently posses.
Aldi Australia needs to enhance its market position as offering higher quality goods at cheaper price due to economies of scale and other cost reduction measures. This is important because, statistics indicate that the behavior of consumers in Australia is changing. Consumers are becoming less interested on the price of a commodity as compared to perceived quality of the commodity (Dahle?n, & lange,2008). It is therefore important that in future, Aldi does not sell its products at very low products compared to rivals since this may create the perception that the products of Aldi are inferior and hence leading to loss of customers.
Increasing popularity of the internet and online retailers has become a threat to most of retail supermarket outlets. Aldi should invest in online shopping to enable customers to shop while at home and the company will deliver the goods at their home at a cost. This will help Aldi to increase its market share in the country and to also offer customers increased convenience since they are willing to pay for the shipping costs.
Apart from the generally low prices that Alda offers its customers.it would be more advantageous if the company introduced loyalty programs to reward loyal customers and to attract new customers(Hitt, 2017). This strategy will help Aldi to snatch some customers from its competitors.
The swap and save campaign should be carried out on the receipts of customers. After they have purchased products from the supermarket, customers can be able to compare and see how much they have saved and hence encouraging customers to buy from Aldi outlets in future(Daft, kendrick& vershinina, 2010).
Conclusion
Aldi`s strategy of cost and other marketing strategies have enabled the supermarket chain to acquire significant market share in the Australia retail market. Aldi has a strategy with its suppliers to ensure that all its suppliers supply Aldi with products at cheap prices. This helps to ensure that Aldi lives up to its bidding as a leading discount supermarket chain. The company chooses cheap promotion techniques such as social media marketing and use of brochures and word of mouth advertising. This strategy ensures that the costs for the company remain as low as possible. This report also gives recommendations on future marketing strategies that Alda should implement so as continue becoming more successful in the market.
References
Australian institute of health and welfare. (2012). Australia’s food & nutrition 2012. Canberra, australian institute of health and welfare.
Cameron, b., & heywood, v. (2012). One family one supermarket. Richmond, vic.: The slattery media group.
Daft, r. L., kendrick, m., & vershinina, n. (2010). Management. Andover, south-western/cengage learning.
Dahle?n, m., & lange, f. (2008). Marketing communications. Hoboken, n.j., wiley.
Hitt, m. (2017). Strategic management. New york: Cengage learning.
Hitt, m. A., ireland, r. D., & hoskisson, r. E. (2017). Strategic management: Competitiveness & globalization : Concepts. Boston, ma: Cengage learning.
Kumar, n., & steenkamp, j.-b. E. M. (2016). Private label strategy: How to meet the store brand challenge. Boston, ma: Harvard business school press.
Mueller, b. (2011). Dynamics of international advertising: Theoretical and practical perspectives. New york: Peter lang.
Plunkett, j. W. (2007). Plunkett’s food industry almanac 2007: Food industries market research, statistics, trends & leading companies. Plunkett research ltd.
Plunkett, jack w., & plunkett, jack w. (2009). Plunkett’s food industry almanac 2009: The only comprehensive guide to food companies and trends. Plunkett research ltd.
Rosenberg, m. (2011). Business advantage. Cambridge, cambridge university press.
Zentes, j., morschett, d., & schramm-klein, h. (2007). Strategic retail management: Text and international cases. Wiesbaden, gabler. Http://site.ebrary.com/id/10231870.
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