PRICE WARS BETWEEN THE COMPANIES……HOW CAN ALDI SURVIVE THIS ONE?

 

Price is the payment offered by the customer to get an item or commodity. It is a marketing plan set by the business to sell it’s product or service to customers in order to achieve the goals. When a company is going to set the price, they have to look after the certain areas or they have to face disaster results. Such as product demand and competitor’s price and the substitutes offered by others. Price is also often fluctuated as u cannot offer the same price all the time and it has to change by the periods or even on the daily basis depending on the product type. When a company going to set a price, they’ll take the average cost of the product in total production and the profit margin. There has been a big rivalry between the shopping center.

“What, when, however we apply the price strategies, our ultimate goal is for only profits.”

ALDI:

  Aldi is a German retail giant that offered discounted products. It’s founded by Theo and karlin 1946 and split into two companies in 1960 as aldi nord and aldi sud means aldi north and aldi south. It is very successful in the Europe and the North America. It’s just entered the Australian market in 2001 as aldi south slowly expanded the stores in Australia. Before aldi, Coles and Woolworths were holds the retail market with 80%. But after aldi the entire situation has been changed. In fact it has occupied the 12.1% of market share in 2016. Their main market strategy using the price by giving discounted price on products what the other companies has been offering

.Aldi-Catalogue

As I said before we have to take some considerations for the price setting, they are

  • Objective
  • Demand
  • Cost
  • Competitor price
  • Pricing strategy

Objective:  every company has their own pricing objectives of the products should compensate their goals. That should be include market share and compete with the price of competitors.

Demand: demand also influences the price of the product. If the product is high on demand the price would increase dramatically, and sometimes people would buy the products even it is high value and sometimes even with the lower price the product won’t get attracted by other.

COST: cost is the main object of the price considerations as it involves manufacturing, packing, storing and advertising. Every company should look after to cover the costs and get the profits from them. Cost of a product is calculated by total cost of the product divide by no of quantities. This it’s included by the profit margin.

COMPETITION: competitors also influence the price of the product. Most of the competitors offered same type of product as u offered with little or same price. We have to consider that change the prices dependently; otherwise we can lose the market to the competitors. It’s once said to be always look after the enemy if you want to succeed.

Plan strategy: plan strategies are most important for the price setting as the market is fluctuated sometimes as customers are not always preferred the same product and they have to change the price to attract new customers. Customers would attract by offers that can give the company an edge. Price strategy should attract the all types of customers from lower income to high income. It should not discriminate the other backgrounds.

 

 Since it’s entered to the Australian market it is giving a huge competition to the customers in terms of prices and customer attraction. They are offering much cheaper products compare to others. They are not only just offering aldi brand but also the other brands. Before aldi the products offered by the others contain cheaper in packages. Aldi has offering their products with higher quality and nice packages with cheaper price. Aldi is done this by taking more quantity of products from it’s suppliers so they can get the products for cheaper price. The customer base for the aldi also increasing, according to a survey more than 31% of the customers like to visit the aldi more than once. They also compensate the product with others so people can get the products from the interest of their brands. For example in aldi you can get a chocolate for 1 dollar and also for 10 dollars.

aldi-vs-big-brands

REFERENCES:

        http://loadedtrolley.com.au/wp-content/uploads/2015/10/Aldi-Catalogue.jpg

        http://1v1d1e1lmiki1lgcvx32p49h8fe.wpengine.netdna-cdn.com/wp-content/uploads/2015/06/aldi-vs-big-brands.jpg

       Iacobucci, D. (2014) Marketing Management (MM), 4th Edition, South-Western, Cenage Learning, Mason, Chapter 9, Pricing.

BODAPATI MANOJ KUMAR

ID:216217356

 

 

 

 

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