"SERVICES MARKETING5rate. Hence, ALDI deals a partnership business with the leading manufacturer organization tomake own-brand products. High and improved quality is maintained along with low costs. Limited range:In the words of Metzger (2014), one of the successful marketing strategies is to focuson the target market and the choice, taste, and variety seeking attitudes of the customers.Now, to reduce the price of the products, the marketing strategy of ALDI is to provide thelimited range of items. By following the market survey, they serve that type of productswhich has comparatively more demand at the competitive price. Furthermore, products areavailable according to their popularity, not in all sizes. As a result, ALDI can be able tocapture the lead position in grocery retailer in the Australian market economy. The price changing policy:As per the view of the price changing policy, ALDI provides the lower price to thecustomers when the cost is affordable. However, when the cost of the production increases, itraises its price of the products. The main reason behind the fact is that ALDI does not want toserve any low quality goods at any costs. As a result, when the cost rises, they also increasethe price of their products but not compromise with its quality. This unique strategy is knownas the value proposition marketing strategy by ALDI which gives the positive result. On the other hand, ALDI believes in the long-term approach to capturing theAustralian grocery market successfully. As opined by Van den Steen and Lane (2014), thelong-term partnership, trust and responsibility with the suppliers and small business firmshelp to grow the new entrant successfully in the competitive industry. ALDI develops a long- term relationship and partnership with the suppliers. Though the new suppliers want to dealwith ALDI with a cheaper rate for their desired quality of the product, ALDI always gives the SERVICES MARKETING6first preference to the existing suppliers. As a result, in the future prospect, it makes a strongrelation which is needed to crack the industry. Focus:The competitor of the grocery industry, Coles and Woolworths expand their businessin different sectors such as liquor, online shopping, petrol and pharmaceuticals. On thecontrary, ALDI only concentrates on its core business. They do not take this type ofmarketing strategy to expand their business. However, they launch a unique idea whichmakes them different from the other grocery stores. This is known as the “surprise buys”through which a batch of items such as computers or televisions are sold for the fixed periodin the stores of the ALDI (Aldi.com.au 2017). With the help of this marketing strategy, ahuge number of new customers attract towards them as they maintain both the high qualityand lower price of the products. Refer to the Appendix figure 1:Porter’s Five Forces model:Other competitors such as Tesco, Wal-Mart andThreats of the new entrantsEurope Lidl want to enter into the groceryindustry in Australia which gives a toughcompetition to ALDI. It also creates a threat ofcopying the successful market strategies andimplementation it by a better way.Threats of the substitution Due to globalization in the grocery industry, therivals of ALDI produce close substitutes forwhich the number of loyal customers getsreduced (Cameron et al. 2015). With the increased number of grocery stores,Bargaining power of the suppliers SERVICES MARKETING7ALDI lowers its bargaining power to thecustomers for maintaining the sales amount. Bargaining power of the buyers As there are a huge number of sellers in themarket, the bargaining power of the buyers isincreased, and they can shift from the one brandto the other. However, ALDI has the advantageas it sets its marketing strategy as “best quality atthe cheapest rate” (Ausfoodnews.com.au 2017).Due to the existence of a huge number of groceryCompetitive rivalrystores, the competitive rivalry is high regardingprice and quality of the products (Voigt, Buligaand Michl 2017). Table 1: Porter’s Five Forces model of ALDISource: (Mortimer 2016)Refer to the Appendix figure 2:Strategic Marketing Options for ALDI moving forward:Current Situation of ALDI:ALDI Australia forecast to increase their profit by 90 percent to the $15 billion overnext consecutive four years. From 2013 to 2016, the sales of ALDI rose 60 percent to the $8billion. Moreover, due to an increase of the stores from 373 to near about 628, the sales areestimated to reach the amount $15 billion by the year 2020 (Mitchell 2017). SERVICES MARKETING8Figure 1: The value of average store of ALDI has developed faster than that of Colesand WoolworthsSource: (Mitchell 2017)According to the report of IBIS World, the revenue of ALDI is $105 billion alongwith 4.1% annual growth in the year 2016. Furthermore, it creates approximately 332,038employment opportunities and 2012 business in the Australian market (Ibisworld.com.au2017). SWOT analysis:With the help of SWOT analysis, the strengths and weaknesses of ALDI relating tothe marketing strategies in the Australian grocery industry have been notified along with theassociated threats and opportunities.Strengths Weaknesses? The Strong brand image along with ? The product range is limited whichincreasing reputation regarding quality indicates the deficit of productand price and the international differentiation.recognition.? Some manufacturers do not want to relate SERVICES MARKETING9their name which creates the demotion of? Simple and unique organizational culturethe brand name loyalty.and operational system.? A limited number of the quality items at ? ALDI uses limited technology in theirproduction process compare to the othera lower price compare to other stores.competitors.? Maintain a good and strong relationship? Advertising policy and the publicwith the suppliers and customers.relations is not so much significant? Low cost on advertising which helps to(McMillan 2013).acquire the cost efficiency (Tseltsova and? The ability to borrow from the market isBohnert 2015).very low which sometimes hinders the? Most of the staffs are well trained andpotential growth of this organization.working hours is less. Opportunities Threats? ALDI has an opportunity to expand their ? Organization culture is not so muchbusiness into the other markets namely significant which could resist the massivehouse brands which are profitable.expansion of ALDI. ? By applying the diversification methods, ? Limited uses of the technology in theALDI can be able to earn more profits production procedure hold back to thecompared to the rivals. growth of this organization. ? Implementation of new systems helps to ? The competitors can employ new andmaintain the desired quality standards of attractive marketing strategies to capturethe products (Bozhinova 2014). the market.?The increase in market penetration ? Globalization can play an important roleensures the growth of this organization. to attract the rivals in near future.? The modern and advanced market trends ? The competitive advantage does notalong with increased number of remain in favor for the growth of ALDI. Australian population enhance thediversification level in the business of "