Retail marketing case study - Essay Example

Retail Marketing Case Study Question Extreme value retailers like Family Dollar and Dollar General have a broad target market. These value retailers target rural and urban shoppers. Similarly, these value retailers target young families with low to middle income, older families with fixed incomes, and ethnic groups. Additionally, value retailers also target suburban shoppers. Question 2 Both Family Dollar and Dollar General open new stores at rates surpassing one store a day. From this, it is clear that both Dollar General and Family Dollar are growing the number of stores too fast.

The fast store growth rate by both Company’s present challenges to the management especially in handling expanded responsibilities without compromising the quality and cost controls necessary for the business. Further, due to the fast growth of the number of stores, there is a likelihood of occurrence of hiring errors as a result of failure to evaluate new hires thoroughly. Question 3 Extreme value retailers make profits by selling low priced single use packet products. These products have higher profit margin compared to larger quantities of the same product.

Given the low prices and average transactions, extreme value retailers can make profits from selling these products in their numerous stores. From the case, it is evident that products prices of both Family Dollar and Dollar General are less than fifteen dollars enabling these firms to make a profit by the sale of these low-priced products. Question 4 There are some reasons for increased customer patronage for extreme value retailer’s stores instead of Wal-Mart. Initially, extreme value retailer concentrated on low-income communities that were small to support a large Kmart or Wal-Mart discount store.

The residences of these communities appreciated the ease of purchasing merchandise close to their homes instead of driving for half an hour to a discount store in a larger town. Several customers can walk to these stores. Also, shoppers can park near the stores in parking lots that are uncrowded thereby avoiding long check out lines.Question 5 Dollar General should have a lower SG &A as a percent of sales. It is because Dollar General has 2005 sales surpassing seven billion dollars this is higher than the 2004 sales of Family Dollar that are approximately five million dollars.

Investors measure how a Company spends its money by looking at SG & A (Yakhlef 1). A corporation that maintains SG & A that is a higher percentage of revenue compared to other Corporations in its industry may indicate a lack of ability to adapt to downturns in the market. Question 6Retail Mix CategoryDollar Stores Implementation MerchandisingStock is supplemented with opportunistic buys of liquidation and impulse merchandise giving the impression of a changing merchandise mix in the stores.Fifty percent of the merchandise is consumables.

PricingDollar stores implement low pricing strategies. Store Location Dollar stores mostly located in the SoutheastCurrently, Dollar Stores are opening stores in suburban strip shopping centers, using space abandoned by drugstores.Retail PromotionPreviously, Dollar Stores advertised using circulars.However, they have reduced their advertising expenses upon conversion to a low-pricing strategy. Work CitedYakhlef, A. Customer Experience within Retail Environments: An Embodied, Spatial Approach.

Marketing Theory (2015): n. pag. Web.