Retai Essay

2545 Words 11 Pages
The Aldi Value brand offered shoppers basic grocery items including baked beans and orange juice at prices significantly lower than those of their branded competitors.
As a competitive mechanism to increase customer footfall in stores and maintain and build customer loyalty, Aldi has engaged in numerous price-based promotions.
Customer satisfaction is created by using criteria used by the customer while buying a product and it is about charging premium prices so that it covers the extra production costs justifying the need of choosing their differentiated product over the competitor’s product (Porter, 1985).
They give an edge over the competitor like TESCO, ASDA, Lidl, Netto,BI-LO, Kwiksave, Save-A-Lot, Penny Market, Plus, Dia by
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Selecting the prices is one of the most difficult considerations when developing a marketing mix. Different pricing strategies that are commonly used include:
• Market penetration – charging lower prices for new products to help them enter the market and gain market share quickly.
• Competitive pricing – pricing at a slightly lower prices than competitors. • Strategic pricing – emphasising the quality or brand positioning of a product to allow a higher price to be charged.
Competitive pricing is a key strategy for Aldi. Aldi is able to offer quality products at low prices as it buys in great volume. The fact that Aldi buys such large quantities of these products allows great leverage for negotiating the best possible prices with its suppliers. This is called economies of scale. Buying large quantities of each product allows Aldi to pass these savings to its customers.
The place element of the marketing mix involves identifying where the product or service will be sold. Aldi keeps its store layouts simple to limit waste and keep costs down. This means Aldi can focus on offering its customers the lowest possible prices for its products
Above-the-line promotion
For Aldi to achieve its objective of increasing its market share, it had to ensure its promotional activity demonstrated the balance of its marketing mix. For example, to increase customer loyalty it had to communicate its

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