M RahmanMarketing mix of Lidl (4Ps of Lidl)
This is a detailed analysis of the marketing mix of Lidl (4Ps of Lidl). It aims to examine Lidl’s strategies concerning its 4Ps i.e. products, prices, places, and promotions. Lidl is a German discount supermarket chain, headquartered in Neckarsulm, Germany. It has operations in many countries around the world including UK and USA.
Products of Lidl
Lidl offers fresh fruit & vegetable, meat, fish, bakery, frozen food, health and beauty products, cleaning and household products, pet food, baby food, baby health care and many more! It is committed to good quality and locally sourced products. For example, in the UK, 70% of its products are supplied by British farmers and suppliers.
Lidl also sells some exclusive brands of products. For instance, Oaklands is Lidl’s exclusive brand of fresh fruit and vegetables (Lidl, 2022). Some of the Lidl products have won different industry awards as well. For instance, it has won Fresh Produce Retailer of the Year 2021. However, its product ranges are often limited compared to the big four supermarket chains in the UK.
An interesting aspect of Lidl’s product strategy is offering regular world food themes. This offers customers an opportunity to experience a wide variety of produce from all over the world including the South of France, Italy, Poland, and Cornwall (Lidl, 2022). However, this approach does not distract the company from its focus on locally sourced produce.
Prices and pricing strategies of Lidl
Price is a very important component of this marketing mix of Lidl (4Ps of Lidl). Lidl is a discounter; therefore, its focus is on penetration pricing. Penetration pricing refers to low pricing but selling more. Lidl is often cheaper than many other grocers.
A survey on a basket of 20 items has found Lidl 9% cheaper than Wal-Mart in the USA. A study by trade magazine The Grocer cited in Owen (2022), found that Lidl is the best option for shoppers looking to buy grocery staples on a budget in the UK. It is indeed the cheapest supermarket for everyday groceries despite prices saw in increase compared to the previous years.
So, how does Lidl maintain its low pricing? One of the biggest reasons is that the vast majority of its products are private-label brands. By producing private-label products, it eliminates the middlemen that results in cost-saving. This often helps it sell it products for higher profit margins than national brands.
Other factors include but not confined to Lidl having a limited number of employees in each store and selling fast moving products. However, having a limited number of members of staff in each store sometimes cause customers inconvenience as they may not find someone around to answer to their queries.
Lidl purchases items from suppliers in large quantities to negotiate lower prices. This helps it reduce overhead costs and keep prices low for customers. However, negotiations may sometimes be tough; hence the risk of relationship break-down with some suppliers.
Place/distribution channels of Lidl
Place often refers to distribution channels. Lidl has a good number of regional distribution centres to deliver quality produce across the UK. Customers can shop from over 800 Lidl stores in the UK, 3200 in Germany, and many other stores across Europe. It has over 200 distribution and logistics centuries around the world (Lidl, 2022). However, it has just over 300 stores in the USA (Smith, 2022). Aldi should focus on increasing the presence in this market.
Lidl is expected to launch an online delivery system in many countries soon. This will certainly help it compete with the rivals more effectively. Likewise, this should also help customers avoid long queues at the checkouts. Currently, Lidl has home delivery systems in some countries. It has partnered with third parties in countries such as the USA, Spain, and Ireland to offer home delivery services.
Promotional strategies of Lidl
Promotion is the last component to discuss in this marketing mix of Lidl (4PS of Lidl). Lidl runs integrated promotional campaigns throughout the year. It often runs TV campaigns in many countries. It has also developed an app ‘Lidl app’ for iPhone and Android to help customers explore all the current and upcoming offers (Lidl, 2022).
Lidl primarily advertises on TV, newspapers, and magazines. It also uses billboards and online advertisements to reach a wide range of customers. It has partnered with many sports teams and authorities to build brand awareness. However, two of its recent adverts that claimed shoppers could save certain amounts of money compared to Tesco were banned by the Advertising Standards Authority (ASA) in the UK (Hawkins, 2022).
Lidl uses public relations very well as well. The company website has a ‘Press Releases’ section to share key developments with the public. It also uses sales promotions. For example, it has ‘Weekly Offers’ with which customers can save up to 25% on selected items.
Summary of the marketing mix of Lidl (4Ps of Lidl)
To sum-up, Lidl, one of the largest retailers in Europe, uses the marketing mix framework to develop marketing strategies that help it achieve success in many countries. It has helped it understand what the primary factors are when trying to attract customers. However, it should be mentioned that some of its marketing strategies need to be reviewed for the future.
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Last update: 06 July 2022
References:
Hawkins, E. (2022) Two Lidl adverts banned after complaint from rival Aldi, available at: https://www.cityam.com/two-lidl-adverts-banned-after-complaint-from-rival-aldi/ (accessed 01 July 2022)
Lidl (2022) About Us, available at: https://www.lidl.co.uk/en/About-Us.htm (accessed 05 July 2022)
Owen, C. (2022) We bought the same shopping list from Lidl and…., available at: https://www.walesonline.co.uk/whats-on/shopping/bought-same-shopping-list-lidl-23421329 (accessed 04 July 2022)
Smith, P. (2022) Number of Lidl stores in the U.S., available at: https://www.statista.com/statistics/727606/lidl-number-of-stores-us/ (accessed 02 July 2022)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
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