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Marketing Executive, Research Paper Example

Pages: 3

Words: 880

Research Paper

In examining the contrasting or complementary approaches and strategies taken by food retailers Aldi and Amazon Grocery, what is immediately apparent are evolutions largely generated by consumer interests, and at enormous levels.  The history of Aldi alone provides a virtual template in a corporate process of adaptation as encouraging growth.  From the company’s 1967 purchase of the Austrian Hofer chain, which marked Aldi’s international expansion, it faced severe resistance from both government agencies and established retailers (Rudolph, Schlegelmilch, Bauer, Franch, & Meise, 2012,  p. 146).  Aldi stores in the Netherlands, France, and the United Kingdom soon followed, however, and the growth was vastly abetted by Aldi’s unique focus: it would, in each new territory, use locally grown food material to create items under its own brand, and thus be able to sell at lower prices.  Around 60 percent of its produce arrives from local growers, as the stores also rely on local bakers (Rudolph et al, 2012, p. 147).  Consequently, Aldi does not appeal to demographics; rather, it enters into cooperation with them.

It seems that a significant measure of Aldi’s success lies in its corporate restructuring of traditional grocery models.  More exactly, Aldi benefits from the commerce by reinventing it.  As with a mega-corporation such as Wal-Mart, and one in business since the mid-20th century, Aldi’s international foundation enables it to create something of a marketplace within the marketplace.  In Germany, the U.S., and Europe, Aldi boasts over 7,500 stores, and this sheer size allows the development and sales of its private brands.  Food marketers at this level typically segregate store brands as a separate type of retail; Aldi, conversely, emphasizes the fact because it both provides the company with greater control over its merchandise and permits lowered pricing (Pradhan, 2010,  p. 138).   Moreover, as an older entity, Aldi’s support base has been created in ways removed from extensive advertising or Internet promotion, just as its mobility and adaptive policies seem to reflect a more European, culturally-based strategy.

Amazon Grocery blatantly defies this commerce, or rather is based on a completely different retail approach. First and foremost, Amazon is a virtual presence, born from Internet usage and designed to conduct all business through it. The modern success of its Grocery, then, illustrates an interesting and vital point: while relatively recent, online retail has taken on aspects of traditional consumerism, certainly in the West. “Virtual trust” is established, rather than a food retailer’s reliance on literal consumer interaction with the products.  In terms of marketing strategy, in fact, it may be argued that Amazon very cleverly entered into food retail only when it had established retail systems for other products proven as successful, and reconfigured those systems for its grocery. More precisely, and reflecting a distinctly Western or American ideology, Amazon’s grocery items are ranked by consumers just as its books and music offerings are (Dunne, Lusch,  2007,  p. 90). This is strategic adaptation at a level of Aldi, if focused in a wholly different direction.

This is not to imply that Amazon ignores economic concerns of its customer base; it is clear that a major attraction for its demographic lies in its adapting shipping discounts long applied to other items, and the company ships orders over $25 free of charge (Hill, Jones, 2012,  p. 279). Then, the company’s Internet foundation relies primarily on Internet advertising, which takes full advantage of the virtual marketplace dynamic.  Interestingly, Aldi, long removed from any such efforts, has also seen the need to embrace at least some modernity. In 2005, the company finally began a full-scale television advertising campaign, in stark contrast to its traditions of the most minimal expenditure on promotion (Rudolph et al 2012, p. 147). It is fascinating to note how these retail giants strategically move toward one another, in a sense; as Amazon seeks to develop a loyal, if virtual, demographic based on old-fashioned values of quality and consistency, so too does Aldi acknowledge the influence of modern technology.

In a very real sense, both companies are well-positioned to expand, simply because modern retail is increasingly international, and scope is then virtually limitless. At the same time, it is recommended that Amazon focus more on its greatest asset: technology systems.  More exactly, there is a vast market to be tapped if the Grocery adopted an Aldi practice, and incorporated fresh, local purveyors into its retail presence.  The process would be complex, but likely to greatly enhance business, as there remains the irony that “Amazon Fresh” deals primarily in canned goods. Aldi has carved out a retail empire based on traditional methods and, technology notwithstanding, people must always be drawn to foods by virtue of tactile impressions, sights, and smells.  Amazon cannot offer this directly but, by engaging in a network of local purveyors (who would benefit from its enormous stature), it would greatly enlarge its range of offerings, add desirable, fresh items to its choices, and create a more socially interactive and responsible image for itself.

References

Dunne, Patrick M., & Lusch, Robert F.  (2007).  Retailing.  Belmont: Cengage Learning.

Hill, Charles W. L, & Jones, Gareth R.  (2012).  Strategic Management: An Integrated Approach. Belmont: Cengage Learning.

Pradhan, Swapna. (2010). Retail Merchandising. New York: McGraw-Hill Education.

Rudolph, Thomas, Schlegelmilch, Bodo B.,  Bauer, Andras, Franch, Joseph, & Meise, Jan.         (2012).  Diversity in European Marketing: Text and Cases.  New York: Springer.

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