Aldi's Marketing Plan Essay: Expanding In New Zealand.

Aldi is a leading supermarket chain or retail stores that deals with groceries. It generates a turnover of around $85 billion operates in Spain, Germany, Australia, Austria, USA, UK, Ireland, France and Slovenia.

The task is based on introduction and establishment of Aldi in New Zealand. The company wants to expand its business to New Zealand by offering food products at initial stage. The whole report is divided in seven parts from introduction to conclusion.

Aldi's Background, Mission, Vision and Values

The report brings out a marketing plan of Aldi for New Zealand in to expand and increase its customer base. The report has a brief elaboration of company’s background, mission, vision, value, and attributes and wide variety of products offered by the company in Australia and what would it offer in New Zealand. The company has decided to start its establishment of retail stores with the introduction of food products. The report analysed the competitors and what features there product has with what promotional strategy it uses to reach the potential customers. Task 3 elaborates and undertakes strengths, weakness, opportunities, and threats of its marketing strategies. It was found from the case study that the company uses humour and emotional promotional strategies to provide them with product at competitive prices. Further, the report discusses marketing mix with product differentiation such as what core product it offers actual product and its augmented product. At last, the company undertakes marketing activities such as several promotional activities and it is important to develop negotiation skills to attract the customers (The telegraph, 2018).   

Aldi is founded by Albrecht family headquartered in Batavia and established its first store in Germany. It offers great quality with low prices goods to the customers. Currently, it operates more than 1600 stores in 35 states and manages a workforce of 25000 people.

To provide the customers with those products that ensure high possible quality goods with low prices. The main objective of the company is to expand the business and grow its market share (Aldi, 2018).  

To provide premium quality goods at low prices with an ideology of five different attributes. The attributes are excellent quality, outstanding value, and superb special purchases, with huge savings (Aldi, 2018).

Although the company a wide range of food and non-food products at a considerable value which includes kitchen appliances and seasonal items for furniture and gardening processes. The company maintains its position in the global market by providing superior value and quality to its customers that also ensure that these products are of highest possible quality with guaranteed prices (Aldi, 2018).  

The company offers food and non-food products to the customers in Australia. The products are refrigerated items and non-refrigerated products such as vegetable snack packets and fruit, humus with single-serving guacamole (Aldi, 2018). More fresh and healthy products include-

Veggie noodles and sliced fruits.

Instant cooking and other organic fresh meats including chicken breasts.

The company wants to establish a new store in New Zealand. To launch new products in the new store for the New Zealand. It chose to offer food products and convenient items such as baked goods and gluten-free bagels. The product portfolio also includes milk alternatives that includes almond milk, soya milk, lactose-free milk, and the coconut milk. For new product launch, fresh, organic items can be used to produce the meat items (KPMG, 2014).

Competitors	Strengths	Weaknesses	Product features	Promotional strategies
Woolworth	· considerable share of New Zealand`s market nearly 45 percent (Woolworth, 2018).	The supermarket`s duopoly between the foodstuffs has affected the producers and growers (Woolworth, 2018).	This brand accelerates innovation in Business drinks. Convenient shopping experiences and differentiated food customer propositions are some another features (Woolworth, 2018).	It aware people socially and with the help of mobile app. Twitter, YouTube, and Facebook that target niche market through positive marketing (Woolworth, 2018).
Countdown	Was first to convert its operations in new format that have lead double digital growth in sales (Case study, diversity Awards NZ, (2018).	The market suffers from the inflation by applying GST on food. Intense competition can entice the customers towards superior products (Case study, diversity Awards NZ, 2018).	Innovative use through technology whether it is electronic payment, self-checkouts, or product barcodes (Case study, diversity Awards NZ, 2018).	The company is named as New Zealand`s direct marketing of the time.   This recognition drives insight-driven direct marketing camps that can connect and generate business results.

According to the case study, the central idea of Aldi`s marketing is competitive pricing. The product offered in New Zealand is different which groceries is.   

Product and Portfolio Offered by Company

Aldi strives to operate through economies of scale that lead to bulk but gets advantage to sell the products at most competitive prices. Apart from cutting cost, the company uses multi- promotional actions such as “Like Brands” and ‘Swap & Save’ campaigns to improve the brand perception.

Aldi has introduced marketing strategy where it offers certain different products on the particular days of the week. Additionally, it encourages two-way communication process with the customers through Facebook, twitter and direct mails (Barrowclough, 2016).

The company has initiated aggressive marketing campaigns. Moreover, it undertakes to communicate to loyal customers. Apart from this, the company also uses advertisements to make popular its well- established brand.   

Most of the advertisements are humour-based that creates emotional connection and confidence to influence its target market. Aldi is very efficient in managing its marketing-mix that enables the company to provide self-owned products with high quality at low possible prices.

Other products such as bathroom accessories, kitchen appliances, and household equipment are not permanently available for all time in the store.

Aldi still needs to improve its marketing strategies so that it can enhance the market share and can withstand among all the competitors.

As competitors such as Countdown has been awarded for its direct marketing strategies in the country. It has created a threat or obligation for the company to formulate such strategy that can be more powerful than Countdown`s strategy. The company can suffer from intense competition, as other powerful supermarkets already exists (Barrowclough, 2016).

The marketing can cost them heavy because the New Zealand`s market already suffers from high inflation rates and introduction of GST has made everything expensive.     

Advertisements that are based on humour and connects to emotions can hurt the value system of any religion. Moreover, it is not important that it will connect and target the whole potential customers. It can just target either young people or the old ones (Case study, diversity Awards NZ, 2018).

The company is offering very limited portfolio of products to the New Zealand market. Aldi only offers food products in the stores. The company`s profit is very much dependent on sales variable volume because as it already serves a limited range of products in New Zealand`s market (Woolsworths New Zealand, 2018).

Although, private labels and other suppliers shall welcome Aldi in the market but its entry will create both opportunities as well as threat for the existing companies.

According to case study, as soon the company finds that their launched food products are successful, they will start offering other products such as bathroom and kitchen appliances that require more investment as they may require more space for their store (Aldi, 2018).

 It needs to invest more in advertisement campaigns to sustain among the competitors. It is important to reach the target market. It is important to undertake the information that how economy of the country is regulated. New Zealand operates on the basis of the demand and supply of the products (Voigt, Buliga, & Michl, 2017).

Competitors and Product Features

The company can buy agricultural products directly from New Zealand as importing can cost them a bit higher because the country has efficient production of agricultural products (Woolsworths New Zealand, 2018).    

Intense competition always remain a threat to Aldi. A major threat disadvantage is that Aldi will take too much time to grow in the New Zealand`s market as it will take time to understand the people`s preferences. Taxation and Government policies that can influence supermarket operations in New Zealand (Voigt, Buliga, & Michl, 2017).

After entering the market, it has to search for trained people or it will have to bear training cost.  Employee dissatisfaction is very high because employee should work in multiple shifts. Discounted and poor penetration among the target market can lead to losses for the company (Voigt, Buliga, & Michl, 2017).     

Geographic segmentation

In order to enter the New Zealand market ALDI Company has to main their focus on geographical patterns of New Zealand. New Zealand is actually a part of Australasia and it is also forming southwestern extremity of Polynesia. Many times Oceania term is being used to denote for New Zealand in order to display it in the Pacific Ocean. New Zealand is also referred to as sovereign island country with an area of 1500 kilometers (900 Miles). Its location is around 600 miles from Pacific island area of New Caledonia, Tonga, and Fiji. From density point of view around it is almost 15 people per square kilometer and ranges at fifth position in terms of 30 OECD countries with having 271,000 square Kilometer area. New Zealand is known as one of the coldest countries in the world and in cold, its temperature falls up to -10 C. It also serves mild temperature, moderate sunshine, and moderate rainfall.

New Zealand follows a specific pattern like for age structure

0-14 years: 19.5 % , 15-24 years: 13.30% , 25/54 years: 39.8%, 55-64 years: 11.8% and 65 years above: 15.22 %.

As per female and male ratio: 1016 males per 1000 females

New Zealand usually follows the nuclear family pattern but some portion also prefers joint family trend. An average income level of the middle-class person is around NZ$49,000 in 2016.

New Zealand follows a social class which is actually a combination of both Maori and Western social pattern (Britannica, 2018). New Zealand population believes in a balanced lifestyle by following multicultural nation policy and a life which is full of a relaxed environment (Herald, 2008).

These populations always prefer high-quality things within average price and are only ready to pay if they feel that the product is offering little bit more benefit from its purchase price.

As per the segmentation of the market, ADLI will mainly focus on the family instead of targeting gender wise of age wise (Kumar, Volz, Alspach & Bus, 2010). As ADLI is in the business of grocery, it will maintain its focus on the nuclear family pattern of New Zealand as well as the youngster and try to form a strong customer on this segment with the help of Differentiated marketing strategy which means focusing on two segments at a time (Herald, 2008).

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis

As per geographical patterns of New Zealand, it has been found that the percentage of the youngster and young married citizen’s population of New Zealand is more as compared to another population segment (Tiago & Veríssimo, 2014). Hence ADLI will make use of digital marketing strategy to position their product in the minds of this population because around almost every youth in the form of single or in relationships are connected to the internet, especially with social media. ADLI with use of all the social media tools like Facebook, Instagram, Twitter and even youtube to promote their products because these tools have wide reach with cost efficiency benefits and will offer the necessary platform to position their product in the mind of set audience by conveying their USP message that high-quality products are available in low price. With the help of Facebook, the company can share some of the images of their quality product along with the information about the healthy ingredients present in their products (Smith, 2011). On youtube, it can share a teaser video of their product formation with adding an appealing edge towards their target customer. The company will make use of Instagram in an appealing pattern by adding some of the famous celebrities from sports and can help to offer a platform to have a conversation with the followers

4P’s of the company explains its marketing strategy and it helps how company dominate in the market especially in grocery and food items. This section explains the product, price, place and promotional strategies of the company, and how it strategies this various elements of 4P’s.  

ALDI provides affordable food products that are different from other brands of product and the quality of product is superior to other brands. Main focus of ALDI is to focus on quality of the product. Different supplier of the product provides their products to ALDI. After that ALDI branded those products as their own and also take a control of over the production and its pricing strategy, that ultimately lowering the price of the product in compare to other brands of product in any super market. ALDI have their own specialized brands and which creates positive financial outlook for ALDI (BBC, 2015). Although ALDI’s product mix is low but still it is able to achieve strong customer base with their low price products and convenience.

 Below are the detailed explanations of product strategy of the company:

1. Core product:Food products are the core product of ALDI. Especially, plant-based foods and beverages, sugary snacks, and fruit based foods are the popular items.  ALDI sold different categories of food product, beverage, fermented foods, and some fast food items. Although people are looking for some grocery, items but they purchase a branded food product with the ALDI packaging (Voigt, Buliga, & Michl, 2017).
   
   
2. Actual Product:  ALDI sells products of other manufacturer with their own packaging and labels, thus they easily manipulate the pricing of the product. Thus people purchase food products with ALDI’s packaging with low prices in compare to other super market stores.Apart from food products they also deals in fresh products and vegetables, health and beauty products, electronic products, cloths, stationary, soft tools, household goods etc.
   
   
3. Augmented Product: ALDI provides best service to its customer with the product, such as easy refund options, heavy discount, low prices, food coupons, and all the things on low prices.

ALDI has strong customer base because of their low pricing products and with their own brand names that is not available in other super market or any other competitor. They follow several tactics in the pricing strategies. These are as follow:

1. ALDI using unit price strategy for groceries items that any customer can compare with other products.
   
   
2. ALDI uses Penetration pricing strategy that means they offer their products on low price in compare to other competitors.
   
   
3. If competition is high in the market they lowering their price in compare to other competitors and they also focuses on purchasing products in bulk, thus they have more bargaining power with suppliers, and thus they can easily transfer these benefits to the customers (Lamey, Deleersnyder, Steenkamp, & Dekimpe, 2018).
   
   
4. Company also using Psychological pricing techniques that is refer to minor change (decrease) in the price of products thus it impact the psychology of the customers. Such as instead of $5, they can charge $4.85 for a product.
   
   
5. Actually ALDI playing in the market on the concept of Loss leader pricing tactics that means it offers its non-products on lower prices thus they can attract and bring customers to the store and then sell their groceries products on high rate (Souza-Monteiro & Hooker, 2017).

Intensive Distribution: ALDI groups focuses on opening their stores in populated area. Main purpose behind this is to they can easily transport their products to one place to another. They also sell their products on online portal. Actually, they mainly focuses on those areas where they can transport their products easily form supplier and can attract people in mass for groceries items (Emsell, 2011). Although ALDI sale necessary and basic products that are needs of human beings, but they target to open store in urban area. Therefore, their main target is to open their stores in rich population. They also try to maintain the regional appearance and thus they keep their name accordingly, such as a store in Switzerland is known as ALDI Suisse (Brook, 2018).

Marketing Mix and Promotional Activities

In Australia, ALDI manly focuses on print media, electronic media, display media, and online media for promotion. They also use emails for their promotion through they inform their customers about their offers and schemes and attract their customers for visit in the stores and encourage them for purchasing (Berman, 2015). Although these are the few important channels of promotion for ALDI:

1. Advertising: ALDI mostly focus on TV advertising to attract people towards their sales stores. Actually they open their stores in those urban area where most of the people working and they watch TV at home. Even female members of the house also watching TV that helps ALDI to promote their groceries items to the family members in Australia.
   
   
2. Sales Promotion:ALDI uses above the line promotion and below the line promotion strategies. They offers heavy discount and coupons for their customers, thus they can regularly visit in their stores. For sales promotion, they use social media such as Facebook, twitter, or advertising on Television channels for their sales promotion (Bolton & Shankar, 2018).
   
   
3. Online and Social Media Marketing: They can use Facebook or twitter for advertisement and for their sales promotion. Actually, company can also use e-mail marketing strategy for attracting people towards their stores.

ALDI mostly focuses on online promotional strategies and advertisement through Television. Therefore, they can reach to maximum people. Through these promotional channels, they also focus on sales promotion through distributing coupons and membership cards to their customers for motivating them for regular visits in stores for purchasing their products (Woolsworths New Zealand, 2018).

1. Online and social media Sales Promotion strategies: ALDI usage social media for advertise their products and urge people to visit in their store, because they are providing best quality products on low price in compare to other competitors. They also use e-mail marketing strategies to tell about their customers about their coupons, offers, and schemes about the products and induce them to visit in the stores for purchasing the product.
   
   
2. Sales Promotion through TV advertisement: ALDI can use TV advertisement for attracting customers and for their sales promotion as well. The ethos of Aristotle’s marketing persuasive techniques said that people follow their heroes and listen what they said to them (KPMG, 2014). Thus, for example ALDI should hire a superstar of New Zealand and endorse them for advertising about their sales promotion, thus people attractively listen him/her and visit in their stores.

Ready with backup data

German people always believe numbers, so the creative director must support their statements along with data back up in order to create a trustable business deal environment. These data will provide a strong foundation in case of any cross-questioning because cross questioning forms the base of the business deal and provide the necessary information about whether the particular deal is connected to their demand or not (Herbst, Voeth & Meister, 2011).

German culture is all able clarity, so creative director must put all the information regarding terms and conditions of the deal in a pattern which do not consume much of time in understanding the matter because for Germans time is considered as one of the most important aspects in case of any meeting or business deal.

In this option, creative director has to just put them all the important information in the form of data on the negotiation table and just have to support it in the form of statements and let the data do its work (Faulconbridge, 2008). But care must be taken that the data should be arranged into a particular direction which can provide the required motive for the deal or meeting.

In this the creative director will address or greet the German owner with their full title name in order to make him feel comfortable with the deal because in German culture if a person is not being addressed by his/her full title named they consider it very disrespectful and will surely impact the deal (Trötschel, Hüffmeier, Loschelder, Schwartz & Gollwitzer, 2011). This will create a win-win like situation for both the parties on the negotiation table.

German people always believe in trust in any kind of business deal and in case of product deal, the trust can only believe through back services. Here the creative director will first of all try to listen all the expectation from the other party, try to understand how their product can fulfill the demand of the other party and then try to gain the trust of the other party by offering them a written document in which they will mention that in case of any issues their company will take the necessary responsibility related to the product.

Conclusion

From the above marketing analysis of Aldi, it can be concluded that deciding to invest in New Zealand. The task or report comes with the promotional activities and the product that is to be offered in New Zealand. The report brings out discussion on segmentation, target market, marketing mix of the product. It also discusses on SWOT of the marketing of the product in New Zealand. It describes communication and negotiations skills to convince the customers to purchase the products.    

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