Aldi supermarket is a well-renowned grocery chain in Australia. This super chain serves millions of customers. The company is witty in making strategies and it is due to this reason it has captured 10 per cent of Australian spending. The company has faced a lot of challenges in recent years and is also suffering during the pandemic situation. Thus this assignment reports about the current marketing strategies and future strategies which the company must undertake.
Aldi's success in the Australian market is a tale of unrivalled success since the day of its inception in the market. It is one of the most rewarded international business in the world. It is due to Aldi's brand image that people have started related to the brand's name with high quality and exceptional value. Aldi supermarket gives its customers a smarter way to shop. All the products of the supermarket are available at a highly competitive price in the market. This assignment aims to find out the nature of Aldi's marketing strategies since the beginning and why this supermarket is continuously embraced by millions of customers (Mortimer, 2016). The assignment also recommends some strategic marketing options which the supermarket must take to remain successful throughout the next decade. Currently, the entire world is suffering from the pandemic situation and the majority of companies are suffering from the economic shutdown. Even Aldi supermarket is also hit due to a pandemic situation. Thus this report will try to find some solution by which the Aldi supermarket keeps on succeeding in the Australian market.
Aldi is a German supermarket chain known for everyday discounted rates. It opened its first supermarket chain in 2001 in suburbs of Marrickville and Bankstown in Sydney. Aldi within three years opened 54 stores in Eastern states of the company. Initially, the store did not invest in advertising rather was relied on mouth publicity to gain traction in the supermarket. The supermarket chain focused on local brands instead of national and international brands. It is due to this reason the store was able to give grocery products at the discounted rates. The company slowly and steadily expanded itself over the 500 stores in different parts of Australia. The store also improved their price strategy, perception towards grocery products, quality of the private labelled products and so on. Its marketing leading initiatives were never seen before in the Australian market (Brandes & Brandes, 2019). It is because the Aldi supermarket chain does things differently but for a good reason. The company expanded to western and southern parts of Australia and it claimed that it covers 10 per cent of the Australian spend on the grocery. It is the Aldi supermarket chain that has made other competitors of the market rethink on their business model. It has made the competitors think on the homemade brands. It was also revealed in the research conducted by Joy Morgan that Aldi is the most trusted brand even though it is a German brand. It is found that the company constantly seek new property, logistics and employment opportunities for investing in new stores. Aldi supermarket chain in Australia has shaken up the supermarket industry in Australia. The company currently has 12000 employees in its stores. The company's continuous expansion has created many job opportunities for people in Australia.
Aldi’s marketing strategy is solely based on minimizing the cost of the products. The company does not have a marketing department. Moreover, it does not even have any strategy to invest 0.3 per cent on marketing as the other companies do. They do not even spend on public relations rather they offer selective buys to the consumers on weekly basis. This scheme is available to consumers as long as the stock lasts. The company has cost-saving culture as soon as the employees find that the daylight is sufficient they put off the lights. This clearly states that the supermarket chain is trying to reduce the cost of the products. Aldi’s vision is to make the lives of the Australians richer in less. It is using this concept because it wants its consumers to have an opportunity to purchase everyday groceries (Curtain & Grafenauer, 2019). Aldi supermarket store is witty in its strategies. It targets low-income customers who enter the store by displaying adds on the store of the supermarket. The company along with them also target middle-income groups by providing them with the grocery items at the most affordable rates. It is found that the company is winning the hearts of the consumers with its low price and high-quality strategy.
Here are four sections of Porter’s competitive advantage that the company employs. These include product differentiation, cost differentiation, cost leadership and focus on cost.
The company tries to sell the products at a low cost and sell them at the market at still the above price. This is how the company can make a profit from the sale which is still above the average price by giving customers a discount on the products. The company operates on low price philosophy which states strictly no-frills. The company can provide goods at low cost but it works on cutting operational cost and transportation cost. It can be done by keeping goods directly in the store as the product per line (Pulker et al. 2018). The store's simplistic design attracts customers. They are the first person to interact with the products. The company has even replaced the queue system with the checkoff system. It is due to the company avenues of cutting cost, it has become feasible to offer a price lower than those of the competitors.
The company since starting has a fundamental point of difference in its market leadership, especially on price. The company in 2016 cut down the price of the products exactly half of its grocery price range. This resulted in an investment of $75 million in lowering its price of everyday grocery range. The company asked its customers to go through the list of the price and head towards the local Aldi shop (Pulker et al. 2019). The supermarket will never lesson down the expectations of the consumer. The customer can come at any point of the week. They will be surprised to know how much they will be able to save.
The company in 2017 announced good different strategy as a new business model of the company. This strategy states that the Aldi supermarket will try whatever it can to keep itself apart from its competitors in the market be it tradition retail market stores or big giants. Coles supermarket and Woolworth are competing hard with the Aldi but the company has decided that it will continue to be different (Voigt, Buliga & Michl, 2017). The company is proud of its differences because it is these differences that allow the company to provide unbeatable value to its customers. The company maintain a strong relationship with the supplier and support our staff every day.
It was identified in 2019 that the company is investing millions of dollars to convert all of its stores into a new store format. According to the research, it is found that the company is expanding its wooden bays and trying to get clearer signage and light the entire store with energy-efficient LEDs. The company is also working on aggressive price reduction strategy and is thinking to expand its products so that its customers get a wide range of products from where they can choose and they are trying to provide convenience to its customers.
It is due to the company's marketing strategy that the company is repeatedly recognized as the most satisfying supermarket from its customers. The company also received Canstar most satisfied customers award in 2011, 2012, 2014 and 2016.
The main marketing strategy which the company must focus is to maintain customer loyalty. It is easy to sell products to the existing customers but it is very difficult to find new customers and sell them. Nevertheless, the company needs to have new customers otherwise with 10 per cent of spending of Australians it would be difficult to manage its presence in Australia (Schmid et al. 2018). Although attracting new customer would require more investment efforts to be loyal to the firm. Here are some areas where the supermarket must focus on.
The company needs to ensure that excellence is fostered in satisfying customers need. The company must also start exercising incredible courtesy every day. It is because it would help the company to remain ahead of the competitors in the market as well as help in overcoming the issues (Pulker et al. 2018 b). There is no doubt that the company is a notch higher in beating major competitors in offering incredible courtesy and high customer satisfaction. The company need to enhance the marketing style. It has kept a complaint box in the store. The complaints from the jurisdiction of the local store can be managed by the manager of the local store.
Coronavirus is spreading at a vast rate and till now there is no cure of the pandemic. The only way to protect customers is by breaking the chain by sanitizing and ensuring to maintain social distancing. All those who enter the store must be thermally checked. If the customers' body temperature comes out of the normal range, then those must not be allowed in the store. Moreover, the customer's hand should be sanitized before entering the store. In-store the manger and other employees need to ensure that people do not make the store crowded by getting collected to a single place. The employees must also be regularly checked. The floors of the store must be cleaned every two hours (Sussman, McMahon & Neale, 2019). The products before keeping in the aisles must be sanitized properly. Besides this, the company in such a situation must start focusing more on online sales. It is because it would be safe for them as well as for the customers. The supermarket chain needs to communicate all the things through an advertisement that they are taking all the safety measure as for them the customer's safety is the priority. Once the news will spread people will come to buy the products from the store or else they would start shopping things online as they are sure that the products which they will get are sanitized properly.
Secondary activities will boost the efficiency of service delivery. These service activities are not part of the production process. Secondary activities that are considered part of the marketing strategy include procurement, human resources, technology and so on. It is observed that good procurement strategy would help in achieving affordable resource management for business operation whereas the human resource reinforces the effort of gaining efficiency by hiring eligible and efficient workers in different departments (Schultz et al. 2020). The management of information and knowledge of the business is achieved through the use of appropriate technologies which is very important in achieving the overall marketing strategy. Besides this, it is equally important to emphasize infrastructure quality planning and senior management. The company must hire competent staff who can resolve the issues faced by the customers. It would help in edging out the competitors in the market.
It can be concluded from the findings that the marketing strategy of the Aldi is based on operational cut downs. The store also improved their price strategy, perception towards grocery products, quality of the private labelled products and so on. Its marketing leading initiatives were never seen before in the Australian market. It is because the Aldi supermarket chain does things differently but for a good reason. They are making things affordable so that maximum people can get products in lesser amount. The company also needs to improve its strategic marketing. There is no doubt that the company is a notch higher in beating major competitors in offering incredible courtesy and high customer satisfaction. The company need to enhance the marketing style. It needs to communicate all the things through an advertisement that they are taking all the safety measure as for them the customer's safety is the priority. Along with these, Aldi supermarket must also involve oneself in secondary activities.
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Schultz, S., Cameron, A. J., Grigsby-Duffy, L., Robinson, E., Marshall, J., Orellana, L., & Sacks, G. (2020). Availability and placement of healthy and discretionary food in Australian supermarkets by chain and level of socio-economic disadvantage. Public Health Nutrition, 1-12.
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Voigt, K. I., Buliga, O., & Michl, K. (2017). Striving for Customer Benefit: The Case of Aldi. In Business Model Pioneers (pp. 11-24). Springer, Cham.
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