Influence Of Consumer Behavior And Environmental Factors On Lidl's Market Segmentation Strategy: An Essay.

1.Use the model of consumer behavior to identify those environmental factors most likely to affect the consumer decision making for a specific product or service.

2.Use the segmentation characteristics to identify and describe market segments.  

Factors affecting consumer decision making for specific products or services

Environmental Factors of LIDL

Lidl does not only sell food or groceries, it also sells clothes and apparels as well. But it is very hard to find the trial rooms in the supermarket. Majority of the population want to but everything in only one shop, rather than visiting different shops to complete their shopping. If they try the clothes on the floor of the super market, this can also put a negative impact on the sales of the company. Another most important environmental factor which is relevant to the customers of the product or services is that the natural climate. The natural climate of Cyprus is very much different from the other countries (Anti?, & Bogeti?, 2015). The summer seasons are very much hot and long. The Cypriots does not like to walk long and do their shopping they prefer to move around in their private cars. So Lidl has to provide big parking slots for its customers. In the previous year as it was very cold, Lidl must respond to the climatic change of whether and start selling heaters for the upcoming winter seasons (Hovav, 2015).  

Customer Factors of LIDL

An excellent customer service provided by a company depicts the customer satisfaction approach of an organization which also determines that the company is full determined to dedicate to deliver the full value for the customer’s investments. It is something which might help or improve the legal aspects of the organization as well. The service standards which are generally maintained according to the international standards, which contributes to the customer satisfaction and meet out their expectation. The three most important factors which are relevant to the products and services offered by the organization (Kita, & Grossmanová, 2014).

New shopper’s behavior and smart shopping has made a point in the national consciousness. Retailers have laid down the new foundations in the establishment of ideas that cheap products does not mean that they are the most degraded products, and technological changes also put the control into the hand of the customers. A better shopping experience also influence the shoppers. The discounters have recently made a few dramatic changes to their shopping experiences and the propositions. The quality of the fresh fruits as well as the labels of the products and the whole environment also results in a more enjoyable and positive experience for the shoppers to shop the products. Lidl has a very strict policy which is used in order to the confidentiality of the information of their customers which they always collect through various methods. The employees of the company are prohibited to leak or use any of the information for any benefit purpose. The customers of Lidl feel that their information are not used with other attentiveness by the company if compared with Tesco and Sainsbury (Hess  & Ring, 2014).

Market segmentation characteristics for Lidl

Customer Buying Behavior

Consumer buying behavior impacts when a consumer is passing through a complex buying behavior. When a consumer purchases certain things very frequently he will definitely know the difference between the brands available. The consumers show case a very complex pattern of behavior when they are purchasing something very expensive. Such consumers does not know much about the products and they want to learn or investigate more before buying something. This is the only reason why the complex buying behavior is most consistent with the level of involvement (Schmid, 2018).

Consumer decision making process.

The first stage for the processes is working on the things that what are the customer needs. If the customer feels that something is missing then the company should address it back to make the customer feel normal. The second stage is the information search where the company gathers information about stuffs from the people via recommendations from the previous experience with various products. The third stage is the evaluation for the alternatives where questions are asked related to the products and services offered by the company. 

Segmentation

Lidl targets the lower, middle as well as the higher class customers. Lidl has adopted many marketing strategies to create and maintain the brand visibility in the market. To adopt both below-the-line as well as above-the-line marketing strategies so that it can attract the mass consumers. It has also launched various advertisement campaigns by printing and other media visuals in several channels of televisions, radio, magazines, board hoarding. Thus the company believes in the process of digital marketing and it sends messages via SMS to update their customers about their latest discounts on various products and services.

Target Market

Customer behavior in demographic variables of Lidl- Customers are offered a tremendous number of choices with the products. Some people restrict the choices and are oriented in becoming long life customers of the company. Consumer behavior in the retail market is therefore characterized by the customers (Vogel etal., 2018)  Determining the age and segmenting the consumers can help in increasing the profitability of the company.

Six criteria for an attractive marketing segmentation are given below.

• Homogeneous – It means that the consumers in each segments are similar in the terms of need, demand and characteristics.
• Heterogeneous – This part demonstrates that the customers in the market are divided into series of different needs.
• Measurable- Each department will be having a minimum number of requirements for the financial returns of the company. Therefore it is very necessary to only consider the segments which are substantial enough to be put to interest.
• Accessible- Each segments have to be reached and communications have to be made on the efficiency basis.
• Responsive – The main motto of this segment is to develop a unique marketing mix for the specified target markets. If the segment is not much responsive then it can be combined with some other similar segments (Willems,  Leroi-Werelds, & Swinnen, 2016).

Target Market Strategy

All the organizations need to focus in its marketing efforts and develop unique marketing mix which will match the needs of the market. Without a proper and clear target market the organization will have an unclear competitive position. Therefore defining a clear target market it would be very difficult for the company to bear success. Therefore Lidl should focus on all the resources in the target market.

Environmental factors and relevance to customers

Positioning

The perceptual map of Lidl in comparison with Aldi and Tesco based on the above stated criterions are as follows:

Fig 1. Brand positioning of Lidl

(Source: Self – made)

Perceptual Map of Lidl based on two components which are Price and Convenience.

Fig 2.Perceptual Map of Lidl based on two components which are Price and Convenience.

  (Source: Self – made)

Lidl currently differentiates itself in the market by offering a good quality product at a very low and reasonable price. Therefore we can use the division in the price and quality of the products to segment the UK grocery market. As we can see from the positioning grids which has only focused on the convenience and price, it is recognized that it was more important for the company to focus more on the market trends. The customers previously may had focused on the price of the products but the customers are presently focusing on the freshness of the products. Therefore from the above grid it can see that Lidl has made an improvement and has focused in the recent market change. That is the reason why it has been placed above the competitor brands Aldi and Tesco. 

References

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Hovav, T. (2015). Business models analysis of Finnish food retailers-Case K-chain, S-chain and Lidl-How to determine right channel to enter grocery retail market as a new supplier with new products in Finland.

Kita, P., & Grossmanová, M. (2014). Reflection of Bratislava retail network in selected aspects of consumer behaviour. Business: Theory and Practice, 15, 279.

Kochova, J., & Drakulevski, L. STRATEGIC PROFILE OF THE TWO LEADING DISCOUNTERS IN THE UNITED KINGDOM: ALDI AND LIDL. ?? ????????? ????????-??????, 203.

Hess Jr, R., & Ring, L. (2014). Off-price versus price-off: use of discriminant analysis to identify competitive differences across retail formats. International Journal of Retail & Distribution Management, 42(10), 902-928.

Schmid, S. (2018). Internationalization of Business. Springer International Publishing.

Sequeira, T. C. F. (2013). How to optimize the traditional retail market for FMCG sector? (Doctoral dissertation).

Thompson, C., Cummins, S., Brown, T., & Kyle, R. (2013). Understanding interactions with the food environment: an exploration of supermarket food shopping routines in deprived neighbourhoods. Health & place, 19, 116-123.

Vogel, C., Ntani, G., Inskip, H., Barker, M., Cummins, S., Cooper, C., ... & Baird, J. (2016). Education and the relationship between supermarket environment and diet. American journal of preventive medicine, 51(2), e27-e34.

Willems, K., Leroi-Werelds, S., & Swinnen, G. (2016). The impact of customer value types on customer outcomes for different retail formats. Journal of Service Management, 27(4), 591-618.