Sales Strategies Essay Example for Free

Sales Strategies EssayEXECUTIVE SUMMARYThe supermarkets in the UK is expanding with retail food proceedss creation sensitive to cross-price elasticity in that supermarkets argon encouraged to be inventive, which ordain accomplish an favor, matched to its discounter competitors (Emerald assembly Publishing Limited , 2014). This report testamenting explain the types of sales strategies that Aldi may develop in fix up to compete with early(a) supermarkets within the equal market. Aldi boast to be considered as a competitor as society is searching for value and that client behaviour is a major square off in sales strategies and that Aldi will be successful in future years with their everyplaceall strategy. BACKGROUNDAldi opened its early store in the United Kingdom (UK) in the 90s, currently supporting more than ergocalciferol stores in the UK, professionally established in Germany. The challenges that face Aldi are primary in attracting guests. As substantially as attracting customers, Aldi will do to consider its competitors within the market. There are a number of conditions that would influence customers behaviour which impacts on the retail market. Society has a wide range of call for and wants which can be varied and impacts customers decisions on a daily basis. The decision that is do is observe to the decision making behaviour which expirations in individuals adapting from situation to situation which would digest an impact on all supermarkets (Dibb, 2012). The leading retailers share of grocers for 2011 and 2012 explains that Aldi versus Morrisons posted surging returns with Morrisons demo as losers.Diagram one Share Market Mintel ReportAn word (sky wises, 2012) reports the fellowship Aldi, has fitn net profit exceeded over 200% in 2011 to 57.8m, suggesting customer confidence is clinical depression and that customer spending brought on by high inflation and weaker growth has influenced Aldi success with 40 newfangl ed stores planned to be developed and open by the end of 2013 generating up to 4,500 jobs. Aldi has now introduced 500 new stores in the United Kingdom (UK) and plans to open new stores in higher more upmarket locations and offer a wide range of products attracting higher-earning customer (Aldi, 2013). This strategy is supported by (Harvey,2000, p. 17) who suggests that in a society, a range of low and high income customers can be brought together by retailers creating an internal niche market, with their own discounted products or with higher shited products, integrating recrudesce segments of customer demand.As Aldi continue to improve on already proceed growth, Morrisons have to act to attempt to maintain and improve within the retail market competition. This is exhibit by an article (mail online, 2013) Morrisons attempt to struggle endure, which Morrisons bosses trust only a reduction of priceson products will sustain Morrisons future.chief executive Dalton Philips of Morri sons confirmed The economic backdrop frame knotty for the customer, as stated (BBC, 2013) Morrisons report Pre-tax profit fell to 344m for the first half of the year, compared to the like accomplishment last year (2012) with profits r apieceing 440m.Diagram Two Share Market flip-flop NewsComparing Diagram one and Diagram two of the market Share, Aldi demonstrate they have a major influence in the market. Aldi in 2011 had a market share of 2.2% increasing to 4.7% ending whitethorn 2014. On the back of Aldi success, Morrisons market share commenced at 10.4% in 2011 with the figures staying static the following year, followed by a slight increase reaching 10.9% by May 2014.The slight increase in instruction execution may be due to Morrisons raising a price war with Aldi by cut down its prices on 135 products with expectation that more reductions will follow, estimating 1bn over a three year period which will be permanent reductions rather than promotions, quoted by chief executi ve Dalton Philips in an article (The Guardian, 2014). It remains to be seen if this will revive the growth of Morrisons in the future.OBJECTIVESOutline the background information of customer goods and Supermarkets. Outline the background of Marketing variance.Apply the theory of Market Segmentation used by supermarkets. accompaniment the tool used for Sales strategy and by key brands to provide competitor advantage.METHODOLOGYIn order for the company to identify sales strategies in the market, will carry disclose what is called Market seek. This fulfil is to furnish the retail company to meet the customers needs. (Lescher, 1995) defines market research as gathering and rating of data regarding customerspreference for products and services. On attempting to interview Robert McDonald the Assistant Store Manager of the Aldi Paisley, merely was unavailable for comment on a visit to the store on 29/06/2014. On the back of the store visit, made contact with Aldi Head Office in Bath gate and through social demarcation line mesh topology LinkedIn but unfortunately Aldi were unable to comment on their sales strategy.SUPERMARKETS IN THE MARKETInstitute of market Distribution (IGD UK) reported that the United Kingdom market is estimated at 174.5 billion in April this year (2014), demonstrated 2.8% increase from 2013. IGD forecasts that in the UK, the grocery market value will reach the figures of 203.0 billion by 2019 potentially an increase of 16.3% from 2014.Todays market the UK grocery market is made up 6 sections, making the retail market competitive. Based on the pie chart, Hypermarkets and superstores have the market monopoly demonstrating 73.7bn Sales with Convenience Stores co destinationinous 37.4bn and Small Supermarkets the next contender with 35.5bn.As Aldi come under the Discounters with 10.8bn, with a continued strong straw man within the retail market, this figure can only increase and could be a potential pornographic player in years to come, if the giving medication continues to grow as previous years and challenge others.AIDA(R) facultyAldi can use a number of channels and methods to increase promotional activity by use the AIDA module. The module can be used for the following Awareness Creating brand awareness to its be and new customers. Interest Sufficient customer interest to encourage the buyer to start researching further. Desire Simply the proclivity from liking it, to wanting it. Action Attracting the customer to visit store, signing up for newsletter.Once the organisation has captured the buyer, it moldiness consider the retention of the buyer exploitation Retention methods. The methods can be Social Media, TVadverts, Newsletters. If buyers are satisfied with your product, a vote of confidence can attract new buyers (customers) to the company brand, rather than its competitors (business contingency studies, 2014)MODEL OF MARKET SEGMENTATIONThe process for Market Segmentation is to identify the whole of the market and mete out the market into each segment, which allows companies to maximise their own opportunity to generate success. (Dibb et al, 2012) defines Market segmentation the process of classify customers in markets with some heterogeneity into smaller, more similar or homogenous markets. Without market segmentation, the market would get that customers would share similar needs and that companies can provide one product to the market (Dibb et al, 2012). Therefore this boldness is not correct and as supported by (Dibb et al, 2012) having a Heterogeneous market describes that customers have unalike needs and wants.PROCESS OF MARKET SEGMENTATIONDividing the market into segments is called STP. STP consists of three key areas which are Segmentation, Targeting and positioning.SegmentationSegmentation can identify potential opportunities within a market. When designing a market strategy, the organisation can take advantage of the marketing mix approach. The marketing mix incl udes the quatern Ps which consists of product, promotion, price and place (Hooley, 2012). Aldi can use this method to take advantage of existing customers as wholesome as attracting new customers. Aldi use the four Ps which can create a process were the right product is sold at the right price, at the right place demonstrating the best accomplishable methods of promotion.TargetingCompanies can use targeting as a business tool, making a decision on what key areas of the business within the organisation requires attention. This process is intended to be implemented in key areas much(prenominal) as sales as described (Dibb et al, 2012).PositioningDiagram Three Company positioning by Customer perceptionDiagram three is a perceptual mapping of the UK supermarkets based on customer perception. The map illustrates that Aldi have built up a customer following, which shows a variety show in customer demand and behaviour. Aldi have progressed and competing with Asda and Morrisons, illus trating that all companies have to be competitive to ensure the individual company has an advantage over its competitors. As customers are more economically aware and seeking value for money, this can be used to target a certain area in the market .i.e. low persona, high quality, low cost, high cost depending on the current times. Customers may wish to corrupt lower quality brands over high quality brands as it may be better value with the end result acquire more for your money.An example of customers getting more for their money, took a challenge to purchase one item from each store and taste it to see if the difference could be spotted with Aldi and Morrisons products. Purchasing Aldi own brand of Jaffa Cakes which demonstrated similar packaging to the McVities brand with 24 segments at a cost of 0.95 a packet, roughly working out 4 Pence a biscuit. Morrisons selling the main brand of McVities Jaffa cakes also offering 24 segments at a cost of 2.19 a packet working out 9 Pence a biscuit. Tasting the two brands without knowing which one was from Aldi and Morrisons, concluded that it was hard to identify which product was from each store. Thus changing to purchase the Aldi brand rather than the main brand (McVities) saving a whopping 1.24. This experiment can be supported in means of description and cost by visitingwww.mysupermarket.co.uk.Aldi 0.95 Morrison 2.19Aldi have acknowledged that competitive pricing is a major influence to bring attention and awareness amongst customers with Aldi being able to support quality products at a cheaper cost than its competitors by purchase products in bulk from its suppliers. Aldi also agree the best possible price from suppliers allowing them to pass the savings on to the customer. To support that Aldi can offer main brands at a cheaper alternative without affecting quality, the cost of a Warburtons Bread from Morrisons iscosting 1.45 with Aldi offering the same product at a cheaper cost of 0.99 pence (mysupermarket, 2014). Aldi 0.99 Morrisons 1.45POTENTIAL SALES STRATEGIESWhen looking at Aldi products and comparing them to other competitors within the retail market, it was discernible that Aldi are demonstrating three broad sales strategies to maximise profit from new and existing customers by victimization targeting strategy, pricing strategy and customer retention strategy. Using the current economic times, targeting the customers that are looking to save pounds, Aldi are using a sales strategy by offering cheaper alternatives which result in retaining the customer overall leading to company profit (Business case studies, 2014)Aldi introduced a marketing drive in 2011 using the slogan Like Brands, Only Cheaper using straight forward, no nonsense, simple adverts to state their own products. The advert using an old fisherman saying Well, there you go then a fine pair of Pollocks demonstrating Aldi own product against the main product that its the same but cheaper. An advert that won most po pular TV advert of 2011 featuring a wife talk of the town about her husbands penchant for a cup of char before declaring I dresst like tea. I like gin.Aldi Marketing Campaign 2011.Aldi marketing stragety is to encourage customers to purchase their own brands over the more costly options that are on offer. This campaign suggests its working by the profits the Organisation has seen in recent years as discussed within this report. To this date, the same marketing campaign is salve being used (The guardian, 2014)Strong Selling StrategyThe retail market is competitive environment with companies expanding and growth availability in the United Kingdom (UK) providing customers more choice. As customers have disposable income to spend, supermarkets are unendingly looking to act on customers emotions. One key observation is displaying the discount price along with the original retail price to influence the customers decision on making them realize what a fantastic bargain they are receiv ing.Aldi.co.ukSupermarkets are always looking to take advantage of an area in the market and Aldi are no different. As reported (Guardian, 2014) Aldi are introducing school uniforms winning advantage of other competitors by offering cheaper alternitvate to other supermarkets and offering parents the opportunity to get their childrens clothing for the coming term in September costing less than the cost of a McDonalds Chicken McNuggets sharebox.The package by Aldi offers four school essentials at a cost of 4 when other competitors, Sainsburys package is costing 7.33, Tesco 6.75 and Asda 7.50. Managing director, Tony Baines was quoted The tailor to the new term can be a stressful time for families. As a result, we were dainty to offer parents the opportunity to stock up on superior school uniforms and accessories ahead of the new term with breaking the bank (Guardian, 2014). As a result of Aldi decision to introduce clothing into the mix, this may see a new price war with other supe rmarkets trying to compete against Aldi, it still to be seen how this will impact on the other supermarkets and how they will react to the new offering by Aldi.Aldi.co.ukCONTINUOUS profitAldi consider the Just in Time (JIT) approach to store management by holding the take stock that the store only requires. As stock is costly with Aldi purchasing stock when required, when stocks are reduced, the companies outstanding improves, allowing Aldi to purchase more stock when required (Jobber, et al, 2006) Aldi.co.ukAs Aldi core purpose is to provide value and quality to customers working efficiently and reducing costs allows reinvesting profits back into the organisation. Lean thinking and continuous receipts is fundamental to meet its business goals for growth allowing new properties, suppliers and more savings for customers and offering benefits to employees.An example of Aldi success, a planning application for 46,200 sq. m regionaldistribution in Wales has been submitted, according to (IGD, 2014) As Aldi demonstrate continued growth in the UK as the organisation attracts more shoppers that wish to save money on their shop. Aldi have revealed further plans to increase their stores to a negligible of 1,000 stores by the end of 2021 (IGD, 2014). The established German company will support further investment in the UK with 60 new stores to open by 2015, while existing shops will benefit from major refurbishment.On the other side of the bridge, Tescos CEO, Philip Clarke became replaceable after(prenominal) 40 years at the supermarket by the head of Unilevers personal care business Dave Lewis. The news came after Philip Clarke failed to produce the results, the company was looking for after a decline in sales and profit alongside a renewed profit warning (Guardian, 2014).Aldi have taken a percentage of the market, which has impacted on others within, with Tesco and Morrisons having to invest Millions into the price war to try and stay competitive (Mail online, 2 014). As Morrisons and Tesco have recently issued profit warnings, it suggests that Aldi are winning the price war and making others take notice.CONCLUSIONAldi fit(p) the market using the STP (Segmentation, Targeting and Positioning) process. Using this method identifies what type of market Aldi are targeting. Aldi demonstrated using the four Ps, product, promotion, price and place to take advantage of competition and gain more customers.The change in economy has seen a change in customer spending with behaviour changing by searching for alternative and main brands at a cheaper value. Its worth noting that other supermarkets are touching the pressure from Aldi and to sustain such a market position and complete with Aldi, its worth consideration the reduction of products to match Aldi which was highlighted by Morrisons chief executive Dalton Philip.Aldi are fulfilling its potential by taking advantage of the market by working efficiently which allows to keep cost at a minimum and e nable the company to expand within the UK. The companies campaigns Like Brands, OnlyCheaper have increased the presence of the companys profile, with continued relationship building with its customers through a number a channels, creating loyal customers.Morrisons have found it difficult to maintain their position within the market, feeling pressure from Aldi and resulted in a profit warning being issued. Its therefore clear that Morrisons have taken the center field of the customer and market, which has shown customer decline and profits dropping due to lack of promotions and low costing products. Unless Morrisons change their way of thinking, a change in the competition may come in the high-priced future for them. Whether they are able to survive remains to be seen while Aldi continue to be competitive.BIBLOGRAPHYaldi.co.uk. (2014). aldi.co.uk. Retrieved June 16, 2014, from https//www.aldi.co.uk/Dibb et al (2012). Marketing Concepts Strategies. 6th ed. Hampshire Cengage Learnin g EMEA. Emerald mathematical group Publishing Limited , 2014. Emerald insight.Online forthcoming at http//www.emeraldinsight.com/journals.htm?articleid=870441 Accessed 3 June 2014.Hooley, G (2012). Marketing strategy competitive positioning. 5th ed. London Financial Times Prentice Hall Mintel Group Ltd, 2014. Mintel. 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