My Theory is and has been that Discount Stores are Mistakes of Marketing, Why?

I will explain.

In 2022, Sales of discount department stores in the United States reached over $ 101.8 Billion U.S. Dollars, slightly down from $ 102.2 Billion recorded a year earlier 2021. Overall, sales of these type of stores have shown a generally downward trend since 2001.

         What was the growth rate of the Discount Department Stores industry in the US in 2022?

            The market size of the Discount Department Stores industry declined -1.6% in 2022.

 Has the Discount Department Stores industry in the US grown or declined over the past 5 years?

            The market size of the Discount Department Stores industry in the US has declined 1.5% per year on average between 2017 and 2022. 

A decline of 7.5% in 5 years is substantial.

(Sources for above: Statista / IBISWorld)


I like to keep things simple so I will share with you these Marketing Mistakes I am talking about.

Companies have grown so big and arrogant that they neglected to put in place the proper Marketing Mix for Each and Every New Product or Service, which basically is the norm in Marketing.

The Marketing Mix is actually the 4P’s:  

Product, Promotion, Price and Place

The above elements are essential for any business to launch a new Prod/Serv, develop effective marketing strategies and successfully promote these products or services.

 What goes into the 4P’s:

1- Product or ServiceYou Figure out what Features & Benefits to include, Quality level, Packaging, Branding and more.  Different Products & Services require different attributes, components and consideration.

All Products provide services, and all Services use Products physical and human.  

 Developing New Product is not done in a vacuum but in Partnerships with your Distribution Channel, and Alliances which usually is the first mistake when ignored & excluded from the process..

2-  Place: is the Geographic area you cover along with Distribution system you put in place to reach end consumer.

A Business needs to decide on the type of distribution channel it will use, such as wholesalers, distributors, physical stores, and online stores, that will help them reach their end customer most effectively.

Ensuring that products are available where and when customers want them is crucial.  Same applies to Services.

 3- Promotion: Promotion encompasses all the activities of what we refer to as IMC (Integrated Marketing Communication). This entails the following: advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.

Effective promotion strategies can help build brand recognition, generate interest, and drive sales.  All above are essential to support your Distribution Channel.

 4- Price: is the most important component of the marketing mix. It involves determining how much customers will pay for the product or service. Of course, this Price is based on the Quality being offered and competition in the marketplace.



This sounds great, Fascinating.  Where is the problem?

Discount Stores usually carry Excess Inventory Companies failed to sell, and Discontinued items being dumped in the market by the Brand/Company. 

Discount Stores buy Products from Companies at a fraction of their Price List.

Let’s look at the first P: Product.

Developing a New Product is not done in a vacuum but usually in Partnership with your Distribution Channel, and Alliances-  Unfortunately, Companies in lots of cases ignore them, tend to create that product based on their assumptions, thus the first mistake. 

When Companies introduce Products that consumers do not like or want, do not value, then consumers refuse to buy them:  They end up in Discount Stores.

The second P: Place

Companies may not: Define a clear Target Market, Where/When/How to reach them,

Do not Train their Sales Team properly (or at all), or fail to Devise a proper Selling Process for them. 

When Products are imposed on the salesforce, they do not promote them properly and- They end up in Discount Stores.

 The third P: Promotion

When Companies lack a Proper Promotion Plan, and have a poor messaging campaign in place, they fail to convince consumers to buy their Products— Their products end up in Discount Stores.

The fourth P: Price

Pricing, Positioning & Branding work together.

Positioning! Do we really need it?  The Brand name will sell the Product!!!  Another mistake.

The company may have over-priced their Product and the customer finds it expensive.

They end up in Discount Stores.

The role of Price is to pay for the cost of the Product/Service, cost of Place, Cost of Promotion and cost of Price which is a profit. 

 The 4P’s have to work in harmony together,

otherwise, failure of One P will contribute to the failure of the other P’s

Very Simple.

 In lots of cases Companies introduce New Products/Services without doing any market research.  When Apple introduced its first iPod + first iPhone, they did Not do any market research on consumer preferences, wants or needs.  They were lucky, quite simple.

Luck is Not a Strategy,

 and that is why we have this big discount stores industry that carry

Mistakes of Marketing:

The Product was not appealing for the consumer to buy

The sales people could not sell it to the Distribution Channel/Place.

The Promotion strategy and messaging failed to convince the consumer to buy the Product/Service

The Price was too high and the consumer did not buy the Product/Service.

Very Simple: They end up in Discount Stores

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