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Interrelationship of Marketing Function of ALDI

Answer :
Organization Selected : ALDI

INTRODUCTION

In today dynamic business environment where in there is tough competition in market not only in terms of large no of competitors but also because even the customer today has become quiet knowledgable and selective about goods and services they purchase (Berkowitz, 2016). Thus, marketing helps a firm to capture attention of its target audience by creating relevant products and services to reach new potential customers and to retain its existing target audience.

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Aldi is one of the discounted supermarket chain which was established in 1913 with its headquarters Germany. Aldi's main products includes daily necessary household products, vegetables, dairy products, clothing range, beverages both alcoholic and non alcoholic and so on.

This project will discuss the various roles and responsibilities of marketing department along with evaluating how it influence other function of business organization. Further in report interrelationship of marketing function of Aldi with its other departments will be discussed to analyse how it contributes in company;s success and growth. In later part of project a detailed marketing plan of Aldi will be analysed besides giving synopsis about comparative study of company's marketing mix strategies in relation to its competitors.

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TASK 1

Role of marketing and its interrelationship with other functions of business organization

Marketing is a customer focused concept that involves tightly integrated efforts for discovering and creating innovative products and services as per customers needs and requirements with minimum cost so that company can attain customers satisfaction which will ultimately reap benefits of high profits and strong hold on market share of the company.

Today, the needs, preferences, fashion, taste of customers changes so frequently in blink of eye that it becomes critical yet quiet important for a business to cope up and manage these demands in order to satisfy its target audience and to maintain and enhance its edge in market (Blythe, 2012). For handling this crucial situation, it is essential for a form to monitor and evaluate past and present market trends so as to predict likeable future changes that can occur and to address unfulfilled wants and needs of consumers by introducing new and creative products to get high sales volumes and maximum returns. Marketing is a vast concept that involves a firm to undertake various activities including coordination with other functional departments like HR, finance etc. in order to formulate best and most appropriate strategies, products and services in accordance with different needs and aspirations of various consumers (Brassington and Pettitt, 2013). Marketing helps a firm to communicate benefits and value of its products and services by making use of various tools and techniques for promoting its products such as advertising, direct selling, online marketing etc.

Marketing department of Aldi assist the company in enhancing its revenue, market share and in its innovations by undertaking various roles and responsibilities such as formulating various strategies, marketing plans by analysing past and present market environment and various other functions that are related to conversion of raw material into delivering it to end users. Mentioned below are some of the most prominent roles and responsibilities undertaken by marketing department of Aldi:-

Market research: Marketing research formas the basic function of marketing function. It involves gathering and analysing information and data related to customers taste, needs, preferences, business rivals tactics and schemes, prevailing market trends, government policies etc. with the help of various tools and techniques like survey, questionnaire, internet, government portals and many more other sources (7 Functions of Marketing, 2017). The marketing manger of Aldi evaluate this information to make necessary modification in its existing products in terms on adding new features in it or to design an entire new product that perfectly fits into customers specifications. Also it helps a firm to make alteration in its marketing and other strategies so that it can remain ahead of its market contenders.

Monitoring and managing social media: In this era of digitalization, where in everyone prefers to be techno friendly and make use of internet to carry out various activities starting from shopping to paying bills, to entertain themselves social media can serves as a useful option to gather information related to market scenario, customers, competitors and so on. Also it can serve as an important, effective and attracting medium to make its customers aware about its new products, various offers and discounts and other company related information. Best assignment assistance for students in UK.

Serving as a media liaison: Another important role of manager of marketing department is to act as key interface between business and its target audience. Its has the responsibility to represent company in various functions, act like a spokesperson on firm's behalf to address complaints and questions.

Promotional Activities: Aldi adopts a very cost effective strategy for its sales promotion spending negligible amount for its sales promotion. Sales promotion is concerned with communicating the information ,value and benefits related to a product or service offered by a company by utilizing various attractive and innovative methods like advertising, publicity, direct selling etc. (Cavusgil and et. al., 2014). This helps a firm to expand and diversify its business by reaching potential target audience and capturing their attention towards the products and services inducing them to buy it.

Setting up pricing: Another major function of marketing department of Aldi is to prepare strategies related to setting price for its products. Aldi uses market penetration strategy to for popularizing its new product and to enter and gain share in market quickly. It keeps prices of its products competitive so that people of every income group can afford it. This benefits company in increasing its brand image across world giving them advantage to diversify their business around the globe in short span of time. To maintain its competitive edge on others Aldi works with motive of providing quality products at lower cost.

Management of firm's Product and service: Product/Service management forms one of the key responsibility of a marketing unit of Aldi which involves various activities of procuring, processing,maintaining and improving a product or service mix in relation to changing customers requirements and emerging market opportunities (Shaw and Director, 2012). ALDI keeps on monitoring the changes occurring in business environment in order to ensure that it is not lacking anywhere in catering its customers needs. Aldi by evaluating people tastes and preferences provides various innovative products and try to introduce new technologies for providing better services to its customers to attain their satisfaction. Aldi by maintaining an effective and efficient channel of distribution make sure that goods are delivered to end users on time reducing their waiting time. Also it provided good after sale services such as exchanging product in case of its being a defective one, handling their queries and solving their doubts patiently and so on. This induce customer's trust in the company and thus give benefit of mouth publicity, friend and family referrals and built up positive brand image of firm.

Importance of Marketing

Product innovation: By analysing about what are the actual needs and preferences of a customers, what are the new and latest market trends, competitors strategies and other information related to market environment marketing unit of a Aldi initiates product innovation either by making necessary modification in existing product or by introduction an entirely new product as per customers demand (Cooper, 2013). Through innovation ALDI can compete with external factors.

Creating brand awareness: One of the major a role of marketing unit is to communicate its target audience about company's product and services, its associated benefits and about its value by adopting most appropriate tools and techniques for sales promotion. Thus, it helps in attracting new customers and retaining old ones thereby contributing to company's growth and profitability.

Relationship building: In order to maintain and enhance its market share firms like Aldi needs to build up a strong customer relationship so as to gain consumers loyalty. Aldi by ensuring that its products and services are customized as per its audience taste and preferences,that goods are delivered on time without any delays and making sure that its after sales services are up to the mark in handling customers queries and doubts works towards achieving customer satisfaction thereby maintaining its trust and brand image in eyes of its target group (Jones and Rowley, 2011).

Responsibilities and roles of marketing relate to organisation

For enhancing its growth and to attain high performance in its operations marketing unit of Aldi collaborate with with other business divisions such as HR, finance, IT and R&D so that work efficiency could be maintained leading to qualitative and innovate products and services generating higher sales volumes and higher revenues. Mentioned below is description of interconnection of marketing unit with other departments of a firm:

Marketing and R&D Department: Research and development department of Aldi assist the marketing department by providing them with information, statics and other relevant data related to customers buying behaviour, their demands, market trends, competitors tactics etc. By analysing this information, comparing past and present data marketing department introduces necessary alternation in its existing policies, strategies, processes and products or introduce an innovation in these areas.

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Marketing and Human Resource Development: Aldi been customer centric leading discounted chain having its 10000 stores in 20 countries maintains a team of more than 1044000 employees who handles its operations. Thus, employees forms the cornerstone and point of focus for Aldi as they serves as a source of knowledge, skills and capabilities utilizing which company fulfil its objectives (Silver and et. al., 2014). Employees represents face of company for customers as that are people with whom customers interacts,.Thus, to achieve customer satisfaction it is of utmost importance for Aldi to have a team of dedicated professionals who are knowledgable and qualified enough assist and handle customers doubts. HR department of Aldi by implementing a marketing tools attract potential candidates both from external as well as internal sources to apply for the job and select the most appropriate employee. Thus, by making sure that marketing unit have right person, at right job profile with required capabilities and skills HR department of Aldi hire talented personnel who assist in achieving objective of firm both short and long in an effective manner.

Marketing and Customer Service Department: After sales services plays a vital role in retaining present customers and to satisfy potential one who are making purchase with company for the first time. business enterprise can earn higher profits by satisfying their target audience in an effective manner. Aldi customer service unit tries to make it customers happy and satisfied by providing them 24*7 assistance in handling their queries and doubts. Also to make it more convenient for consumers to reach company executives Aldi customer service department are making use of social networking sites where in consumers can send their queries and can get instant reply (Lilly, 2014).

Marketing and operational department: Operational department of Aldi is mainly concerned with managing and controlling various business activities such as converting resources into finished goods, handling supply chain and distribution system and so on. By working in close association with marketing department it get benefit of finding information related to potential suppliers that are available in market who could provide required raw material in comparatively reasonable prices. Further with these units work conjointly to prepare and implement various effective techniques like TQM, inventory management etc. that assist in improving quality of its existing products.

Marketing and Finance Department: The marketing managers of Aldi are in constant requirement for economic resources for conducting planning, research and to evaluate effectiveness of marketing strategies. Thus, it get aided by the finance department of Aldi that provided requisite funds and prepare budgets for them so that marketing manager could effectively carry out it activities within limited resources.

Thus marketing department is interrelated with various other functions of an Aldi to effectively work towards its key elements such as research for which information is aided by R&D department, strategy that are been based on findings of market research, planning and tactics which is prepared with close discussion of various department managers and tactics.

TASK 2

Marketing Mix of ALDI

Marketing mix of every company outs its customers into center of focus. In order to attain an edge over competitors and maintain and enhance brand image marketing department by tries to create a perfect blend in its marketing mix by producing right product, sold at right price, in perfect place by using most appropriate and attractive promotional technique (Marketing Mix,2016). Thus, by formulating a smart marketing mix strategies Aldi can achieve high performance, productivity and profitability by attracting consumers and induce them to buy their innovative products. Mentioned below its the comparative study of marketing mix of Aldi with one of its leading competitor Lidl.

Basis

ALDI

LIDL

Product

Aldi claims to offer a variety of products ranging from household goods to beauty products, fruits and vegetables, clothes, beverages etc. with high quality at reasonable price in comparison from other brands. Also, it experiments with its non foods products by modifying its product line in accordance with season.

LIDL deals in same product as offered by other supermarkets at cheap prices. The distinctive feature of Lidl is that it offers products in their original brand names unlike Aldi (Wirtz, 2012).

Price

Aldi follows unit price strategy giving advantage to its consumers to compare it with other firms price. Having a strong customers and large market share Aldi gains economies of scale in its production leading to keeping product quality high and prices affordable. It various pricing strategies like market penetration, cost leader pricing, psychological pricing enables a company to attract new customers and retain the old ones.

Lidl created image of offering private labels products at affordable prices. Their have a clever pricing strategy which focuses on selling more at low price level.

Place

Aldi has a strong channel of distribution. It has around 8000 stores in around 20 countries as well as its own warehouses that helps company to maintain its visibility to customers and to cater their needs on time without any delays (Malhotra, Birks and Wills, 2013). Moreover it also well maintains its online presence through its web portals which make it convenient for customers to track down products details and nearest store location.

Lidl maintains a good regional distribution centres cross UK and around 10000 stores across Europe where it provides quality products at reasonable prices.

Promotion

Aldi spend very negligible amount on its sales promotion and follows a cost saving strategy. It extensively uses print ,electronic and online media to promote its brands, communicate its offers and discounts schemes to its customers. It also make us of email marketing and other attractive promotional techniques like “swap and save”, “like brands. Only cheaper” etc.

Lidl uses public relations, integrated promotional campaigns and other methods of online, electronic and print media for sales promotion.

People

Aldi has a very smart and convenient store layout which reduces the requirement of employees needed on every floor to assist customers. It has a proficient team of employees who are well trained and dedicated towards their work as they are paid well in accordance to their capabilities and skills. .

Lidl pays quiet attractive salary to its employees whose performances are marked on the basis of how fast and how many items that they can scan in shortest time. It provide its employees with proper training to make them proficient in their tasks.

Process

Aldi follows a very smart and well coordinated store layout which assist customers to to easily find what they are looking for. Also it stocks limited quality brands which prevent people in getting confused and decreases their selection time.

It primary process involves buying and selling large quantity of goods at lower prices. Lidl do not involves customer in any of its procedure or processes.

Physical Evidence

Aldi is known for its simple, standardized business process and for its pricing policy. It claims to provide 30% cheaper products as compared to any other brand and is the only store to maintain same price for groceries across world.

Lidl stores follow a linear and traditional layout design assisting consumers to to have easy access to find and purchase products. It utilizes its brand colours in its stores and its surroundings to make it convenient for them to locate it.

TASK 3

Marketing-Plan

Company Overview

ALDI is world renowned discount supermarket chain managing its operation in around 20 nations with more than 10,000 stores. Company deals in a wide variety of products comprising household products, electronic appliance, beauty products, groceries, clothing range and other non food items of high quality at reasonable price level (Mihart, 2012).

Vision and Mission Statement Aldi :

Vision: "Top quality at incredibly low prices – guaranteed”. It aims at providing products by following its ideologies i.e. huge savings, excellent quality, outstanding value, superb special buys and buy with confidence (Papasolomou and Melanthiou, 2012).

Mission: Aldi mission states “Simply Aldi” which describes its aspiration to follow its three core values – simplicity, responsibility and reliability so as to provide its customers with top quality products at affordable prices helping it to further expand its market position.

SWOT Aldi Analysis:

Strength

  • Provide high quality products at reasonable prices.
  • It captures large market share in Germany, operating around more than 2500 stores.
  • Due to large customer base it has benefit of economies of scales in its production
  • It keeps on modifying product line of its non food items in accordance to season (Peter and Donnelly, 2011).

Weakness

  • Although being discounted retail chain Aldi still has to increase prices its certain product due to fall in pound in order to maintain its profitability .
  • Although Aldi has experienced an increase in its growth rate but it stills lacks behind in term of market share from British supermarkets.
  • Aldi is alleged to provide lower quality products as people generally perceives economic goods to be of cheap quality
  • Aldi lacks in no of staff in its stores so as to mange operations in case of increased footfall Low customer attraction

Opportunities

  • Aldi requires to expand its operations by capturing potential markets in emerging economies like India .
  • Company can also have potential to diversify its business in UK as well as Aldi currently operating 700 stores aims at having 1300 stores by 2022
  • With immense competition from it leading business rivals like Lidl and other big brands like TESCO, Walmart etc. company needs to intensify and spend more on its promotional activities.

Threats

  • High level of competition from other supermarket brands.
  • Aldi fails to provide a “complete shopping experience” to its customers under one roof.

STP Approach:

Segmenting

Customers who are looking out to purchase household products and grocery at affordable prices.

Targeting

Family and household Groups

Positioning

Aldi is already gain popularity with its private labels. Having strong base in Germany, company is now targeting other emerging economies internationally.

Marketing Budget:

Marketing budget

Particulars

1st year

2nd year

3rd year

4th year

5th year

Initial money

3000

6000

8000

10000

12000

Investment

13000

20000

25000

12000

Total

3000

19000

28000

35000

24000

Marketing outlay

Promotion

4000

2000

3000

4000

2000

sales publicity

4000

4000

5000

3000

3000

Direct selling

4000

2000

5000

4000

5000

Total

12000

8000

13000

11000

10000

Application of 7P’s to achieve marketing objectives

  • Product: By providing variety of products and services with high quality but at reasonable price Aldi is able to acquire large market share.
  • Price: By following a collective pricing strategy involving aspects of unit price, psychological pricing, cost leadership and market penetration strategies Aldi is to set most competitive price that is affordable to every one.
  • Place: By maintaining strong distribution channel and efficacy in supply chain management Aldi is been able to establish around 8000 stores in 20 nations. Also by launching its online website company is having significant online presence that enables in capturing wide market share.
  • Promotion: As Aldi offers high quality products at affordable price customers are already well aware about the brand. Thus, company incurs minimum expense on its sales promotion. However its promotional activities includes use of print, electronic and online media apart from various discount schemes.
  • People: Aldi employees more than 30,000 employees in UK and about 104,4000 staff across its global stores. Thus Aldi maintains a proficient team who are being provided with necessary training time to time to enhance their skills and knowledge about various changes occurring in market.
  • Process: By maintaining a well coordinated store layout having limited quality brands Aldi facilitates its customers to shop easily reducing and by reducing their selection time.
  • Physical Evidence: By maintaining brand image of having simple standardized business process Aldi is been easily recognized by its customers. Also, its unique offering of high quality at affordable price makes it popular and distinctive from its leading competitors.

CONCLUSION

The project undertaken concludes that marketing plays critical role in organisational growth and success as it helps firm to formulate those strategies and manufacture those products and services that are as per customers demands and aspirations. Moreover marketing manger undertakes various roles and responsibility and coordinate activities with other department so as to enhance efficiency of various decision undertaken related to product development, modifications, policies etc. Further it discuss about elements of marketing-mix which enables firm to perfectly amalgamate its product,price,place and promotion variants. Further, detailed marketing plan of Aldi with SWOT and STP plan is discussed.

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