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Background of the company

Discuss about the Integrated Marketing Plan of ALDI.

Marketing refers to presenting the product features to the target market to influence them to make a purchase (Vargas, 2013, p.2-10). It is, however, a critical element that has received a new focus by most institutions around the globe. And the primary contributing factors for the application of sophisticated channels includes the development in the field of technology, changes in customers’ preferences and tastes and further the increasing level of rivalry among firms in the industry. Marketing indeed is an aspect that needs more focus than ever.

Simply, the report has analyzed various aspects regarding marketing strategies used by Aldi stores in Australia. The most important area that was explicitly covered in the report is the marketing approaches that were applied by the company dating 50 years back after the establishment. It also focused on the current and suggested future marketing options that can lead Aldi Australia into success and expand its operations across the borders. In doing this, the paper has begun with a summary that has given an overview of the main ideas discussed, followed by the introduction, company background, marketing analysis, conclusion and recommendations respectively.

Aldi Australia is an organization that has operated in the grocery industry for long and has recorded significant success (Pash, 2016). The company was established in Australia since 2001, and from that period, so many changes have been occurred. It has more than 400 stores with a workforce of about 9,000 employees deployed to work in the various stores (Chung, 2015). This company is however known for the sale of quality products at a relatively low price. It has faced stiff competition from other players in the grocery industry like the Woolworth and Coles (Chung, 2015). Aldi have survived with the application of low pricing strategy. The current rating reveals that Aldi has succeeded to meet customers’ needs, especially the low and middle-income earners. This advantage has resulted in a positive market response, where an average of 6 million people's shop in the stores within one month.

This part involves a research that primarily aimed at identifying Aldi marketing approaches since it began. However, the understanding of the internal and external business environment is fundamental to the development of sound and efficient operational strategies (IBIS world, 2016). Such plans significantly help in overcoming the stiff competition on the market.  Some of the appropriate analytical tools applied to establish the facilitators and hindrances of the business include the SWOT analysis, PESTLE analysis and Porters five forces (James, et al. 2011, p. 212-220). A clear understanding of the metrics constituted in these environmental analysis tools will enhance the establishment of appropriate marketing strategies. Apparently, these are just part of the tools Aldi has relied on as well as determined staff to come up with effective marketing strategies that have resulted in the success. It is noted that Aldi provides its products at a discount rate of about 25% and has further diversified to offer a range of non-grocery product (IBIS world, 2016). This strategy is part of a measure to keep off new players who enter the market since taking such pricing strategies might result in losses.

Marketing analysis

As earlier noted, Aldi has significantly relied on the marketing research and environmental assessments to establishing solid marketing strategies that have seen it expand and grow. Currently, the company more than 7,000 stores across the world. It thus implies that the marketing strategies enacted have been fruitful. Based on Australia economy, the changing consumer needs, technological developments, government regulations, the level of competition, and others forced Aldi to apply the following marketing strategies as discussed below (Zarkada& Fraser, 2002, p. 282-299).

Marketing mix strategy: Here, Aldi has been employing product, price, place, promotion and positioning strategies. Notably, these elements have been the critical approaches that have culminated to the achievements seen today.  To start with, the company has limited product brand of high quality at the lowest price. The low pricing strategy was a well-planned measure that was customer centric (Lamb, et al. 2012, p. 125-300). Because a large population of Australia is characterized by high sensitivity to price changes, the strategy of offering the goods at relatively low prices has been a disadvantage to others. Also, the establishment of more stores in the entire parts of Australia enhanced the reach of the products to more customers. Still, on the pricing strategies, Aldi have been applying different modes just to ensure the targeted market is achieved (Jimenez, 2004).

Advertising: Aldi has also significantly invested in advertising initiatives that have resulted to the information reach to the target market.  And here, the Radio, Television were immensely used. To be specific, the company has jointly used social and electronic sources of media to ensure that sales and marketing objective is achieved. The combinations of both these forms enhanced integrated marketing communication in that a system that fails to generate the desired impression is boosted by the other (Vargas, 2013, p. 2-10). The grabbing message in both the advertisement focused on the prices, availability and the quality of the products. As a result, price sensitive customers’ who purchased a product from the store vowed to come back and hence customer loyalty (Thomas, 2011, p. 141).


Also, Aldi uses the social media and the internet to inform the customers about the products. Currently, social media has been immensely used by the organization to reach the youthful population. With the technological developments, most organizations have incorporated it in the operational processes and gone further to automate most of the transactions. Similarly, the marketers currently use the internet, Face book, Skype, Twitter, and more to present the product features to customers. Aldi is among such institutions that have not lagged behind in technological advancements. Its products are also marketed through these channels to ensure consumers timely access the information.

The marketing strategies employed since it began

Publicity and public relation: Publicity and public relations have also played a critical role in promoting the products and services of Aldi. A healthy connection with the customer, generally the society positively popularized the company. Also, the coverage on the social media played an equal role in presenting the company’s products to the customers. For instance, an interview held by “The Grocer” and “The Financial Times” exposed the company to various clients. It, therefore, created a positive endorsement for the products of the enterprise. The most important part to note about these marketing strategies is that their efficiency emanates from a keener analysis of the SWOT, PESTLE and the Porters five forces. This assessment considerably resulted in a proper balance of forces behind these tools and aligned the plans with the organizational abilities and goals (Fred, R. 2009, p. 5-57).  . The SWOT analysis should be used to assess the unutilized opportunities by Aldi. The understanding of the available opportunities can help Aldi develop sophisticated marketing strategies and further modify the products to suit customers’ needs (Miller, et al. 2002, pp. 40-43). Still, from the SWOT, Aldi can identify its strengths and work to perfect on them and lead the organization towards a right course. On the other hand, the Porters’ five forces will be instrumental in examining the external environment.  It is from this examination that an appropriate marketing mix and sales promotion mix will be adopted to overcome the stiff competition on the market (Grant, et al. 2014).

Currently, Aldi is still performing well. However, the ever-changing technology imperatively demands adoption of management, operational and marketing change (Roberts, 2004).  The embrasure of technology and incorporation into business process helps to solve just a fraction of the challenges facing the most organization. It substantially addresses internal environmental requirement, but the external ones still require more assessment and planning on effective ways of liquefying the adverse effects on the organization's success (Charles & Kareth, 2008, P. 142-311). It is from this assertion that the report proposes some changes on the marketing strategies currently used by Aldi. Aldi however, has to come up with the following marketing recommendations:


Aldi should first use more of the Advertising. It is apparent that the company has combined several forms of marketing. Because most of the target market for Aldi is the families, these people can mostly be reached through the radio and television. And it can be managed through booking for the message to be aired during a popular Television or Radio program. This strategy will consequently attract new customers (Vargas, 2013, p. 2-10).

Strategic marketing options for moving forward

Secondly, Aldi should also embrace personal selling. This strategy is where talented marketers are hired to move on the ground and meet with customers. With the products provided by Aldi, these marketers will be obligated to offer some demonstration regarding the use of the product. The strategy can, however, be successful if some products can be offered as free samples for the customers to taste the quality. Managing this strategy is possible through hiring experienced and talented individuals to lead the process.

Thirdly, Aldi should regularly offer a discount to its customers. Being a cost leadership company demands more regular changes that are meant to benefit customers. Because of its ability to influence suppliers to supply products at a lower price, it should also negotiate for other deals like discounts offering. Such discounts should be directly passed to the customers. This strategy can be successful through establishing a good relationship with the manufacturers as well as the customers.

Lastly, Aldi should embrace social marketing. It can be through committing itself to supporting programs that are intended to benefit the society. Also, it should identify with supporting the needy and donate to the non-governmental organizations established to promote the society. Moreover, it should establish a healthy relationship with the stakeholders. By doing all these activities, Aldi will create a good reputation and will consequently benefit from the goodwill generated by increased customer base.

Conclusions

In conclusion, the business understanding of the intimate and outer surrounding can enhance the establishment of appropriate sales and marketing strategies. Marketing is fundamental to any business organization because of the numerous contributions it has made to most companies. And the use of pricing strategies, have assisted Aldi to gain substantial market share in Australia. For example, the company offers grocery products at 25% lower than the competitors. Indeed, these are high-quality products, at a low price. So far, pricing has been one of the best marketing strategies that Aldi have used for long necessitating for the use of other modern marketing approaches to caution against the entrance of new player who might apply them and pose a significant challenge. Indeed, the current methods are still approaches, but the dynamism in the market just requires a performing company always to remain at the top in introducing changes to propel the company towards success.

References

Charles, W.L. & Kareth, R.J.  (2008). Strategic Management: An Integrated Approach. Cengage Learning, P.142-311

Chung, F (2015). The Supermarket switch is on as Aldi takes top award in customer satisfaction. Retrieved on 18th Jan, 2017, from: https://www.news.com.au/finance/business/retail/the-supermarket-switch-is-on-as-aldi-takes-top-award-in-customer-satisfaction/news-story/3ce35413bb26d01118190010c9cb0916.

Fred, R. (2009). Strategic Management: Concept and cases. 13th edition .Prentice hall: Pearson, p. 5-57

Grant, et al. (2014) Contemporary strategic management: an Australasian perspective, 2nd ed. John Wiley & Sons Australia, Ltd., Milton, Queensland. ISBN 978-1-118-36255-6 Retrieved on 18th Jan, 2017, from: https://au.wiley.com/WileyCDA/WileyTitle/productCd-...

IBIS world, (2016). Supermarkets and Grocery Stores in Australia: Market Research Report. Accessed online on 18th Jan, 2017, from https://www.ibisworld.com.au/industry/default.aspx?indid=1834

Jimenez, K.  (2004) ‘ALDI Hits State with Price War Promise’. The Australian, June 23.

Miller, D, Eisenstat, R & Foote, N. (2002) ‘Strategy from the Inside Out: Building Capability-creating Organizations', California Management Review, vol. 44, no. 3, pp. 40-43.

James, C., Paul, T., Debra, & Paul, S. (2011). Business analysis techniques: 72 essential tools for success: British Informatics Society, 10(3), 212-220

Lamb, C., Joseph, F., Hair, J.R., & Carl, M. (2012). Essentials of Marketing (7th ed.) Mason, OH: South-Western, Cengage Learning. pp. 125–300.

Mitchell, S. (2004). Aldi Tops $1bn Mark: Australian Financial Review, June 25.

Pash, C. (2016). Aldi opens its battle with Coles and Woolworths in South Australia. Business Insider Australia 3 February 2016. Accessed online on 18th Jan, 2017, from https://www.businessinsider.com.au/aldi-opens-its-battle-with-coles-and-woolworths-in-south-australia-2016-2

Roberts, J. (2004).The Modern Firm: organizational design for performance and growth, New York: Oxford University Press

Thomas, R. (2011).Diversity in European Marketing: Text and Cases. Springer Science & Business Media, p.141.

Zarkada-Fraser, A & Fraser, C. (2002)‘Store Patronage Prediction for Foreign-owned

Supermarkets’.International Journal of Retail & Distribution Management, vol. 30, no. 6/7, pp. 282-299.

Vargas, R.D. (2013). Integrated Marketing Communications: An Effective, Comprehensive Approach, Business Ventures. 5(5), pp. 2-10

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