Comparison of Aldi and Lidl

Comparison of Aldi and LidlABSTRACTThe price war among super commercialises does really benefit the customers in quoin time. But the major(ip) discount supermarkets like Aldi and Lidl cannot get the all grip on the retail markets as they had it at early stage. They are not equal to(p) to maintain the position in the market as cheapest retailers because of tough competition from rivals. This project hopes to discuss somewhat of the trends among major supermarkets like Tesco, Asda Sainsburys in pricing to grapple with discount retailers such as Lidl and Aldi. It also focus on the strategies made by the mainstream supermarket chains to overcome the recession effects.TopicIn the veritable economy, provide the retail discounters loose tabu? A case postulate of Aldi and Lidl.Aim and ObjectivesAims-Identify the Strength, weakness, opportunity and Threat of Aldi and Lidl to sustain as discount retailers in the current retail market.ObjectivesFind out why commonwealth shop at Lidl a nd Aldi? Their perceptions of the check offs, how often they come? How much they spend?To ascertain why Lidl and Aldi customer fealty has hurt since the competitors changed the strategies.To evaluate the effectualness of Lidl and Aldis recent repositioning strategies on their brand paintingReview of LiteratureScientific and technological revolution have shaped an effective and innovative duty order .Since the source of information and information procedures have become rapid and convenient ,the business automatic teller has turn out to be more chaoetic.Consumers are showing their buying capacity with an expectation of high quality for reasonable price. As there are liberal policies, new products and service are launching every day in to the market. Information technology plays a crucial role in the business world with up go out information and rapid sort of communication1. Customer BehaviorCustomers are offered tremendous bundle of choices. Some people restricts their choic es, becoming relationship oriented with some organization (Sheth and Parvatiyar, 1995) and have the potential to become long life customers. Customers life cycles are becoming increasingly transitory due to the severe impact of competitors movement on existing relationships (Reinartz and Kumar, 2000). Consumer behaviour in retail sector is characterized by impulse purchasing and fickle customers (Newman and Patel, 2004).. This may do to the fact that customers do not experience any switching costs when changing their supplier (Reinartz and Kumar, 2000). Others exhibit switching behaviour in their shopping (Peterson, 1995) and split their purchases among severalTable.1 Attributes of remembering imageMost Frequently Cited AttributeOther Attributes1. Merchandise* Selection* Quality* Price* Styling2. Service3. Clientele4. Physical facilities5. Convenience6. Promotion7. Store atmosphere8. Institutional9. Post-Transaction2. BrandWhen a brand is communicated through announce, packaging and merchandising, it aims to create confidence and minimise the purchasing risk to the consumer (Palmer, 1996). Such attributes, it is held, are fussyly of the essence(predicate) when buying fashion products (de Chernatony and McDonald, 1992 Doyle, 1991). In brief, brand values provide a promise of sameness and predictability (Keller, 2003).Branding came to be understood as providing a curious mixture of benefits that satisfy rational needs, but also emotional aces, by facilitating and simplifying the consumers choice process through behavioural shortcuts, habit and perception. Successful brand is defined as a name, symbol, design or some combination of these, which identifies the product of a particular organisation as having a sustainable differential good (Schmitt, 1999).3. PositioningTo under dead end positioning from a customer perspective, it is important to explain what is positioning in marketing literature. Although the craft of positioning is a defining contribution of modern branding, the idea of positioning dates back to Classical Greece, with Platos assertion that memories evoke related memories, thus colouring interpretation (Warren, 1916). In the seventeenth and eighteenth centuries, the British empiricists elaborated the Aristotelian notion that ideas are stored in memory by association, developing the three Laws of Association similarity, contrast and contiguity.Discussion1. Recession affecting the retailers. here we forget discuss about the recession and its affect on retail markets. As we know that we are running in the bad economic condition. So it gives us unemployment, lack of money, poverty, people go behind the cheap product..etc. in these situation we call it for recession. Recession participate everywhere around the world. In these situations people are scaring to spend their money in to business or market.2. Current retail UK Market.In the current economic conditions the retail markets are trying to catch up with their custo mers giving different offers and products. Using cheap price and quality products are the priority for all retailers to the customers and it is the key factor to increase the business and survive the recession.Neil Saunders, the consulting managing director at Verdict, said (telegraph nov 2009) We are now entering the most challenging period many retailers will have ever faced the UK retail market is both mature and intensively competitive and that, combined with a s number 1d profess in growth, means everyone will need to work much harder just to stand still.Andy bond Asda CEO (the marketing blog aug 2009) We be able to already see how changing attitudes are affecting customers shopping habits, Consumers are not inclined(p) to pay a premium when they cannot taste the difference. The era of conspicuous consumption is besides.Saving money by cutting out waste of every part of kinds will be the priority.3. Major discounters Aldi and LidlThe German chains Aldi and lidl are discount r etailer and fight with the big four rivals called Tesco, Asda, sainsburey, and Morrisons. The two discounters have to do a raft of work while competing rivals.Aldi one of the retail company in UK and launched in 1990 and they have more than 300 stores across UK. the company called Aldi sell food, drinks, healthn and beauty product, healthful items, baby product, and different cheap house hold items and wide variety of fruits and vegetables, including frozen food, fresh meats, fish, desserts, baked goods and alcohol, wines cheeseetc. the important thing that Aldi has concentrated products are own labelled or in other words own brand products and the other brand product or none Aldi products are limited. The store strengthened in cheapest products and it introduced from GERMANY. So the company typically use two similar brands for all category of the product. So this structure gives Aldi stores to be smaller than general supermarkets which suppress the same range of products but w ith more variety. About the companys offer to the customer giving special offers per week, special buy deal offer a particular range of product like electronics and car accessories, cloths and house hold items, garden ,appliancesetc at bargain prices on Sundays and Thursdays (it might be for a week or available for limited products). Aldi is able to offer deeply discounted prices on around 1,300 popular food items (a typical grocery store has 30,000) due to its various cost-cutting strategies. These involve buying cheap land on the outskirts of towns and cities, building cheap warehouses, employing few staff, keeping store furnishings to a bare minimum and carrying mostly private-label items, which are displayed on pallets rather than shelves. The firm takes a fixed amount of money for carrier bags.Lidl the rivals of Aldi and the major discount supermarket store chain in UK. the store more cognizant about their customer and so the firm provides 800 different products. As i above m entioned about Aldi , Lidl has wide variety of their own brand products and the companies priority for preeminent brand for each category. Food, fresh produce, frozen foods, Italian cuisines, wines, home appliances and garden products including tools and planets are available from Lidl. These are the products known as Specials and they offer to the customer low cost of frozen foods as well. Low-cost operating methods, such as avoiding expensive advertising, high-rent locations and a diverse-range of goods, have enabled it to challenge and even overtake its number one rivals in some European markets such as France. Lidl can attract more customers in 2008 in the beginning of recession because most of the consumers especially gist class consumers started their shopping at discount retailers like Aldi and Lidl. According to market look into firm TNS, Lidl was the second most successful UK supermarket group over the spry Christmas period in 2008, with group sales far exceeding growth in the overall grocery sector. GGavin (2008) describe When we visited Lidl stores across Europe, we find that new, improved ranges are being introduced across fresh and chilled categories. Ranges are far more tailored to national and even regional markets than in the past. Organics, healthy have and fairtrade ranges have also been incorporated into the mix. And this strategy, too, is very much determined on a country by country basis, in line with key predominant consumer trends. Clearly many of these elements are not unique to Lidl among its discounting peer group, but the combination of these is leading to the development of an increasingly compelling proposition, with the branded presence in-store a key differentiator from its largest rival Aldi.Now come to the point that the big four super markets battling towards the discounters like Aldi and Lidl.TNS world panel realise that the Aldi and Lidl sales from whitethorn to July 8.3 percent, 6.8 percent. But in the case of the bi g retailers achieved second quarter Morrison 9.5 percentage, Asda 8.1 percentage, waitrose8.2 percentage respectively. Paul (2009), Aldis UK Managing Director, blames some of the slowdown in growth on promotional bodily process from the brands, which has been pretty effective. Aldi does not sell the traditional big brands. The important things that the big four mainly concentrated in their sales called promotions, discount ranges, and advertising campaigns.etc. The Tescos promotion known as discounters, Asdas round pound, Sainsburys switch and save, Waitrose essential. Chris (2009) of TNS, said The promotional activity the major multiples have put in place has stolen the wind out of the discounters sails. Waitroses Essentials range now accounts for 15 percent of the grocers sales.Now the current economic down turn the consumer always looking for the promotions and discount sales. So the major discounters will be loose their sales until they started promotional activity from the tra ditional brands.Research methodology1. Research ApproachTo understand the different research advancement is in business research. These approaches can be mainly categorized as positivist and critical interpretive, qualitative and quantitative. positive(p) and critical interpretive researchPositivist paradigm believes in the view that the world is external and objective to the researcher, which is identical to the belief used in natural sciences. Positivist researchers are independent of the research being conducted and focus on description, uncovering facts and explanation .Researchers, then by using models and theories that they have created explains the behaviour on the grounds of the facts and observationsThe other position, known to us as the critical interpretive paradigm believes in the view that the world is cooked socially and is subjective. They also believe that reality does not exist outside the perceptions of people. fine researchers are seen as a vital part of the re searching process. Critical researchers attempt to discover understandings and discovery of the broad interrelationship in the circumstances they are researching. soft and quantitative researchIn qualitative research words are the units of analysis. Qualitative research tends to be associated with description. The data needed for qualitative analysis has to be gathered from interviews and questionnaires. Methods like ethnography will be used for the process of qualitative analysis and ethnographic data storage software will be used to store information. There are many advantages of using such software which will help store the data safely, the data can be coded easily, and retrieval of data will be more reliable. Computerization removes barriers and scales to the scale and complexity of analysis. There are virtually no clerical limits to how much overgorge you get now, and few to how complex it is. (Richards and Richards 199340)Quantitative researchQuantitative research tends to be associated with numbers, as the unit of analysis and it tends to be associated with statistical data. Charts and graphs have to be constructed from the figures and information gathered from the questionnaires and researches. Word processing and spreadsheet packages can be used for this purpose. Information in the form of numbers will be gathered from various HR Mangers by using different data collection tools like questionnaires, review of previous documents etc. and the data will be used to construct meaningful figures and charts using software.Research StrategiesSurvey- Since the case study is on the basis of customer behaviour with a clear aim on customers perception of a particular brand, certainly the importance is set on radical data. The secondary data backed the primary data using appropriate hypothetical framework. The primary data will be collected using pre-designed questionnaire. Twelve questions were involved in the close ended questionnaire form with shoppers demogr aphic outlines. Brand and Store loyalty measurement can be done by enquiring Lidl Aldi shoppers to rate definite qualities on predefined scales. Uni-polar scales will be utilized (Ajzen and Fishbein, 1980) starting from one all the way to five, places very low, low, average, high, and superb respectively. Former researchers, like James et a. (1976) have used the similar scaling methods while assessing attributes of a certain brand or store by implying how much a store is able to fulfil consumers expectation.In AldiLidl outlets in London where customers should be asked to rate the attributes with one hundred questionnaires.At least lxxx interviews will be carried out in London AldiLidl outlets. Since only AldiLidl shoppers participated, every questionnaire will be involved in the research. A detailed survey must(prenominal) be conducted. The data analysis could be created by using e SPSS12.O which is the data mining programme.Case study- This research is on the basis of case study since it discovers the individual behaviour of consumers in retail market.Research on the basis of case study is suitable since it covers the contextual situation and a broadly investigation other than a mere theoretical study.More over it is reliable as it provides multiple sources of information. In research, a familiar figure is used to study as it represents the tout ensemble concept with itself.Discount supermarket case studies are widely used in most of the UK institutes and research fields as it had a bright past with enormous brand loyalty by customers.,But now the scenario became different and it is facing more challenges to exist in the market.Explanatory study On the basis of brand position and opening Explaining fundamental connection of variables (correlation of style and shoppers customers visiting time) Focusing circumstances for describing the connection among variables.Form of PresentationThe dissertation will be presented in a create verbally form supplemented with charts showing current and historical dataConclusionAldi and Lidl the major discounters in UK, but the above mentioned information give us they are release to lose in current economic conditions. So the message give us the total picture about the current market, economic conditions, and the rivals in the current markets.ReferencesGeoffrey Moore, the business cycle research, Jon Gregory Taylor, investment timing and business cycle, john wiley sons publisher in 1997,p23Gary marks john F. Maudlin, rocking wall street john wiley sons publisher in 2007, p92.Invstopedia forbes digital company(http//www.investopedia.com/terms/r/recession.asp)India dialy news paper(2007) (http//www.indiadaily.com/editorial/17492.asp)Bureau for Economic Research (BER) http//www.fastmoving.co.za/news-archive/retailer-news/retail-sector-faces-threat-of-recessionhttp//www.telegraph.co.uk/finance/newsbysector/retailandconsumer/3368164/Tesco-most-likely-retailer-to-survive-recession.htmlAndy Bond CEO Asda http//www.themarketingblog.co.uk/e_article001292783.cfmAldi http//www.supermarket.co.uk/aldi.htmlLidl http//www.supermarket.co.uk/lidl.htmlGavin Rothwell, senior business analyst, IGD, http//www.igd.com/index.asp?id=1fid=1sid=19tid=11cid=85http//www.guardian.co.uk/business/2009/jul/24/aldi-lidl-sales-growth