Creating value through the marketing mix An Aldi case study
Page 3: Balancing the mix
Organisations need a balanced marketing mix to meet the needs of its customers. Aldi’s focus is on offering the best possible quality products at the lowest possible prices. Every buyer for Aldi, from fresh fruit and vegetables to meats and electronics, is an expert in their field. They look for products from around the world. This enables them to get the finest quality products that Aldi then sells under its own brand labels.
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. When considering new store locations, Aldi takes into account:
the number of people visiting an area as well as the demographic of the area - for example, the population of the area should be more than 30,000 people
the position of store - Aldi focuses on edge of the town centre locations with good visibility from a main road and not too much competition
the accessibility of the store and its public transport links