Aldi in Australia - 1

Topics: Marketing, Aldi, Pricing Pages: 9 (2780 words) Published: October 20, 2012
Aldi is a German discount retailer which has entered the grocery industry in Australia since 2001. It offers customers very low prices on a limited range of groceries to attract low and working classes. Although “the Australian retail grocery industry is one of the most concentrated in the world, with the two major chain stores, Coles and Woolworths”( Walker, 2004, p. 317), Aldi becomes the another force by its lower prices products and other advantages. This critique will first analyze micro and macro marketing environment. Then it will illustrate overview of Aldi’s market share in Australia and redesign its marketing mix under 7Ps. Lastly, several recommendations will be stated.

1. Marketing Environment Analysis- Micro Trends
As Kotler and Keller stated (2011, p.34), marketing microenvironment refers to forces which are close to a company and have an impact, positively or negatively, on its customers. It consists of the company, suppliers, marketing intermediaries, customers, competitors and publics. 1.1 Trend One: Customers

Customers play an essential role in a company’s marketing. Marketing decision makers always make a strategy to attract their target customers and try to establish a close and positive relationship with them. According to Kotler and Armstrong (2005, p. 124), “Customer markets consist of individuals and households that buy goods and services for personal consumption”. Therefore, a company’s executive officer may make a targeted strategy to satisfy one or more specific groups of consumers.

As Walker (2004, p.326) pointed out, Aldi offers “consumers very low prices on a limited range of groceries”. Although the range of groceries is limited, Aldi choose the best seller brands as their major products. If a brand cannot achieve a satisfying sale, it will be replaced by another one soon, which means that Aldi always choose products that most of its customers can be satisfied, not only because of the competitive price, but also because of other factors, such as good quality and so on. Meanwhile, the low price strategy attracts the people who do not have quite much budget on their daily lives. Those customers can easily purchase everything they need on their daily lives at a relatively cheaper price. In addition, Aldi’s stores are located almost everywhere. Thus, customers are more likely to do daily shopping in Aldi as its stores are close to the place they live. On the other hand, the customers may not have as many choices as they do shopping in other supermarkets like Coles and Woolworths, since the range of groceries is limited.

1.2 Trend One: Competitors
As Kolter and Armstrong mentioned (2005, p.125), if a company should provide more advantages to satisfy their target consumers than its competitors, it may take more market share and develop successfully. According to Clark and Montgomery (1999, p.68), making differences between a company itself and its competitors can help the company to enhance the ability of its competition in the market. For instance, a company can make a unique strategy or provide a specific service which can show its different characteristics from other competitors. Thus, these differences may gain more good publicity.

According to Zarkada-Fraser and Campbell (2002, p.284), there are several differences between Aldi and its competitors. Firstly, products’ prices from Aldi are always lower than other relative companies. It also keeps its prices stable. Instead, its competitors, like Coles and Woolworth may have some special price products in a very short period. And the discounts may change soon. As a result, this pricing strategy helps Aldi gain consumers. Secondly, the brands of products that Aldi sells are not as famous as ones its competitors sell. Aldi claims that 80% of products are made in Australia (Flanagan, 2001, p.3), most of which are from the same manufactures with some famous brands in other supermarket. Therefore, the qualities of its...
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