Contemporary Marketing

Assignment No. 1

The One Dollar Store

An Analysis of the Micro and Macro Environments

EMBA II – SZABIST Islamabad

Ahmed Abdullah Khan

Habib Shah

Khawaja Ahmad Salim

 1 TABLE OF CONTENTS

2 Introduction ............................................................................................................................. 3

3 One Dollar Store ...................................................................................................................... 3

4 The Marketing Environment ................................................................................................... 3

5 The Micro Environment .......................................................................................................... 3

5.1 Company .......................................................................................................................... 4

5.2 Suppliers ........................................................................................................................... 4

5.3 Marketing Intermediaries ................................................................................................. 4

5.4 Competitors ...................................................................................................................... 5

5.5 Publics .............................................................................................................................. 5

5.6 Customers ......................................................................................................................... 5

6 The Macro Environment .......................................................................................................... 6

6.1 Demographics................................................................................................................... 6

6.2 Economy........................................................................................................................... 6

6.3 Nature ............................................................................................................................... 7

6.4 Technology ....................................................................................................................... 7

6.5 Politics .............................................................................................................................. 7

6.6 Culture .............................................................................................................................. 7

7 Conclusion ............................................................................................................................... 8
2 INTRODUCTION

This short paper discusses the marketing environment that surrounds the local chain of retail
outlets that go by the name ‘One Dollar Store’. Each element of the micro, and macro environment,
that collectively form the marketing environment will be sequentially considered, and their impact
of the store will be analyzed.

3 ONE DOLLAR STORE

Globally Dollar Stores are part of a well-established phenomenon, as customers are increasingly
spending more money in Dollar Stores across markets.

In the U.S., ‘Dollar Tree’ and ‘Dollar General’ are some of the biggest names in the U.S. discount
retailers. These chains have a wide presence in the U.S. market. Dollar Tree and Dollar General
are listed on U.S. exchanges Nasdaq and NYSE respectively.

The Dollar Store concept has proved its allure to the Pakistani customers, with 14 successful
outlets, under the One Dollar Store brand in Islamabad/ Rawalpindi region. With three new stores
opening soon in this region, there are plans to expand the stores footprint across Pakistan.

4 THE MARKETING ENVIRONMENT

Marketing Environment is the combination of external and internal factors and forces which affect
the company's ability to establish a relationship and serve its customers. As mentioned earlier, that
the subject of this study would be the external environment which comprises of the micro and
macro environment factors.

5 THE MICRO ENVIRONMENT

The micro environment comprises the following factors:

i. Company
ii. Suppliers
 iii. Marketing Intermediaries
iv. Competitors
v. Publics
vi. Customers

We will now go over the effects of each of these factors on ‘The Dollar Store’, as it is popularly
known.

5.1 COMPANY
Without a close knit communication channel between departments, an organization rarely
survives. The dollar store is thriving due to the well managed flow of information that allows their
inventories to remain updated with exactly the products that are being sought after. The helping
staff at the store notices which items are more popular amongst the clientele, and communicate
their need to the store manager, who then reaches out to procurement to ensure that the aisles
remain filled with the required items.

Effective value chain is thus maintained, and it is ensured that the customer entering the store, does
not return empty handed or disappointed.

5.2 SUPPLIERS
As a retail store, the dollar store is greatly dependent upon its suppliers. A list of suppliers is
maintained, and it is ensured that the communication with them is a step ahead of cordial. The
marketing understands that failure of delivery due to any reason, would result in the reduction of
value in the eyes of the customer, and so relationship with the suppliers is kept such that they feel
obliged to fill in the demand as early as possible, and not just because it is good business.

5.3 MARKETING INTERMEDIARIES

When it comes to marketing intermediaries, like all organizations, the dollar store is also dependent
upon banks for financial transactions and services. Since the processes and procedures of banks
are very well defined, the stores operations are planned out, and managed accordingly.
Services of marketing agencies has been utilized in the past, not in a way that these are now a
dependency for the store in anyway. The store believes strongly in the marketing through positive
‘word of mouth’ philosophy, and this has worked for them so far.

5.4 COMPETITORS
An ever watchful eye is required on the competition to stay ahead in the market. Fortunately, for
the dollar store, there isn’t much competition in the market to begin with. Their brand, which
promises everything within the price range on one dollar, is unique. Of course there are thrift stores
all around, but none of these have the ‘something for everyone’ option.

That, coupled with their ‘location’ or placement, and presentation strategy (glamourous as any
retail store, as they are) has till now kept them ahead of any competitor that may be out there.

5.5 PUBLICS
Media, social or electronic, is of course the greatest dependence of any organization. Thus far, the
dollar store has only received very positive reviews. A watchful eye is kept on the media, so that
concerns over its operations may be addressed immediately.

Apart from the media, local community organizations have also remained positive in their
treatment of the store. The product being offered is unique, and is acceptable to all, with hardly
any complaints.

5.6 CUSTOMERS
Customers, and consumers are the driving force behind any business operation. The value being
provided to them must be greater than the associated direct and indirect costs, in their minds. The
store targets the consumer market, and it attempts to cover all segments of it, through its
‘something for everyone’ objective.

Here again, so far the store has done a good job, by meeting the expectations of its consumers.
Their exponential growth in such a short time is proof of the success of their concept.
6 THE MACRO ENVIRONMENT

The macro environment comprises the following factors:

i. Demographics
ii. Economy
iii. Nature
iv. Technology
v. Politics
vi. Culture

We will now go over the effects of each of these factors on ‘The Dollar Store’, as it is popularly
known.

6.1 DEMOGRAPHICS
Demographics allow businesses to create categories of the total market population. They are then
able to target the category, or segment of the population that their product serves, and provides
value to.

With the ‘something for everyone’ idea, the dollar store covers most demographic divisions. The
only thing left to monitor is the size of each division in the area where the store is located. This
generally becomes evident through a rough survey of the locality before the inception of the store,
so that the items that are focused towards a particular larger segment are abundant. After the
inception, the sales at the store, give a more precise idea of the segment that is a stronger consumer
base, and merchandise addressing the needs of that segment are made available.

6.2 ECONOMY
The economy of Pakistan, is of course not one of the strongest. With a per capita GDP of $1,547,
there is always a requirement of thrift stores. People are looking to save, yet want to have as much
of the amenities as they can afford.

The name ‘One Dollar Store’ itself, promises cost savings, and attracts the greater population very
effectively.
6.3 NATURE
Apart from natural disasters, organizations do manage to work around the natural environments of
their area of operations, and in the cases of successful businesses generally, manage to make it
work to their benefit.

In comes a thrift store, that provides shelter from the summer heat, which lasts around seven to
eight months, and offers a comfortable, cozy environment during the winters, when temperatures
reach fall to the freezing point. In this way again, the dollar store has managed to attract the
population, and has effectively used nature to its advantage.

6.4 TECHNOLOGY
Advancement in technology outdates the existing and the old. For the dollar store however,
keeping up with the technology was not much of a challenge. Being a retail store, and that too,
limited to a product price of less than one dollar, there isn’t much range in terms of technological
products that are available.

Fortunately, the consumers visiting the stores are not looking for the availability of very high tech
products in the aisles either.

6.5 POLITICS
Thus far, the store has managed to remain unaffected by the political situation of the region and
the country. There aren’t any laws that impact the business the store is conducting, and it is
expected the situation will remain persistent as such.

6.6 CULTURE
In terms of business, the social culture of the region, due to the economy, is focused towards saving
from costs. This model has been most effective mainly due to this reason. The population aims at
reducing the costs of amenities and small luxuries as much as possible, but does shy away from
good bargains either. This is exactly what the dollar store offers; a good bargain.
7 CONCLUSION

In conclusion, we can say that the marketers at the dollar store have done great job, with the
identification of a need, to begin with, and then providing a solution for that need, which in the
minds of its customers, has greater value associated to it, as compared to the related costs.

The factors and forces that make-up the micro and macro environments surrounding the business,
are being considered, at each step of the way, and are managed in the most beneficial way possible.

The success of the stores, and their growth, in a very short period is proof that a successful
operation may be run, even if the overall economy is not as conducive, just as long as the right
need is identified, and is catered to, with the focus of adding value at each customer experience.