MBA IIBMS ANSWER SHEETS – Retail Management – Why are customers increasingly patronizing these extreme value retailer stores
MBA IIBMS ANSWER SHEETS – Retail Management – Why are customers increasingly patronizing these extreme value retailer stores
www.answersheets.in
info.answersheets@gmail.com
+91 95030-94040
Retail Management
CASE 6 Dollar General and Family Dollar Cater to an Underserved Market Segment
Dollar General, headquartered in Goodlettsville, Tennessee, and Family Dollar, based in Mathews, North Carolina, are the two leading retailers in the fastest growing segment of the industry, referred to as extreme value retailing. In 2005, Dollar General has over 7,500 stores in 30 states with sales surpassing $7 billion. Its annual growth in sales has been above 20 percent for the last six years. Family Dollar, with 5,600 stores in 44 states, generated over $5 billion in sales in 2004. Both retailers are opening new stores at rates exceeding a store a day.
The extreme value retail format has become increasingly popular among a variety of customers, including rural and urban shoppers, low-to middle-income young families, ethnic groups, and older customers with fixed incomes. Consumers have come to trust both of these retailers to provide good quality merchandise at low prices without the hassle of crowds and lines. The breakdown by geographic segments is 25 percent rural, 33 percent urban, and 44 percent suburban. This distribution is about the same as the sales distribution for Wal-Mart and Kmart stores. About 25 percent of U.S. households shop at an extreme value retailer once a month.
Sometimes these firms are grouped under the category of dollar retailers-retailers that sell merchandise priced under one dollar. While Dollar General and Family Dollar keep their prices typically under $15, most of their merchandise is priced over a dollar. Family Dollar has multiple price points, whereas Dollar General prices its merchandise at even-dollar price points.
About 50 percent of the merchandise sold in the stores is consumables (pet supplies, food, paper, household cleaning and personal care products), with the remaining sales equally divided among basic clothing, hardware and seasonal merchandise, and home products. The percentage of consumable sales has been increasing over the past five years. Basic stock is supplemented with opportunistic buys of closeout/liquidation and impulse merchandise giving the impression of a changing merchandise mix in the stores.
Vendors are developing new products and packaging to meet the needs of these extreme value retailers. For example, Fruit of the Loom typically sells men’s underwear in a nine-pack, but it offers small packs to value retailers. Procter & Gamble and Johnson Products also sell smaller sizes of hair care products with lower retail prices to extreme value retail chains.
Most of their locations are in the Southeast, where the companies are headquartered. The stores are small, 6,000 to 8,000 square feet, primarily located in small towns with populations under 40,000 and in suburban strip shopping centers. Because the stores are relatively small, it is easy to find good locations in almost any market the retailers choose to enter.
Initially, these extreme value retailers focused on low-income communities that were too small to support a large Wal-Mart or Kmart discount store. Residents of these towns appreciate the convenience of buying merchandise close to their homes rather than driving 30 minutes to a discount store in a larger town. Many of their customers walk to the stores. Not only are the stores closer to customers, but shoppers are able to park closer to the stores in uncrowded parking lots and avoid long checkout lines. With a small store, customers can get in easily, find what they are looking for, and get out in a few minutes. The average transaction is between $8 and $9. To maximize operating efficiencies, the retailers typically open a cluster of stores in a geographic area before entering a new area. Dollar General and Family Dollar are now opening stores in suburban strip shopping centers, using space that has been abandoned by drugstores that moved to stand-alone locations.
At one time, these extreme value retailers advertised sales using circulars. But both Dollar General and Family Dollar reduced their advertising expenses when they converted to an everyday low-pricing strategy. This cost saving allowed the retailers to pass even more savings on to their customers.
A recent Family Dollar annual report stated, “Supply chain efficiencies are vital to the success of any retailer, particularly one growing as fast as Family Dollar.” Thus, Family Dollar and Dollar General are making significant investments in point-of-sale terminals, store-level inventory tracking systems, automated distribution centers, space allocation software, and replenishment systems to reduce stockouts and increase inventory turnover.
DISCUSSION QUESTIONS
-
What is the target market of extreme value retailers like Dollar General and Family Dollar?
-
Why are customers increasingly patronizing these extreme value retailer stores?
-
How do extreme value retailers make a profit when their prices and average transactions are so low?
-
Can extreme value retailers defend themselves against general merchandise discount retailers like Wal-Mart, or will Wal-Mart eventually drive them out of business? Why?
Welcome to Answer sheets
We at Answer sheets offer all types of online academic assistance, be it homework help, coursework help, case study help, Assignment help, Project Reports, Thesis, Research paper writing help.
And for each service, each subject and each topic, we dedicate an expert writer who has knowledge in that specific field of study. Experience impeccable academic writing service like never before.
Our experts understand that the time of the customers is very precious. The professors of universities and colleges are very rigorous about the submission deadlines of projects or assignments. Hence, the key objective of our case study help service is to deliver the assignments to the customers even before the promised submission deadlines.
We keep the quality measures for all papers which mean we will provide best essays. Our editing services are also excellent. Before submitting any essays, we will check whether the papers writer well or not. The high standards of academic writing will exceed your expectations. With our quality service, we have satisfied more number of people across the world and also work with different universities in Australia, UK, USA, Dubai, Oman, etc.
At our Answer sheets services, our experts are familiar about the formatting styles that are followed in the academic world. Our experts have a great knowledge about the formatting styles such as MLA, Harvard, APA, Turabian, and many others. All types of formats for the case study help are available at our case study help services. In addition, our experts can solve the case studies as per the instructions of the customers.
The experts of our Answer sheets services are highly qualified and professional. We have CAs CFAs & PhD on our panel who have years of experience in the writing of case study / Assignments.
At our Answer sheets services, our experts never plagiarize the content from the other sources for the solutions of case studies. We have strict policies regarding plagiarism at our organization. We have never faced any complaint so far regarding plagiarism from our customers. We use new technologies and modern plagiarism checking software’s to detect plagiarism from our papers.
Case Study Solutions, Assignments done by MIB, CA, PhD, & CFA
The experts of our Answer sheets services are highly qualified and professional. We have CAs CFAs & PhD on our panel who have years of experience in the writing of case study. In addition, our experts have the expertise of how a case study should be done by using the information that is mentioned in the case study. All the experts of case study help services are competent and they have all the skills that are required in order to solve a case study. A case study that is solved by our experts looks professional and will surely fetch great grades.
O % Plagiarism
At our Answer sheets services, our experts never plagiarize the content from the other sources for the solutions of case studies. We have strict policies regarding plagiarism at our organization. We have never faced any complaint so far regarding plagiarism from our customers. We use new technologies and modern plagiarism checking software’s to detect plagiarism from our papers.
Best Price Guarantee
You get premium service at the best market price. Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors, in case they do – “We will beat the price”.
Confidentiality
We keep our clients’ personal data confidential. In addition to this payment, info is protected, so you no need to worry about any factors. Feel free to refer to the support team for more information and get some essential details related to the payment methods. Our company aims to keep all your details safe; our advanced security standards will exceed your expectations.
Benefits:
Quality Control and Simplicity
We only focus on the quality and offer best quality essays for all time. So you will receive well-crafted and 100% unique content. Need some alterations? You have great chances to get the essays for free.
Direct Communication and Support:
You can easily control the writing process based on your needs; we help you a lot. You can approach our writers directly and requesting drafts. Our dedicated team of experts is available to offer responsive support for 24/7. So just contact us, we ready to help you.
IIBMS MBA CASE STUDY ANSWER SHEETS,
IIBMS MBA CASE STUDY SOLUTIONS,
IIBMS EMBA CASE STUDY ANSWER SHEETS,
IIBMS EMBA CASE STUDY SOLUTIONS,
IIBMS DMS CASE STUDY ANSWER SHEETS,
IIBMS DMS CASE STUDY SOLUTIONS,
IIBMS MMS CASE STUDY ANSWER SHEETS,
IIBMS MIB CASE STUDY SOLUTIONS,
EMBA IIBMS CASE STUDY SOLUTIONS.