Aldi's Marketing Strategy since Inception (Essay Sample)

Aldi’s Marketing Strategy since Inception Name Institutional Affiliation Aldi’s Marketing Strategy since Inception Executive Summary Marketing is an important business component as it popularizes the company and increases their chances of achieving success in the market. Aldi Supermarket has been in operation since 1914, and it has been among the best performing retail companies. From humble beginnings, the company grew slowly and consistently into a multi-billion dollar retail store. Thanks to its continuous innovation, the company has created a unique business model that gives it some competitive advantage despite operating in a highly volatile industry. The discussion looks at Aldi Supermarket and the marketing strategies it has been using since it was founded. The paper also analyses the extent to which these marketing strategies have been fruitful and provides suggestions on what the company needs to do to succeed moving forward. Introduction Marketing is a management process that organizations use to identify, anticipate, and satisfy customer needs in a profitable manner (Ododo, Mulholland, & Turner, 2015). In one way or another, marketing processes influence the consumption decisions that customers make on a daily basis. Many people assume that marketing is simply about advertising and selling products but this is not the whole story since it does not capture the producers’ desire to attract and satisfy or exceed customer expectations through product presentation. Marketing addresses some fundamental problems that organizations face, and is thus central to the business performance of small and large organizations alike. Companies benefit from marketing processes because through them, they understand the competitive marketplace and tap into key trends making it possible to supply quality products to the market at the right time, place, and price (Voigt, Buliga, & Michl, 2017). The purpose of this paper is to examine the marketing strategy or strategies that Aldi has adopted since its creation with the aim of describing new marketing options for the supermarket to help it remain successful throughout the next decade. Aldi has adopted effective marketing strategies since inception and it should continue to do so moving forward to maintain its success. Background to the Company Aldi is a leading global discount supermarket chain that Anna Albrecht established in the German mining town of Essen in 1914. At present, the organization operates in 18 countries and has more than 10,000 stores globally. In the United States alone, there are more than 1,500 stores. The growth of the company started in 1948 when the founder’s sons took over the business and expanded to four locations (ALDI, 2017a). However, it was not until 1954 that the sons established a self-service store in Essen-Schonnebeck, which became the first of its kind in Germany. All along, the company had been operating as Albrecht Discount until the owners shortened the name to Aldi (derived from the original name Albrecht Discount) in 1962 (ALDI, 2017a). Five years later; there were more than 200 Aldi stores in the southern parts of Germany. The first branch of the supermarket in the United States opened in 1976 in south-western Iowa. In 1990, 1999, and 2001, Aldi opened new stores in the Great Britain, Ireland, and Australia respectively. Aldi Supermarket opened new branches in Slovakia and Hungary in 2005 and 2008 respectively followed by new divisions in South Windsor, Connecticut and Haines City, Florida in the year 2008. The Texas branch began operations in 2010 while the one at Jefferson, Georgia opened in 2011 and these two have become a popular shopping destination for locals and visitors alike. Aldi is a low-cost grocery store in the country that attracts many customers. The management of the company agrees that Aldi’s business model is based on achieving efficiency at every level from the manner in which contractors build the brick and mortar stores to the distribution of goods and the choice of products it stocks. Aldi believes in creating unique proposition by differentiating itself from competitors in every aspect of the business and simplicity, consistency, and responsibility have been its three defining core values since creation (ALDI, 2017c). Maintaining unique characteristics is an effective way of achieving financial success while operating in a flooded market. The supermarket business is flooded with numerous stores that differ in their management and operations approaches, and unless an institution finds a way to distinguish itself from its competitors, it is likely to fail. It is for this reason that the management of Aldi has rethought every aspect of its operation, including the design of the stores and the goods sold there. The rethinking and reinvention of operations at Aldi has not only increased the company’s competitive advantage, but also maximized the quality of the products sold and the savings for the company’s customers. Marketing Analysis From its humble beginnings, Aldi has grown into a multi-billion-dollar retail business serving millions of customers every month. Its current success can be attributed to a positive business outlook and effective marketing strategies. The firm has predominantly focused on the integrity of its business plan and the satisfaction of customer needs and expectations, which is it is the leading low-cost grocery supermarket. Providing low cost goods at convenient locations has been the secret of the company’s success since inception. However, without its positive and fitting business philosophy, it is unlikely that Aldi would have achieved the level of success it enjoys today. In order to offer the lowest possible prices for high quality products, the company has instituted a series of innovations and efficiencies at every level of its operation to minimize costs (ALDI, 2017d). Aldi’s unique business model enables it to provide the highest quality products at the lowest possible prices. Aldi stocks more than 1,400 commonly purchased grocery and household products in appropriate sizes (ALDI, 2017b). This means that products are fast-moving allowing for rapid restocking and business continuity. The stock is also appropriately arranged in shelves in smaller, manageable stores whose design incorporates long term saving in recurrent bill expenditure. Customers also enjoy unique operations in the institution that gives them almost complete control over their shopping experience. Moreover, the customers are treated with passion, respect, and dignity and this encourages them to make numerous trips back and forth to the supermarket because they enjoy personal space as they do their shopping. Customers also achieve peace of mind while shopping at Aldi because the institution stocks a variety of products in convenient locations, convenient sizes and packaging, and retailing at affordable prices. The Nature of Aldi’s Marketing Strategy or Strategies since it began The main marketing strategy at Aldi since its inception has been selling quality products at low prices to capture all potential customers irrespective of the level of their disposable income (Shannon, 2016). Apart from that, the company sells ordinary products that almost every family is in demand for. It means that the grocery and other products stocked move fast reducing the probability of making losses due to slow moving products. Aldi retails at low prices because it has succeeded in initiating efficiencies and innovations at every level. For instance, customers can carry their shopping in their own bags to save on cash. One of the reasons why many supermarkets are expensive is because part of the money caters for the cost of purchasing bags that customers are given freely to carry their goods in them. At Aldi, customers have the option of purchasing reusable bags from the store if they do not have somewhere to put their shopping. Aldi also rents its carts to avoid incurring additional costs that can possibly push the prices up. The stores are modest sized to ensure that every space is well utilized. In addition, the company has completely eliminated non-essential grocery store services to further cut on operation cost. The packaging of products also doubles as display and this saves on time and money in restocking and replenishing. Aldi also uses in-house distribution network, which is more effective and efficient resulting in even greater savings for the customer. Most importantly, the store opens only during peak hours; it does not operate round the clock (24 hours) as this may increase the cost of labour and rent. The savings are passed on to the customer through cheaper products (ALDI, 2017c). Another unique preposition about Aldi is that more than 90% of the products it sells are its own exclusive brands (ALDI, 2017c). The brands are specially produced to meet customer’s expectations and in case of quality shortcoming, customers receive a replacement of the product and money back if they are not satisfied. Strategic Marketing Options for Aldi moving forward Moving forward, Aldi should continue to offer high quality products at attractive prices to continue enjoying the level of success it enjoys now. The company should also monitor customer behaviours going forward to ensure that they understand them and adjust operations accordingly. Apart from that, Aldi should consider the possibility of using segmentation, targeting, and positioning to increase sales in the coming years. Segmentation is the process by which marketers divide an existing market into groups with similar characteristics (Batra & Keller, 2016). It is done to determine the right kind of customers to sell to. Once the marketers have identified different market segments...