Stp process 4 1 1

Running head: STP Proposal
4-1 STP Proposal
Lacey Bailey
Southern New Hampshire University
Milestone two- STP Proposal
Purpose of STP process
Doller General already understands that different people and groups have different needs.
That is why they have come up with Pop Shelf and DG Market to suit the needs of middle- and
upper-class markets as well. The main purpose of segmentation is 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. In order for Dollar
General to really understand their consumers and target market, an effective segmentation
process is necessary. This will allow us to know exactly what our customer wants needs and
benefits to our store before we even enter the market. We will use this market segmentation to
identify different groups within our target audience so that we can deliver more targeted and
valuable products to all of our customers, which will help us determine our market opportunities
internationally. Once different segments are identified, we can then determine which target
segments to focus on to support corporate strategy and growth. The main principle behind the
process is to segment your audience, target each segmented group according to their
preferences and habits, and make positioning adjustments in strategies to accommodate their
needs and expectations. So, for Dollar General trying to go international, this would help us
decide the preferences of the Chinese and see what products would be best for our target
market and what locations would strategically fit in our structure.
Bases and Variables
For the base we use to define the overall market, we would segment based on geographic
location and start with rural areas and expand Pop Shelf to urban areas as we see success with the
transition internationally. We would also segment based on socio-economic segmentation
including income, lifestyle, family size, age, and gender. We know that other competitors have
done well over there such as Miniso. Family size, age and gender also play a major role in our
targeting and how we position our products.
Effective Segmentation.
Effective segmentation should be measurable, accessible, substantial, differentiable, and
actionable. There is plenty of quantifiable data sources on these consumers already and also
hiring a research firm over in China would help with our segmentation process. Our audiences
are well defined, and we could partner with someone over in China to enter the marketplace. The
lower and middle class is substantial in size and making sure we are reaching the different
segments will help in this process with making sure we succeed in China.
Dollar General’s biggest differentiator is that they are serving markets that had been vastly
underserved. Our action is to serve low-income customers, tailoring the shopping experience to
the needs of its primary demographic. The target customer for Dollar General is usually from a
household with a gross income of less than $40,000 a year and is mostly women. Often, these
shoppers live in rural areas commonly referred to as ‘food deserts’ which means that they are far
away from other larger grocery stores. In this way the Dollar general has really been able to
segment out their consumers and will be able to use this strategy in China.
Positioning Strategy
Price-based strategy would be the best strategy to take in China. Many stores are cheaper
to operate in rural areas and can save us cost and boost profits. Competitive pricing for name
brand quality items at a savings has always been our competitive advantage along with
convenient locations usually positioning stores in towns with less than 20,000 people making it
easy to access and affordable. Partnering with a Chinese company, finding local suppliers and
transportation and positioning ourselves as the local American/Chinese discount store will be
beneficial for DG.
Consumer Culture Positioning.
We would position ourselves as a local American culture with our Dollar Store brand as a
new go to market space for discount retailers but would include Chinese brands and products
into the mix. We will have both brands that Chinese love at affordable cost and also American
items that can be found at the Dollar General in America. This will position us as the local go to
brand where you can also find many American items.
The STP proposal will break down the market for your product into different groups of
consumers that differ in their response to the firm’s marketing mix program. The different
consumers we are targeting is lower income women who live or work in rural areas making less
than 40,000 and also middle upper class for pop shelf and DG Market in the urban areas. We will
include both Chinese and American Brands but keep the overall brand of Dollar General where
consumers can find quality brand name essential items at a discount.
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