Analysis of Lidls Marketing Strategy | 7Ps, SWOT

summary of Lidls Marketing dodging 7Ps, SWOTIntroductionLidls history begins in the 1930s, when their first store was created in Germany acting as a securities industry wholesaler. Since then, Lidl has now become one of the largest mart retailers in europium, with over 600 stores operating in the UK, and thousands establish across Europe (Butler, 2014). Although the touchstone of stores that Lidl cave in in operation is staggering, it is made regular more astonish by the fact they only overstateed out of Germany 20 years ago (Lidl, 2015). This rapid involution has made them one of the near dominant and fe bed competitors in the UK grocery merchandise, with major grocery retailers constantly nerve-wracking to minimise Lidls portion of commercialize sh ar.Although Lidls grocery sh be in the UK is still relatively small, with them acquiring 3.5% at the beginning of 2015, they atomic number 18 one of the fastest growing grocery retailers. Whilst many supermarkets argon losing their market sh ar, Lidls was change magnitude by a stagger 15.1% from 3.1% to 3.5% (FT, 2015). Figure 1 highlights the variation in market share, and how much market share each supermarket currently holds.As previously mentioned, although Lidl have a relatively low market share, they are currently one of the fastest growing retailers in the market. An abbreviation of Lidls current marketing dodge leave behind be conducted, with particular emphasis on the 7 Ps of marketing. Furthermore, Porters Generic Strategies will be analysed in order to aid in the understanding of Lidls current strategies. This will then be think with a SWOT analysis, with recommendations creation drawn up via the utilisation of a TOWS matrix.Marketing Strategy AnalysisThe five core concepts of marketing are consumer needs/wants/demands, products and runs, value/satisfaction/quality, exchanges/transactions/relationships and markets (Kotler, et al., 2008). One of the most efficient ways to analyse these factors is to conduct a marketing strategy analysis, which looks to explore the strategies an organisation utilises in order to grow and expand their market share.7 Ps AnalysisIn order to successfully analyse Lidl marketing strategy, a 7 Ps analysis ignore be conducted, which seeks to analyse slightly precise basic, but significant issues. Originally, the 7 Ps was only comprised of 4 Ps which aimed to address sure issues that would allow a firm to have a more offended understanding of their innate operations. The 4Ps are comprised of product, price, place and promotion (CIM, 2009). However, due to the limited applicability of the 4 Ps, three more were added to form the 7Ps, which aims to overcompensate some function qualities the 4 Ps do non cover (Booms Bitner, 1981 Lusch, et al., 2007).Product (Quality, brand name, service line, warranty, capabilities, facilitating goods, tangible clues, price, personnel, physical environment and process of service deli very(preno minal))Very solid brand name from being one of the cheapest supermarket retailers in the industry. Their important competition as a value supermarket is Aldi (Bosshart, 2006).The products sold in Lidl are lots very similar to the goods sold in different supermarkets, such as Tesco or Asda. However, the main distinction would be the different brand names of the products in Lidl stores.Consumers could have a negative perceptual experience of the quality of Lidls products as they are sold for such a cheap price (Siro, et al., 2008).Price (Level, discounts and allowances, fee terms, customers own perceived value, quality/price interaction and differentiation)One of the key competitive advantages for Lidl is their clever set strategies. Lidl entered the market on the basis of being one of the most value-driven supermarkets in the industry (Dolgui Proth, 2010).All payments are made up before leaving the store at the check outs.As they offer goods at an unbelievably cheap price, co nsumers whitethorn believe that the goods they deal are poor quality, however this is generally non the case (Siro, et al., 2008).Place (Location, accessibility, distribution channels and distribution coverage)Lidl have a plethora of stores across the UK and Europe. However, depending on the country, they operate in different segments of the supermarket industry, ranging from value to high-end goods (Butler, 2014).They have a variety of distribution hubs across the UK and Europe to ensure that stores are maintaining a constant level of stock (Brown, 2015).As their handicraft model is to sell as many goods as possible in the shortest amount of time, ensuring stock levels are maintained is incredibly important. This means that it is imperative to have stores in reasonably close proximity to national distribution centres.publicity (Advertisements, personal selling, sales promotion, publicity, personnel, physical environment, facilitating goods, tangible clues and process of service delivery)Lidl do not current have any loyalty schemes present in the UK, as they believe their pricing model is enough to incentivise consumers.Lidl often have in store promotions, but they do not discount their goods as highly as other retailers due to the low prices that already exist.People (Personnel training, discretion, commitment, incentives, appearance, interpersonal behaviour, attitudes and customer behaviour/degree of involvement)Employees are generally paid a very attractive salary, but have to work incredibly unuttered whilst on the job. The amount of items scanned is often used as a performance measurement indicator (Ruddick, 2015). postgraduate training standards to ensure employees can scan items fast enough and meet all customer needs.Consumers may feel that staff do not pay them enough attention as they are very rushed doing their job responsibilities.Process (Policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flo w of activities)Primary process of Lidl is to barter for and sell as many goods as possible on a low-cost basis.Consumers are not very involved in any of the processes or procedures of Lidl, and would have little power over their business operations.Physical (Environment, furnishings, colour, layout, noise level, facilitating goods and tangible clues)The majority of Lidl stores are laid out in a very linear and traditional manner. This is to aid consumers in finding their goods as soon as possible and having unclouded access to purchase and leave (Lidl, 2015).Lidl will often exhibit their brand colours, yellow and blue, throughout their stores or surrounding areas. This will help consumers know there is a Lidl nearby.Porters Generic StrategiesPorter outlines four generic wine strategies differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980).From utilising the information gathered from the 7 Ps analysis, it becomes pronto apparent as to what strateg y Lidl are currently pursuing. Lidl have a reliant focus on selling quality products at the cheapest cost possible. This would suggest that they are utilising a cost leadership strategy, and are implemented it with incredible effectiveness (Morschett, et al., 2006). However, in order to maintain their current rate of growth and expansion, Lidl may have to diversify from their current strategies in order to stay competitive and innovative within the UK grocery market.SWOT AnalysisBased on the 7 Ps analysis, a SWOT analysis can be conducted in regards to Lidl. The SWOT analysis will help an organisation measure and understand the internal strengths and weaknesses, and the external opportunities and threats facing the firm. Being able to identify these elements will help an organisation to formulate and get down strategies which may build on the strengths, negate the weaknesses, exploit the opportunities or counter the threats (Dyson, 2004).Strengths (Simon, et al., 2010 Kumar Steenk amp, 2007)Strong business building allows them to sell their products at an incredibly cheap price.Wide range of private labels gives them exclusivity and security.Has a huge amount of stores across the whole of the UK and Europe giving Lidl great exposure.Online presence that showcases the products they have and any deals they may be running.Weaknesses (FT, 2015 Siro, et al., 2008)Does not quite have the market share of the other big supermarkets in the UK, such as Tesco or Asda.Has not been able to spread their operations outside of Europe very successfully.As their products are so cheap consumers can often think that the quality is not good enough.Opportunities (Felsted, 2014)Potential to expand in the UK and acquire a higher share of the UK grocery market.Successfully expanding abroad can leave more funds to invest in the UK.Expand their website to actually accept orders and sell products.Threats (Poulter, 2014)If Lidl were to engage with a price war with other major grocery r etailers then they could force competitors prices down.International expansion of other global brands would cause more competition.Aldi surpassing their market share and becoming the dominant discount grocery retailer.RecommendationsTogether with the SWOT analysis, a TOWS matrix can be utilised in order to develop strategies and recommendations for Lidl to acquire a great market share of the UK grocery industry (Weihrich, 1982).Based on the TOWS matrix, and the analysis of Lidls current market strategies, three recommendations can be laid that would help Lidl acquire a greater share of the UK grocery market. The three recommendations areExtend the usability of their website to accept click collect orders or even delivery. This would expand their presence in the UK market.Develop and implement quality branded products in order to home run a new demographic and compete with the major supermarket retailers on a more even environment. compel firm barriers of entry to deter other org anisations from entering the UK grocery market and potentially encroaching on Lidls market share.In order to stay competitive in the UK grocery industry, and continue to build upon their UK market share, Lidl should utilise the aforementioned strategies. Furthermore, this could result in them following a combination of generic strategies, as the introducing of upper-class brands, in combination with their current business structure, would suggest a differentiation strategy is in place. However, if Lidl operate the adoption of other strategies, they must ensure that their current consumer base is not alienated, or they could end up losing market share. Furthermore, Lidl should continue to open more stores in the UK in order to expand their presence and accessibility, which will allow their operations to have similar exposure to the other major supermarket retailers.BibliographyBooms, B. H. Bitner, M. J., 1981. Marketing strategies and organization structures for service firms. In M arketing of Services. Chicago American Marketing Association, pp. 47-51.Bosshart, D., 2006. Cheap? The Real Cost of Living in a Low Price, Low Wage World. London Kogan Page Limited.Brown, G., 2015. Giant Lidl distribution hub to create viosterol West Midlands jobs. Online Available athttp//www.birminghampost.co.uk/business/business-news/giant-lidl-distribution-hub-create-8883111Butler, S., 2014. http//www.theguardian.com/business/2014/jun/27/lidl-launches-store-expansion-programme. 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