In today’s business environment, marketing is a crucial
concept, particularly when it comes to satisfying the needs of consumers. This
is because they play a very important role (metaphorically) within the
organisation. For example, by determining how successful or not the business
is. Marketing can be defined as ‘the management process responsible for
identifying, anticipating and satisfying customer requirements profitably’
(Chartered Institute of Marketing). Any organisation that adheres to this basic
procedure will in turn benefit from happy customers who may recommend the
company to others (word of mouth). Thus, this may mean that the organisation
will benefit from a growing reputation and positive image as well as more
customers visiting their business to purchase products and use their services. However,
to do this effectively, an extensive amount of research must be undertaken as this
will aid the company in finding out, analysing and understanding what their
customers and potential customers need and want. This is when all companies
need to ‘consider the marketing mix’ (BBC Bitesize, Business Studies – N/D).
The Marketing Mix
The marketing mix is an extremely useful tool to use within
any organisation. This plan should be adopted to when trying to analyse any
information that was gathered through research which was carried out by the
business at hand. The Economic Times (N/D) website states that: ‘The marketing
mix refers to the set of actions, or tactics, that a company uses to promote
its brands or product in the market’. The importance of the marketing mix is
highlighted on this website furthermore as it is made evident how ‘all the
elements of the marketing mix influence each other’. It is also suggested that
the elements ‘make up a business plan’ for organisations which is extremely
helpful. However, if this is not followed through correctly then it can go
wrong which means that the business could potentially suffer from many negative
consequences.
The Marketing Mix usually consists of 4 main P’s – price,
product, place and promotion. However, this can be developed furthermore into
what is known as the Extended Marketing Mix which adds on an additional 3 P’s.
These are people, process and physical evidence. Therefore, there are 7 P’s in
total.
1. Price – How much customers pay for a
product
2. Product – The features and appearance
of goods and services
3. Place – The point where products are
made available to customers
4. Promotion – How customers are
informed about products
5. People – Those who pay a key role in
selling the products and services that the business offers.
6. Process – How the service is
delivered
7. Physical evidence – What is on offer
to the customers
Within this blog, examples of rival companies, such as Lidl
and Aldi, which have implemented this course of action will be shown and their
adoption to the 4 main P’s will also be demonstrated.
Lidl was discovered as a ‘small, independent grocery’ in
Germany in the 1930s. However, in the 1990s, Lidl ‘began opening stores outside
Germany’. They ‘started in France’ before opening their first UK store in 1994.
Now, there are more than 600+ stores in the UK alone. Lidl hold great belief
that this has all been achieved due to the ‘dedication’ of their people and
their ‘simple vision’ which is to provide ‘high quality at low prices’. - (Lidl
website)
Aldi
In 1914, a woman called Anna Albrecht ‘opened a small food
store in the mining town of Essen, Germany’. However, in 1948 ‘her sons took
over the business and expanded to 4 locations’. Originally, the name of the
business was ‘Albrecht Discounts’. However, in 1962, it ‘was shortened to ALDI’.
From here on, Aldi stores began opening all stores all over, with the first UK
store opening in 1990. Like Lidl, Aldi also intend to the provide ‘great value
and quality’ to customers. Their main goal is ‘to provide’ ‘customers with the
products they buy regularly and ensure that those products are of the highest
possible quality at guaranteed low prices’. – (Aldi website)
Lidl vs Aldi -
Product
It is fair to say that Lidl and Aldi have been competing
against each other since the beginning of time. Some may say that this is
because both companies adopt to very similar approaches, particularly when it
comes to attracting customers to their stores. This can be demonstrated in
their array of irresistible high quality products which are lowly priced, yet
still provide consumers with ‘value for money’.
Since both businesses have been labelled as ‘low budget supermarkets’
within the media, it is clear to see why they have both have such a strong base
of loyal customers who visit their stores. This is because these low budget
supermarkets have just as much on offer as the well-known supermarket chains
such as Tesco and Morrison’s. Therefore, when it comes to doing a weekly shop
at Lidl or Aldi, customers never struggle for choice, especially when it comes
to deciding what they desperately need or simply want to put in their basket or
shopping trolley to satisfy their needs.
·
Branding
The Business
Dictionary states that branding is the ‘process involved in creating a unique
name and image for a product in the consumers’ mind, mainly through advertising
campaigns with a consistent theme’. However, it is also suggested that the
overall aim of branding is to ‘establish a significant and differentiated
presence in the market that attracts and retains loyal customers’. This form of
marketing strategy was highlighted clearly when it came to researching the
mains aims and key focuses of Aldi and Lidl.
A key way in which Aldi wanted to gain more customers to
their shops (both globally and across the UK), was to demonstrate that their
‘brands are of equal quality to well-known brands’ for example Heinz and Fairy
Liquid. To do so, they carried out ‘blind taste tests’ amongst a ‘cross section
of shoppers’. The result of this activity showed that most customers who liked
the well-known brands, also liked the brands that were provided by Aldi, which
was sometimes even their own. Therefore, this highlighted that when put to the
test, the high-quality brands provided by the bigger supermarkets chains were
not as different as the lower priced and own-branded products provided by Aldi.
The results from this research enabled the ‘basis’ of Aldi’s ‘Like Brands’
campaign to be formed. Thus, this allowed Aldi to ‘communicate its quality and
value messages effectively’. However, the introduction of Aldi’s ‘Swap &
Save’ Campaign back in 2014 caused a huge uproar, particularly within the media
as this was their way of trying to convince consumers that ‘shopping at Aldi
would be cheaper’ in comparison to anywhere else. This will be discussed in
more detail later within this blog.
When it comes to branding,
Lidl is another ‘low budget’ supermarket which has not fallen far from gaining
praise not only for its staggeringly low prices but also for the quality of its
products. Quality, defined by Google, is ‘the standard of something as measured
against other things of a similar kind’. Lidl received ‘13 gold medals in the
annual Own Label Food & Drink Awards’ survey which was conducted by a
Grocer magazine. This result showed that just because prices are low, this does
not mean to say that there is a lack of quality and flavour within the products
- ‘low prices do not necessarily mean’ that ‘quality and flavour’ are being
‘sacrificed’ (Mail Online, 2015).
Price
According to an online source (learnmarketing.ne, N/D), pricing
is said to be ‘one of the most important elements of the marketing mix’. This
is because it is ‘the only element of the marketing mix, which generates a
turnover for the organisation’ (learnmarketing.net, 2015). It can also
potentially make or break the organisation. Therefore, organisations must
seriously consider what pricing strategy they should use before implementing it
into their business and most importantly, products because if the wrong
strategy (or strategies) is or are chosen, then this can have many implications
for the business. There are various pricing strategies that can be used within
today’s business environment. For example, market penetration. This is when an
organisation charges ‘lower prices for new products to help them enter the
market and gain market share quickly’ (learnmarketing.net, 2015). However, which
pricing strategy is used, purely depends on the company at hand, and the
products and services they provide as this is at the heart of the organisation.
Through exploring Aldi’s use
of the marketing mix, we can quite clearly see how they distinguish themselves
from other stores through the pricing strategies that they use. One of the main
pricing strategies used by Aldi is competitive pricing. This is when an
organisation prices its products at ‘slightly lower prices than competitors’.
In addition, from my research I have discovered that ‘Aldi’s products are 30%
cheaper than those offered by its competitors’. Therefore, Aldi are gaining a
competitive advantage. This also allows Aldi to invest any profits that they
make back into their business. As a result, this will enable them to start planning.
For example, expanding the business into different countries or simply opening
more branches. This means that Aldi are meeting ‘its business objectives for
growth’. By adopting to this method, it shows that Aldi are being efficient and
cost effective.
Unlike Aldi, over the last
few years, Lidl has struggled to fight for the top spot at being the best in
their field (low budget supermarkets). This has been highlighted particularly
when it comes to offering consumers with the best prices. It is unclear as to
what pricing strategy (or strategies) that Lidl use. However, through extensive
research, it has been quite clearly demonstrated from an online source
(Prezi.com) that a lot of Lidl’s rivals are carrying out ‘price matching
strategies’. A price matching strategy is when an organisation is ‘willing to
match’ those prices of competitors (Prezi.com). Any organisation that adheres
to the price matching strategy is basically assuring their consumers that ‘they
have found the best price’ (bizjournals.com) and place to shop. However, any
business that has already implemented this course of action ‘probably has low
prices already’ (bizjournals.com). If not, then the business at hand will have
wasted both a huge amount of time and money ‘changing their prices on every
order’ (bizjournals.com). However, because of Lidl’s competitors adopting to
the price matching strategy, this has proven to have many sever knock-on
effects to Lidl. For example, this means that Lidl is losing their competitive
advantage, which was what drove their business to success in the first place.
Now, this potentially means that the company could struggle to survive in the
future. Thus, Lidl has already started planning for the future of the company by putting many long-term
objectives in place for the company. For example, their aim is now to ‘grow
their market share and to open new stores in higher traffic areas…’
(Prezi.com). Furthermore, they also intend ‘further develop the deluxe
range’(prezi.com). If Lidl were to do so, then this means that they could
increase their prices maybe for a certain length of time, such as during
festive period so that they are meeting seasonal demands or they could even
adopt to a specific pricing method for certain products all year around.
Place
According to an online
business case study, ‘the place element of the marketing mix involves
identifying where the product or service will be sold’ – retail. However,
according to Cleverism.com it can also be known as the ‘process and methods
used to bring the product or service to the consumer’. From Aldi’s marketing
mix, we can see that they intend to do this by expanding their outlets and
opening more stores throughout and across the globe (as well as within the UK).
Currently within Aldi stores, the layout is ‘simple’. This is because they
intend to keep ‘waste’ and cost levels to a minimum. This also demonstrates
Aldi is striving to be social responsible. For example, by reducing the amount
of wastage that they have it means they are help protecting the environment. This
shows the desire that they to be perceived well by the public and consumers. In
addition, since place is all about ‘how the product is bought and where the
product is bought’ i.e. the location(cleverism.com), this helps in increasing awareness
of the company and the products that they provide. When it comes to opening new
shops, there are many aspects that Aldi like to take into consideration. Some
of these were identified on an online case study based on Aldi. They include:
where the store is located. With this concept, Aldi like to ‘focus on…good
visibility from a main road and not too much competition nearby. Thus, this
means that Aldi will be in a better position, both financially and within the
market as it will allow them to benefit from a greater market share. In
addition, this has many advantages for the organisations as they will
eventually begin to see an increase in their revenues and profits.
It quite easy to see how
Lidl have contrasting views compared to Aldi, particularly when it comes to the
‘place’ element of the marketing mix. As previously discussed, Aldi like to
locate their stores and branches in central locations for all to see. However,
Lidl seem to adopt a more different approach when reaching out to consumers.
This is made evident as much of their shops are ‘out of the way and not in
central locations in towns and cities’ (Prezi.com). However, this may put Lidl
at a serious disadvantage as there would be a limited number of consumers
visiting their store. However, having said that, it may also prove to be
extremely effective as the staff will be able to deliver better customer
service to consumers. In addition, this may help Lidl to gain new customers as
current ones may recommend the company to a friend or simply share the
experience that they had their with others.
Promotion
Promotion is the process involved when it comes to ‘raising
customer awareness of a product or brand, generating sales and creating brand
loyalty’ (Google). Promotion can include anything from advertisements to
special offers. However, from my research, I have found it very interesting to
see that it is very common for most companies to use more than one method of
promotion at a time. This is called the ‘promotional mix’. However, companies
must consider several factors before they decide which promotion method they
should use. These include aspects like: their competition, their marketing
budget etc (tutor2u.com). Promotion is one of these most vital sections of the
marketing mix as it helps increase awareness of the ‘existence and positioning
of products’ (tutor2u.com). Businesses also use promotion in order ‘to persuade
customers that the product is better than competing products and to remind
customers about why they want to buy it’ (tutor2u.com).
When it comes to the promotional aspect of the marketing mix,
it is interesting to see that Aldi use a variety of techniques from both above
the line and below the line promotion. Above the line promotion is where ‘mass
media is used to promote brands and reach out to target consumers’ (Google).
For example, the television. Recently, Aldi have had their television adverts
praised for nothing but good humour. This is clearly portrayed in their ‘Like
Brands’ campaign. This campaign was launched in 2014 to demonstrate the fact
that they are ‘like’ other brands, ‘only cheaper’. The advertisement shows ‘…a
famous brand as a benchmark for quality side-by-side by an Aldi product’ (Aldi
website). Again, this reinforces the fact that ‘Aldi products are cheaper than
leading brands but equal in terms of quality’. Aldi has stated on the campaign
section of their website that: they ‘love to make people smile’. From this,
they also state that ‘they’ve always managed to make a good impression by
sprinkling a little humour’ into their ads’. However, above the line promotion
can be expensive. Whereas, below the line promotion ‘is an advertising strategy
in which a product is promoted’ (Google) through direct mail campaigns etc.
This method was used by Aldi when they wanted to advertise the message of their
‘Swap & Save’ campaign. The campaign shows the amount of money that
customers ‘could save if they swapped their weekly shop to Aldi’. From an
online business case study based on Aldi, it is stated that: ‘they use a
variety of communication methods and channels to increase the impact of its
promotional activity and meet the aims of AIDA’. From my research, I have found
that ‘AIDA’ is a business model that can be used when trying to demonstrate
‘the aim of any promotional activity’ (businesscasestudies.co.uk). AIDA stands
for Awareness, Interest, Desire and Action.
Lidl has shown to excel when it comes to promoting their
company and products. Lidl’s 2014 campaign, ‘#LidlSurprises’ was described by
an online source (3doordigital) as a ‘genius marketing campaign’. This campaign
took place in September (2014) in London, where members of the public were
‘invited to attend an exclusive farmers market’. On the day, guests were given
free food samples to try. This included ‘fresh fruit to cheeses and steaks’
which were ‘enjoyed greatly and praised enthusiastically’ by attendees.
However, when they ‘expressed their wish to purchase the products’, buyers
could not believe what they were seeing ‘when the vendors pulled out a Lidl
paper bag to pack up their purchase’. Lidl worked in conjunction with Twitter
and well-known food bloggers to promote this event. In addition, on the run up to the event,
leaflets and flyers were also handed out to members of the public. Finally,
this once again highlights Lidl’s dedication for the company to succeed.
Overall, through analysing the marketing mix and its uses, it’s
clearly demonstrated how it can enhance the performance and contribute towards
the success or failure of a company within today’s business environment. This
has been shown within Lidl and Aldi as they have both experienced many success
and failures since the beginning.
References
1.
BBC Bitesize, Business Studies - http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml
- accessed 21/11/16
3. Lidl website –
4.
Aldi website –
5. Online business
case study –
http://.co.uk/aldi/creating-value-through-the-marketing-mix/introduction.html#axzz4QfO2vl65 – accessed
21/11/16
6.
Business dictionary –
7.
Daily Mail –
8.
Cleverism –
https://www.cleverism.com/place-four-ps-marketing-mix/ - accessed
21/11/16
10. Biz
Journals –
12. http://www.adnews.com.au/campaigns/aldi-continues-with-like-brands-only-cheaper-campaign - accessed
21/11/16
15. https://www.google.co.uk/search?hl=en&site=imghp&tbm=isch&source=hp&biw=881&bih=420&q=lidl+logo&oq=lidl+&gs_l=img.3.0.0l10.1186.1856.0.3586.5.5.0.0.0.0.86.373.5.5.0....0...1ac.1.64.img..0.5.370.8JvbBiNm1hs#imgrc=0atavxSUSyfVpM%3A
16. https://www.google.co.uk/search?hl=en&site=imghp&tbm=isch&source=hp&biw=881&bih=420&q=aldi+logo&oq=aldi+logo&gs_l=img.3..0l10.965.3252.0.3842.9.9.0.0.0.0.115.578.7j1.8.0....0...1ac.1.64.img..1.8.573.aWmGi8brqHg#imgrc=hJgw1OqoDCBTxM%3A
17. https://www.google.co.uk/search?hl=en&site=imghp&tbm=isch&source=hp&biw=881&bih=420&q=marketing&oq=marketing&gs_l=img.3..0l10.903.2635.0.4984.9.7.0.2.2.0.147.625.4j3.7.0....0...1ac.1.64.img..0.9.650.qEquPa3YUTQ#imgrc=ZL-RX5_mlh39GM%3A
No comments:
Post a Comment