Dollar General Marketing Mix
About Dollar General: An Introduction
Dollar General is among the most well-known retail brands operating across 46 states in the United States.
The retail brand has been serving customers in the US for more than 80 years.
J. L. Turner founded the company in 1939 when it was called J.L. Turner and Son, Wholesale.
The company was renamed as Dollar General corporation in 1968.
In the recent years, the retailer has experienced solid growth in retail sales driven by a focus on offering an omnichannel shopping experience, digital initiatives, digital marketing and a more competitive pricing strategy.
The number of Dollar General stores operating in the United States has increased to more than 17,000 in 2020.
Despite the impact of the pandemic, the company experienced sales growth in 2020, which proved the resilience of Dollar General's business model.
There are several things that differentiate the Dollar General brand from the other retailers in the United States including its pricing and product choices.
However, the company is operating in a highly competitive industry environment.
It is investing in technology and digital marketing to maintain its competitive edge and market share.
In this marketing Mix of Dollar General, we will analyze the four Ps including Product, place, price and promotion.
Dollar General Marketing Mix Four Ps
As a retail brand, the product mix of Dollar General is a key driver of competitive advantage for the brand.
The company focuses on limited product categories instead of selling nearly everything and anything like the other large retail players in the United States.
Dollar General’s product assortment is relatively limited compared to Walmart, Costco or Target corporation.
The focus of the company is on products that are more frequently used and replenished including food, snacks, health and beauty aids, cleaning supplies, basic apparel, housewares and seasonal items at everyday low prices in convenient neighborhood locations.
Dollar General sells products created by some of the most trusted brands in the US like Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg’s, General Mills and PepsiCo.
The company also offers some high-quality private brands in its stores.
Its private brands include Clover Valley, Good and Smart, True Living, DG Home, Gentle Steps, Studio Selection, DG Health, DG Office, Comfort Bay, Bobbie Brooks, Smart and Simple and others.
So, the company has maintained its focus on the most basic needs of the customers and apart from them, it sells a few essential gadgets too.
In the marketing mix, the placement or distribution mix refers to the channels through which a brand makes its products or services available to its customers.
The place mix plays an important role in the marketing mix since the placement or distribution strategy affects customer experience, sales and popularity of the brand.
In the recent years, a large number of retail brands have switched to an omnichannel retail strategy due to the growing use of digital commerce channels among customers across all leading markets. They are trying to achieve a proper balance between the digital and the physical operations to maximize customer satisfaction.
Dollar General has also switched to an omnichannel strategy and uses both digital and physical channels to serve its customers in the United States.
One of the key factors that has helped dollar General find success in the US market is its heavy footprint.
The company has 17,266 stores in 46 states of the United States (As of February, 2021).
Some of the states that have the highest number of Dollar General stores include Texas, Georgia, Florida, North Carolina and Ohio.
While Texas alone had 1,626 DG stores, the rest of these states had more than 900 DG stores operational as of February, 2021.
DG operates most of its stores in leased properties.
As of February 2021, the company also operated 27 distribution centers including 17 for non-refrigerated items, nine cold storage distribution centers and one combined for both refrigerated and non-refrigerated items.
The company also leases temporary warehouses based on its distribution needs.
It uses its own private fleet for its distribution needs mostly apart from some third-party trucking firms.
However, the ecommerce channels are also gaining prominence in the place/distribution mix of the firm as more and more customers are switching to the use of ecommerce channels for shopping.
Customers can order products online from DG.com or they can select to pick up from the DG stores nearby after placing their orders online.
The price mix of a firm has an important role in terms of demand, sales and popularity in the retail sector.
For a large segment of customers, their choice of retail store depends heavily on the pricing strategy.
Especially the retail businesses that are targeting the middle class and price conscious consumers, their pricing strategy is the core pillar of their marketing strategy.
It is also true about Dollar General which aims to serve its customers and offer them good quality products at lower prices and higher convenience.
This has been an important focus of the brand since its foundation and it still sells a wide range of products that come for a dollar or less.
Such products constituted around 22% of its entire assortment in 2020 according to Dollar General’s annual report.
In terms of pricing, the focus of Dollar General is on selling its products at highly competitive prices.
Dollar General has positioned itself as a consumer-friendly retailer that helps its customers save both time and money.
It also offers a nice range of private label brands that are priced quite competitively compared to national brands.
The company offers its customers both national and private label brands at every day lower prices, generally below $10, in its convenient small box locations.
Its competitive pricing strategy is among the core sources of company’s competitive advantage and has helped it gain higher customer loyalty.
Despite the competitive pricing strategy, which generally requires the retailer to keep profit margins lower, the company has achieved impressive sales and growth in 2020.
Its net sales remained $33.75 billion in 2020 compared to $27.75 billion in 2019.
(Mission Statement of Dollar General : Serving Others.)
The retail industry is marked by heavy competition. Apart from the larger players like Walmart, Costco or Target, Dollar General competes against several smaller players too like Family Dollar, Dollar Tree and others.
Marketing and promotions are key factors driving brand awareness and sales in the US retail sector.
The retail brands need to maintain a strong focus on marketing and promotions through traditional and digital channels to maintain their growth momentum.
Dollar General also invests in advertising and promotions to grow sales and customer base.
The brand enjoys strong brand awareness in the United States and its more than 17,000 stores also work as effective marketing and customer service channels for the brand.
Its focus on customer experience has also helped the brand earn strong customer loyalty.
The company spent $107.4 million on advertising in 2020 according to its annual report.
Its website and app are also important marketing and customer engagement channels.
Retail brands offer a lot of deals and discounts to their loyal customers to drive higher sales.
Dollar General deals in a limited range of products compared to the leading retailers in the US but its focus remains on offering higher convenience and lower prices for these essential products it sells.
It also offers deals and discounts to its loyal shoppers to grow sales and retain customers.
Apart from these things, the company uses social media channels for promotions and to grow brand awareness.
On its Twitter page, the company notes,
“We’re here for what matters, because price should never get in the way of priceless. Save more every day at Dollar General.”
Dollar General Twitter Profile.
It shows Dollar General’s commitment to serving its customers and helping them save more on every purchase.