Introduction
Aldi is an international discount store that was started in 1913. Since its inception, Aldi has established itself to be one of the most preferred and reputable retailers by focusing on offering great quality and value (ALDI, n.d.). There has been a great competition in the market and Aldi has been continuously striving to remain competitive. Its goal has been to offer its customers with affordable products that are of high quality and which customers can buy regularly. Moreover, Aldi sources its products from selected suppliers whereby the products are sold under the brand label of Aldi. Currently, Aldi as about 10,000 retails across the world in approximately 70 countries (ALDI, n.d.). Creating a competitive advantage is difficult. Aldi has not performed to its full potential according to the expectations, but it is making efforts to remain competitive like the popular brands such as Heinz (ALDI, n.d.). There is need to create an effective marketing communication through a marketing plan that will help to boost Aldi’s popularity, attract more customers and also give it a competitive advantage. Therefore, this report presents Aldi’s marketing plan for the next three years. To achieve this, the paper will conduct an external audit of Aldi using PESTLE analysis and also conduct a SWOT analysis. Moreover, two smart objectives will be justified, suitable marketing strategy and marketing programmes for Aldi will be identified.
PESTLE analysis
| Factors | Threat/Opportunities | Impact | |
| P | The impact of Brexit on Aldi Increased value added tax | Increasing inflation which forced the United Kingdom customers to reduce their spending habits mostly on non-essentialsThe UK government increased the value added tax from 17.5% to 20%. | Customers shifted to low budget discounters such as Aldi for cheaper productsIncreased the prices for products by about 2.5% |
| E | Weak pound currency Recession which has led to decreased consumer spending | Led to a price hike which made consumers to be unwilling to spend their money on high priced productConsumers resorting to discounters such as Aldi to purchase affordable products | Led to increased cost of importation in UK. Increased sales and profitability at Aldi |
| S | The shift to healthy eating habitsAldi socially defined as a low quality shop | Consumers rejecting sugary drinks and foods and embracing free organic and sugar free foodsThe assumption that low quality is equal to low price drives customers away | Increased demand for healthy food leading to Aldi increasing it offerings of healthy foods at lower prices and easily accessible. Customers avoiding Aldi and preferably shopping at the big four supermarkets |
| T | Online deliveryUse of credit and debit cards in shopping | Lower sales since Aldi has been reluctant to introduce it in UK Increased convenience and shopping made simple and fast | It has the company significant sales as many customers in UK are opting for online services rather than queuing in supermarketsIt has given Aldi a competitive advantage |
| L | Legal issues with UK workers unionsAccusation of wage theft | Accusation of breaking the law for having unfavorable employment engagements for its workersFailure to pay workers for negative hours | It has damage Aldi’s reputation as well as the efforts to establish a positive brand awarenessDamages the company’s reputation |
| E | OperationsThe people | Strong emphasis on minimizing their carbon footprint, waste recycling, as well as being energy efficient. It focuses on delivering high quality, development opportunities as well as structured training programmers. | It has contributed to building the company’s brand image and reputationIt has increased performance of the company giving it a competitive advantage |
SWOT Analysis
| Vision, Mission and Value Statements | Strengths Strong distribution networkReliable supply | Weaknesses Net contribution & profitability ratio below the industry averageInappropriate financial planning |
| Opportunities Aldi’s core competencies can be successful in other product sectorsNew markets opening up due to government agreements | SO –strategies Increase variety of products they offer (S1+01)Expand its stores to new markets (O2+S1) | WO – strategies Introduce other products they do not offer(01+S2)Expand into new emerging markets (O2+W1) |
| Threats Increasing pay level Advanced technologies developed by other competitors | ST- Strategies Develop effective marketing strategies to boost sales (W1+O2)Ensure appropriate financial planning is achieved by employing qualified employees. | WT – Strategies Employ few employees (T1+W1)Invest in technological research and development (T2+02) |
SMART Objectives of ALDI
- To remain competitive, Aldi considers its objectives in the form of SMART objectives. Those objects are described below:
- Specific: Aldi’s objectives are more specific. The first objective is to increase sales, the second objective is to increase its market share and the third objective is to increase its feedback rates to its customers.
- Measurable: Aldi’s objectives are measurable in the form of the level of achievability.
- Attainable: Aldi’s objectives are attainable within the set period since most of its objectives are near to the company’s target.
- Realistic: All of Aldi’s objectives are sensible and realistic. More so, customer feedback appears to be more realistic.
- Time-bound: These objectives can be attained in the given time frame. Every objective has a reasonable definite time frame.
- Aldi has a well-established strategy to attain its objectives. Aldi’s objectives have been determined using the 4ps strategy as explained below.
The strategy of the ALDI to meet its objectives
Aldi’s objectives are achievable only by exploiting the 4ps strategy which is very essential in facilitating Aldi to achieve the goals. Customer satisfaction relies on the quality of the product whereby the consumer decides the purchase volume of the products depending on the price (De Haas et al., 2020). Therefore for Aldi to achieve the objectives, it has to ensure that it offers high-quality products to its customers to increase purchase volume. Additionally, place and promotions tend to make customers make purchases on the product. Therefore, to achieve the objectives, Aldi has to focus on finding a suitable place or geographic position to position its store whereby it can be easily accessed by the customers. Moreover, Aldi needs to invest in promotions to promote its brand and products to create awareness in the public which will help in boosting sales (Armstrong et al., 2018). Therefore, by ensuring that proper placement and product adjustment is observed by Aldi, the company will be able to meet its objectives. Proper placement of its stores helps in increasing accessibility customer visits which leads to increased sales. On the other hand product adjustment is essential in ensuring that products are designed and aligned to suit the customers’ tastes and preferences.
The marketing mix for Aldi should emphasize on Product – by ensuring that they offer high-quality products to its customers to build and maintain its brand. In terms of price, Aldi should focus on offering the best products at low and affordable prices. Its products have to be cheaper as compared to their competitors to attract more customers (Boyer et al., 2018). But it has to ensure that the quality is not compromised and main its products to be of high quality. With regards to the place, to achieve its objectives, Aldi needs to focus on expanding globally and exploiting new markets to increase its customer base. In terms of promotions, Aldi has to ensure that it uses effective promotion strategies and promotion channels. It is best that the company uses the above-the-line and also the below-the-line promotions while focusing on its ‘Swap & Save’ as well as the ‘like Brands’ campaigns (Schmid et al., 2018).
Aldi also needs to focus on balancing its marketing mix to meet customer needs and also to meet its objectives by focusing on providing high-quality products at low prices. To achieve its market penetration, it has to charge low prices for the new products that it introduces to enable it to effectively enter the market as well as to get a larger market share quickly. Competitive pricing is also essential by ensuring that their prices are lower than those of their competitors. Also, strategic pricing has to be done by focusing on the quality or brand positioning of their product to enable a high price to be charged on the product (Brandes & Brandes, 2019). It is also important for Aldi to consider the place it positions its stores by considering the accessibility and the number of people who can visit the area. The store should be placed in urban areas that have good roads and with less competition. The place should be easily accessible and has transport infrastructures available with adequate parking spaces. It should also focus on promoting the business through advertisements on the media such as television, radio, and newspapers. It should also use various social media such as Twitter, Facebook, and Instagram to promote itself.
Porter’s Generic Strategy
Porter’s generic strategy asserts that a strategy is taken by a company and gains a competitive advantage within the selected market scope. Essentially, this generic strategy enables Aldi to meet its objectives as it facilitates the company to remain extraordinary from its competitors and enable it to gain a competitive advantage. To achieve a competitive advantage, Aldi has to put more emphasis on the segmented product supply or alternative offer long-product service to a wider market segment (De Haas et al., 2020). Aldi can also resort to sticking to the low-cost policy suggested by porter’s strategy policy to efficiently serve the large volume of customers or choose to adopt a higher price strategy with differentiation.
Marketing programs for Aldi
Aldi should use the below-the-line marketing program to engage its customers. It will enable Aldi to take more control over its communications with the customers. There are there marketing programs that Aldi should use which include; targeted emails to customers, social media and public relations and media relations. Aldi should use social media such as Instagram, Twitter, and Facebook in engaging its customers since it offers two-way communication with customers for interaction (Chernev, 2015). This will enable it to raise awareness regarding their products as well as obtaining opinions from the customers regarding their brand to improve on meeting the customers’ needs. Aldi should also utilize direct emails to customers. Such emails will enable it to communicate various messages to their targeted customers. It also encourages customers to provide feedback on their services and products. Public relations should also be utilized by Aldi by adopting the use of positive third-party endorsements. This can be achieved through positive endorsements for products via televisions, through the press reaffirming that the products for Aldi are of high quality and affordable (Chernev, 2015). Coverage can be achieved by targeting the main media that offer seasonal promotional messages. I chose these marketing programs since they are suitable for increasing awareness and promoting Aldi’s brand. Moreover, these programs are effective in communicating and interacting with customers.
Conclusion
To sum up, Aldi operates in a tight and highly competitive industry. Therefore it is important to create an effective marketing communication through a marketing plan that will help to boost Aldi’s popularity, attract more customers and also give it a competitive advantage. It is vivid that Aldi has many strengths and opportunities it can exploit to gain a competitive advantage over its competitors. To remain competitive, Aldi considers its objectives in the form of SMART objectives. Aldi’s objectives are achievable only by exploiting the 4ps strategy which is very essential in facilitating Aldi to achieve the goals. Aldi also needs to focus on balancing its marketing mix to meet customer needs and also to meet its objectives by focusing on providing high-quality products at low prices. Competitive pricing is also essential by ensuring that their prices are lower than those of their competitors. Aldi can also resort to sticking to the low-cost policy suggested by porter’s strategy policy to efficiently serve the large volume of customers or choose to adopt a higher price strategy with differentiation. Aldi should use the below-the-line marketing program to engage its customers. Aldi needs to invest in promotions to promote its brand and products to create awareness in the public which will help in boosting sales. There are there marketing programs that Aldi should use which include; targeted emails to customers, social media and public relations and media relations.