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The retailing German company Aldi has been increasingly successful over the last sixty years mostly due to carefully chosen marketing strategies that eventually proved to be effective. First and foremost, Aldi attracted its customers by low prices and a developed discount system. The company started to carry a big number of group private labels and branded products, which were sold at the prices determined by Aldi itself. Thus, Aldi became a hard discounter – a sort of a supermarket that was difficult to surpass. Another key point was the high quality of products despite the low prices. Quality tests for all kinds of products became daily in Aldi, ensuring meeting the tastes and demands of the customers. Active promotion of products, low prices, and high-quality strengthened Aldi’s authority among consumers. Aldi became a strong competitor at the retailing market due to its limited number of offered products and a very fast and high quality customer service. Moreover, a small number of staff at a supermarket (up to three) and well-planned logistics (so that shipments got to the supermarket shelves very quickly, without extra stocking) contributed a lot to its progress. “Aldi’s philosophy was to focus on the indispensable and avoid the unnecessary” (Mitchel, 2006, p.2).
2. The German business press criticizes Aldi for its slowing and almost stagnant growth, especially when compared to its main competitor, Lidl. What do you think?
Aldi’s main competitor Lidl appeared almost thirty years after the first Aldi supermarket had been opened and clearly became its emulator. For the past years, Lidl has developed into an international fast-growing retailing company. Its pace of growth surprises many marketing analysts and allows statements that Lidl has a tendency to surpass slowly developing Aldi. However, one should not forget that stability is the best sign of success. Aldi has already won its public, particularly in Germany, having become not only a reliable supermarket but also a part of German household history. That is proved by statistics– while Aldi is one of the closest and most native supermarkets for the German with the presence of half of all its stores in Germany, Lidl has the minor part of its stores there. According to some observers, “…an ageing population and stagnating economy played into the hands of Aldi” (Mitchel, 2006, p.11). Once earned, customers’ loyalty has remained the key to Aldi’s success.
3. What are the key challenges for Aldi’s expansion in other countries?
Taking into account that Aldi has always been a pure German brand, “a cultural institution” (Mitchel, 2006, p.11), it is necessary to mention that expansion abroad makes Aldi meet certain challenges. Aldi’s supermarkets have always focused on customer’s needs and carried a very limited variety of products. Starting a business in other countries, Aldi has to study the peculiarities of customers’ demands in the given countries, or it might lose its key feature – sale of only indispensable products. Meanwhile, it has to face the competition with the existing chain supermarkets in the country, which have already occupied their market share. With time people get used to the fact that they can trust Aldi because it always has a certain amount of necessary, proper quality products at low prices.
Analyzing Aldi’s marketing strategies, its organizational principles, and its development history, we can state that Aldi has consolidated at the market of retailing stores. Its constant growth during almost sixty years has made it a strong competitor of other chain supermarkets. Being a hard discounter, Aldi has won a whole army of its admirers. Certainly, one cannot deny a growing quantity of new stores, including other hard discounters, which enter the market and attract their customers by hot offers, discount system and EDLP. However, in our opinion, Aldi will continue to be successful, at least in Germany. Its main difference from other supermarkets is the ability to create loyal customers – quickly and permanently. Effective promotional activity together with the lowest possible prices gives its results. Uneven distribution of Aldi’s stores across Europe, with a bigger concentration in Germany, Belgium and Netherlands, makes many critics believe that Aldi has already finished its development. However, from our perspective, as long as there are people who appreciate good quality, and low prices, hard discounter retailers with a good reputation will always exist.