Is ALDI creating value through the Marketing Mix?

The internet has fundamentally changed the marketing function, creating the best move in the field since the invention of the television. Digital marketing, social media and mobile devices have drastically  changed how we interact with the audiences. It has opened new doors as well as colossal burden.

WHAT IS MARKETING STRATEGY AND PLANNING?

Does your business have a sound marketing strategy and clearly documented marketing objectives to ensure next budgetary year is a more effective one, or will you continue to keep doing the same thing and expect a different result?

(Business Growth Hacks 2015)

(Business Growth Hacks 2015)

A marketing strategy is a road map that details how you will spend your constrained assets to develop your business and concentrate on where you need to take your business and who your objective market truly is.

Once marketing strategy is completed it ought to deliver a marketing plan that identify the distinctive ways of connecting with the customers and concentrate on the ones that will create most sales using various sources such as social media, websites, paid advertisements and do not under estimate podcast and videos to connect and grow the business (Stannage 2016).

Here are the key things that need to be focused on when creating a marketing plan while marketing strategy session:

  • What is it? What does it do and how does it influence the target audience.
  • What is the value proposition? What is the need and what problems/issues it can fix?
  • Who are the competitors of the brand or the product
  • What are the risk factors involved in failing or succeeding and how do they affect the business
  • Does the business have the right resources to make this happen?

WHY ALDI?

( Australia Backpackers Guide 2015)

( Australia Backpackers Guide 2015)

ALDI is a leading retailer with over 8,000 stores worldwide. The first Australian store opened its doors in January 2001. Presently there are more than 400 stores operating effectively in Australia . ALDI’S objective is simple; ‘To furnish customers with the items they purchase on regular basis and guarantee that those items are of the most astonishing quality at ensured low costs’ (Muston 2014).

HOW ALDI’S MARKETING MIX IS DIFFERENT?

A marketing mix is a complex set of variables. ALDI’s mix concentrates on providing top notch items that are cheaper alternatives to other brands. ALDI’s marketing mix therefore concentrate on 4Ps:

Product – How is our goods/items distinct vs competition.

Price – ALDI gives discount on their products by offering discount vouchers or loyalty perks to customers and thus creates competitive advantage.

Place – ALDI stores/outlets are expanding all over the world.

Promotions – ALDI uses unique and effective techniques for the promotion activities and also monitor effectiveness of advertising media.

ALDI’S AIDA MODEL

ALDI use AIDA communication strategy for efficacious promotion of their products and to achieve the desired targets.

  • Initiate awareness among potential customers
  • Generate interest for particular item and also create desire to grab that product
  • It leads to fruitful result by customer taking action to purchase

(Hanlon 2013)

ABOVE-THE-LINE PROMOTION TECHNIQUE

Above-the-line promotions are paid advertisement for a large gathering of people which incorporates the media. This type of marketing can be expensive. It can likewise be hard to target particular groups of customers. ALDI uses a variety of above-the-line techniques to reach to its potential audiences which includes:

  • Advertisement on TV is one of the effective method.
  • Printed flyers are being distributed within stores (Millions of copies printed each week). These leaflets also highlights products with discounted price (The Times 100 2016).

BELOW-THE-LINE PROMOTION TECHNIQUE

This type of promotion can be more easily targeted to the specific audiences in contrast to above-the-line method. ALDI uses a variety of below-the-line methods which includes:

(Business Case Studies 2016)

(Business Case Studies 2016)

  • Social Media
  • Targeted emails to customer
  • 3rd party endorsements (The Times 100 2016).

HOW PORTER’S THREE GENERIC STRATEGIES CREATE COMPETITIVE ADVANTAGE?

ALDI’s integrated Cost Leadership/ Differentiation strategy

Porter

Cost Leadership Strategy

ALDI is a typical ‘hard discounted’ store pursuing cost leadership strategy. It is utilized to lessen the expense of the operation in running the supermarket. Below mentioned are the few cost leadership techniques implemented by ALDI stores.

  • ALDI believes in buying low cost land and display products on pallets rather than on shelves.
  • Nevertheless, typical ALDI stores employees 4 to 5 store assistants compared with 15-16 in standard supermarket.

Differentiation Strategy

The distinctiveness about ALDI is that they are very specific in terms of cost cutting so that customers can get products at cheap prices without compromising the quality. Below are the points that will help you to get a good idea in brief way:

  • The prices for general use products are less compared to other Australian supermarkets. For instance, 1 kg of bananas cost $1.69 at ALDI, $1.98 at Woolsworth and $2.75 at Coles.
  • ALDI pay’s its store employees AUD 19/hour in contrast to pay rate of about AUD 15 an hour in other superstores.

Operational Excellence

ALDI has been keeping up its operational excellence by improving its capabilities that support its operations in connection with a legitimate utilization of its assets maximization of the resources.

WHY ALDI IS BECOMING A THREAT TO OTHER SUPERMARKETS?

Check out the video!

RISE OF SUPERMARKET

As evidenced, ALDI has a particular way to deal with retailing that has given it an upper hand in a crowded marketplace. ALDI’s unique balance of the marketing mix enables it to provide high quality, own branded products at the lowest possible price. Moreover, its multi-channel promotional activity is engaging customers and creating positive feedback.

Adish Gupta

216051302, adish@deakin.edu.au

REFERENCE LIST

Muston, P 2014, Marketing Practices and Strategies for Aldi, slideshare, retreived 23 July 2016, <http://www.slideshare.net/paulmuston3/aldi-marketing>.

Stannage, T 2106, ‘ Marketing help | Marketing Strategies that work’,  Business Consultancy Services, weblog post, retrieved 22 July 2016 <http://timstannage.com.au/marketing-help/>.

The times 100 2016, Creating value through the marketing mix, Business Case Studies, retreived 22 July 2016, <http://businesscasestudies.co.uk/aldi/creating-value-through-the-marketing-mix/conclusion.html#axzz4FEUwCJ6x>.

 

 

 

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