The Marketing Objectives of Albrecht Discount - Case Study Example

Executive Summary The report which looks at the marketing objectives of ALDI has identified the fact that ALDI looks to work on the same business model of being a low cost provider and aims to improve its market share through better penetration and development of new promotional methods. ALDI thereby has segmented the market for its products where highest relevance and weight age is being given to psychographic as it helps to understand the culture which is required to ensure that people purchase products from shopping malls. In addition to it ALDI have determined the target market where the focus is primarily on housewives and office goers which is supplemented by all other section of the society. This has helped them to ensure a differentiated positioning statement where they aim to provide the customers products at the lowest cost. The overall strategy has further being depicted through their market mix where every aspect has been considered. The use of different promotional methods and tools has helped to ensure that the overall objectives are achieved. To support their development an action plan and a time frame has been developed which will require proper monitoring to ensure that the long term goals are achieved. Thus, on the overall basis ALDI will be able to achieve the bigger picture and will be able to grow its business and gain operational efficiency. Table of Contents Introduction 3 SWOT Analysis 3 Opportunities 5 Market Entry 6 Segmentation & Target Market 6 4P’s of Marketing 10 Distribution 13 Strategies 14 Market Positioning 15 Motivators 15 Obstacles 15 Cultural Environment 16 Competitors 16 Consumers 17 Suppliers 17 Advertising 17 Action Plan 18 Time Line 19 Measurement & Control 20 Conclusion 20 References 21 Introduction Organizations for their long term success looks to develop marketing strategies based on their internal competencies and aim towards developing the entire market so that they are able to target the correct audience. This will require that organization understands the market clearly and based on the identification of the market develops strategies through which operational efficiency can be gained. This report analyzes the global marketing aspect for ALDI which is an Australian retail chain player. The report based on the opportunity analysis for ALDI looks to formulate the marketing strategies which will include price, product, promotion and place strategies. This is supported by the clear identification of the target market, the segmentation and positioning strategy along with the manner in which the different resources will be used in the most effective manner. This has helped to chalk out a plan which will look to provide the details based on which the action plan will be developed the time horizon within which the organization aims to achieve the desired objectives and the method through which control will be exercised. This will thereby help ALDI to develop a complete plan which will help in the formulation of strategies through which the long term success can be determined. This will act as a point through which the organization will be able to ensure better use of the resources and will be able to accomplish its marketing objectives. SWOT Analysis The SWOT analysis as identified is as Strengths Cost advantage as bulk purchasing has helped to ensure economies of scale Attracting and retaining customers through different promotional schemes and loyalty programs Increasing market share due to deeper penetration and better control of market Competitive pricing helping to stay ahead of competiton Weakness Lack of online presence Increasing risk due to lack of diversification Lack of advertising Opportunities Increase in the use of technology Work in markets with a high disposable income Improve in the different promotional tools and loyalty programs Threats Increasing competition Economic slowdown Product substitution Opportunities Based on the analysis of its internal strengths and external opportunities which is faced before ALDI the organization has identified the different areas and fundamentals through which they can improve their performance. This has helped ALDI to identify the following marketing objectives To become a cost leader where they look to offer products to customers at the lowest possible price. While looking to adopt the strategy ALDI has focused on ensuring that quality at no cost will be compromised and instead the organization will look towards eliminating the middle man and ensure that the extra cost which was incurred due to the presence of middle man can be passed on to the customers (Firoziyan, Hasangoli & Stiri, 2009). This will help to develop direct relationship with the other suppliers and help to provide products at the most competitive rates. To develop new and better promotional scheme which helps to attract people from all segment of the society? ALDI aims to develop promotional scheme which will improve the retention of customers and will provide an opportunity through which market penetration can be improved. This mechanism will help them to increase their market share and provide an opportunity to be better placed in the market. To target and enter new markets where the disposable income is high. This will help ALDI to reduce the risk as diversification and spreading the business to different corner will act as a point through which better opportunities of future revenues can be ascertained. This will also ensure that ALDI is able to improve its presence and will be able to find out the different areas through which operational efficiency will be achieved. Market Entry ALDI while looking to persuade with the different opportunities that the market provides will look towards entering other market. The market entry strategy will be focused on building new partnerships which will be established with different distributors along different countries. The organization will look to enter into partnership with other retail players in Asia and aim towards ensuring that a market is created. The overall strategy will be focused on using the existing chain and thereby building the long term relationship through which better effectiveness will be gained. The market entry strategy will be aimed at ensuring that the government norms and rules with regards to foreign investments and other are considered. This will help to ensure that the already established business networks is used and will ensure that entering into strategic partnership will serve as a mode of entry into different countries. Segmentation & Target Market Identification of the target market and the different market segments which ALDI is looking to tap will help to develop marketing strategies and will prove beneficial for the business as it will determine the path through which the different internal and external resources will be used (Ismailpour & Ghafarieashtiyani, 2002). Segmentation ALDI based on the different products offerings has segmented their entire market in such a manner that their targeted customers can be easily attracted. ALDI based on the different offerings and developments has looked towards identifying the segmentation of its market based on different factors which is as Geographical: On the basis of geography ALDI has identified its customers to be people from developed and developing countries. The prime reason which has made ALDI to focus on developed and developing countries is that fact that the disposable income of the people in that country is high or increasing. This will provide an opportunity for ALDI to sell different products as it will look to tap people. Along with it tapping the developed and developing countries provides an opportunity to ensure that they are able to cater to a wider market which increases the chances of being successful and ensuring that they are able to penetrate deeper into the market (Coughlan, Stern & Adl Ansary, 2006). The geographical segmentation has further been ensured based on the presence of a similar culture where people look to shop from retail malls which provide an opportunity to work in an already developed culture and market. Demographical: On the basis of demography ALDI has aimed towards people of all ages (Coughlan, Stern & Adl Ansary, 2006). Since, ALDI has products for all age groups it has looked to ensure that their target market is big. The organization focuses on providing necessities along with luxuries which provides an opportunity for the organization to tap every segment of the society who is looking for some or the other product. ALDI further have ensured that their main target is housewives and working individuals as it provides the basic necessities and aims to target mostly women. Behavioural: Based on the behavioural characteristics ALDI aims to attract customers by providing the necessities of life. This includes fruits, vegetables, toiletries and other items which people need each and every day (Coughlan, Stern & Adl Ansary, 2006). The fact that ALDI works on a different phenomenon compared to traditional groceries where people had to place order and got their stuffs packed. In case of ALDI consumers they have to travel the entire store and pick up the items which they find fit and matching their requirements. The organization has ensured sales personnel to assist the customers but requires the culture where people are willing to purchase from the malls. The products are placed at eye level and the customers have to pick those (Brassington and Pettitt, 2001). Psychographical: Based on the psychographical traits ALDI aims at people who have a preference of purchasing products after seeing them. The fact that ALDI works on a different phenomenon compared to traditional groceries where people had to place order and got their stuffs packed. In case of ALDI consumers they have to travel the entire store and pick up the items which they find fit and matching their requirements (Clemons, 2008). The organization has ensured sales personnel to assist the customers but requires the culture where people are willing to purchase from the malls. The products are placed at eye level and the customers have to pick those. ALDI has further ranked the different factors based on the needs and preference so that based on it the correct market can be identified and has helped them to formulate the marketing strategies based on it. The different ranks which have been provided is as Factor Rank Geographical 4 Demographical 3 Behavioral 2 Psychographic 1 The different ranking attributed to the different factors by ALDI helps to understand the importance that is given to different factors. This has thereby helped ALDI to identify both its primary and secondary target audience. It has been clearly depicted that ALDI gives the highest importance to psychographic factors which requires the development of a culture where people will prefer to purchase from retail malls. The organization has given the highest importance to it and based on the target market for ALDI has evolved which is as follows Primary Target Market ALDI on the forefront looks to attract housewives and working individuals who require products which are ready for use and don’t have to undergo the process and cleaning it. Since, ALDI has increased the amount of finished products which can be consumer directly it has started to focus on office goers so that they can purchase the items and consume those directly. Further, the presence of retail store of ALDI all around the space provides an opportunity through which office goers while going home can purchase the products. This has been matched by smaller size packets which ensures easy use and can be consumed at a single time. Along with it ALDI focuses on housewives as the majority of the household decisions are taken by them. Since, housewives determine the budget of the house so ALDI has ensured that the different offerings from them helps to attract the housewives and matches their target requirements by supplying quality products. Secondary Target Market ALDI apart from the primary target audience which is housewives and office goers looks to focus on the all other customers. The organization hasn’t determined any age and looks to target children, old people and men as their secondary target audience. The different products being offered by ALDI are such that it has something for everyone in the society so the organization has determined the secondary target audience based on it. This has also been determined on the footfalls which the retail store receives and the amount of customers visiting the stores gets converted into actual customers. This has helped ALDI to focus on the secondary segment as well as it accounts for 25% of their volume and provides an opportunity through which market penetration can be increased. 4P’s of Marketing The different aspect of marketing mix for ALDI is as follows Product ALDI offers a different range of products which ranges from necessities, to luxuries, food items to durables and others. ALDI looks to provide its customers with all the things under a single roof and is aimed at multiplying the satisfaction level of the customers. This is matched by the fact that the products offered are of the finest quality and special efforts are being made to ensure that customer satisfaction can be maximized through quality offering. The organization while looking to offer a product has ensured that two or three different companies product are kept for the same item. For example wheat the organization has ensured that the product is available under different banner which includes both the branded and the non branded ones (Czinkota & Ronkainen, 2004). This helps to multiply the options for the customers and ensures that the customers are provided an opportunity through which they will be able to choose the one which they prefer (Hamel & Prahalad, 1994). This has given their product credibility and authenticity compared to other products. Price Pricing has an important role in the retail industry as it helps to develop strategies based on it. The organization aims to provide quality products at the lowest possible cost. Since it adds value to a product or service, a price mismatch of under pricing or over pricing may significantly affect the demand and supply of the services and products offered by an organization. ALDI has thereby developed a market mechanism through which they charge a certain profit over the cost which has helped them to keep cost under control. The pricing strategy chosen by ALDI is that of penetration pricing as the organization focuses on everyday low pricing. The company has ensured that the lowest price is being offered is due to the fact that the organization purchases in bulk and sells the same individually. This helps to gain the advantage of economies of scale and has helped ALDI to develop their pricing strategy based on it. Physiological pricing strategies are used for by providing additional discounts when the purchase passes a certain amount which thereby benefits the customers directly and helps to ensure that the organization is able to charge the correct price. Promotion Promotion is a strategy which is used to ensure that customers are reminded, persuaded and inform about the product so that they are able to create lasting image on the mind of the customers (Joseph, 2007). ALDI has developed different promotional methods and objectives through which the targeted customers can be properly attracted towards the products. ALDI has developed a brand equity which has helped to develop the promotional strategy through which it has gained an edge over its competitors and has helped to improve better coverage (Hoffman, 2010). ALDI uses different promotional tools like a) Advertising: ALDI uses different advertising media like to advertise its products on media, radio, magazines, newspapers, brochures, posters and billboards (Platt, 2009). The organization has chosen the advertising media to ensure maximum penetration and reach and has thereby helped to ensure that the amount spent in the direction helps to provide the required benefits that it is aiming at. b) Sales Promotion technique is used to ensure that the customers understand the product and in case of a new product full description and demo about the product is given so that understanding improves c) Personal Selling is taken by ALDI but to a limited extent where the sales personnel assists the customers in helping them to find out the products they need. d) Public relations and publicity is used by being associated with different events which has helped to maximize awareness and has helped to create a halo effect around the brand name (Alvarez & Casielles, 2005) Place Place is the area where the organization looks to sell the product and is important to determine the correct place so that the customers can be correctly aimed at (Harcourt, 2009). Having stores at the correct place will help to attract more and more customers and will thereby help to ensure that the opportunity of increasing sales will improve. ALDI has looked towards developing their business in such a manner that they are able to effectively provide services to its customer by having establishment at major places and junctures. The organization aims to use the different fundamentals and aims to establish the entire network by using the already established network so that business effectiveness maximizes. Distribution ALDI looks to use a channel of distribution from where the organization aims to remove the bottlenecks and middle man. The organization directly aims at selling the product to the customers and is aimed towards ensuring that the products are sold to the end customers. This has ensured that the strategy of providing the product at the lowest cost has helped to ensure differentiation strategy. This has helped to develop the required fundamentals and have ensured better presence. This is supported by the fact that ALDI has looked to open up stores all around Australia and the globe. This is matched by the fact that the stores are placed at major points which will ensure maximum customer footfall and increase the chances of ensuring that the needs of the customers are met. ALDI has further developed its stores at major juncture and places where the population is high thereby enabling them to use the opportunity to develop the entire market and catering to a larger section of the society. Strategies ALDI has developed different promotional methods and objectives through which the targeted customers can be properly attracted towards the products. ALDI has developed a brand equity which has helped to develop the promotional strategy through which it has gained an edge over its competitors and has helped to improve better coverage. The organization based on its needs and requirements have focused on improving the entire working scenario in a manner where they develop better promotional tools and loyalty programs ALDI based on the needs and requirements of the Australian market has framed the marketing strategy where they will use different advertising medium and tools to spread awareness about the product. The overall strategies will be such that it will multiply the use of the resources and will help to ensure better returns for the organization. Market Positioning ALDI has further looked to position it products and offerings differently from other in the market. This has been possible because of the fact that ALDI aims at everyday low pricing and looks to offer quality products at the lowest price. This is matched by the fact that the organization has ensured two to three same types of products from different organization which includes branded and non branded stuffs thereby acting as a point of differentiation from other players in the market (Awni, 2008). This has helped ALDI to position its product differently from its competitors and has helped them to develop their positioning strategy based on their products. Motivators ALDI based on the internal resources and its strengths has determined to be a cost leader and looks to provide the customers with quality products at the lowest price. The organization has already started working on the same direction and increases the chances of being successful in the same direction as the different inputs provides a clear idea about the manner in which the resources will be used. The use of different promotional tools and schemes will further help and assist ALDI in achieving the objectives it has been looking for and will develop the required fundamentals through which the marketing objectives which have been identified will be achieved. Obstacles ALDI while looking to pursue with the strategy of growing their business has to deal with different obstacles which are as The manner which the government rules and regulations with regard to the foreign investment The process through which partnership will be entered and the sharing ratio has to be properly determined The different promotional schemes which have to be used to attract and retain customers Cultural Environment ALDI while looking to function in Asia will have to develop strategies through which the cultural requirements of Asian countries are met. The fact that Asia represents a different culture and is sensitive towards the different requirements requires that ALDI understands the culture and based on it makes the necessary changes. ALDI has to ensure that the strategies developed are after analyzing the cultural requirements and should be aimed at maximizing the opportunities. In addition to it ALDI has to highlight the local culture and will need to transform their business based on the needs and requirements of the local community. Competitors ALDI while performing in Asia will have to deal with both local and international competition from different players like Big Bazar, Food Bazar, Coles, Woolworth and others. This will require adoption of proper differentiation strategy so that the business is able to separate their working style from others. This has been supported by the fact that the unrecognized and traditional grocery market is still prevalent in Asia. This multiplies the complexities and risk and will require identification of strategies to deal with those. Consumers ALDI in a similar manner looks to focus on housewives and office goers. The prime reason which has made ALDI to focus on developed and developing countries is that fact that the disposable income of the people in that country is high or increasing. This will provide an opportunity for ALDI to sell different products as it will look to tap people. Along with it tapping the developed and developing countries provides an opportunity to ensure that they are able to cater to a wider market which increases the chances of being successful and ensuring that they are able to penetrate deeper into the market Suppliers ALDI looks to use a channel of distribution from where the organization aims to remove the bottlenecks and middle man. The organization directly aims at selling the product to the customers and is aimed towards ensuring that the products are sold to the end customers. This has ensured that the strategy of providing the product at the lowest cost has helped to ensure differentiation strategy. This has helped to develop the required fundamentals and have ensured better presence. Advertising ALDI uses different advertising media like to advertise its products on media, radio, magazines, newspapers, brochures, posters and billboards (Platt, 2009). The organization has chosen the advertising media to ensure maximum penetration and reach and has thereby helped to ensure that the amount spent in the direction helps to provide the required benefits that it is aiming at. This will help to maximize their reach and create the awareness through which more and more people can be attracted. Tracking & Evaluation To achieve the marketing objectives ALDI will have to develop the strategies which they are likely to follow in the near future and the manner in which the action plan will be determined. This will involve the following Firstly, identifying the different opportunities which are present and identification of the best option among the different options. This will require that the organization evaluates each option and based on the internal strengths and capabilities decide the course of action to be taken. This will help to choose the best option and reduce the risk for the future. Secondly, communicating the same to all employees and others associated within the organization. This will help each and every person to understand their roles and will also prepare the individual from the beginning to be ready for the changes which they are going to face. This will help to reduce the barriers and ensure effective development of strategies. Thirdly, hiring a person with the required knowledge and experience so that the management is assisted in developing strategies (Chrisan, 2001). This will reduce the risk and increase the chance of developing correct strategies Fourthly, formulation of different strategy which can be applied and testing each one; so that the best strategy can be implemented. This should be accompanied by the fact that a contingency plan has to be developed which will be implemented if something goes wrong. This will ensure effectiveness and help the organization Fifthly, implementation of the strategies which will help to develop their market share and ensure that they are able to work as a cost leader Sixthly, monitoring the entire performance and based on it reviewing the different changes and developments which have to be done so that the changes can be properly accompanied. This will ensure better achievement of the goals. Time Line ALDI while looking to accomplish the marketing objectives have developed the following time line within which the entire process will be carried out and is as Objective Time Period Finding out the opportunities 2 months Choosing the best opportunity 1 month Developing strategies for the best option 2 months Preparing for the necessary resources 3 months Implementation of the strategy 3 months Evaluation of the developments 1 months Thus, ALDI has identified the time frame under which the total work will be completed. Measurement & Control ALDI has also developed a contingency plan which will be used in case the actual plan goes wrong. Along with it the organization will look towards continuous monitoring and evaluating the performance at each time period so that any errors can be fixed at the same moment (Berkman & Gilson, 2001). This will help to save valuable time and will provide an opportunity through which the resources will be used effectively. The organization has further identified the different parameters based on which the performance will be evaluated and will thereby he able to ensure that the goals are achieved. Conclusion The report thereby highlights the global marketing initiative which has been developed by ALDI by identification of the target market, its segmentation strategy and positioning strategy. This has helped to develop the different marketing mix and ensured that the resources are directed correctly. This has thereby provided the opportunity through which their objectives are being realized and has ensured that the overall productivity of the organization increases. The organization while looking to enter into Asia has focused on developing strategic partnership which will be focused on developing long term relations. This is supported by the fact that the required legislation will be adhered. ALDI further has analyzed the complete Asian markets and has identified the manner in which competition is increasing and will have to deal with cultural issues as well. The overall framework will thereby be aimed towards improving the performance and will look to develop an environment through which the chances of achieving the objectives multiplies and operational gain is achieved. References ALDI. (2013). ALDI, Australia. Retrieved on August 10, 2013 from http://www.aldi.com.au/au/html/company/3775.htm Awni, R. (2008). Strategic position indicating. Translated by SeyedAmir Poya seyfzadeh, Management Selected Monthly, 78, 70. Alvarez, B. & Casielles, R. (2005). Consumer evaluations of sales promotion: the effect on brand choice, European Journal of Marketing, 39 (1/2), 54-70. Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Chrisan, P. (2001). 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