Marketing for Aldi Supermarket - Essay Example

Marketing - Aldi supermarket Marketing for Aldi supermarket 1 Creation of competitive advantage In order to secure its position in the UK supermarket industry and to set the basis for future growth Aldi needs to develop a competitive advantage towards its rivals. Different approaches can be used by the firm for achieving such target. Focusing on product differentiation is a potential strategy for acquiring a competitive advantage. The emphasis on product innovation is an example of product differentiation, as a marketing strategy (Lamb et al. 2011). Nike has used this strategy for securing its competitiveness in the global market (Lamb et al. 2011). In Aldi product innovation could be related to the introduction of products that do not currently exist in the UK supermarket industry, even if their differentiation from the industry’s existing products would be small: for example, an energy drink of different ingredients depending on the status of health and the age of consumers would be a product that meets the terms of product differentiation. Through product differentiation Aldi could manage to acquire a sustainable competitive advantage, i.e. an advantage that ‘cannot be copied by competition’ (Lamb et al. 2011, p.42). For developing a sustainable competitive advantage Aldi should try to ensure that its products are aligned with the needs of the local market and that they could attract the interest of local consumers (West et al. 2010); this means that the advantage of the firm’s products towards them of its competitors should be clear to the consumers. Another approach that Aldi would use for acquiring a sustainable competitive advantage would be the following: the firm could use social marketing, which ‘promotes behaviours that provide well-being for individuals or for society’ (Kapoor and Kulshrestha 2013, p.10). For example, Aldi could use its marketing campaign for increasing the awareness of people on the health consequences of the consumption of milk-based products. Of course, other strategies, for acquiring a sustainable competitive advantage would be also available to Aldi: for example, by decreasing the price of a specific category of products would result to a sustainable competitive advantage for Aldi, even in the short term (Lamb 2012). 2.2 PEST analysis In the context of marketing, a PEST analysis is a valuable tool for assessing the status of a particular market, i.e. to identify the market’s current performance in regard to one or more industries. In addition PEST analysis can help to check the prospects of a market, i.e. its potentials for growth in the future, as related to a series of factors. PEST analysis refers to certain of these factors, such as the ‘Political, Economic, Social and Technological environment of a specific market’ (Williams and Curtis 2008, p.127). In regard to the UK market the PEST analysis, as related to the country’s supermarket sector, could be developed as follows: a) Political; the political environment of UK is quite stable; in addition, the country’s government is quite supportive towards business activities, as revealed through the extensive scheme for funding of businesses of various sizes, the continuous update of taxation laws and the development of strategic cooperation with other countries for the promotion of cross-borders trade (BBC News 2011, Torrance 2013). In such political environment Aldi would face no particular difficulties in increasing its competitiveness in the country’s supermarket industry; b) Economic; the UK economy is quite dynamic; despite the recession of 2008 the country’s economy has managed to keep its competitiveness in the global market. According to recent literature, between April and June of 2013 the growth of GDP in UK reached the ‘0.7%, the highest one, in regard to this quarter, from 2010’ (BBC News 2013), which is quite important if taking into consideration the severe pressures in economies worldwide; c) Social; the growth of UK population is the highest among all countries of the EU; for 2012 the increase of the country’s population was estimated to ‘392,600 people, compared to 2011, leading to a total population of 63,888,000’ (Waterfield 2013); this phenomenon would result to the increase of Aldi’s chances to achieve high profits; and d) Technological; in UK technological innovation is highly appreciated; in this way, the level of technology available to businesses of various industries of the country is quite advanced; for example, in the UK supermarket sector, electronic devices are available for 3-D printing (Gibbs 2013); software applications that can offer to consumers access to a virtual supermarket are also used in the UK supermarket industry (Ashford 2012). 2.3 SWOT analysis The SWOT analysis is a strategic tool using for exploring the performance of an organization. This target is achieved by focusing on the organization’s strengths, weaknesses, opportunities and threats (Ferrell and Hartline 2012). For Aldi, the SWOT analysis could be analyzed as follows: a) Strengths; Aldi has become quite popular in the UK supermarket industry; ‘between September and November 2013 the firm’s sales have been increased by 31.1% compared to the same period last year’ (Ruddick 2013). The increase of popularity of Aldi in the UK supermarket industry can be related to a specific strategy of the firm: quality of products is kept high while prices are decreased, as possible, so that products are accessible to all consumers; the efforts of firm to emphasize on sustainability are also highly valued by consumers; in addition, the firm continuously develop its supply chain so that it is able to keep costs low and to avoid delays in delivering the products to customers (Aldi, Corporate, Consumers 2014); b) Weaknesses; in terms of its strategic planning and its mode of operations Aldi seems to have no particular weakness (Ruddick 2013); still, in case that pressures in the UK market would become strong then consumers could probably decide to support only British supermarkets, a fact that would lead to losses for Aldi, which is a German firm; c) Opportunities; the UK supermarket sector has significant prospects. In fact, it seems that the growth of the specific sector has been the highest compared to all UK industries during the last 20 years (Thomson 2012); in such industrial environment Aldi would have the chance to achieve a significant growth in the long term; and d) Threats; competition in the UK supermarket industry is quite strong. In fact, the performance of the industry’s key competitors, such as Tesco and Sainsbury’s is quite high with signs of further growth (Ruddick 2013). In order to keep its market position and set the basis for a future growth Aldi would have, necessarily, to develop a sustainable competitive advantage; otherwise, its survival in the UK supermarket sector would become quite difficult. References Aldi Supermarket (2013) Organizational website. Available at . [Accessed at 23 Jan 2014] Ashford, W. (2012) “Smartphones drive Tescos UK virtual supermarket.” August 7, 2012. Computer Weekly. Available at . [Accessed at 23 Jan 2014] BBC News (2013) “UK GDP: Fastest growth for three years.” Oct 25, 2013. Available at . [Accessed at 23 Jan 2014] BBC News (2011) “Government financial support for SMEs.” Jan 4, 2011. Available at . [Accessed at 23 Jan 2014] Ferrell, O. and Hartline, M. (2012) Marketing Strategy, Text and Cases, 6th ed. Belmont: Cengage Learning Gibbs, S. (2013) “Asda to offer 3D printing in store.” Oct 10, 2013. The Guardian. Available at . [Accessed at 23 Jan 2014] Kapoor, A. and Kulshrestha, C. (2013) Dynamics of Competitive Advantage and Consumer Perception in Social Marketing. Hershey: IGI Global Lamb, C. (2012) Marketing. Belmont: Cengage Learning Lamb, C., Hair, J. and McDaniel, C. (2011) Essentials of Marketing, 7th ed. Belmont: Cengage Learning. Ruddick, G. (2013) “Britains leading supermarkets lose market share as Aldi and Waitrose soar.” Nov 19, 2013. The Telegraph. Available at . [Accessed at 23 Jan 2014] Thomson, R. (2012) “Analysis: The rise of the supermarkets.” Oct 5, 2012. Retail Week. Available at . [Accessed at 23 Jan 2014] Torrance, J. (2013) “Government hopes to boost SME international trade with Export Week.” Nov 11, 2013. Real Business. Available at . [Accessed at 23 Jan 2014] Waterfield, B. (2013) “UK population growing faster than any other EU country.” Nov 21, 2013. The Telegraph. Available at . [Accessed at 23 Jan 2014] West, D., Ford, J. and Ibrahim, E. (2010) Strategic Marketing: Creating Competitive Advantage. Oxford: Oxford University Press Williams, J. and Curtis, T. (2008) Marketing Management in Practice. London: Routledge. Read More