Milestone three

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Milestone Three: Marketing Mix
Lacey Bailey
Southern New Hampshire University
Int 640
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Introduction
Product
Product Related Problems and Challenges
Dollar General will face many challenges and problems when trying to capture the
market in China. China is one of the biggest global markets especially for ecommerce. Dollar
General will have to step up their game with their marketing mix strategy if they want to gain an
advantage over their competitors. However, with our strategy of Chinese lead products at a lower
price along with a place they can find their favorite American items in one trip, we are hoping to
penetrate the market and use economies of scale. Culture understanding and business etiquette
and miscommunication are the biggest challenged faced when doing business in China.
Therefore, a partnership with a local business will be key to addressing this problem.
China’s rapid global rise has created new challenges for the United States. Beijing provides an
alternative to the West and offers ready-made solutions to countries seeking economic
development. In addition to these longstanding challenges, American companies report that
regulatory compliance risks, including insufficient time to comply with new regulations, as a
growing challenge. Yet China also takes advantage of local vulnerabilities and weaknesses—
such as fragile state institutions, elite capture, and weak civil society—to exert its own economic,
political, and soft power influence.
China has become known for widespread piracy and counterfeiting of intellectual property rights.
China is the global leader in counterfeit products, with over eighty percent of the world’s counterfeit products.
(Behind the counterfeit goods industry in China,2022) However, enforcing intellectual property rights
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in China is a challenge due to local protectionism and bias against foreign companies. China has amended its
laws and regulations regarding intellectual property rights, but there is still little enforcement.
Shipping goods to China from the United States to get some of the American Products
can be complicated and costly due to issues in the nation’s logistics environment. For example,
large trucks are restricted from many urban areas, so shipments need to be transferred to smaller
vehicles that complicate distribution optimization. In addition, the vast majority of China’s
distribution centers and shipping yards are out of date and lack automation. Conflicting logistics
regulations make it harder for foreign companies to get their products into the massive market in
China. Rules and regulations are not applied consistently or equitably in China, and companies
often are not treated the same as Chinese companies regarding regulation and implementation.
Thankfully the Dollar General already has its own transportation and logistics it can incorporate
internationally to get Doller General Brand items to the stores from the US.
The global coronavirus pandemic in 2020 has reshaped the global retail landscape. Due to
its fast post-pandemic recovery, China became the only economy that managed to maintain a
positive GDP growth in the third quarter of 2020. Retail sales of consumer goods in China grew
by more than eight percent annually in the past five years. Though in-store retail still held the
largest market share among all retail channels, coronavirus outbreak has boosted online retail in
China (Yihan, Ma, 2021).
Product’s Designs Features and Benefits
Similar to its U.S.-based stores, China locations are expected to offer a carefully curated
assortment of Chinese and American products that customers use and replenish often, such as
food, pet accessories, cleaning and paper products, fresh goods, as well as discretionary nonconsumable items. Dollar General will bring its own brand name and products to China but lead
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the store with Chinese brands mainly. Lower priced popular brands and US products will be
available to a price-conscious market that values bargains. The most significant benefit is that
consumers get to buy products that are not available in China. They will also be able to shop
popular products at a much lower price. Dollar General also stocks a selection of private-label
goods, which have higher margins than national brands and give the company greater control
over manufacturing costs and can set its own prices.
In 2019, Dollar General rolled out its Cart Calculator option on the DG app. We will also
make this available internationally which will help customers scan items and keep a running tally
of their total purchase (including tax), the cart calculator feature also can notify customers if an
unclipped digital coupon offer is available for the item scanned. We also plan on bringing online
shopping to the table where anyone from around the world can shop online through our app and
have it delivered to their mailbox. This will save us a lot of effort on logistics if we have a
distribution center that everything gets shipped from.
Product Responsiveness.
Once established in the Chinese market, data and reports will be compiled to identify if
the globalization strategy is working or not. The company will gauge whether the product
responsiveness is being made at its distribution centers and if the streaming capabilities are up to
par by gathering data and customer satisfaction surveys. With this information, Dollar General
will make changes according to the results to optimize responsiveness. Dollar General is a
customer-centric company and will always put the customer experience first. With our joint
adventure strategy, I think product responsiveness will be better than if we were just going in
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alone. This will help with the entry and responsiveness to the market as well and will provide
data that the local company has already gathered.
Pricing.
The company’s everyday low-price model is anticipated to draw low-income customers
in China, who have been seeking both value and convenience. Prices are kept as low as possible
as the target audience is not very well off. Customers that walk into the stores belong to an
average-middle class category and are usually lured by great discounts and bulk buying. Hence
the brand focuses on competitive and low pricing strategy in its marketing mix to live up to the
brand positioning of Dollar General store even in China.
Pricing Strategy
We will adjust for economic value, currency conditions, and income class over in China
but our overall, low-price discount for brand name items will be the same as in the United States.
Pricing in emerging markets is complicated for several reasons such as fluctuating inflation rates
and volatile currencies. China is no exception to these issues. Therefore, pricing for China is
going to be difficult to determine. Very low pricing is going to be necessary in order to meet the
target market established of lower income rural areas. The strategy for pricing is going to have to
be based on income and will need to fluctuate accordingly to income levels in China.
Intended for the appropriate target market
Our Pricing strategy is appropriate for our target market because of how we placed the
stores so far from big box and grocery stores. Carrying a limited number of items gives Dollar
General more buying power with suppliers, as it buys in bulk. Most of our target market is
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living paycheck to paycheck and needs savings and discounts to make it to their next check.
Dollar General also keeps its prices competitive with competition using smaller bottles of brand
name items for a discount.
Coordinate cross-border prices
Even though some of the international risks are outside our control, DG will need to take
all factors into consideration when talking about cross-border pricing decisions. Things such as
currency inflations, fuel and raw materials prices only keep increasing. Especially once we get
the app for ecommerce shopping, we will really have to pay attention to cross-border prices for
online sales. For the strategy here we will connect to local banks all in the international target
markets as well.
Risks
For Dollar General to Succeed in China the pricing strategy will need to look at all the
opportunities and risks. Some risks for Dollar General will include making sure we have the right
pricing model, and we are taking into account any import and logistics fees and not passing too
much of the price to the customers. We will do this by being very strategic about our
partnerships and economies of scale and partnering with other companies already doing business
locally to try to offset some of the costs.
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References
Behind the counterfeit goods industry in China. Daxue Consulting – Market Research China.
(2022, April 15). Retrieved May 3, 2022, from https://daxueconsulting.com/counterfeitproducts-in-china/
Ma, Y. (n.d.). Topic: Retail industry in China. Statista. Retrieved May 4, 2022, from
https://www.statista.com/topics/1839/retail-in-china/#dossierContents__outerWrapper
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