Dollar Tree Analysis

IBP Objectives * Focus on continual growth and im fixment patch providing a reason equal to(p) return to our investors. * Obtain more of the spunk-income consumers as consumers, argue to just low-down-income consumers. * Increase the publics aw beness of long horse maneuvers products, inventory, and superior of products. yield Dollar corner generate a part of consumers recall. * Inform consumers of the extreme quality of Dollar steers products, no products are expired or out to date. We just get an extreme discount with loyal distributors. * Change customers attitudes towards Dollar Tree and discounts breeds 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 star million million annual revenue by 5% to $ 6,176. 52 million. * Increase consumer purchases from seasonal purchases to everyday purchases. Most people sh op in discount stores for seasonal, party supplies opposed to everyday consumer sine qua nons, desire dish soap. IBP strategy Being a dollar store, Dollar Trees usual target sense of hearing is primarily low-income ho holdholds with closely 55% of their customers making less than $40,000 annually (IBISWorld, 2011).About 69% of Afri washbowl Americans shop at dollar stores at least once a month compared to 50% of Caucasian consumers (Mintel, 2005). Dollar Tree has successfully securities industryed themselves to lower income Hispanics and African Americans, but on that point 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 obtain, 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 umteen people have been alter by the latest economy, more than ever people are looking for 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 the likes of juice, spices, hips, and some(prenominal) 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 dont have the time to go from store to store searching for the best price. Simply put, this demographic does n ot like to waste time, which will be one of our key marketing points.thither are very few stores that offer the amount of different products that Dollar Tree does. There arent 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 compact 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 familys children start shopping. On top of targeting 25-34 year old s in the middle class, we will also continue to target Dollar Trees current market of lower income households. We will run advertisements in these lower income areas simply to serve as a reminder of Dollar Trees low fixed price of a dollar.The one quality that puts Dollar Tree ahead of all other dollar stores is that it actually sells all of its products at one dollar. It does not matter what the product usually sells for or what it should sell for, because Dollar Trees business works in a way that makes them dependent to sell their products at the simple price of one dollar. Because of this unique aspect, we will focus a large portion of our advertising on that message. Consumers can do all of their shopping at one low price, and in return, receive quality products which satisfy their needs. Our advertising will give off the personality of the add up working family.Dollar Tree is not a fancy store and that is certainly not the image that our advertising will convey. We want peopl e to be able to relate to Dollar Tree and have the feeling that shopping at our stores is like shopping at a Walmart or Cosco, but cheaper and less of a hassle. Its the one stop shop for all of your family needs. For our media plan, we decided to advertise through Television, Newspapers, and Internet, and these advertisements will run for a whole year. Dollar Trees advertisements will give off the same accordant visual appeal to all of its targeted consumers.Moreover, all elements of Dollar Tree will portray a consistent image, while visually appealing to their target consumers. With that being said, our creative strategy will focus on the portrayal of Dollar Tree as a family business with great products at low prices. To do this, advertisements will show off many popular, trusted name brands with the intent to influence consumers into believing Dollar Tree carries quality and trusted products. In order to get as many customers into our stores as possible, our advertisements will v isually appeal to middle class families.In addition, advertisements will contain visuals of various families shopping at its stores, and have the families appear to be very stress free and loving. These visual appeals will give off the vox populi that Dollar Tree caters to everyday middle-class consumers by offering an enjoyable family-friendly environment. Dollar Tree competes with many big-chain grocery stores in the country like Wal-Mart, Meijer, and Kroger. These are all huge stores with larger budgets than Dollar Tree, giving them the ability to create expansive creative campaigns that register with consumers.We dont ask Dollar Tree to go over their limit, but to work with what they have, represent themselves well, and differentiate from other competitors. We believe that there are amazing opportunities for Dollar Tree within their market, and that they are not taking advantage of them by not committing to a traditional ad campaign. We found out that they are missing out on ma ny beneficial ways to increase the companys income, by not advertising much, and not representing themselves well. Also, differentiating Dollar Tree from other stores is a very great aspect, because too many stores cause clutter to consumers.We have to make Dollar Tree stand up as something special, different, and relatable to target consumers. All of these elements would get the store new shoppers as well as maintaining their current customer base. Media Strategy Dollar Trees first problem is that they dont apportion enough money in their advertising budget to produce an sound campaign that has the ability to produce worthwhile excrete and frequency. If they wish to emulate stores like Wal-Mart it is essential that they advertise like them. Wal-Marts annual ad budget is $2. billion we are not trying to suggest that Dollar Tree cast off $2. 1 billion. However that $2. 1 billion worn-out(a) on advertising is only . 8% of Wal-Marts annual sales, this is the strategy we suggest Do llar Tree employ (Ries, L. , 2011). Dollar Trees current advertising budget is $11. 1 million about . 2% of their annual sales. By increasing the ad budget to . 8% of annual sales, which by market standards is still below average, their new budget would be $47 million a budget that can actually buy effective GRPs year round. The optimal media strategy for Dollar Tree is to use a pulsing technique.A pulsing strategy is most effective because consumers use their products year round, but there are significant seasonal spikes in consumer spending around holidays, mainly Easter and Christmas. To do this, its important that Dollar Tree maintain a moderate level of reach year round of 75 or at least 3/4th of the target audience. At the same time, Ostros Matrix indicates that an appropriate level of frequency should be at 4. 1 exposures. During the months of March, April, November, and December is when we plan our flights.During the flighting months reach increases to 80% of the target mar ket and frequency to 4. 5 exposures in the national market. It is also during these months that we use an integrated spot market strategy to maximize consumer spending in local markets that Dollar Tree has a particularly high presence in by increasing reach to 90% and frequency to 6 exposures. These spot markets include 5 DMAs in California and Florida (Griffin, J. , 2012) Los Angeles, SacramentoStockton, San Francisco, Miami-Ft. Lauderdale, and Tampa-St. Pete making up 11. 31% of the U. S. population.To reach our targeted audience of middle-class Americans, it was decided to use TV as the primary vehicle to maximize exposures at the national level. To support the brunt of the ad campaign about a quarter of the budget was spent on half page full color ads in national newspapers since 79% of Americans with white collar jobs read the newspaper (MC Marketing Charts, 2009). Dollar Tree has invested into Dollar Tree Direct, an online e-commerce business, so an additional quarter of the b udget was used to buy internet sponsorships, embedding a link to Dollar Tree Direct onto already branded websites (Dollar Tree Inc. 2010). Research Questions Dollar Tree is having issues determining the consumers current awareness of their product, recall of their product, and approval ratings. Several research methods would be effective to obtain this information. Such as look into research, Dollar Tree can pass out surveys to their target consumers using geographic location or an online survey targeting the sites their audience will frequent or through email lists. Another issue of Dollar Tree is that in the past they were unsure of what their target audience should be.Since the economy is so poor, they have expanded their target reach from low-income to the middle-class, but who accompanies this middle class. The middle-class is a large sector that contains many different incomes, lifestyles, and so on To deal with this dilemma Dollar Tree can perform focus groups to figure out who is shopping at Dollar Tree. Why they are shopping there, if they are not shopping there why not? They can get in-depth answers on what the public really thinks of Dollar Tree, and similar stores within their market sector.