ALDI Marketing Mix

Posted in Services, Total Reads: 1154
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Marketing Mix of ALDI analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the business & marketing strategies of ALDI.

Let us start the ALDI Marketing Mix:

Product:

ALDI claims to provide affordable food products that are of the same quality as other branded products. The products sold at ALDI’s are sourced from selected suppliers and are then branded as their own to have a control over the production and ultimately the cost, which is the sole reason that enables ALDI to price its products lower than other supermarkets. This gives an overview in the marketing mix product strategy of ALDI. 

Other than Food products and beverages ALDI also stocks Fresh fruits and vegetables, Health and beauty products, Clothes, Stationery, Electronic products, Household goods and Soft tools. It does not change its food products but keeps on experimenting with non-food items. Example- in winters ALDI offers snow gear and warm-camping gear, thus modifying its product line as per seasons. It is the largest retailer of Wine in Germany and has few other products like:

ALDI Talk & ALDI MOBILE- In Germany, Belgium, Netherlands and Australia ALDI has a mobile virtual network operator

Diskont- In Austria ALDI has 66 card operated self-serve gas-stations on or nearby its stores after entering in a joint venture with a local petrol retailer.



Image: flickr-photos/jeepersmedia/


Price:

ALDI has a strong customer base due to the cheap price & quality that it offers for its own brand products which aren’t available with the competitors. The various other policies used by ALDI are:

• Unit pricing Strategy: ALDI uses unit pricing strategy for groceries so that the customers can easily compare.

• Market Penetration: It charges low prices for the new products so that they can enter the market and gain share quickly.

• Competitive Pricing: In case of high competition, it prices its products below the competitor’s, making use of its economies of scale purchase where it buys in bulk at a bargained price enabling it to pass the benefit to the customer.

• Psychological Pricing: Considering a minor difference in price can make a huge difference in customer’s mind, ALDI prices its products in an intelligent manner like, $3.78 instead of $4.

• Loss leader pricing: ALDI offers its non-food products at cheap prices to bring customers to the store, so that they can also buy groceries where ALDI can make up for the foregone profit.


Place:

ALDI group has more than 8000 stores in 18 countries and roughly a new store opens every week in Britain. It keeps its store layout very simple to have minimum costs for the customers. ALDI procures all the products in bulk from various suppliers and stores them at local warehouse, all the time ensuring that the product quality is maintained. It ensures minimum waste disposal while transportation of goods and uses environmental friendly equipment in its store. ALDI tries maintain a regional appearance and thus names its stores accordingly, like in Switzerland it is known as Aldi Suisse. Other than physical stores ALDI also has online presence which allows customers to check product details and to locate the nearest store.


Promotion:

ALDI promotion activities under its marketing mix strategy is comprehensive. Claiming it to be a cost-saving strategy ALDI invests negligible amount for promotion and does not keep a marketing department in Germany. All it offers is some ‘Super Buys’ offers which are only available till stocks last and changes every week these are communicated to the customers by the means of weekly newsletter called ‘Aldi informs’ which is either handed over to customers in stores or reaches them via direct mail or newspaper.

In the US, UK and Australian markets ALDI makes extensive use of print, electronic and display media to promote its stores. ALDI also makes an extensive use of Email marketing where it informs all its customers about ‘Special buys’ and new products. Thus, a mix of ATL (Above the line) & BTL (Below the line) promotional strategy is used by ALDI. It also uses various promotional techniques such as:

• ‘swap and save’ to make customers switch to their brand from competitor’s brand

• ‘Like brands. Only cheaper’ to build customer trust in its products.


Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of ALDI.


People:

ALDI has lower customer service than its competitors as employees do not assist customers in product selection, this is because ALDI has very thoughtfully put store layout where everything is divided into proper sections which reduces the number of employees needed on every floor. Also, unlike other stores employees at the billing counters are seated which makes them quicker in scanning products as the computer is right in their front and ultimately results in faster sales. ALDI pays its employees higher than its competitors and provides on the job training to new employees.


Process:

ALDI by its sheer layout makes product finding very easy, and thus customers generally select the products on their own which reduces the number of employees that ALDI needs to assist the customers. ALDI keeps limited number of high quality, nominally priced brands to prevent customers from getting confused and this in turn reduces the selection time. In addition to this ALDI’s products have larger barcodes for quick identification and broader-longer conveyor belt for fast billing.


Physical Evidence:

ALDI is globally renowned for simplest business processes, standardization, and global pricing. 85% of the stock at its stores has items from home brand and the rest are from well recognized brands. It provides 30% cheaper products and keeps everyday low prices the same globally. Also, it is the only store which maintains the same prices for groceries throughout the world. This covers the ALDI marketing mix.


About ALDI:

ALDI is a supermarket chain that was founded in 1946 in Germany by 2 brothers Karl Albrecht and Theo Albrecht who started off by taking over their mother’s store which was started in 1913. ALDI stands for Albrecht Discount and consists of 2 main groups ALDI SUD and ALDI NORD, each owned by Karl and Theo respectively with independent operations in different markets. ALDI has transformed itself from a small business to a globally renowned supermarket chain with an annual turnover of more than 53 billion EUR, employing over 1,00,000 people in its 9600 stores which are spread across 18 countries. ALDI started its operations mainly on ‘limited assortment concept’ wherein the high-quality products sold in the store was limited to certain categories and were to be purchased in bulk and thus, were sold at reasonable prices.

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The names and other brand information used in the Marketing Mix section are properties of their respective companies. The companies are not associated with MBASkool in any way. The brand names are used purely for educational/academic purpose only.

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