Aldi Marketing Mix

Despite the economical recession that the US currently faces, all around the country, ALDI continues to grow. ALDI is recently celebrating the opening of their 1,000th U.S. store in West Haven, Connecticut. At a time when other retailers are cutting back and the recession is deepening, ALDI continues to build new stores in 29 states nationwide and also around the globe.

This occurs when a business charges the highest price for a product during the introduction stage of its lifecycle. This is typically used when introducing a new, unchallenged product into the market, ensuring high profits before the product has competition. For example, Apple set its price for its iPhone 6 plus exceptionally high due to its advanced features and lack of competitors. This ensured that Apple received high-profit levels before the iPhone 6 plus was challenged by other products. Additionally, this has seen Apple have a high product position and helped cement its brand image, as these higher prices are typically associated with a higher quality product. This has subsequently improved market share and profits.

This is a strategy that can apply to products with consumable supplies. This is where the pricing at high prestige levels, otherwise they will not sell; customers equate higher quality with higher prices.

Pricing is important when marketing a product. The determining factor for the pricing is the material, time to make, amount spent on marketing and promotion of the product. The goal in providing such a product that is moderately

This strategy guarantees that the company does not loose out on the venture by covering their fundamental costs of operation. This allows them to keep the price low enough to entice consumers while simultaneously hedging themselves from the risk of losing money on each item sold. This is basis for a market penetration strategy.

Aldi’s has the prices I like, but the choices at times can be limited. I have liked certain frozen items and they will only have them in stock at certain times of the year. Aldi’s lacks the customer services aspect, the people who work there don’t seem interested in helping the customers at all. They are either re-stocking or working the cash out lines with very little interaction with the customers. The store has a clean and easy aisle to navigate through. To like Aldi’s you would have to be a self-sufficient customer who knows what they want without help. The advertising and signage is minimal within the store. The nice thing that Aldi’s provides is the flyers that come in the weekly community paper. Half the time that is the only way I know if there is something at Aldi’s I want to stop in for. Also, it’s fairly easy store to get in and out without the hassle of

7. Specials: Specials entice shoppers into store & encourage savings, so Aldi’s 5 star rating for specials is a big win. Coles & IGA received 4 star for their specials & Woolworths followed

After researching news releases about the company, it has been determined that the company uses a backward vertical integration system. The company has close relations with their suppliers. Consequently, partaking in a close relationship with the buyers permits the company to create a store brand product that is close to or beats the name brand product. However, the company only offers one name brand product. Moreover, most of the store consists of the Aldi name brand products which conversely, follows the steps of many grocery chain retailers who also carry their

The main objective of a low-cost provider is to achieve a lower overall cost than its main competitors and rivals by means of underpricing (Gamble, 93). This is also known as price advantage in order to attract customers. Companies that use this strategy will achieve high sales volumes while striving for low cost margins. For example, Wal-Mart is known to have considerable low prices that attract a broad spectrum of customers. People who shop at Wal-Mart are familiar with their “Rollback Prices” which focus on the idea of everyday low prices that are sold at a far cheaper rate than its main competitors. They are able to sustain these prices because of a successful supply chain market. Many of the products they sell are from foreign and domestic markets that focus on a lower price demand. This allows Wal-Mart to sell their products at lower prices at a high volume. Basically, they buy a huge quantity in volume in order to achieve a lower price to gain a higher profit.

Aldi does not have a published vision or mission statement. However there is a clear set of values and business philosophy which they adhere to. This philosophy is outlined by the statement which it continuously uses, ‘Top quality at incredibly low prices – guaranteed’. In its small levels of advertising Aldi elaborates on this philosophy by stating its five main principles; huge savings, excellent quality, outstanding value, superb specials and buy with confidence. These five principles were quoted as the ‘Aldi Pledge’. This outlines there key values namely to offer their customers high quality products at low prices. This is achieved by their low cost operations, which is well known and evident throughout

According to Survey by national consumer organization, CHOICE (2014), a comparable basket of goods at ALDI is 25% cheaper than at one of the MSCs. ALDI is estimated to hold 9.1% market share in 2015-16 as compared to other grocery stores (ibis). In terms of the strategy of ALDI, ALDI focus on reducing costs to the customer in such a manner that customer is convinced to continue shopping. However, on further analysis, the organization illustrates a differentiating strategy and prefers to distinguish itself from other major retailers the likes of Coles, Wesfarmers and Woolworths. For example, ALDI provides weekly specials like on gardening, camping, kids, and kitchen with discounted offers. ALDI is a low-cost player that stocks a less variety of popular grocery items. Over past five years, an incredible achievement contributes to ALDI 's rapid growth to which consumers have responded positively (ibis). Therefore, it can be said that in terms or corporate strategy, the organization has characteristics of both a cost leadership strategy as well as a differentiation strategy.

This dissertation is submitted in partial fulfillment of the requirements for the Degree in Marketing Practice

The definition of Premium pricing strategy is, using a high price where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are charge for luxuries, free delivery-pick- up service, service quality, special chemical free products and prestigious presentation.

Price interacts with all other elements of the marketing mix to determine the effectiveness of each and of the whole. The objectives that guide pricing strategy should be a subset of the objectives that guide overall marketing strategy. Thus, it is probably wrong to view price as an independent element of marketing strategy or to assert that price, by itself, is a central element in the marketing mix.” (Webster, 1979)

Second, because ALDI stores are typically small they chooses inexpensive or affordable locations usually outside town or on side streets that can minimize the overheads costs that they can spend . The size doesn’t even matter as long as they can conduct their operations and provide goods and services to its valued customers. Third, they display their products on pallet rather than on shelves. They also have cross trained employees to conduct the operations within the entity, to operate, check and also replace the pallets. Lowering the price of their inputs is a way to decrease the cost. Through the methods that they use to follow they are able to achieve their low cost strategy that serves as their strength among their competitors.