Strategic Marketing: ALDI Case Study

Introduction: Enhancing Market Presence of ALDI

Strategic marketing is a method to achieve the goals of the organization and gain a competitive advantage in the market. Moreover, in the following report, ALDI company has been selected which was founded in 1961 in Germany. ALDI is one the big s in the retail industry that has approx. 12000 stores in 19+ countries all around the world. Nevertheless following that market size and trend data will be determined. This report will present how SOSTAC model cam be used for developing a strategic marketing plan in organizational context. Further, this model also highlights Aldi's situational analysis, objectives, strategy, tactics, action and control. With that competitive analysis, TWOS and pestle will be carried out to explore the external market of the organization. At the same time, customer analysis with the STP marketing and stakeholder analysis with a matrix will be explained. Further, Andsoff's matrix to analyze market growth and target audience will be maintained. Lastly Gantt chart, Budget and KPI also will be carried out for the marketing campaign.

Main Body

Market Analysis

Market Size and Trend Data

ALDI is one of the big corporations in the industry of retail a German-based private corporation that has been serving its customers for a long period. The company provides a wide range of products and services to its customers. Moreover, ALDI also provides products and services at low cost with good quality as well. The organization has more than 12000 stores in almost 19+ countries with a wide variety. Further, the market share of ALDI has also increased more than 10% in recent time of 10 to 12 weeks of April according to the recent data (Aldi hits double-digit market share for the first time, 2023). At the same time as last year, ALDI sales have increased up to 25% as well.

Moreover, many new trends have come into the industry that the company has to follow to cope in the market with other organizations. Nevertheless, some of the major trends are technological and digital advancement. At the same time sustainability is also being adopted by many other companies because of customer preference and to attract investors as well (Dekimpe, 2020). So organizations are practicing CSR and taking the initiative to achieve their sustainable goals. Lastly, the retail companies also collaborate with other companies to enter a new market or sustain in the market.

Competitor Analysis

Competitor analysis is essential to make an effective strategic marketing plan to gain competitive advantages. There are many methods to analyze the competitors and one of them is Porter's five forces model. This model covers many factors some of which are as follows:

• Threat of new entrance: ALDI is one of the big corporations in Germany that provides good quality products and services at low prices. Moreover, there is a threat of new entries in the market with quality products at a reasonable price (Isabelle, et. al, 2020). At the same time, they can also come up with innovative ideas as well because of market trends that can become a threat to the ALDI.
• Threat of substitutes: Many new substitutes in the market can be a major threat to the ALDI. Some of them are like Convince and pop-up stores they are attracting more and more customers because of social media influence and facilities.
• Bargaining power of customer: The customer of ALDI is very cost-conscious and the organization faces challenges in providing any other services. Moreover, if the company increases the price of the products the consumer will directly switch to other shops.
• Bargaining power of supplier: The company has long-term contracts with the supplier for the resources by which their bargaining power of them get increases. At the same time finding some other supplier can be time and cost-consuming.
• Competitive rivalry: The retail market is full of competitor that provides similar products and service. Moreover, that makes it hard for the organization to provide something different to its customers (ALDI Porter Five Forces Analysis, 2023). At the same time, a new market of online shopping is getting popularized and preferred among the consumer. Further, these factors make the competition more intense in the market and treat the ALDI if they file to cope with them.

Pestle Analysis

There are many models to analyze the external environment of the organization like PESTLE. The analysis of the external environment will help the organization to make strategies for marketing to obtain a competitive advantage in the industry as well.

• Political factor: Political factors affect the company directly or indirectly in various ways. For example, the government can change any policy or the regulations. The organization also has to comply with that can be time and cost-consuming.
• Economical factor: In recent times businesses are facing major issues regarding the economy like inflation, instability, rise in unemployment etc. That eventually also affects the company's growth as well.
• Social Factor: The social factor is that in recent times, the consumer trend has changed drastically like preferring more digitalization in services etc. So as per that the organizations also have to make some changes to attract the customer.
• Technological factor: Many retail brands are adopting technological advancement to provide their customers with more quality services (Kardes, Reinecke Flynn and Dugan, 2021). Moreover, ALDI also has to adopt technological advancement to sustain itself in the market.
• Legal factor: There are many laws and regulations regarding health and safety major that the business has to comply with to avoid any kind of compensation and court cases. With the legal charges company can also damage its reputation.
• Environmental factor: In recent time people become aware of environmental changes and safety. Moreover business has adopted sustainability practices to reduce the negative impact on the environment.

TWOS Matrix

Customer analysis

Customer analysis helps the company to understand their consumer to make an effective marketing strategy. Moreover, there are different methods for customer analysis and one of them is STP marketing. STP is also known as segmenting, targeting and positioning by which company can position and target a different segment of customers.

• Segmentation: In the segmentation process company divide customer into a different group based on gender, age geographical and other factors. The segmentation helps the company to position and target the customer while making a marketing strategy according to that as well (Ing, Osman and Tze-Yin, 2020). Nevertheless, the company has divided the customer into two parts based on demographics and geography. Moreover, demographically ALDI mostly targets the customer that is cost conscious which mostly includes families and mid to old-age people. Further geographically the location of the store is mostly urban or suburban areas.
• Targeting: Now based on segmentation the company targets the group of customers by various methods and strategies. For example, to target the customers of the demographic group organization showcases the low prices of the product. Moreover some strategies like organizing different events like occasional discounts or sales. At the same time company also has a loyalty program to attract more customers, Further to target the customer geographically ALDI also focuses on providing different facilities and services to retain and attract them.
• Positioning: Based on customer segmentation and different strategies to retain and attract them the position of the product and service will depend. Moreover, ALDI's position in the market is as a discount store or quality product at an affordable price. Nevertheless, their tagline is also similar to the agenda that is “Spend a little live a lot”. The tagline encourages the customers and attracts them as well.

Customer Persona

Stakeholder Analysis

Stakeholders are the part of the organization that directly or indirectly affects the company's growth and decisions as well. So analysis of stakeholders is essential before making a marketing strategy as well. Moreover, the stakeholder matrix helps to analyze it more accurately and effectively (Rze?ny-Ciepli?ska and Szmelter-Jarosz, 2019). Nevertheless, there are different kinds of stakeholders in a company and some of them are an employee, customer, managers suppliers etc. Further, it is divided into four different parts that are keep satisfied, monitor, manage closely and keep informed divided into two categories power and interest.

• Manage closely: ALDI has to closely manage the communities and financial sources like banks or investors because they have high interest and high power in the company. Moreover, they directly influence the company's decisions and growth.
• Keep satisfied: The company has to keep satisfying the customer because ALDI's center of attention profitability always remains there. Moreover, the customer has low interest but has high power in the organization as well.
• Monitor: Well ALDI has to keep monitoring the media and traders because they have low interest and low power in the company. Moreover they can impact the company indirectly as well.
• Keep informed: the company has to keep informed of trade union, workers, contractors etc. because they have high interest but low power in the organization. Moreover, even though they have low power in the company indirectly they can impact because they have high interest in the organization as well.

Campaign Strategy

From the above mention all of the analyses of different factors of the company that influence and impact the company directly and indirectly on the marketing strategy. Moreover so with a campaign for ALDI can be made that will help them to attract and retain customers while making a competitive advantage as well.

Campaign overview

The campaign can be to target customers from different demographic and geographic areas. Moreover, it can be d as a customer target advertising campaign in which the company will use different methods and strategies of marketing. The different methods and strategies and methods of marketing will help the company to target different age groups and locations like semi-urban by digital marketing (Veleva and Tsvetanova, 2020). The reason behind the campaign is that the company's targeted customer is mostly families and people who are cost-conscious. Moreover, if the company wants to increase the range of customer and profit they have to target other segments as well. Further, the objective of the campaign is to improve engagement, optimize the advertising methods, and increase the customer base and wide range of stores in the world.

At the same time, this campaign will also allow the ALDI to analyze its performance more accurately. Moreover, the goal of the campaign will be to make a presence geographically by different methods and ways. Nevertheless, ALDI will be able to spread awareness about the brand to create a unique and positive image in people's minds. Further, the primary goal of the campaign will be to target the right audience at the right time. Lastly, the company can also reach its potential and increase its profit margin. At the same time, it will also make market position and competitive advantages in the industry to cope with the intense competition as well.

Andsoff's matrix for market growth

Andsoff's matrix is a group of strategies that the management of the organization can use to grow and develop in the market. Moreover, many companies use this matrix to analyze different methods:

• Market penetration: This method emphasizes increasing the sales in the existing market with the existing product. Moreover, the company can use this method to increase its sales through different methods of marketing.
• Market development: In this method, the company tries to sell existing products into the new market which can be sometimes risky as well (Clarissia, 2020). Moreover, in the case of ALDI which is part of traditional retailing, they have an opportunity the switch to online retailing like Amazon.
• Product development: The product development method emphasizes introducing or launching a new product into the existing market. Moreover, this method is considered a less risky and safer option by the companies.
• Diversification: The method of diversification is different from all the other options as it emphasizes entering into a new market with a completely new product.

After analysis of all four methods of Andsoff's matrix the one which will be more suitable for the ALDI is Market penetration (Ansoff Matrix, 2015). This option is much safer and has the same objective as the campaign to increase the rate of customers.

Target audience

ALDI are mainly the people who want quality products but at a low price. Moreover from the campaign, the company will target new customers demographically and geographically as well. For example more young people and area-wise semi-urban population.

Campaign message

To start a campaign in the market in need a associated with the public that can be like “ALDI quality unbox”. With a message of providing everyone with quality products at an affordable price so people do not have to compromise on anything.

Strategy implementation

Four Ps of the marketing mix

There is four Ps or marketing mix to determine the implementation of strategic ideas and method.

• Product: ALDI provides a wide range of products to the consumer to satisfy their different needs and demands of daily life.
• Price: The company offers its customers quality products at low prices to make them affordable for everyone.
• Place: ALDI has a different retail outlet at a good location so the customer can reach h and use it easily. Moreover, they can provide the right product at the right time as well.
• Promotion: The company uses online and offline stores to sell the products to make a competitive advantage in the industry.
• People: Competent people are appointed or hired with the motive to deliver high quality services to the customers.
• Process: Standardized process will be followed for booking, delivery and accepting payments.
• Physical evidence: Unique interior and exterior designs will used for enticing potential customer base.

RACE Model

RACE is a growth model by which the company can effectively implement a marketing strategy. Moreover, in the case of ALDI, they need to use this model for digital marketing for growth (Sestino, et. al, 2023). Nevertheless, this model emphasizes learning or developing new skills for digital marketing like training and hiring employees to learn different tools. Moreover, ALDI also can use different online platforms to attract customers.

• Reach: For reaching to the target customers digital modes will be used such as SEO, social media and online advertising
• Act: Customer interaction and engagement will be facilitated by uploading compelling content on social sites (Facebook, Twitter & Instagram).
• Convert: Through the means of online promotions and discounting offers customer interaction will be converted into
• Engage: For the customer engagement strategies pertaining to feedback initiatives, communication and loyal card program will be used.

Marketing Roll-out Plan

Marketing Roll-out Plan consisted of various factor to control and manage the all activities like:

Gantt Chart: Channel with Timing

Budget

The above depicted timeline and budget clearly exhibits that major focus will be placed on page per click and social media marketing strategy. Moreover, in the recent times, customers spend more time on social sites. Referring this aspect high budget is allocated for SMM.

KPI Matrix

KPI also known as keep performance indicator is a matrix by which a company can control and analyze growth in performance (Wannes and Ghannouchi, 2019). Moreover, KPI also helps the company to manage the data and information so the growth can be consistent as well. There are several KPI's which will be used for doing monitoring of Aldi's marketing campaign. This mainly includes sales, brand awareness, market share, ROI etc.

• To increase sales by 15% at the end of an accounting year.
• To enhance market share by 5% till the end of 1st quarter.
• To increase ROI by 10% within a year.
• To maximize customer traffic by 20% within one year.

In the context of business unit KPI's are highly significant which helps management team in evaluating performance. By doing comparison of current performance in against to KPI's deviations can be assessed. Thus, by taking corrective actions within suitable time span Aldi can improve performance level.

Conclusion

The assessment has covered many topics and factors regarding the strategic marketing plan as per the following SOSTAC Model for ALDI which is a Germany-based Retail Company. So the market size and trend data of ALDI company and the retail industry have been maintained. Moreover with Porter's five forces model competitive analysis and analyses of the external environment pestle and TWOS matrix have been done. Nevertheless with STP marketing customer analysis and with stakeholder matrix the analysis of stakeholders has been mastodon. Further, a campaign has been recommended to ALDI with reason, goal and objective and with Andsoff's matrix the market growth has been analyzed. Moreover, the target audience and with Race model digital marketing have been explained. Lastly to control a KPI and budget have been mentioned as well.

References

Books and Journals

• Clarissia, S.M.S., 2020. A study on Ansoff Matrix Technique: As a growth strategy and an adaptive learning technique adopted in the leading brand of products. BIMS Journal of Management, 18.
• Dekimpe, M.G., 2020. Retailing and retailing research in the age of big data analytics. International Journal of Research in Marketing, 37(1), pp.3-14.
• Ing, P., Osman, Z. and Tze-Yin, L., 2020. Marketing Mix and STP Strategies: An Exploratory Study into Grocery Retailers in Malaysia. Asian Journal of Entrepreneurship, 1(4), pp.129-143.
• Isabelle, D., Horak, K., McKinnon, S. and Palumbo, C., 2020. Is Porter's Five Forces Framework Still Relevant? A study of the capital/labour intensity continuum via mining and IT industries. Technology Innovation Management Review, 10(6).
• Kardes, I., Reinecke Flynn, L. and Dugan, M., 2021. Online retailing: determinants of competition between multinationals and local firms in emerging markets. International Journal of Retail & Distribution Management, 49(2), pp.263-280.
• Rze?ny-Ciepli?ska, J. and Szmelter-Jarosz, A., 2019. Assessment of the crowd logistics solutions-The stakeholders' analysis approach. Sustainability, 11(19), p.5361.
• Sestino, A., Prete, M.I., Piper, L. and Guido, G., 2023. The future of online marketing strategies and digital tools: new challenges and contributions to RACE framework. International Journal of Electronic Trade, 1(1), pp.4-27.
• Veleva, S.S. and Tsvetanova, A.I., 2020, September. Characteristics of the digital marketing advantages and disadvantages. In IOP Conference Series: Materials Science and Engineering (Vol. 940, No. 1, p. 012065). IOP Publishing.
• Wannes, A. and Ghannouchi, S.A., 2019. KPI-based approach for business process improvement. Procedia Computer Science, 164, pp.265-270.

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• Aldi hits double-digit market share for the first time, 2023. Online. Available through: < https://www.thegrocer.co.uk/supermarkets/aldi-hits-double-digit-market-share-for-the-first-time/678596.article#:~:text=Aldi's%20market%20share%20reached%2010.1,ahead%20of%20Aldi's%2025%25%20growth.>
• ALDI Porter Five Forces Analysis, 2023. Online. Available through: < https://www.mbaskool.com/five-forces-analysis/companies/18403-aldi.html#:~:text=The%20analysis%20focuses%20on%20measuring,Threat%20of%20New%20Entrants>
• Ansoff Matrix, 2015. Online. Available through: < https://corporatefinanceinstitute.com/resources/management/ansoff-matrix/>