Retail Discount Store Business Plan

Dollar Store
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Strategy and Implementation Summary

The Dollar Store uses a strategy of total market service. Our promise is in our location and the products we sell, the people we attract,
and the atmosphere we create.

We will present a store that is pleasant to shop in with a large variety of merchandise to choose from.

Ultimately, we are selling more than just merchandise. We are selling ourselves. We want to provide the kind of customer service that
will provide an atmosphere that creates a positive shopping experience for our customers.

Strategic Assumptions:

1. Every person with income limitations or on fixed incomes is a potential customer.

2. Marketing to these segments of the population will lead to an expansion in overall market growth.

5.1 Competitive Edge

Our location is a very important competitive edge. We are located in the popular Riverway Mall which has a high appeal to many
different kinds of consumers. There is a good mix of high and low end shops with several quality restaurants near by. With easy access
from Main St. the Riverway Mall is a popular destination not only for Bend residents, but for people commuting from Redmond and the
outlying areas.

Another competitive edge we will have over our competition is the large variety of merchandise we will carry. With the sources we are
working with it will be possible to carry many name brand items at a discount price. Add a staff committed to providing great customer
service and the Dollar Store will be an attractive stop for the consumer.

5.2 Marketing Strategy

The Dollar Store will benchmark our objectives for sales promotion and mass selling.

We are focusing our marketing effort on the community of consumers that want a store which has an interesting variety of merchandise
at bar gin prices. We will implement a strategy that treats these customers as a community. This means our marketing resources will be
centered around both sales promotions (events, displays) and personal sales (customer service, friendly atmosphere).

• We will stay within our marketing budget.

• Marketing promotions will be consistent with the Mission Statement.

5.3 Sales Strategy

Employees are paid a straight wage but can achieve a semi-yearly bonus based on profits and customer satisfaction rates.

All potential sales will be attended to in a timely fashion and long-term salesperson-customer relationships will take precedence over
sales closure.

5.3.1 Sales Forecast

The following table and chart give a run-down on forecasted sales. We expect sales to increase at a rate of 10% by April. We would like
to see another increase of 10% by August.

We expect to experience a steady growth throughout our first year even though we are a new business enterprise. As we become more
familiar to the public we expect to gain more market share and would like to see progressive growth as we head into the following year.
The Dollar Store, with an aggressive marketing approach expects to increase its share of the market by offering a unique option to
discount shopping.

Note: For company purchases, the per-unit price of inventory purchases includes cost of shipping.

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Sales Forecast
Year 1 Year 2 Year 3
Sales
Perishable Items $113,500 $136,200 $163,440
Non-Perishible Items $212,000 $254,400 $305,280
Total Sales $325,500 $390,600 $468,720
Direct Cost of Sales Year 1 Year 2 Year 3
Perishable Items $56,750 $68,100 $81,720
Non-Perishable Items $106,000 $127,200 $152,640
Subtotal Direct Cost of Sales $162,750 $195,300 $234,360
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5.4 Milestones
The milestone table shows how the responsibilities break down in the start up of our store. Ted Brinkman will head up the drafting of the
business plan and will conduct the drive to secure funding. Jim Spencer will work to secure a site for the store and will handle the
details with the personnel plan. Our accountant Dick Garret will set up our accounting plan.

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Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 1/1/2003 2/3/2003 $1,000 Brinkman Owner
Secure Start Up Funding 2/17/2003 4/3/2003 $500 Brinkman Owner
Site Selection 3/1/2003 4/22/2003 $1,500 Spencer Management
Personal Plan 6/4/2003 6/21/2003 $500 Spencer Management
Accounting Plan 7/8/2003 7/19/2003 $1,000 Tollman Accounting
Totals $4,500

Read more: http://www.bplans.com/retail_discount_store_business_plan/strategy_and_implementation_summary_fc.cfm#ixzz1NxZRap2q

Place Strategy

According to Philip Kotler, most producers do not sell their goods directly to final users. Between producers and final users
stands one or more marketing channels, a host of marketing intermediaries performingt a variety of functions. Marketing-
channel decisions are among the most critical decisions facing management. The company’s chosen channel(s) profoundly
affect all other marketing decisions. Companies use intermediaries when they lack the financial resources to carry out direct
marketing, when direct marketing is not feasible, and when they can earn more by doing so. The most important functions
performed by intermediaries are information, promotion, negotiation, ordering, financing, risk taking, physical possession,
payment, and title. Manufacturers have many alternatives for reaching a market. They can sell direct or use one, two, or three-
level bhannels. Deciding which type(s) of channel to use calls for analyzing customer needs, establishing channel objectives,
and identifying and evaluating the major alternatives, including the types and numbers of intermediaries involved in the
channel.Effective channel management calls for selecting intermediaries and training and motivating them. The goal is to build
a long-term partnership that will be profitable for all channel members. Marketing channels are characterized by continuous
and sometimes dramatic change. Three of the most important trends are the growth of vertical marketing systems, horizontal
marketing systems, and multichannel marketing systems. All marketing channels have the potential for conflict and
competition resulting from such sources as goal incompatibility, poorly defined roles and righats, perceptual differences, and
interdependent relationship. Companies can manage conflict by striving for superordinate goals, exchanging people among two
or more channel levels, coopting the support of leaders in different parts of the channel, and encouraging joint membership in
and between trade associations. Channel arrangements are up or the company, but there are certain legal and ethical issues to
be considered with regard to practices such as exclusive dealing or territories, tying agreements, and dealers’ rights. E-
commerce has grown in importance as companies have adopted “brick-and-click” channel systems. Channel integration must
recognize the distinctive strengths of online and offline selling and maximize their joint contributions.

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Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness
use. Retailers can be understood in terms of store retailling, nonstore retalling, and retail organizations. Like products, retail-
store types pass through stages of growth and decline. As existing stores offer more services to remain competitive, costs and
prices go up, which opens the door to new retail forms that offer a mix of merchandise and srevices at lower prices. The major
types of retail stores are specialty stores; department stores; super-markets; convenience stores; discount stores; off-price
retailers (factory outlets, independent off-price retailers, and warehouse clubs); superstores (combination stores and
supermarkets); and catalog showrooms. Although most goods and services are sold through stores, nonstores retailing has
been growing. The major types of nonstore retailing are direct selling (one-to-one selling, one-to-many –party selling, and
multilevel network marketing); direct marketing (which includes e-commerce and Internet retailing);automatic vending; and
buying services. Although many retail stores are independently owned, an increasing number are failing under some form of
corporate retailing. Retail organizations achieve many economies of scale, such as greater purchasing power, wider brand
recognition, and better-trained employees. The major types of corporate retailing are corporate chain stores, voluntary chains,
retailer cooperatives, consumer cooperatives, franchise organizations, and merchandising conglomerates. Like all marketers,
retailers must prepare marketing plans that include decisions on target markets, product assortment and procurement,
services and store atmosphere, price, promotion, and place. These decisions must take into account major trends, such as the
growth of private labels, new retail forms and combinations, growth of inter-type retail competiton, competition between store-
based and non-store-based retailing, growth of giant retailers, decline of middle-market retailers, growth investment in
technology, and global presence of major retailers. Wholesaling includes all the activities involved in selling goods or services
to those who buy for resale or business use. Wholesalers can perform functions better and more cost-effectively than the
manufacture can. These functions include selling and promoting, buying and assortment building, bulk breaking, warehousing,
transportation, financing, risk bearing, dissemination of market information, and provision of management services and
consulting. There are four types of wholesalers;merchant wholesalers; brokers and agents; manufacturers’ and retailers’ sales
branches, sales officers, and purchasing offices; and miscellaneous wholesalers such as agricultural assemblers and auction
companies. Like retailers, wholesalers must decide on target markets, product assortment and services, price, promotion, and
place. The most successful wholesalers are those who adapt their services to meet suppliers’ and target customers’
needs. Producers of physical products and services must decide on market logiostics-the best way to store and move goods
and services to market destinations; to coordinate the activities of suppliers, purchasing agents, manufacturers, marketers,
channel members, and customers. Major gains in logistical efficiency have come from advances in information technology.

Price Strategy

According to Philip Kotler, despite the increased role of nonprice factors in modern
marketing, price remains a critical element of the marketing mix. Price is the only element
that produces revenue, the others produce costs. In setting pricing policy, a company follows
a six-step producedure. It selects its pricing objective. It estimates the demand curve, the
probable quantities it will sell at each possible price. It estimates how its costs vary at
different levels of output, at different levels of accumulated production experince, and for
differentiated marketing offers. It examines competitors’ cocts, prices and offers. It selects a
pricing method. It selects the final price. Companies do not usually set a single price, but
rather a picing structure that reflects variations in geographical demand and costs, market-
segment requirements, purchase timing, order levels, and other factors. Several price
adaptation strategies are available; (1) geographical pricing; (2) price discounts and
allowances; (3) promotional pricing; and (4) discriminatory pricing.After developing pricing
strategies, firms often face situations in which they need to change prices. A price decrease
might be brought about by excess plant capacity, declining market share, a desire to dominate
the market through lower costs, or economic recession. A price increase might be brought
about by cost inflation or overdemand. Companies must carefully manage customer
perceptions in raising prices.Companies must anticipate competitor price changes and prepare
contingent response. A number of responses are possible in terms of maintaining or changing
price or quality.The firm facing a competitor’s price change must try to understand the
competitor’s intent and the likely duration of the change. Strategy often depends on whether a
firm is producing homogeneous or nonhomogeneous products Market leaders attacked by
lower-priced competitors can choose to maintain price, raise the perceived quality of their
product, reduce price, increase price and improve quality, or launch a low-priced fighter line.

Product Strategy

According to Philip Kotler, product is the first and most important element of the marketing mix. Product strategy calls for
making coordinated decisions on product mixes, product lines, brand, and packaging and labeling. In planning its market
offering, the marketer needs to think through the five levels of the product, the augmented product, and the potential product,
which encompasses all the augementations and transformations the product might ultimately undergo. Product can be
classified in several ways. In terms of durability and reliability, products can be nondurable goods, durable goods, or services.
I(n the consumer-goods category, products are convenience goods (staples, impulse goods, emergency goods), shopping goods
( homogeneous and heterogeneous), specialty goods, or unsought goods. In the industrial-goods category, products fall into
one of three categories; materials and parts (raw materials and manufactured materials and parts), capital items (installations
and equipment), or supplies and business services (operating supplies, maintenance and repair items, maintenance and repair
services, and business advisory services). Brands can be differentiated on the basis of a number of different product or service
dimensions; product form, features, performance, conformance, durability, reability, repairability, style, and design, as well as
such service dimensions as ordering ease, delivery, installation, customer training, customer consulting, and maintance and
repair. Most companies sell more than one product. A product mix can be classified according to width, length, depth, and
consistency. These four dimensions are the tools for developing the company’s marketing strategy and deciding which product
lines to grow, maintain, harvest, and divest. To analyze a product line and decide how many resources should be invested in
that line, product-line managers need to look at sales and profits and market profile. A company can change the product
component of iys marketing mix by lengthening its product via line stretching (down-market, up-market, or both) or line filling,
by modernizing. Its products, by featuring certain products, and by pruning its products to eliminate the least profitable. Brands
are often sold or marketed jointly with other brans. Ingredient brans and co-brands can add value assuming they have equity
and are perceived as fitting appropriately. Physical products have to be packaged and labeled. Well-designed packages can
create convenience value for customers and promotional value for producers. In effect, they can act as “five second
commercials” for the product. Warranties and guarantees can offer further assurance to consumers.

A brand is a name, term, sign, symbol, or design, or some combination of these elements, intended to identify the goods and
servies of one seller or group of sells and to differentiate them from those of competitors. The different components of a brand-
brand names, logos, symbols, package designs, and so on are brand elements. Brands offer a number of benefits to customers
and firms. Brands are valuable intangible assets that need to be managed carefully. The key to branding is that need to be
managed carefully. The key to branding is that consumers perceive differences among brands in a product category. Brand
equity should be defined in terms of marketing effects uniquely attributable to a brand. That is, brand equity relates to the fact
that different outcomes result in the marketingof a product or service because of its brand, as compared to the results if that
same product or service was not identified by that brand. Building brand equity depends on three main factors : (1) The initial
choices for the brand elements or identities making up the brand; (2) The way the brand is integrated into the supporting
marketing program; and (3) the associations indirectly transferred to the brand by linking the brand to some other entity (e.g.,
the company, country of origin, channel of distribution, or another brand). Brand equity needs to be measured in order to be
managed well. Brand audits are in-depth examinations of the health of a brand and can be used to set strategic direction for
the brand. Tracking studies involve information collected from consumers on a routine basis over time and provide valuable
tactical insights into the short-term effectiveness of marketing programs and activities. Brand audits measure “where the brand
has been,” and tracking studies measure “where the brand is now” and whether marketing programs are having the inteded
effecs. A branding strategy for a firm identifies which brand elements a firm chooses to apply across the various products it
sells. In a brand extension, a firm uses an established brand name to introduce a new product. Potential extensions brand
equity to a new product, as well as how effectively the extension, in turn, contributes to the equity of the exsting parent
brand. Brands can play a number of different roles within the brand portofolio. Brands may expand coverage, provide
protection, extend an image, or fulfill a variety ofother roles for the firm. Each brand name product must have a well-defined
positioning. In that way, brands can maximize coverage and minimize overla[ and thus optimize the portofolio

Promotion Strategy

Promotion strategy concists of advertising strategy, sales promotion strategy, public relation strategy, event strategy, personal
selling startegy and direct marketing strategy.

Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.
Advertisers include not only business firms but also charitable, nonprofit, and government agencies. Developing an advertising
strategy is five step process : (1) Set advertising objectives; (2) Establish a budget; (3) Chhose the advertising messege and
creative strategy; (4) Decide on the media; and (5) Evaluate communication and sales effects (Kotler, Keller, 2007).

Sales promotion strategy consists of a diverse collection insentive tools, mostly short term, designed to stimulate quicker or
greater purchase of particular products or services by consumers or the trade. Sales promotion includes tools for consumer
promotion, trade promotion, and business and sales force promotion (trade shows and conventions, contests for sales reps, and
specialty advertising). Developing a sale promotion strategy, a company must establish its objectives, select the tools, develop
the program, pretest the program, implement and control it, and evaluate the results (Kotler, Keller, 2007).
Event strategy is a means to become part of special and more personally relevant moments in consumers’s lives. Involvement
with events can broaden and deepen the realtionship of the sponsor with its target market, but only if managed properly.

Public realations strategy involves a variety of programs designed to promote or protect a company’s image or its individual
products. Many companies today use marketing public relations to support the marketing department in corporate or product
promotion and image making. Marketing public relations can affect public awarness at a fraction of the cost of advertising and
is often much more credible. The main tools of public relations are publications, events, news, speechs, public service activities,
and identity media.