The Target Market of Extreme Value Retailers

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Low income community is the target market for extreme value retailers like Dollar General and Family Dollar. But they also serve the rural and urban shoppers that belong to low-to-middle-income families, ethic groups and older customers with fixed incomes. The low income families experience significant higher levels of material hardships than families one rung father up the economic ladder – families with incomes two to three times the poverty level. They tend to skip meals or not being able to pay for food. Most of them have low economic positions and are more likely to have large families with three or more children. Considering that they don’t earn that much, they still have to meet their basic expenses. Taking into account the taxes, observed expenditures on housing, health care, child care and imputed food expenses, we can assess how much income low income families have left to meet their other expenses including clothing, utilities and transportation cost. To help the underserved market, extreme value retailers targeted them by offering extreme discounts. They are served an enduring need in society by allowing them to buy more or better items for less money than what they are used to or supposed to pay. We all know that there is a greater percentage of low income families compared to high income families and serving them not only gives a big opportunity for the company to earn but at the same time, they are helping these families to achieve a better social self esteem by providing them merchandises at affordable rates.
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