Background Information regarding Aldi

This report has been composed with the aim of utilizing the knowledge of marketing theory and concepts. In simple terms, marketing can be understood as the offering of any appropriate products at the right time at the right place and with the right price. The emphasis is put on the four P’s of marketing, more often mentioned as the marketing mix. These four P’s of marketing are product, place, price and promotion. Marketing mix of any organization is a significant tool that can turn the marketing plan for that organization efficient with an effective product offering. These four marketing P’s of the marketing mix is helpful for the achievement of the business targets of profit, sales and consumer satisfaction (Gordon 2012). This report is composed with authorization that there is a need of examining the marketing strategies of the German supermarket chain called Aldi for their in-house energy bar brand, Elevation. The paper would be divided into four parts. The first part would be giving a brief background information regarding the company. The second part would focus on analyzing the marketing mix of Elevation and the third section would be providing innovative recommendations for them. In the final section there would a concluding comment regarding the whole report. The major limitation for this report would be not being able to access enough material regarding the organization for proper in-depth analysis of their strategies and objectives. The scope of this report is utilizing the knowledge regarding marketing concepts and carrying out its proper application in a real-life situation.

Aldi is a leading retailer that has more than 9000 stores all over the world. Since it opened its first store in Germany in the year 1913, Aldi has been effective in establishing himself as one of the most regarded retailers in the international business market. The main marketing objective of the organization is growing their market share all across the world. The main focus is on the provision of high quality products and superior value for customers, of which Elevation is one focused on providing energy bras and protein powder. Aldi is known for offering customers a smarter way of shopping. It is stated on the website of Aldi that they have made a promise of providing their customers with the products they buy recurrently and ensuring that those products are of the best possible quality at a definite low prices. The decision of their concentrated product goes, which joins a refined quality thought with an interminable low-price procedure, has made them the market and supposition leader in Germany. Long-term business associations and an unusual condition of specialist association have always made an enormous duty towards the achievement of their organization drove exclusive organization. The character of their corporate brand has been developed through their corporate identity which in this way has created from their business standard and is separate by vague building determinations, store traces including marketing activities, and exchanges. At ALDI they are standard tradespeople and are alluded to in the business as results-arranged, honest to goodness and sensible (Aldi.com 2017).

Analyzing the Marketing Mix of Elevation

Aldi knows how to dependably join their incredible requirements with their own specific markdown standard. A decentralized structure, flat dynamic frameworks and constantly streamlined methodology impact them to act quickly and effectively. They concentrate on the rudiments and are always arranged to pass on a best execution. Direct cash related planning makes them monetarily strong and free. Their own guarantees are absolutely critical. They treat people the way they might need to be managed themselves: in a spirit of partnership and with concession. They are depicted by openness, reliability and resolute quality. Standard trading values shape their appreciation of organization and business and guide their exercises (Butler 2017).

ALDI makes things direct: essential structures, capable systems, a concentrated extent of products of tried and true quality. Subtlety and undemonstrative handiness depict their direct. A clear course of action of fundamentals with obviously portrayed regions of commitment in regards to action support their planned exertion. They generally develop their business model using low down examination and concentrating on the basics (Butler 2017). Meanwhile they for the most part try strong and confining responses for the upside of their customers, their specialists and their business partners and suppliers. ALDI ensures quality and expect on risk. Their understanding of quality joins the prosperity and security of the customers and also tolerating social and biological commitment all through the production and supply chain. For their specialists they are a reliable and pleasing manager. For their suppliers they are an honest to goodness and sensible business partner. their own guarantees are absolutely critical: as a reasonable and supportive, utilitarian and significant association, they coordinate in an answer arranged way and settle on confining decisions and obligations. Reliably more than 50,000 delegates can rely upon ALDI as a solid administrator and training provider. They require their customers to have the ability to rely upon their value proposition. This is the reason ALDI advances reliable articulations. They dependably complete their quality necessities together with strong suppliers and business partners. The consistence with their first-class measures is at risk to standard watching. They understand that their achievement in the long-term will be liable to the tried and true consistence with their upheld quality essentials (Greenblat 2017).

Their specialists make an unequivocal sense of duty regarding the achievement of their association. They perceive their execution through open and cognizant relations and offer an appealing remuneration system at all levels of the affiliation. They have to continue with the ALDI case of defeating difficulty together with moved and presented specialists. That is the reason they engage their specialists and reinforce their change in their association. For their specialists they should be a competent and strong manager and training provider. They expect their business partners and suppliers to share their value proposition. They portray objective situated quality standards and screen their acknowledgment. They require their strong suppliers to feel that they are managed acceptably in their cooperation with ALDI. Along these lines, they go about as a tried and true partner and support their suppliers through confining target assentions for the change of production structures and the further progression of quality measures. Long-term business associations outfit their suppliers with the conviction of action they need and help them with the constant capacity of their supply and production chains. They require the all-inclusive community who make products for ALDI to be managed in a socially just manner. They reduce versatile quality for the upside of their customers: they select astounding sustenance products and normal customer goods for their standard product go, complimented by uncommon things which change every week. Shopping at the market leader ALDI is invaluable, smart and basic: presentation is given by a meticulously picked product go and a clearly sorted out presentation of goods which is uniform in all stores. A sensible returns and warranty policy gives security. For the benefit of their customers they concentrate on the change and extent of goods with a particular ultimate objective to finish a strong and positive price-execution ratio in the long term (Thompson et al. 2012).

Innovative Recommendations for Elevation

Marketing mix of any organization is often referred as being its marketing four P’s. It is inclusive of the creation of an exclusive blend of the right product, selling it at the appropriate price, at the appropriate place with the help of the most appropriate approaches of promotion. Inside every business there is found a different type of marketing mix (Aremu and Bamiduro 2012). The marketing mix of Aldi is concentrated on the provision of high quality products that are inexpensive substitutes for famous brands. Their in-house brand of energy bars Elevation is focused on providing the customers with value, health and satisfaction all at a low price, substituting national brand bars and protein powders. The marketing mix of Aldi is therefore focused on:

• Product: high quality “like brands”
• Price: Aldi is offering lesser prices than their competitors instead of cooperating on quality.
• Place: Global expansion of Aldi outlets
• Promotion: Using of a combination of above-the-line and below-the-line promotions with a concentration on their “like brands” and “swap and save” campaigns.

Every organization requires a stable marketing mix for meeting the requirements of their clienteles. The focus of Elevation is on the contribution of the best quality product possible at the lowest price possible. Each consumer for Elevation, is an expert in the field, be it energy bars or protein powders. They are looking for products from all across the world. This permits them into getting the best quality products that Aldi then vends under the Elevation brand label (Butler 2015).

To understand the benefit building process of the product, the product can be viewed in three layers, helping in extracting all the benefits that the product can offer.  In the first layer, the core basic level, the product can be judged by what it can offer to the buyers for which they would look at it in the first place when they set put to buy. The core product benefits of Elevation bars are that it is an energy bar, which acts as supplements for people who look for quick energy but have no time for a proper meal. In the second level, the actual product benefits are translated so that people are open to buying it over competitor products. The best attributes of Elevation bar are its ample supply of vitamins and minerals instead of plain chocolate or caffeine. It also has not grainy texture like other energy bars. In the third layer, the non-tangible benefits of the products are judged, competition being based augmented attributes. The packaging and the pricing of the bars are decided based on the requirement of the customers and what they look for in a product. The products are kept at a reasonable enough price and the packaging is maintained to make customers feel they are getting something special and healthy.

Concluding Comments

The product can be classified into the convenience product category, as they do not require significant consideration and effort from the customer’ side. They tend to be falling into the category which is available to the customers as per their needs and requirements. Elevation bars are currently in their growth stage of the product cycle. They are experiencing amount of sales and has competition, with healthy profits. Promotion would emphasize brand ads and development costs gets recovered.

Selection of prices are one of the toughest deliberations at the time of developing of a marketing mix. Diverse pricing strategies that get generally used is inclusive of the following:

Competitive pricing – pricing at a comparatively lower amount than the competitors for energy bars.

Market penetration – changing of lower prices for any new energy bar products so that they can get some assistance in entering the market and acquire market share quickly.

Strategic pricing – Focusing on the brand positioning or quality of the energy bars for allowing a higher price to be charged (Huang and Sarigöllü 2014).

For Aldi, competitive pricing is a key strategy. The company is capable of offering quality energy bar products at a much lower price as they buy it in huge volumes. The fact that Elevation is into buying such huge amounts of these products permits for great influence for the negotiation of the best possible prices with their suppliers. It is known as economies of scale. Purchasing of huge quantities of every product permits the passing of these savings to the customers of Aldi.

The price of 6 bars of Elevation by Millville is approximately $5.99, which actually quite high in comparison with other national energy bar brands. Even their competitor, Clif bars comes at the same price of $5.99 for 6 bars. On the other hand, Trek energy bars of 16 pieces comes at a price of £16.99. It is generally thought that Elevation bar prices are set based on Clif bars, but they are much less than the national brand bars. For this particular product, competitive pricing strategy is used, placing the price of Elevation bars below those of the competitors, so that the economies of scale can be used while purchasing where they buy in bulk at a bargained price making it possible for it to pass the profit to the customer. For this particular product of Aldi, income elasticity is negative, making it a kind of inferior good. There is positive relationship between the price of Elevation bars and the quantity demanded for the retailers form other countries. Two other factors that influence the price of this demand is the brand and the revenue.

The element of place inside the marketing mix contains the involvement of the identification of where the products or the services would be sold (Parker, Roper and Medwa 2015). Aldi is known for keeping their store layouts uncomplicated for limiting waste and keeping the costs down. This implies that Aldi have the option of focusing on offering to their customer the lowest possible price for their Elevation products. When Aldi is bearing in mind new store locations for themselves, they take into consideration:

• The location of the store – Aldi concentrates on center locations that have good visibility from the main road or highways and there is not much competition nearby.
• The number of people visiting any area – the requirement for any store of Aldi is that the area population must exceed 30,000 people.
• The public transport link and the convenience of the store
• The number of available parking spaces
• The demand for products like energy bars and protein powders according to area

Elevation is mostly using direct marketing channels for putting their products across to their customers. They are using mails, pamphlets and surveys to reach out to their customers and make them aware of the existence and benefits of the product. In terms of indirect marketing, they are using media channels and customer service to reach out to their customers and make them aware of the product benefits, low prices and build a competitive edge. Elevation is using direct distribution methods for both their energy bars and protein powders. Milleville is the mother brand of Elevation, which is in itself an in-house brand of Aldi. The brand is directly supplying the products to the supermarket outlets to reach their end customers. Since direct distribution is the only way they are retailing, their intensity of distribution is one-tracked but intense.

For Elevation to achieve their objective of increasing their market share, they had to make sure their promotional activity displayed the balance of their marketing mix. For instance, for increasing their customer loyalty they had to convey their key quality and value messages. Promotion assists in:

• Increasing consciousness and improving brand recognition
• Increasing request for products
• Improving brand image
• Highlighting the advantage of products and services

Above-the-line promotions are paid for advertising that has been intended at a mass audience. These are inclusive of media like newspapers, magazines, radio and television that has the capacity of reaching their customers and potential customers. This form of promotion is expensive and it also gets difficult targeting specific audiences (Murdy and Pike 2012). They use a wide range of above-the-line methods, which includes:

• Printed leaflets that are distributed inside stores
• Advertising done for the television
• Extension of the “Like brands” campaign with the help of newspaper adverts
• Use of in-store posters that can be put to use for highlighting the “Fuel up for less” message.

Below-the-line promotion makes use of diverse methods of engaging with customers. These approaches can be utilized more for easily targeting particular audiences than above-the-line methods. They suggest a larger control level to organizations over their communications (Peck et al. 2013). A variety of below-the-line methods are put to use by Elevation, which includes media relations, social media, public relations, targeted mails to customers and third-party endorsements and awards. Their Facebook and Twitter pages are endorsing two-way communications with their customers, providing a platform for the company to relate with customers and then assess the opinions regarding their brand. The main promotional message for this product is “Fuel up for less”. They are stressing on the fact that their product is providing the same benefits as other national brands but all at a much lower price. This message is very effective, as people are always looking for something more at a much lesser cost. Using both above the line and below the line promotion methods, Elevation has been able to attract customers to their products and create a steady customer base for themselves.

The Australian grocery industry is one of the most settled and competitive market, however progression of such industry change swiftly. Notwithstanding Aldi’s wonderful stroll in entering the Australian grocery market and accepting control over an immense market share, one can’t repudiate the way that the flow of frequently altering business world can bounce this improvement. One can similarly not deny how the contenders are additionally functioning towards growing their market share and abusing the benefits. In brutal competition with in-house brands of Coles and Woolworths, Aldi is endeavouring to improve the market share and additionally basically caring for it. Numerous examinations have underlined on product quality as one of the most fundamental factors of market share. It has been exposed that quality and add-on services have constructive and high association with business execution. Thinking on the near lines, one can commend the quality move up to give a harder opposition to the primary supermarkets. However, there is a risk related with that method as perpetual variations in the business strategy can incite damage of handle on the observing and governing of the business. Businesses with a nonappearance of clear method oftentimes confront inconveniences in customer targeting. However, Aldi has an unbelievable expansiveness in offering some motivator added services. Office of online shopping is one such value added advantage. Home delivery of the shopping things and additionally ‘click and collect’ services can be viably completed in the present web time as the other driving supermarkets are similarly proposing such services. Since Elevation bars are mostly retailed via direct distribution, Aldi can think of testing the indirect channels too. Using of social media can be upped, with products being made available in other outlets too.

With a considerable measure of options open, even with incredible quality and low prices, loyalty can be exceptional subject of apprehension for a grocery firm. Diverse loyalty cards and point based reward structure can be familiar with guaranteeing the market share to be to some degree stable. Australia being a socially grouped nation, a broad assortment of products, for instance, Indian, Chinese, and Caribbean grocery things must be added to pull in more customers. The campaign of “Fuel up for less” can be influenced a walk to help by overhauling the software system. Starting at now it is demonstrating the price contrast on the day by day papers and ads which should be considered the receipt after the spending to teach the customers individually the sum they have saved by shopping in Aldi.

Conclusion

Aldi possesses a distinct approach towards retailing, which has given the organization a competitive edge in a competitive market. The company’s unique balance seen in their marketing mix has made it possible for them to provide the best quality and their own branded products at the lowest price that is possible. The company’s brand perceptions have been improved with the help of their “Fuel up for less” campaigns. These kinds of promotional campaigns are assisting the accomplishments of the marketing objectives of Aldi. These campaigns have been beneficial in increasing the sales per store over the years by means of creation of more loyal customer base. Their multi-channel promotional activity is effective in engaging their customers and the creation of some positive feedback. The country in which Aldi operates, Australia, is one of the most established and is globally competitive, effectively working along with the changing dynamics of this industry.

References

Aldi.com. 2017. Welcome to ALDI. [online] Available at: https://www.aldi.com/ [Accessed 17 Oct. 2017].

Aremu, M.A. and Bamiduro, J.A., 2012. Marketing mix practice as a determinant of entrepreneurial business performance. International Journal of Business and Management, 7(1), p.205.

Butler, S. 2017. Aldi becomes UK’s fifth largest supermarket. [online] the Guardian. Available at: https://www.theguardian.com/business/2017/feb/07/aldi-uk-fifth-largest-supermarket [Accessed 17 Oct. 2017].

Butler, S. 2017. Strong sales growth at Aldi and Lidl takes their market share to 12%. [online] the Guardian. Available at: https://www.theguardian.com/business/2017/may/31/aldi-lidl-sales-growth-uk-market-share-supermarket-raise-prices [Accessed 17 Oct. 2017].

Butler, S., 2015. Aldi overtakes Waitrose to become UK’s sixth-largest supermarket chain. The Guardian.

Gordon, R., 2012. Re-thinking and re-tooling the social marketing mix. Australasian Marketing Journal (AMJ), 20(2), pp.122-126.

Greenblat, E. 2017. Aldi targets bigger market share. [online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/business/companies/aldi-set-to-take-bigger-bite-of-grocery-market/news-story/27fb4de63160407eebc5cbedecec5185 [Accessed 17 Oct. 2017].

Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Murdy, S. and Pike, S., 2012. Perceptions of visitor relationship marketing opportunities by destination marketers: An importance-performance analysis. Tourism Management, 33(5), pp.1281-1285.

Parker, C., Roper, S. and Medway, D., 2015. Back to basics in the marketing of place: the impact of litter upon place attitudes. Journal of marketing management, 31(9-10), pp.1090-1112.

Peck, H., Christopher, M., Clark, M. and Payne, A., 2013. Relationship marketing. Taylor & Francis.

Thompson, C., Clarke, G., Clarke, M. and Stillwell, J., 2012. Modelling the future opportunities for deep discount food retailing in the UK. The International Review of Retail, Distribution and Consumer Research, 22(2), pp.143-170.