Introduction:
The article “Five numbers that show how Aldi has revolutionised grocery shopping” published in the online version of Daily Telegraph dated 29 September 2014 is the topic of investigation for this paper.
The main features of the article relate to how Aldi respond to the overall competitive environment in the UK grocery market. In addition, the article outlines how the discounter has made great strides in the UK grocery market.
The marketing story undertaken relates to the grocery sector for this investigation which has implications on every individual in the society.
Critical Analysis:
The foremost talking point in the article is about the marketing strategy of Aldi in the UK market. The analysis presented in the article signifies
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In this respect, attaining customer loyalty is very difficult to realise. However, Aldi has shown how a focused strategy can offer a competitive advantage in the retail market.
The differentiation strategy in the retail sector is critically vital to attain the competitive advantage (Williamson and Zeng, 2009).
For instance, the rising trend in the consumption of healthy food is a differentiating element in devising marketing strategy in the grocery segment (Voberda et al. 2011).
The notion of ‘low price is cheap quality’ has been efficiently dismantled by Aldi. More importantly, the rise of Aldi in the UK market reveals that customers look for precise choices.
Therefore the overall value for money that Aldi has offered to the customers is quite significant which signifies the assertion of Kotler that ‘customer is the king’.
Kotler has also emphasized on achieving sustainable growth which is demonstrated by the performance of Aldi in the UK grocery market. The diverse needs of the society is catered along with the stakeholder’s interest is also preserved.
Furthermore, from a marketing perspective, the story about Aldi reveals that critical success factor in the retail sector is embedded in a simple but holistic
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For instance, the ‘like to like products’ category offered at reasonable price can enhance the customer engagement with the retailer (Gapper, 2009).
A vital element is to attain the economies of scale and it can be achieved on a consistent basis when the firm is able to investigate in the varying needs of the consumer segments (Bose, 2010).
Philip Kotler emphasize on creating synergy between the marketing mix elements. The strategy of Aldi is a testimony that convenience of customers is the top priority in leveraging the marketing mix elements. This is only attainable if the supply chain is properly administered (Dvorak, 2009).
The notion of becoming a specialist is confirmed by the strategy of Aldi which is essential to enhance the reputation and equity of the retailer. The reputation increases customer satisfaction and impact the market share of the firm.
The sales figure for October 2014 outlines the growing reputation of Aldi.
GN (2014) demonstrates that sales increased by 27% for Aldi where other competitors struggled to make a considerable impact.
The sales figure signifies that the consumers are paying considerably less for a representative grocery
They anticipate competition between supermarket chains will be fierce this year as food prices continue to stay low. The Canadian grocers have been grappling with declining food prices, especially for meat, and Loblaw’s said “The notion of a shift into a steady inflationary environment is going to be offset by what we see as a continued level of competitive intensity”
According to Parnell, Porter’s generic strategy typology consists of a “basic economic assumptions about cost versus differentiation, and the whole notion of focus and market orientation but this strategy has some limitations” (2014). This strategy typology helps simplify a complex industry by identifying and emphasizing the key strategic factors. These factors are low-cost with focus, low-cost without focus, differentiation without focus, and differentiation with focus. Low-cost with a focus offers a small focus area of the market its product and service at a low cost due to the economies of scale like ALDI. ALDI focuses on “low-cost, its products have a rapid turnover to keep costs down, and it targets low-income consumers “(Parnell, 2014).
One of the benefits from having low prices is that customers tend to migrate to the store that offers the cheaper products. Low prices and happier customers will have a positive impact on ALDI’s sustainability. Competitors that offer substitute goods are a step behind ALDI’s lower prices. However, because other companies such as Wal-Mart and Target, who are large corporations that have their hand in thousands of areas around the country, also sell products that are similar to what ALDI sells, ALDI is still faced with a
This essay describes how Costco has undergone evolutionary changes from its inception to present through its value chain model to become a success story. For example, in its distribution system, Costco utilizes the cross-docking technology to help in the conveyance of products in the different locations. This ensures that there are no product delays in the respective markets (Guo, 2016). Accordingly, Costco can attract more customers who prefer the warehousing services provided by the company.
Albertson’s also has also taken steps to boost it average sales. Albertson’s goal is to fill every shopping cart to as full capacity as possible, as well as getting to know their customers a lot better. They have installed have installed a $50 million NCR Teradata where house in order to analyze customer data, and what type of products certain customers primarily purchase. They then plan to use their customer loyalty cards, so that they can match individual buying preferences against store inventories. Also through technology this data is available for analysis minutes after customers leave the store. This is a very valuable resource, because now Albertson’s may be able to reach its goal of having the right products, on the right shelves, at the right time.
For Oliver’s Market among the five Competitive forces, pressures associated with the threat of new entrants into the market are the strongest one. Because Wal-Mart and Target had announced plans to develop regional supercenters in the Sonoma county region. They are strong candidates for entering the market, because they possess the res...
To most consumers Whole Foods is known as a chain grocery store specializing in organic and natural foods. Some may go as far as say the name is synonymous with quality. This comparison is the result of Whole Foods’ marketing their brand successfully to consumers demanding their specialized foods. As with any organization, Whole Foods may consider evaluating their strategic objectives and decide if necessary course corrections are needed to reach their objectives and goals. Through a fundamental and technical analysis, I will discuss Whole Foods’ mission, vision, and goals, their competitive environment, and some factors within their strength, weakness, opportunity, and threat analysis. With such data and information I will recommend, if needed, and strategic changes in order to sustain a competitive advantage.
On the one hand, Lidl’s stores are limited in range and number. As mentioned, Lidl only has 640 stores in the UK. In contrast, Tesco has over 6000 stores and Sainsbury has over 1200 stores. It is clear that the gap of geographic reach is still huge. On the other hand, big supermarkets have sufficient financial support to compete in price war. In addition, low customer loyalty is also a concern. Lidl’s first loyalty program a new online community called ‘My Lidl’, was just launched in March this year, years later than its rivals (Hobbs, 2016). Although lower prices have attracted more customers, it is difficult to maintain them as loyal buyers.
Lidl is a food retailer with its roots in the 20th century, being founded in Germany and expanding to the UK in the early 1990s – with amazing growth in the 21st century, a century of change. Since being founded and also in future, revolutionary leadership and exceptionally organised management are grown though in the fundament of Lidl’s success and have encouraged one of Germany’s biggest grocery market share holders to have reached 4.6% of the market share in the UK in September 2016, with some of its competitors being the German food retailer Aldi, but also the British “Big Four” food retailers Tesco, Sainsbury’s, Asda and Morrisons. According to Hett of n-tv (2016), the “German Discounters are conquering foreign countries”,
Marks & Spencer is one of the UK's foremost retailers of clothing, foods, homeware and financial services, boasting a weekly customer base of 10 million in over 300 UK stores. Marks & Spencer operate in 30 countries worldwide, and has a group turnover in excess of £8 billion. It has specific values, missions and visions. It’s main vision is ‘to be the standard against which all others are measured’, it’s main mission is ‘to make aspirational quality accessible to all’, and it’s main values are quality, service, innovation and trust. (www.marksandspencer.co.uk).
Bibliography: Lawson, A. (2013). Analysis: Is Asda’s five-year strategy the right one?. [Online] Retail-week.com. Available at: http://www.retail-week.com/sectors/food/analysis-is-asdas-five-year-strategy-the-right-one/5054989.article [Accessed 23 Jan.
it is also important to remember that Aldi’s main competitive advantage is its low prices offered to its customers, therefore their customer base will prioritize low discounted prices over any other factor when shopping for groceries. This means that they are highly price sensitive, if the prices were to rise, the demand for Aldi’s products will fall, since a majority of their customers will look for other cheaper alternatives. Therefore, the customer bargaining power is very strong for Aldi. The next force, the threat of substitutes, can go either way for Aldi: on one hand, they can choose to stock their own brand of produce, toiletries, etc. which will therefore limit the threat of substitutes to virtually zero; on the other, if they see an opportunity for increased profit by stocking competitor’s brands, they may do so. Aldi’s brand, in general, is the substitution to big name brands.
...nal supermarket retailers will reinvent themselves over a period of time, in order to attract and maintain a loyal customer base. New concepts, neighborhood marketing, and innovation will be the key to success over the next decade.” (Imlay, 2006) What is propose is that a smart mix of products, perhaps catering to demographic tastes and needs, may tempt the shopper not drive out to the big box store, but instead loyal to their local market.
The concept of grocery stores and supermarkets industry is an idea that has been created in order to make easier human`s life. According to the study “The Evolution of the Supermarket Industry From A&P to Wal-Mart” by Ellickson, who explains that a century ago people had to jump from one store to another store in order to get different products such as milk, meat, bread and other products. In addition, in the article “Understanding Groceries Industry” by The Reinvestment Fund, they state that back in a day the concept of grocery stores was created based on the owner`s store needs. Later on, as the development of the society and the standards of customer needs increased, the owners of the grocery stores started to be more focused on their customer needs. Also, the study of “Understanding Groceries Industry” shows that the supermarket and grocery stores industry is in their mature stage as they have developed an extensive and solid customer service.
Challenges in Today's U.S. Supermarket Industry. 2014. Challenges in Today's U.S. Supermarket Industry. [ONLINE] Available at:http://msdn.microsoft.com/en-us/library/aa479076.aspx. [Accessed 31 March 2014].