Milestone 2

Running head:

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5-1 Milestone Two: Marketing Strategy Framework
Lacey Bailey
Southern New Hampshire University

Author Note
Being a great global brand and showing commitment and desire to be part of the local
Chinese culture will be a must for the marketing plan of Dollar General. Since China started its
“reform and opening” policy in 1978, its economy has expanded rapidly, and most leading
international retailers and manufacturers have entered the China market. Despite the country’s
rapid economic rise, China’s regions have developed at different rates, and consumer trends vary
greatly among different groups and regions. Understanding the preferences and mindset of
consumer groups is the key to successfully expanding a retail business in China.

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Marketing Strategy Framework
Dollar General is looking to expand operations internationally to China and its target
market they are looking into is Rural China. As of April 11, 2022, Dollar General operates 18,216
stores in the continental United States across 47 different states. (Dollar General, 2022)

A. The greatest target market spaces for discount retail stores such as Dollar General is
low- to middle class women making under 40,000 living on a budget or looking to
save money on essential items. Pop Shelf targets middle class consumers making
between 50,000 to 150,000 in urban areas.
B. An analysis of the industry shows that the highest threats are rivalry of existing
competitors and customer buying power. These threats are due to the industry being
highly price competitive and selling of undifferentiated products. In addition, the
target market is low to middle income families who are price sensitive. The critical
success factors are achieving a low-cost business model, economies of scale, and
acquisitions. Due to the size of our stores, DG competes with the big box stores such
as Walmart and other discount retail stores. We have made it an objective to find rural
areas who are in need for the market and to be at least 20 miles from big box stores. It
also leaves us with low purchasing and customer buying power since we keep stock
low to supply more stores. Since we are looking at expanding into China and
competition there is fairly high, we will be using that weakness to partner jointly with
another company and also to be 20 miles proximity to big box stores so we can enter
the market and be successful. These rivalry conditions have impacted the strategies
and formation for our marketing conditions. Acquisitions also enable Dollar General

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to achieve economies of scale in the highly fragmented industry. Acquisitions will
allow Dollar General to reduce the threat of existing rivalry in geographic areas.
C. The purpose for Dollar General expanding internationally is to expand our operations
for economies of scale and new products. Since many of our products are already
coming from China, we decided it would be more cost effective to start sourcing
locally once our store is over there which will save on cost and tariffs that have been
caused due to the trade war. With 598 million living in rural China that represent a
little under 50%, China has great opportunities for Dollar General.
D. Dollar General must work to keep operational cost low and profits high. The high
threat of existing rivalry drives profitability of the industry down but becoming a joint
adventure with another discount retailer will help with entry into this market. We
expect financials to increase when first entering this market as Chinese consumers
love shopping local and also take very well to American brands and products. We
will still keep the DG branding and sign out front but we will lead with many Chinese
products from brands that they already love and are shopping for. Below is our
expected market share, regions, and financials for the first 24 months.

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Revenue in Millions
5
4.5
4
3.5
3

2.5
2
1.5
1
0.5
0

6 Months

12 Months

18 Months

Revenue in Millions

24 Months

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E.
Dollar General can use their U.S. rural and urban strategy in the China landscape,
locating in small towns that can serve as a reliable customer base through localization
of offerings for brands at a discount price but also a place to get American made
products that could become some Chinese shopping favorites. We will lead with
Chinese products and source more locally at each level. Eventually we can target
urban areas and bring in pop shelf if we see a positive growth with DG. Another
strategy they will also use is acquisitions to enable Dollar General to achieve
economies of scale in the highly fragmented industry of China.

Segmentation, Targeting, and Positioning.
A. Please see attached template
B. Customers want to do business with brands who understand them, their values,
interests, and behaviors. In order to personalize our marketing efforts, creating our
STP framework was beneficial to learn everything about our target customer over in
China. Dollar general uses the STP process to ensure that potential and current
customers can be reached more effectively, and that brand, communication, product,
and services can be matched to the unique needs of the different customers. After
doing the STP with China, we learned more about the Chinese cultures behaviors and
preferences and put together a persona based on our ideal person to market and
communicate to.

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Target Market Entry Mode.
For our strategic entry mode plan Dollar General will be pursuing a partnership with a
local business. Partnerships reduce the amount of investment that a company needs to
make because the costs are shared. A partnership will also be helpful to make us appear
to be more local because it enters the market with someone who already has ties to
suppliers which can lessen the risk for DG.
A. Our TOWS analysis and market objectives were the drive that caused us to choose
entering China through a partnership. Examining our TOWS analysis gave is the best
research to choose this entry mode. It was an easy decision to enter the market with a
local partner knowing that Chinese preferred to deal with locals and the examining
the opportunities and threats we decided this will be a successful way to enter.
B. The trade-offs among organizational/market control, profitability, strategic flexibility,
and foreign market risk were also considered in your decision. Dollar General will
have 51% of the company so it can make the decisions and be the influencer of the
products, marketing, and portfolio and take most of the control. We will take
advantage of the local businesses and working with locals for sourcing local products,
and transportation to lower the risk of entering this China market. We already source
a lot of our products from there so just maintaining those relationships and continuing
to source American made products from our distribution centers will be key in
decision making. We will also have mostly Chinese products as a lead and include a
few options for American products that they wouldn’t otherwise be able to get at a
different story hopefully causing brand loyalty in the future.

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D. This Partnership will also later inform the marketing mix elements by taking into
consideration the strategies and knowledge of the partner and blending them to create one overall
strategy that can help us be successful in our marketing mix elements over in China.

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References
Wikimedia Foundation. (2022, April 16). Dollar general. Wikipedia. Retrieved April 20, 2022,
from https://en.wikipedia.org/wiki/Dollar_General

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