Dollar Tree Analysis

Topics: Wal-Mart, Variety store, Retailing Pages: 5 (1841 words) Published: November 20, 2012
IBP Objectives
* Focus on continual growth and improvement while providing a reasonable return to our investors. * Obtain more of the middle-income consumers as consumers, opposed to just low-income consumers. * Increase the public’s awareness of Dollar Trees products, inventory, and quality of products. Have Dollar Tree become a part of consumers recall. * Inform consumers of the extreme quality of Dollar Tree’s products, no products are expired or out to date. We just get an extreme discount with loyal distributors. * Change customer’s attitudes towards Dollar Tree and discounts stores in general. Discount stores carry the same quality name brands as department stores, while staying true to their single price of $1 for everything. * Increase sales and customer traffic in stores from $5,882.4 million annual revenue by 5% to $ 6,176.52 million. * Increase consumer purchases from seasonal purchases to everyday purchases. Most people shop in discount stores for seasonal, party supplies opposed to everyday consumer needs, like dish soap.

IBP strategy
Being a dollar store, Dollar Tree’s usual target audience is primarily low-income households with about 55% of their customers making less than $40,000 annually (IBISWorld, 2011). About 69% of African Americans shop at dollar stores at least once a month compared to 50% of Caucasian consumers (Mintel, 2005). Dollar Tree has successfully marketed themselves to lower income Hispanics and African Americans, but there is an opportunity in another market. In recent years there has been a rise in the number of upper income consumers using Dollar Stores. Everyone would much rather save money shopping, which is why with the recent economic downturn, it has become more common for middle and upper income families to supplement their shopping needs with dollar stores. We see an opportunity to market to this newly emerging market, and believe that we need to capture brand loyalty before the recession is over.            Dollar Tree has a unique opportunity with the recession. Because so many people have been affected by the current economy, more than ever people are looking for cheap ways to maintain their lifestyles. As lower income households continue to shop at dollar stores, people who were once wealthy or are still considered wealthy are starting to reconsider their shopping behaviors. Offering products like juice, spices, chips, and several other food and drink products, any homemaker could easily get all of their grocery shopping complete without checking the price tag (“Dollar Tree, 2012”). The middle class in America typically consists of people with a fast paced lifestyle, and they are all very busy. They work hard for their money, and are always looking for deals, but sometimes don’t have the time to go from store to store searching for the best price. Simply put, this demographic does not like to waste time, which will be one of our key marketing points. There are very few stores that offer the amount of different products that Dollar Tree does. There aren’t any stores that have the variety of products that Dollar Tree offers for only one dollar. You can get office supplies, party supplies, medicine, food, games and toys, and much more. The medium income demographic would be attracted to this because they can get all of their errands done at one store for a portion of the price. As well as targeting medium-income households, we will narrow that down to 25-34 year olds in that demographic. These are people who are starting families and starting careers. They are busy trying to make it in the world, and targeting this demographic would prove extremely beneficial for Dollar Tree. We can establish brand loyalty with this relatively young market, and possibly profit in future years when these younger family’s children start shopping. On top of targeting 25-34 year olds in the middle class, we will also continue to target Dollar Tree’s current market of...
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