How can LIDL maintain its position and market share in the supermarket sector? What are the risks of entering in markets beyond Europe?
Low prices good quality relationship
Good marketing communications
Good staff-customer relationship
Wide target segment, people of all ages and backgrounds
Understanding of legal framework in each country it operates
Existing countries where Lidl can expand
Due to the recession all customers look for one thing: low price.
This is Lidl first value.
High competition like Tesco, Aldi and ASDA
Consumers are not loyal to bran but to prices so there is small cost of switching brand Recession has affected drastically retailers in this sector
Adaptation or Standardization
Standardization means when a brand develops standardized products marketed worldwide with a standardized marketing mix, normally called mass marketing. Whilst adaptation means customizing the products in a way that satisfies better the market and minimizes costs. Lidl’s priority is to satisfy customers as the switching cost to competitors is low, therefore it has to consider the different tastes country has. Packaging needs to be changed in every country as it has to be translated into the language country Lidl operates in.
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Also tastes can vary in different countries, for example water with gas. Some countries hardly don’t drink water with gas whilst others 70% of the population drink it, therefore Lidl should be aware of customers’ needs in order to provide with each of their necessities. Products normally are quite standard and you can find similarities in supermarkets but it needs to consider the cultures and traditions that influence a country.
Extension, Adaptation and Creation
In order for Lidl to continue its expansion strategy and try operate in foreign markets outside Europe it should firstly investigate the market. Position all the firms in the same segment and search if the position of Lidl has already been taken. It should after identify customers’ needs and tastes in order to orientate and afford all products they most consume. Furthermore, the company needs to translate all the packaging into different languages, like Chinese if it decides to enter China and be alert of all meanings in case means something different in another language.
Lidl have shown success in its work and has maintain a good position in the market, so the recommendation will be to continue as it has been doing. Although, it should constantly keep an eye on its competitors as it is operating in a dynamic market, where prices can change so fast as customers. Therefore it should be alert on what competitors are offering and how can they do it better. It should also work on the cultural values in each country and if any sort of adaptation is needed to satisfy customers, not all have same tastes. In order to continue growing Lidl needs to expand and if it wishes to expand to other markets beyond Europe it should closely analyse the market and see whether the position is already occupied by another company and if their products are tailored for the customers in the countries.