Marketing Mix And Marketing Plan Of Aldi And Woolworths

Marketing Mix of Aldi and Woolworths

Aldi is one of the biggest retailers who have approx. 8,000stores worldwide. Aldi started its business in 1913 by opening its first store in Germany. Its business is divided into groups. The first one is Aldi Nord headquartered in Eseen and second one is Aldi Sud that has headquartered in Mulheim an der Ruhr. Aldi Nord is operating in various countries such as France, Portugal, Netherland, Poland, Spain, Denmark, Belgium, and Luxemburg. On the other hand, Aldi Sud is operating in Switzerland, Australia, United Kingdom, Australia, United States of America, and Austria. Marketing mix strategy helps the company in many ways (Stanton,2018). Therefore, in the first section of the report, marketing mix of Aldi and Woolworth’s has been discussed by differentiating between them. In the second section of the report, Aldi’s marketing plan is highlighted.

Product- Aldi provides food products that all are affordable. All the products that Aldi uses are taken form its selected suppliers. Besides the beverages and food products, Aldi also deals in fruits, vegetables, beauty products, stationery, clothes, household items, soft tools, and electronic items. Usually it does not change the food products but always apply innovative approaches in the non-food items. As compare to Aldi, Woolworths deals in eggs, meats, vegetables, fruits, magazines, DVDs, stationary items, as well as packaged products. It takes the help of experts to approve the quality of its products before moving for the final use by customers.

Price- Aldi offers the entire products at lower prices. It has introduced the “national pricing policy” for offering the products at lower price. In addition, it has also adopted the unit pricing strategy by which customers can compare its prices with others. Besides this, Aldi also uses competitive pricing strategy, penetration-pricing strategy (Inderst and Obradovits, 2015). In the market penetration strategy, Aldi charges low prices from the newly launched product so that it can gain a good customer base. In the case of high competition, it charges the low prices of customer so that customers get the quality product at low price. As compare to Aldi, Woolworth’s rates are higher than all the other competitors in the market. Woolworths offer both the premium prices and minimum prices from its customers. The pricing strategies of Woolworths are monitory and changes accordingly. As compare to Aldi, it does not have discounted stores but it has products at low cost that helps in creating value.

Place- Aldi has almost 8000 store in 18 countries. It also roughly opens a new store in the Britain. It acquires the entire product from the supplier in large quantity by storing them in warehouse. It also ensures the very less wastage of products in its transportation. Aldi believes that store should be on main area so that it is easy accessible to the customers. It also has online site where customers can get the home delivery and proper services. Comparing Woolworths to Aldi, it has 1000 stores in which 950 are the supermarkets and remaining are convenience stores. Same as Aldi, it also provides online services that operate in several brands (Cavallo, 2017). The names of the brand are Woolworth’s home brand, Woolworths select, Woolworths Fresh and Woolworths Gold. There are some countries where Woolworths operate this brand. These are Germany, UK, Mexico, and Austria. In recent times, Woolworths has also launched mobile app for providing easy convenience to the customers.

Marketing Plan of Aldi

Promotion

The promotional activities of Aldi are broad. It invests small amount in the promotion in order to become cost effective. It also not has any separate marketing department in Germany. Aldi also offers the “super buy” offers that it offers when the stock are about to end. These changes are communicated to the customers through its weekly newsletter. In UK and US, Aldi uses the display, electronic and print media for promotion. In addition to this, it also makes use of email marketing for promoting its products. In comparison TO Aldi, Woolworths has intensive use of the promotional strategy. It has started the “Fresh food campaign” in 1987 that was ended in 2012. In this campaign, promotion was done with the help of magazines, newssheets, and media. Advertisement through social media, discounts, gift cards are some of the promotional techniques used by the Woolworths. All these techniques helped the company to get a wider reach in the market.

People

In stores of Aldi, each store layout is in such a way that reduces the necessity of employees required on each floor. Besides this, Aldi also has less customer service as compare to its competitors. It means that it does not support the customers in selection of product. In every billing counter of its stores, employees are seated which quickly scan the product and make the faster sales. It also makes high payment to its employees as compare to its competitors (Methne, Hamann and Nilsson, 2015). Woolworths on the other hand, pays more attention while hiring the employees as it believes in hiring the competent employees. Woolworths also has trains its employee’s time-to-time to maintain good bind with the customers. It has “destination zero policy” in which harm caused to the environment and employee is zero.

Process

Aldi has sheer layout where customers can find their product easily by their own. It helps in reducing the requirement of number of employees in assisting its customers. It usually does not keep the high quality in order to reduce the confusion of customers in selecting the products. As discussed, Woolworths mainly focus on the satisfaction of customers that’s why it makes the use of customer-friendly methods (Voigt, Buliga and Michl, 2017). Feedback of customer is an important parameter in Woolworths that can help in improving the processes.

Physical evidence

Aldi is known for the standardization, simple process and its global pricing.  Compare to this, Woolworths has the eye-catching stores that customers easily direct into the stores. All the 85% of the stock in Aldi is from its own home brand. Rest are from the well-recognized brand. It also provides the 30% cheaper products by keeping the prices low every day (Business case studies, 2018). On the other hand, Woolworths believes in placing the products in right manner so to keep its stores systematic. Aldi is the only stores that keeps its prices same in the world.

The Albrecht family opened Aldi store in 1961. It was the first discounted store of the world. It has more than 16, 00 stores in the 35 states where it employing more than 25,000 people. It is growing very fast when it first opened its store in US (Kincaid, 2018). In year 1960, it was separated in two groups name Aldi Sud and Aldi Nord. Aldi Sud headquartered in Mulheim and Aldi Nord headquartered in Essen. Aldi Nord has 2500 stores in northern, western, and eastern Germany. Aldi Sud has 1600 stores in the southern and western Germany. Each month, it is serving approx. 35 million customers. It is one of the most reputed and trusted brand in the world by offering high quality products in low prices. It uses various pricing strategy in order to build strong market base worldwide.

1. The main strength of the Aldi is its prices. By using cost effective techniques, it is able to offer the products at low prices to its customers. Day-to-day necessity products are offered at the lower prices as compare to other retailers (Berman, 2015).
2. High support from customers- Due to its discounted stores, it gains the high support from the customers. Due to its affordable prices, it enjoys high level of customers support. It also has wide range of choices for the customers. T5herefore, high level of customer support is the main strength of Aldi(Chatterjee, 2017).
3. Good product mix- all the discounted stores including Aldi gain the various advantages having a good product mix. In Aldi, the product mix is in merchandise that takes more than the 25 percent of the space of shelf.

1. Low satisfaction of employees- In order to survive in the market, it is essential to have the high level of productivity. The employees of Aldi are usually working in two shifts but are paid less for the same. Due to this, employees of Aldi are dissatisfied.
2. Lower margin- discounted stores are usually flourishing based on the low margin by heaving depending on the sales growth (Mortimer, 2016). In order to get the margin, they usually indulge in unethical practice such as discrimination in prices by treating its supplier badly.
3. Low level of advertising- Aldi does not spend too much on the advertising that is the weakness of its store (Van, Deterink and Fenko, 2016). Use of promotional strategy is the essential part of every organization whether it is small or big organization. Aldi can get the more market base by spending more money on the advertising.

1. Preferences for customers- It is seen that customer’s preferences are growing day by day. Due to this, propensity to spend also increased. Now days customers are willing to pay higher prices for availing premium services. Due to this, discounted stores can also charge higher prices by offering the premium and quality services to the customers. In the niche products, various new products offer the extra revenue to the business enterprise.
2. Movement into the emerging economies- There are various opportunities available into the emerging economies such as Brazil and India where population is high. In both the places. Customers can easily afford the prices of Aldi’s product. Aldi has also announced to spend the $3.4 billion into the US stores by the year 2022.
3. Investment in advertising- Aldi can spend more in advertising in order to beat the competition. It is seen that there are various competitors in retaining industry who are almost offering the similar kind of products. Therefore, promotion is the only strategy that can increase the marlet share in the market (Aldi, 2018).

1. Competition- It is the biggest threat that Aldi is facing. The major competitors of Aldi are best buy, Walmart, Woolworths and Wesfarmers. Besides this, Amazon is also the biggest competitor from which it can face a threat. In USA also, it is facing the challenges. For example- In USA , there are growing trend of separateness whereas Brexit is trembling the EU. These challenges putting the threat to retailer.
2. Risk associated with suppliers- There are various associated with suppliers such as delay in delivery of products or poor quality products. This risk can put the company in danger.

 Aldi’s most important objective is to develop the market share in its UK grocery market. Through its lower pricing strategy, its aim is to create the awareness among people for its brand. It has also adopted the different pricing strategies in order to provide the best services to its customers.  Attainment of competitive advantage by its competitive pricing strategy is one of the marketing objectives of Aldi. From a market research published, it is founded that 80% of the customers of Aldi also shopped at the other supermarkets. All the customers spent around £20 billion per year by shopping at another stores. Therefore, Aldi has adopted the marketing strategies that focus on generating the customer loyalty (Pechey and Monsivais, 2015). In this strategy, its main objective is to demonstrate the equal quality of its product from the brands such as Heinz and Fairy liquid. In addition to this, Aldi has the goal to defeat the grocery market of UK. It set a target to open the 1000 more stores by the year 2022.

• Lower pricing strategy- It is one of the main strategies Aldi has adopted in order to gain the more market share and customer base. It ensures the effective production methods so that low cost incur for its products and customers avail the best services at lower price. This is the major marketing strategy and the basis of success (Morschett, Swoboda and Schramm, 2015).
• Competitive strategy- It is one of the important methodology for Aldi. At the time of high competition, it does the well research in order to find out the prices of its competitors. Based on the prices of its competitors, it sets the prices low from its competitors in order to gain the competitive advantage.
• Promotional strategy of Aldi- In its promotional strategy, it uses various methods to communicate better with the customers. Aldi has sued both below the line and above-the-line marketing strategies in order to create the interest in customers by its campaigns of swap and save and like brands. For ensuring the two-way communication, Aldi uses the various social media platform such as Facebook and twitter. It also uses direct e-mails for promoting its seasonal sales (Belz and Schmidt, 2010).
• Business strategy- the business strategy is known for employing careful ways to earn the good amount of profit by providing the quality product at low price (Das Nair and Dube, 2017).The two brothers have adopted this strategy from starting by keeping the stock of non-perishable items and removing those products having slow sale in the market. In their business strategy, they focused less on the advertising strategy and put more emphasis on the mouth marketing.

Segmentation- segmentation in marketing is divided into many parameters which are as follows-

1. Demographic segmentation- In this segment, Aldi target both the income group people: high-income group as well as lower income group people. However, it mainly targeted the lower income earner people who have less money to spend on the products.
2. Geographic- Aldi operates in various countries by its two segments Aldi Nord and Aldi Sud. In Germany, Aldi Nord group has 35 regional branches that include 2500 stores and Aldi Sud consists of 31 companies that have 1600 stores. Internationally, it operates over 8000 stores all over the world.
3. Psychographic- As Australia is a modern society where people want to purchase from the urban markets. Aldi is also positioned itself in the urban market of Australia.
4. Behavioural- In today’s time, consumers prefer shopping from e-commerce sites. Aldi is the biggest supermarket with satisfying the need of consumers through e-commerce.

Targeting- In order to generate the revenue, firm’s segment and target particular market segment. Aldi mainly targeted the household sector in the retail industry. It has targeted the household sector by satisfying their day-to-day needs (Dunne and Wright, 2015). Positioning involves the steps that help in retention of the brand image. Aldi’s focus is to keep its brand alienating from its competitors by offering the best quality product at lower price.  In this way, it has mainly targeted both: lower as well as higher income group people by satisfying their needs.

Positioning incorporates the preferences and needs of customers by creating a distinct set of market segment. In order to differentiate its brand from other competitors, it has adopted “Good Different” positioning strategy in order to position its brand other from competitors. For this, Aldi created an ad in which one woman was dancing with its trolley bag. This depicts the happiness of its customers by using its brand.  Besides this, it has also started an online service for its customers so that they can enjoy the services of its product from their home only (Morgan, 2012).

• New store format- Aldi must maintain the innovation in its store so that more customers will engage with its supermarket. It can change the furniture in its store format to make its store better and attractive.
• Environmental friendly approach- To gain more competitive advantage, Aldi is required to identify itself as one of the best socially responsible supermarket. It can adopt various others environmental friendly approaches in its store. In addition to this, it can also use sustainable strategies to create more customer base.

Controlling is necessary for evaluating the marketing efforts of the organization in terms of sales, revenue, and growth. It has four bases such as strategic control, annual planning, profitability and efficiency control. By checking the sales and market share of firm, it can take the necessary action for its future growth. Besides this, the firm to evaluate its capital improvement also uses number of capital employed. Controlling is taken essential by the Aldi to evaluate its progress time-to-time. Based on the result, it is able to take various steps and actions for future.

Conclusion 

In the limelight of above discussion, it can be concluded that Aldi is one of the biggest market by giving its services worldwide. Due to its best quality products and lower pricing strategy, it is able to gain maximum customer satisfaction. However, it does not spend much amount on advertising that can prove to be threat for Aldi in future. In order to remove this, it is necessary for Aldi to take some action for its promotional strategies. In the upcoming years, Aldi has the objective to spend more stores in order to gain more market share and customer base. Besides this, it is also suggested to Aldi to open its more branches in those countries where it is not serving currently. Due to its wide variety of products and different prices, it is able to attar act high as well as lower class people.

References 

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Berman, B. (2015) How to compete effectively against low-cost competitors. Business Horizons, 58(1), pp.87-97.

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Cavallo, A. (2017) Are online and offline prices similar? evidence from large multi-channel retailers. American Economic Review, 107(1), pp.283-303.

Chatterjee, S. (2017) Two efficiency-driven networks on a collision course: ALDI’s innovative grocery business model vs Walmart. Strategy & Leadership, 45(5), pp.18-25.

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Inderst, R. and Obradovits, M. (2015) Too Much Attention on Low Prices? Loss Leading in a Model of Sales with Salient Thinkers. United Kingdom: Routledge.

Kincaid, E. (2018) Aldi beats Walmart on price online, study finds. [online] Available from: https://www.grocerydive.com/news/grocery–aldi-beats-walmart-on-price-online-study-finds/534309/ [accessed 25/11/18].

Methner, N., Hamann, R. and Nilsson, W. (2015) The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer, Cham.

Morgan, N.A. (2012) Marketing and business performance. Journal of the Academy of Marketing Science, 40(1), pp.102-119.

Morschett, D., Swoboda, B. and Schramm-Klein, H. (2015) Competitive strategies in retailing—an investigation of the applicability of Porter’s framework for food retailers. Journal of Retailing and Consumer Services, 13(4), pp.275-287.

Mortimer, G. (2016) ALDI gives suppliers, as well as shoppers, greater choice: Retail expert. Journal of the Home Economics Institute of Australia, 23(2), p.39.

Pechey, R. and Monsivais, P. (2015) Supermarket choice, shopping behavior, socioeconomic status, and food purchases. American journal of preventive medicine, 49(6), pp.868-877.

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Voigt, K.I., Buliga, O. and Michl, K. (2017) Striving for Customer Benefit: The Case of Aldi. In Business Model Pioneers (pp. 11-24). Springer, Cham.

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