Dollar General goes after higher earners – Nashville Business Journal


Dollar General goes after higher earners – Nashville Business Journal.

Targeting those making $75,000 a year and who want consumables…

The question is, will this be a brilliant move to expand market share or will it lead to a diluting of Dollar General’s brand by moving away from its core mission of selling cheap goods to super-discount shoppers?

via Dollar General goes after higher earners – Nashville Business Journal.

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Olive Garden: Cheap eats aren’t always enough


Olive Garden has conceded it needs to make changes to address lackluster sales figures for five quarters in a row.

Although the chain offers “affordable Italian food,” which should be a plus in this economy, it has been suffering from competition from fast-casual chains like Panera Bread and Chipotle Mexican Grill, Motley Fool reports.

One person says Olive Garden plays Dean Martin music and expects that to provide an Italian atmosphere, according to the Chicago Tribune.

Company officials have acknowledged the need to make changes, and plan to introduce healthier, low-cost meals, Yahoo Finance reports. Other changes will include remodeled restaurants and a new ad campaign.

I agree with what one person posted in comment boards on Yahoo Finance: Olive Garden needs to focus on the food. Americans are demanding more healthy, fresh food, not frozen. If you have good food at a reasonable price, you have most of the components in place (along with good marketing to tout these changes). I recently dined at Carrabba’s with my wife, and the food was delicious, and the atmosphere was pleasant.

Oh, and I would ditch Dean Martin for authentic Italian music. Sorry Dean, but the Rat Pack needs a vacation.

The Kindle on a budget


I was a holdout for several years on ebooks, including the much-touted Kindle. I’m a journalist and a bookworm, a lover of the printed word, and to me, nothing could compare to the allure of text on paper. Certainly computers and smart phones cannot compare to reading a newspaper or a (paper-print) novel. The price of ebook readers was another factor. But I could no longer ignore the changing nature of print media – even as I finished earning an MBA to stretch my workplace skills, I began forcing myself to upgrade my technical abilities – I bought a Blackberry, and I began blogging and using Twitter.

Cheapness is the feature that finally won me over to the Kindle (I have been called a cheapskate more than once). Amazon.com had dropped the entry-level price to $139. I began researching the Kindle and discovered rave reviews by users on its E Ink technology that allows words and pictures to appear just like ink on paper. (I learned the reviews were true once I started using my Kindle).

Even as Amazon.com was drawing flack for trying to force ebook prices up, I read that many classic books are available for free on the Kindle. And indeed they are. I have downloaded well more than two dozen free classics, ranging from “The Scarlet Letter” by Nathaniel Hawthorne to “The Invisible Man” by H.G. Wells. I just finished reading Jonathan Swift’s “Gulliver’s Travels” and have started Jules Verne’s “Twenty Thousand Leagues Under the Sea.” Some versions of these books are free, while other electronic versions cost a few dollars and are still a bargain.

I have also downloaded free games – Mine Sweeper and Blackjack.

A final appealing feature of the Kindle is the access to newspapers like the Wall Street Journal. I have subscribed to the WSJ for $14.99 per month, but am enjoying my first two weeks for free. Additional print media options for the Kindle include The New York Times, USA Today, regional papers like The Houston Chronicle, and magazines like Time. Since my Kindle was a Christmas gift, my only expenses associated with it have been a case and the WSJ subscription.

My next Kindle blog will look at how it and other ebook readers fit in with the future of newspapers.

Starfish-style challenges


What do you do when you’ve always charged for delivering a service or product and some Web site comes along and offers something much like it for free?

That’s been the question plaguing the music recording, news and software companies for some time.

I recently came across a book published in 2006 that takes a fascinating look at this phenomenon: “The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations,” by Ori Brafman and Rod A. Beckstrom. The authors take a look at movements/organizations that defy the traditional leadership model of “Who’s in charge?” Sometimes, no one is in charge. The Aztecs had Montezuma and a capital city, and were easily wiped out by the Spanish who killed the leader. The Apache had no centralized leader and no capital, and thus were better equipped to fight off attacks by armies from developed nations who looked for traditional targets to strike. But the book’s authors say that also describes the recording music industry’s attempts to fight off Napster: They effectively killed that one Web site, but their efforts antagonized people and spawned lots of imitators.

The authors write that Craigslist provided an unexpected challenge to the newspaper industry. Why pay for a newspaper classified when you can advertise a product for free all over the world? Likewise, why subscribe to a newspaper when you can read it for free online?

Newspapers learned to combine ad sales for print and online editions, as well as partnering with sites like CareerBuilder. After many newspapers dropped their attempts to subscriptions for stories, some organizations are taking a second look. My newspaper, The Daily Post-Athenian, already has returned to the online subscription model.

Platforms like the Kindle and the iPad hold out some hope of helping newspapers get digital media users accustomed to paying for content (the Wall Street Journal costs only $14.99 a month on the Kindle, and slightly more on the iPad).

You can buy publicity like that


A restaurant that hadn’t advertised with my newspaper in a long time recently began advertising again through a coupon campaign. Two of the coupons promised a free buffet if you bought a 99 cent soft drink.

Not surprisingly, the campaign seems to be a hit. I redeemed one of the coupons Monday, and the cashier said people had lined up outside the restaurant on Sunday with those coupons.

Obviously the restaurant is losing money. You may ask how can the restaurant lose money this way? The restaurant is basically treating its losses on the food inventory as a promotional expense to draw new customers in.

One downside of dropping prices is you attract disloyal customers. You may be drawing new people into your store/restaurant hoping to enlarge your client base, but not all of them will return at future dates. These disloyal customers will run to your cheaper competitors when your price discount ends. Also, if you drop prices too often or too dramatically, you run a large risk of customers always expecting you to offer very low prices. That can be death on some brands.

This restaurant’s gamble on price discounting illustrates the difficulty in setting prices, whether you’re selling a meal or an automobile.

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