PED, Market Positioning and Branding – How do Aldi and Lidl’s own-brand lookalikes get away with it? [Video]

Edexcel Business A level – 10 mark essay

This video explores a case study centred around the intriguing practices of Aldi and Lidl in offering own-brand products that bear a striking resemblance to established brands.

The case is contextualised within the framework of Price Elasticity of Demand (PED), branding, and market positioning, offering a comprehensive foundation for understanding these concepts in the context of a 10 mark essay walkthrough video.

Price Elasticity of Demand (PED) is a crucial economic concept that measures the responsiveness of the quantity demanded of a product to a change in its price. In the context of this case study, understanding PED is essential to assess how Lidl’s strategy of offering “discount clones” impacts its market positioning and consumer demand for its own-label products.

Branding and Market Positioning are central to this case study, highlighting the tactics employed by discount supermarkets like Aldi and Lidl to compete with traditional brands. These retailers have adopted a strategy of creating own-brand products that closely mimic the appearance and packaging of well-known brands, such as Thatchers Cider, leading to legal battles and public debate over intellectual property rights and the ethics of such practices. Market positioning, in this context, refers to the strategy employed by Lidl and Aldi to position their own-label products as high-quality yet affordable alternatives to established brands, targeting price-sensitive consumers.

The case study illustrates a legal battle where Thatchers Cider, a family-owned business with a 120-year history, accused Aldi of mimicking its drink and packaging with its own brand Taurus. Despite the visual similarities, the High Court ruled in Aldi’s favour, highlighting the complexities surrounding brand imitation and intellectual property rights in the retail sector.

The practice of offering “discount clones,” as adopted by Lidl and Aldi, serves as a double-edged sword. On the one hand, it attracts price-sensitive customers, increasing demand for its own label products and potentially repositioning these products as comparable in quality to famous brands at a lower price. On the other hand, it risks alienating consumers with brand loyalty and those who perceive the own-brand products as inferior in quality, impacting the effectiveness of this strategy among less price-sensitive customers.