Background to the Company

Discuss about the Sustainable Management for Model Building.

Marketing is one of the most important for an organisation.This report presents the background of Aldi Company and analyses the company’s marketing strategies. It also outlines the nature of Aldi’s marketing strategies since it began. It also defines the marketing mix strategy of Aldi that is executed by the company to grow the business and to gain the market share of the company. This report also explains the strategic marketing options for Aldi to move forward. It also suggests the Ansoff matrix model useful for Aldi.   

Aldi is low price grocery leader in Australia, which executed simple approach such as retailing of grocery and increasing efficiency means company enables to provide the premium quality product at the low price. Further, the first retail store was opened in 1976 in U.S, Southeast Iowa. The company has 1500 stores in 34 states and also serving approximately 32 million customers in each month since 1976 (Aldi, 2017). The main aim of the company is to provide the grocery and household items at the low prices.   

Aldi’s first retail store was established in 1913 as it has developed itself as the reputable brand and awarded best dealers in the global business market. It also provides the high-quality products and services at the highly competitive price. Further, Aldi has grown their debut store in 2001 and also build the more than 270 stores across Australia (Aldi, 2017). It is one of the top 10 Australian retailers that persuaded the price of grocery and improve the insights of the customers. 

It also focuses on the quality of private label goods together with considering their exclusive brand philosophy. It has also developed the market leading initiatives that have never been implemented by their competitors in Australia. Aldi also focuses on ambition expansion initiatives where it seeks to logistics, new building, employee opportunities and high investment in new stores (Aldi, 2017). It has 8000 store location around the globe and also 60 years of experience. 

Aldi uses marketing mix strategy since it began which involves the four P’s of marketing i.e. product, price, place, and promotion. This marketing strategy is significant for the company to improve its market share and profitability because it entails the unique combination of the right product, sold at the right price, in the right place by using the appropriate model and techniques of marketing (Kotler, et al., 2015).  

The Nature of Aldi’s Marketing Strategy or Strategies since it began

Further, market mix strategy of Aldi is a composite set of variables which focuses on providing the high-quality products because it is a cheaper option to the prominent brand. Aldi also uses AIDA (awareness, interest, desires and action) marketing model to meet the customer’s needs and wants. Moreover, it uses different communication models and channels to meet the marketing objectives of the company (Rosenbloom, 2012).  Following are Ps of the marketing mix of Aldi:

Aldi used own specialized brands since it began which generates positive financial position for business. In the beginning, Aldi has low marketing mix because it offers low-quality products. But, recently, it enables to attain the strong customer base due to offering high-quality products and services. Although, Aldi does not change their food products yet it focuses on producing a range of products that not only includes food but also includes differ product category (Armstrong, et al., 2014). For example, in beginning, it used snow tools and warm campaign tools in the winter season, which led to the customer to take action with respect to purchase. Therefore, Aldi sold their products by seasonal influences to the customers. But, now, Aldi offers high-quality products as it creates a distinct image in the customer’s mind. For example, Aldi provides the bread that is known by the most of the customers. Because, it accomplishes the marketing objectives such as to offer the high quality at a low price so, a large number of customers are aware of the quality and price of the products and services (Steenkamp, 2017).             

Moreover, in the beginning, and uses cost-effective packaging but it does not attract the customers because it contains the wastage of the products. But, in the recent years, Aldi focuses on reducing the unnecessary wastage by using the recycling process as it attracts the most of the customers towards their products and services (Piercy, 2016). Its packaging trends can be demonstrated as below:

This strategy is crucial for Aldi to attract the more customers. In the earlier era, Aldi charges a low price for their products and services in order to increase their market share. Further, the swap and save campaign also used by the company as price penetration which aims to increase current market share as compared to its competitors. In recent years, it uses psychological pricing and competition pricing strategy in order to create a distinct image in customer’s insights as compared to its key market participants (Helm, and Gritsch, 2014). For example, alcohol product’s price of Aldi is slightly cheaper as compared to key marker players.

Strategic Marketing Options for Aldi moving forward

This strategy entails that where products and services will be delivered and how products are brought to the store. In earlier years, it keeps its simple store layout due to focusing on cheaper per cost for the customers. Hence, Aldi has obligated to reduce the wastage in the shipping of products from the suppliers to stores (Piercy, 2016). But, in recent years, Aldi buys the products directly from the suppliers in bulk which helps to maintain a high quality of the products and services and also introduces new stores around the new place and across Australia.

Promotion is significant to improve the awareness of the products that the company tries to trade and to bring into the marketplace. This strategy involves different communication tools such as advertising, media, and special offers like discount and other offers. In the earlier years, Aldi uses radio, television, magazines and newspaper to reach a large number of the customers (Helm, and Gritsch, 2014). But it was too expensive for the company. In recent years, it not only uses these promotional tools but also includes the e-marketing, public relation, and website of the company to promote the products and to catch the attention of a high number of customers as compared to its key market players (Piercy, 2016).

Ansoff matrix can be strategic marketing option for Aldi moving forward. This tool enables the business to identify the existing and potential markets and products growth strategy. This model is significant ways for Aldi by which company can grow through their existing and new products as well markets (Hussain, et al., 2013). Following are the for prospect product and market combination that can be used by Aldi:

This strategy is less risky for the business because it controls the number of the existing resources and competencies. In this strategy, Aldi should continue to develop at the distinct level in Australia. Further, it should start a number of stores and also considers the different kinds of customers such as lower, middle, and high social background’s people (Vignali, 2015). Along with this, Aldi should provide the loyalty card to improve loyalty among loyal customer and it also leads them to continue shopping at Aldi stores. 

In this strategy, the business tries to trade its current products into the potential market.  In this strategy, Aldi should seek to expand the additional new market segmentation and geographical areas in order to create its distinct image at the international level. This strategy can be effective for Aldi because it has core competencies that are more specific as compared to its experience in the new market (McDonald, and Wilson, 2016). This strategy is riskier as compared to market penetration because the company will expand their product into the new market.

This strategy is used to launch new products into the current market. In this strategy, Aldi should develop the new competencies associated to its customers rather than to the specific product which can plea to existing market. This strategy is riskier as the market development. Moreover, Aldi should maintain the low costs and high profit margin in order to expand its set of products rapidly. Aldi must also launch new products and services to protect the revenue stream in order to grow the business in the future. In addition to this, the company should consider the involving the effective delivery system in order to satisfy the customers (Craciun, and Barbu, 2014). Aldi should focus on the attention of the customers such as quality of the products and effective pricing strategy. 

This strategy is riskier because it requires both market and product development in order to grow the business. There is high risk because the company has no experience about the new market and new product but there are possibilities of getting a high rate of return for the company. Further, in this strategy, Aldi should use the core competencies of outside the environment (Darroch, 2014). The company should also develop the new product categories and services and also focus on different product range to attract a large number of customers.  

As a result, it is suggested that these four strategies can be involved by Aldi to grow the business. But, market penetration is a more beneficial strategy for Aldi because it is less risky and less costly for the company. Further, it is effective to attract more customers and also enables the business to gain their market share.

From the above analysis, it can be concluded that Aldi is one of the leading retailers in Australia which influences the price of grocery and creates the positive position in the customer’s mind. It can be summarized that marketing mix is used as the marketing strategy because it combines the different components to persuade the more consumer to buy its products. Further, it can be concluded that Ansoff Matrix model can be used by Aldi because it enables the company to grow through their existing and new products as well markets.

References

Aldi (2017) About Aldi. [Online]. Available at: https://corporate.aldi.com.au/en/about-aldi/ (Accessed: 17 January 2017).

Aldi (2017) Who is ALDI. [Online]. Available at: https://aldistorejobs.com/about-aldi (Accessed: 17 January 2017).

Armstrong, G., Adam, S., Denize, S., and Kotler, P. (2014)  Principles of marketing. Australia: Pearson.

Craciun, L., and Barbu, C. M. (2014) ‘The Brand as Strategic Asset of the Organization’, Revista de Management Comparative International, 15(1), p. 69.

Darroch, J. (2014) Ansoff’s Growth Matrix—In Detail. In Why Marketing to Women Doesn’t Work (pp. 131-147). UK: Palgrave Macmillan.

Helm, R., and Gritsch, S. (2014) ‘Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets’, International Business Review, 23(2), pp. 418-428.

Hussain, S., Khattak, J., Rizwan, A., and Latif, M. A. (2013) ‘ANSOFF matrix, environment, and growth-an interactive triangle’, Management and Administrative Sciences Review, 2(2), pp. 196-206.

Kotler, P., Burton, S., Deans, K., Brown, L., and Armstrong, G. (2015) Marketing. Australia: Pearson Higher Education.

McDonald, M., and Wilson, H. (2016) ‘Planning: Yes, it Really Works! Experiences from the Real World’, Marketing Plans 8e: How to Prepare Them, How to Profit from Them, pp. 603-614.

Piercy, N. F. (2016) Market-led strategic change: Transforming the process of going to market. UK: Routledge.

Rosenbloom, B. (2012) Marketing channels. USA: Cengage Learning.

Steenkamp, J. B. (2017) Global Brand Strategy: Worldwide Marketing in the Age of Branding. Berlin: Springer.

Vignali, C. (2015) ‘Sustainable Management; Model Building for Decision Making’, CULTUR-Revista de Cultura e Turismo, 6(3), pp. 11-18.