Marketing Practices of Modern Businesses †Myassignmenthelp.Com

Question: What Is the Proper Marketing Practices of Modern Businesses? Answer: Introduction In the contemporary market scenario, the organisations seeking success in the target market must make the assessment of the target demographics profile. Invariably, by doing so, modern business firms can perform significant marketing exercise suitable for business dynamics. Precisely, the segmentation of target market, identifying the particular target market, and positioning the business according to the preferences of target demographics should be done effectively to gain a comprehensive competitive advantage in the challenging business environment. In the reported study paper, the target marketing practices of ALDI Australia have been illustrated. ALDI is one of the renowned discount supermarket chains operating in the retail industry in Australia. The retail supermarket chain had opened the first store in the Australian market in 2001 ("ALDI Australia", 2017). The retail business of ALDI offers diversified products including food, beverages, household consumer goods, and sanitary articles to the target audience in Australia. Moreover, the retail outlets of ALDI have provided quality products at affordable price improving the living standard of the target public. In the context of marketing practices, the aim of the study is to identify the different types of audience segmentation, and the advantages and disadvantages of each of the segmentation process. Secondly, based on the outcome of the target market segmentation strategy, the study identifies the primary and secondary target market for ALDI. Alternatively, the final aim of the study is to evaluate how ALDI is positioned in the target market and the reason behind such positioning strategy. Audience Segmentation In modern marketing practices, the method of dividing a target market of impending customers into particular segments or cluster in terms of individual behaviour and characteristics is called market segmentation (McDonald, Dunbar, 2013). Precisely, market segments have been created to identify the similar types of target audience that can respond correspondingly to a marketing strategy. In the underlying section, the ways in which an organisation can segment its target audience have been analysed. Geographic Segmentation Geographic segmentation is one of the most fundamental ways of audience segmentation based on geographic location and areas such as regions, cities, and countries etc (Ray Chaudhuri, 2014). In case of ALDI, Western Australian market, New South Wales market, and other regional markets can be segmented following the strategy. The advantages and disadvantages of such segmentation have been briefed as follows: Advantages Considers Cultural Differences of Target regions: Geographic segmentation strategy considers the leading differences in culture among the target regions to segment the target audience (Miles, 2014). Thus, consumer can be listed according to the similar behavioural differences and cultural differences. Effective for firms having limited geographic reach: The approach is significantly valuable for the firms having limited reach to a massive target location. By applying the specific segmentation strategy, a company can operate different geographic area in an efficient way (Shi, Gu, Chhajed, Petruzzi, 2016). Disadvantages Assuming similar consumer needs: During geographic segmentation of target market audience, it is assumed that each of the consumer belonged to the same geographic segment possesses similar needs (Miles, 2014). However, the originality is different as customers included in a geographic segment can have difference choice of needs. Hence, it is one of the disadvantages of the strategy. Effective in combination with another segmentation strategy: As similar geographic segmented customers have different choices of needs, the strategy must be utilised in a combination with another market segmentation strategy to become more successful. Therefore, it is a limitation for geographic segmentation method. Demographics Segmentation Demographic segmentation of target audience has been done based on age, gender, income status, race, religion, family size, and nationality of the target demographics (McDonald, Dunbar, 2013). In case of ALDI, age segmentation will include kids, young, adults, and older people. Also, the income status should be taken into consideration to offer products to a larger target audience pool. In the underlying section, the advantages and disadvantages of the segmentation strategy have been analysed. Advantages Rich Data Sources: By using such market segmentation strategy suitable data can be collected from rich sources in a convenient procedure. Based on the data, certain demographic information can be used by the companies such as ALDI during product development as well as developing marketing strategies. Easy to manage: Demographic segmentation method is one of the simplest methods to identify the target audience. Precisely, retail companies such as ALDI can utilise such market segmentation method to measure the demand and fundamental needs of the target audience (McDonald, Dunbar, 2013). Also, managing the customers and sales of the business will become easier by applying the strategy of demographic market segmentation. Disadvantages Descriptive and Theoretical Concept: The entire concept of demographic segmentation is descriptive and based on theoretical ideas. Meanwhile, there is little understanding of the target demographics profile. Assuming similar consumer needs in same demographic segment: Demographic segmentation also assumes that each of the target audience belonged to the same segment has possessed similar needs and lifestyle (Miles, 2014). Hence, it is a substantial limitation for the market segmentation strategy. Psychographic Segmentation Psychographic segmentation is a method of market segmentation that divides a target market based on the lifestyle, attitude, social class, personality, interest and preferences, and activities of demographics (Hunt, Arnett, 2014). By considering the customer purchasing behaviour, ALDI can utilise such strategy in market segmentation to influence the marketing activities in the target Australian retain sector. Advantages Greater Insight on Target Demographics: Based on the market research, psychographic segmentation can provide greater insight into the demographics as per the standard of living, attitude, social class, personality, interest, and lifestyle of the consumers. Thus, the marketing practices of ALDI can be influenced by adopting such market segmentation strategy. Create motivation in product purchasing: By developing marketing campaigns according to the psychographic needs of the target audience, such market segmentation method can be helpful to motivate the target audience to buy new products. Disadvantages Lengthy market research: Psychographic segmentation requires substantial market research i.e. both qualitative and quantitative research that can be so much expensive (Parker, Don, McLoughlin, 2010). Hence, such segmentation cannot be suitable for SMEs. Difficult to reach the market segment: Alternatively, psychographic segments within a target market cannot be reached easily by the conventional marketing methods. Therefore, it is one of the fundamental limitations of psychographic segmentation (Zolfagharian, Cortes, 2010). Behavioural Segmentation By identifying the purchasing behaviour of the target market audience, behavioural segmentation of a market can be done (Hunt, Arnett, 2014). Based on the knowledge, perception, and attitude towards a product or service of the target demographics, ALDI can create behavioural segmentation for marketing efficiency. Advantages Competitive Advantage gain: In case of developed markets where target audience is highly knowledgeable, such market segmentation strategy will be eventful. By evaluating behavioural segmentation of the market, firms can get competitive advantage over the other market players (Ren, Yang, Diao, 2010). Unique for marketing: Behavioural segmentation can be a unique marketing strategy to develop latest product or service category. Thus, the need of the target audience can be met to influence the purchasing behaviour of the demographics (Wood, Pierson, 2016). Disadvantages Lack of buying consideration: In behavioural market segmentation, marketers actually do not identify why the consumers are interested in buying the products. Therefore, a marketing uncertainty can be attached to such segmentation strategy (Aaker, 2015). Hence, it is a limitation for behavioural segmentation. Market intelligence dependency: On the other hand, such market segmentation needs to be done after analysis of detailed market data related to sales. Such market intelligence dependency is one of the primary disadvantages of behavioural market segmentation. Target Market Analysis The demand of the consumers varies from one market to another. On the other hand, it is not possible for the ALDI Australia to meet the varying demand of its all market segments due to the availability of limited resources. Hence, the theory of market targeting is applied to choose the most suitable segment for the company to expand its business (Zolfagharian, Cortes, 2010). While making the target market decisions, the marketers need to consider different factors such as how the current segment is served by the present rivalries, the size of the segment and the capability of the company to serve the chosen segment (Weinstein, 2014). On the basis of the factors, the primary and secondary target markets are chosen for which the company develops its positioning strategy. The primary and secondary target market for ALDI Australia has been discussed herein below: Primary Market The primary market for ALDI Australia is the low and middle income people. The primary market consists of people with annual income of $20,000 to $100,000. The first reason for targeting this market is its size. According to the study, it can be seen that more than 50 percent of the Australians earn an annual income between $20,000 and $100,000 (Bennett, Blythe, 2012). Hence, by targeting this segment, the company can convert the maximum population of the country into its potential customers. On the other hand, most of the rivals in the market offer premium range of products at a higher price (Wang, 2015). The cost leadership model of the firm can help it to offer products at cheaper price to target the low and middle income people. Hence, the market consisting of customers with lower and middle income can be considered as the primary market for ALDI Australia. Secondary Market The secondary market for ALDI Australia is the fashion and lifestyle market. The secondary market consists of consumers of younger generation who are fond of fashionable and lifestyle products at cheaper price. Hence, the company offer apparels and trending gears for this market to attract the customers. The first reason to choose this segment as a target market is the capability of the company to serve these customers (Wang, 2015). On the other hand, the high demand for garments and fashion products increases the size of the segment and provide potential growth opportunity to ALDI Australia. Hence, the company needs to develop differentiated products and offer them at cheaper price to seek growth in the secondary target market. Positioning Positioning is an effort made by the marketers to influence the perception of the consumers over a brand or product related to the perception over the competing brands or products. The primary objective of the positioning strategy is to occupy a unique, clear and advantageous position in the mind of the consumers (Friedmann, 2007). The marketing strategies are developed by the marketers in order to improve the brand positioning over the rivals and occupy a better market share. In order to achieve a better market positioning, the marketers develop a balanced marketing mix that include the product, price, promotion and place strategy of the brand (de Ruyter, Scholl, 2008). For instance, the positioning strategy is used by the marketers to develop a better brand image and seek competitive advantage in the market. On the other hand, the positioning strategy helps the firm to improve its revenue model and seek sustainable growth in the battle of market competition (Vanderveer, Pines, 20 07). How does ALDI Position itself The primary aim of ALDI is to offer the customers quality products in cheaper price as compared to the other supermarkets. In context to the Australian market, the company charges around 30 percent lower price than the other supermarkets. Hence, the pricing policy of the company has helped the company to develop a good image among the consumers (Wood, Pierson, 2016). On the other hand, the company does not compromise with its quality in order to offer a cheaper price. The cost leadership model of the firm helps the brand to maintain its competitive pricing policy. Meanwhile, the increased use of technology has made it difficult for the retailers to support the changing habits of the consumers. For instances, the younger generation consumers prefer window shopping using the internet. ALDI Australia lacks in providing an e-commerce online store for the consumers that impacts its sales. Furthermore, the less number of stores as compared to Woolworths Group and Wesfarmers Group flattens the retail market of Australia and makes ALDI hold the third position in the Australian market in terms of its in store sales. In the year 2015, the company hold around 12.1 percent of the total retail market share (Wood, Pierson, 2016). A figure has been presented herein below for further consideration: Figure: Market Share of the retailers in Australia Source: (Wood, Pierson, 2016) Why should or shouldnt ALDI position itself like this ALDI Australia position itself as a cheaper and quality supermarket brand that has helped the international enterprise to seek growth in the Australian market. ALDI has been quite successful with its positioning strategy in the last 10 years. The company has effectively increased its market share from 5.5 percent to 12.1 percent between 2007 and 2015 (Wood, Pierson, 2016). On the other hand, the low pricing policy of the company has been quite effective in attracting the customers from different segments. Hence, the current positioning of ALDI is quite effective for the company to seek growth in the short run. But, with emerging challenges and growing competition in the retail market, the current positioning of the firm is not suitable to seek sustainable growth in the long run. Firstly, the company has its website that can be used to search the store locations and get details about the firm and its products. The website of the company does not offer buying or selling of product. With the changing demographic factors and purchasing behaviour of the consumers, it is quite important for ALDI to develop an e-commerce website to reach more number of potential customers. The online portal will act as a virtual store for the firm that will further improve its brand positioning in the market (Bennett, Blythe, 2012). On the other hand, it will increase the sales of the firm by reaching customers who are unable to visit the existing stores due to the busy schedule of their life. Secondly, the number of stores of ALDI is quite less than the other supermarket giants such as Woolworths and Coles. Hence, the company needs to increase the number of stores in order to improve its market positioning. Finally, ALDI needs to make changes in its promotion strategy in order to enhance its market share. The management of ALDI should invest on digital marketing tactics in order to improve the marketing positioning of the brand. Conclusion On the basis of the above analysis, a supermarket retailer such as ALDI Australia can segment its market using demographic segmentation, geographic segmentation, psychographic segmentation and behavioural segmentation. Moreover, the primary market for ALDI Australia is the low and middle income people who search for quality products at cheaper price. On the other hand, the secondary market for ALDI is the fashion and lifestyle market. The company has effectively implemented its positioning strategy and have achieved success in the previous years. However, ALDI Australia needs to make changes in its positioning strategy to seek competitive advantage and sustainable growth in the future. References Aaker, D. (2015).Strategic market management(1st ed.). 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