Competitive Strategies in Retail

Introduction

According to Kotler, (2000) mentioned that marketing mix consists with a set of controllable factors which is used by an organisation to influence the consumers’ response toward the offerings of the company. According to CIM (2009) marketing mix is defined as the combination tactics utilised by an organisation to understand its objectives through marketing its offerings efficiently to a specific target market. According to Kalyanam & McIntyre (2002) argued that marketing mix is a set of thousands of micro-factors grouped together for the purpose of simplifying the activity of marketing manager. However, according to Borden (1964) pointed out that the marketing manager must integrate the major elements of marketing mix to design and execute marketing operation of an organisation. According to Grönroos, (1994) mentioned that the marketing mix tool became a useful tool for marketing decision making and teaching. From analysing the above definition the author has recognised that marketing mix is a mix of various marketing decision elements, tactics and variables and strategies utilised by the management of a company to offer its goods and services in the market. It is evident that the marketing mix consists of different an element which is called the 4Ps of marketing. The 4Ps of marketing include product, price, place and promotion. These four factors can be controlled by the marketing manager of a company. These elements are mixed to attract the customer response in the market. Therefore, an organisation produce products, set price, makes it available in different place and execute different promotional activities to influence the buyer to buy products.

Asda is a UK based supermarket retailer which sells groceries, clothing and home furnishing products. The company has to face severe competition in the European market. The competitors of Asda and Aldi include a number of companies like Tesco, Waitrose, Ocado, Hotfrog, Walmart and Amazon etc. Aldi is one of the biggest competitors of the Asda. Aldi is a German based family-owned discount supermarket which has operation in different countries including United Kingdom. It is obvious that the super market doesn’t want to lose its customer to its competitors. The supermarkets are aware of retaining customer trust of their service offering. Moreover, Supermarket undertake different strategies to retain the new customer and convert them into profitable customer. In order to capture the value from the customer, the organisation has to develop different marketing strategies. Therefore, the supermarkets design different marketing mix for different groups of customers. Research showed that there exists an inherent fight among competitors in the market. The supermarket changes the factors of different elements of marketing mix to beat its competitors. In this report, the author will analyse the marketing mix of Asda and Aldi. The author will describe how the marketing mix elements of Asda and Aldi implement their marketing mix element to get positive response from the customer. In this report, the 4Ps (product, price, place and promotion) of the two company has been examined in detail. Lastly, the author will compare the marketing mix element of Asda and Aldi.

Product

Asda Company deals with many products and as such, has many varieties of items for sale. It is significant noting that the company has almost monopolized the supermarket industry and has even gone to an extent of selling groceries, clothing and home furnishing products. However, it is evident that the understanding of products’ life-cycles, and even the acceptance of some products, especially in some areas provides the company with a competitive edge over its competitors. As such, it is clear that Asda Company has not limited itself to just one kind of business proposition, rather, it has opened up a variety of businesses. Notably, this has been able to make the company’s marketing stance to be stronger, which in turn, had given it immense success (ASDA, 2017).

Price

Asda Company focuses strongly on the prices of its products, and as such, they term it as “Asda Price” which they refer to as a “Smart Price.” Notably, the pricing imposed by Asda depends on the sales of the products, as such, owing to the fact that the company is a leading retail store, it has placed its prices to be fixed. Moreover, it is evident that how the company prices its products depends on the company’s consumers too and this poses as the reason why the slogans that are used by Asda often focus on the provision of better products at way lesser prices, in order to attract even the rural population (Jordan, 2017). In Asda, there is an understanding that when the prices of a product are lower, or even higher than the expected price, or even when they differ greatly as compared to the competitive prices, then the product is bound to fail to sell.

Place

Place refers to the location within the market, where a given product is sold. Products, which Asda sells, are mostly household items such as food, as well as non-food products and as such, the stores of the company are located in various areas where population demands such kind of outlets. Asda believes in the idea of selling its products together in one given place and it is evident that, that is better in terms of saving on transportation costs. It is worth noting that the company focuses on even rural, as well as suburban areas, which provides the company with a competitive edge, as the stores pose great significance to the public in such areas (ASDA, 2017).

PromotionIt is evident that Asda uses prominent and unique promotional features. The company believes that use of sound, and also maximum promotional features enhance a great promotional value, as it is aware that through proper promotion, the company has the capability of selling its products in maximum. Clearly, the company promotes its products through advertisements, as well as slogans such as “More for you, for less” and also “Why pay more?” Clearly, these promotional strategies pushes the company towards a positive success curve. Evidently, the company considered the slogan of “Saving your money every day” and this evidently attracted many consumers. In this regard, the promotion involved the portrayal of celebrities in some exotic places whilst having fresh food items (ASDA, 2017). Notably, this lured a huge number of consumers.

Product

Aldi provides consumers with a variety of products, which include fresh food, bakery, household items, health, as well as beauty products, drinks, pet care, and even whole foods. Notably, the company sells its items, which have its items, which have been categorized as its private label brands. Of importance to note, is that the company works together with good suppliers and as such, it able to deliver the best products to its customers (Aldi Stores Limited, 2017).

Price

Aldi is known to be a discounter whilst it sells its products at a greater value and also of high quality. It is evident that the company has a strong and loyal customer base, and as such, a combination of those factors (cheap price and high product quality) has significantly aided the company in achieving customer loyalty. Of significance is that Aldi uses various pricing strategies. For instance, it uses psychological pricing, such that it prices most of its products, in an intelligent way such as £3.99 instead of £4.00 (David, 2018). In this regard, the difference, which is £0.1 often has a positive impact on the customers’ psychology as well as decision-making. Moreover, it is evident that Aldi often lowers its prices than its competitors whilst ensuring that the quality of its products is not in any way compromised.

Place

It is evident that Aldi has many stores (thousands) in 19 countries across the globe. Putting this into context, it is evident that the company has over 680 stores in the UK and also more than 1500 stores across 35states that are present in the USA. Aldi’s customers are privileged to visit their nearest stores or even shop online. The company delivers its provides to many postal areas, especially in the main land, UK, and interestingly, the company has no minimum requirement for spending, when it comes to delivery. Moreover, the company has granted its customers many options, such as, they can select CollectPlus, as their suitable option of delivery and thus, be able to collect their order from a selected point of collection within the UK and in a time span of between 3 to 5 working days whilst their order is being processed (Aldi Stores Limited, 2018).

Promotion

Aldi uses various promotional strategies such as advertising, public relations as well as sales promotions. Mostly, the company advertises its products on TV, and even newspapers, in order to be able to reach out to most of its customers, particularly those based in the US, UK, as well as Australia. Moreover, it is evident that the company also utilizes PR and as such, it has initiated various projects that are concerned with corporate social responsibility. For instance in the UK, the company works with organizations such as Teenage Cancer Trust, in order to ensure that no young person battles cancer alone. In terms of sales promotion, the company cuts prices on most of its products (Aldi Stores Limited, 2017).

Recommendations

In terms of product, it is recommendable that both Asda and Aldi should purpose to sell more products, thus increasing the variety they sell to customers, in order for them to increase their sales, as well as returns. In this regard, the two companies should determine more products, which their customers need, and as such, sell them as well. Moreover, whilst considering price, it is recommended that the two companies should purpose to start using the penetration pricing strategy. In this context, the companies should set artificially low prices on products, in order to gain a significant market share, especially when they have entered a new market. Significantly, this strategy can as well aid in attracting more customers. Overall, in an instance where this strategy has significantly achieved its time of maturity, the companies can thus increase their prices. In terms of place, it is recommendable that both companies should engage more in social media platforms, as they provide a better shopping platform, especially when customers feel that it is not in their convenience to make to their physical locations. Finally, in term of promotion, it is recommendable that both Asda and Aldi should use more of permanent TV channel advertisements, as it promotes at all times unlike other strategies, which are temporary.

Conclusion

From the above provisions, it is evident that marketing mix provides a significant combination of tactics, which organizations use in understanding their objectives through marketing their offerings efficiently to a specific target market. Notably, marketing mix has been noted to be of significant to companies such as Asda and Aldi, which are also rival companies. It is significant noting that the marketing mix of Aldi and Asda are almost similar whilst putting into consideration the 4Ps. However, significant recommendations ought to be put in place, in order for the companies’ strategies to be effective. All of the recommendations relate to the 4Ps. Overall, it is evident that there exists an inherent fight among competitors in the market, which mandates companies to engage effective marketing mix, in order for them to compete their competitors, owing to the fact that the 4Ps focus on consumers, who have their personal obligation of choosing where to purchase their products and where not to.

Reference

• Aldi Stores Limited (2017). Award-Winning Aldi Quality. available at https://www.aldi.co.uk/awards (Accessed 18th Nov, 2019)
• Aldi Stores Limited (2018) Delivery Information. available at: https://www.aldi.co.uk/customer-services/delivery (Accessed 18th Nov, 2019)
• ASDA (2017) About us. available at https://www.asdasupplier.com/about-us/about-asda (Accessed 18th Nov, 2019)
• Borden N.H. (1964). The Concept of the Marketing Mix. Journal of Advertising Research, 24 (4): 7-12
• CIM. (2009). How to achieve an effective marketing mix, 10 minute guide. The charted institute of marketing, UK
• David, J. (2018). Marketing mix of Aldi – 4Ps of Aldi. available at: https://www.howandwhat.net/marketing-mix-aldi-4ps-aldi/ (Accessed 18th Nov, 2019)
• Grönroos C. (1994b). From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing. Asia-Australia Marketing Journal, 2 (1): 9-30.
• Jordan, D. (2017). Asda offers staff a pay rise for ‘flexible’ contract. available at http://www.bbc.co.uk/news/business-39257259 (Accessed 18th Nov, 2019)
• Kalyanam K., & McIntyre S. (2002). The E-marketing Mix: a Contribution of the E-Tailing Wars. Academy of Marketing Science Journal, 30 (4): 487-499.
• Kotler, P. (2000). Marketing Management, (Millennium Edition). Custom Edition for University of Pheonix: Prentice Hall