...Principles of Marketing Case Study, Target: From “Expect More” to “Pay Less” Introduction In this case we examine Target, a discount retailer who was always known for their ‘cheap chic’, “Expect More, Pay Less” value proposition. Heavy investment into this value proposition positioned Target in the market in a not too distant second position to WalMart with their slogan “Always Low Prices”. Over time Target’s success led WalMart to mimic certain aspects of Target’s value proposition but shortly thereafter the macroeconomic force of the “Great Recession” fell upon the market and WalMart seemed to reinforce its position of superiority. In response to this Target rolled out a new marketing strategy which involved adjusting the flavour of its value proposition to entice customers who were seen to have defected to their major competitor. In this case study we shall examine Target’s strategy in the face of these challenges and evaluate the effectiveness of it against best marketing practices. What microenvironmental factors have affected Target’s performance over the past few years? Four main microenvironmental factors have affected Target’s performance in a negative way over the past few years. Four main microenvironmental factors have affected Target’s performance in a negative way over the past few years. 1. Competitors: Pre-recession, both Target and its main competitor, WalMart had well developed and communicated value propositions. Target’s being “Expect More, Pay Less”...
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...Gege ShiSummer 2015 | PMBA-8365 International Marketing Management Term Project Article 2 Dr. Ashmen CVS to Buy Target’s Pharmacy Business Abstract In this article, the author mainly focused and analyzed one journal “CVS to Buy Target’s Pharmacy Business for $1.9 Billion; Deal includes about 1,700 pharmacies within Target stores” from the Wall Street Journal. At the beginning, the author briefly summarized this essay; then, she explained why this article had bearing on corporate marketing strategies. At the end of paper, the author mentioned her own opinions of this deal. Introduction We all know that “my enemy’s enemy is my friend”; in today’s commercial environment, every industry is tough in this competitive world, especially for the prescription-drug business. So in this journal, it is mainly about an unusual cooperation, which occurs between CVS Health Corporation and Target Corporation. Both CVS and Target decided to make a business deal; CVS paid $1.9 billion to buy Target’s pharmacies and clinics. Why It Is Called “an Unusual Partnership”? CVS, a well-known pharmacy that already become domestic dominant provider of prescription drugs. Although Target’s prescription drugs business is not as good as CVS, it still has chance to be improved and become Target’s another business opportunity. Meanwhile, Target and CVS are the substitute competitors to some extent; most customers would visit either of them based on which one is relatively convenient...
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...1. What micro environmental factors have affected Target’s performance over the past few years? Target’s performance has been affected by a range of micro environmental factors. The major micro environmental factor was the drop in sales revenues and the dwindling profits. Wal-Mart’s sales were growing, and that meant that Target’s sales would go down since consumers preferred Wal-Mart for Target. The inability of Target’s managers to identify a solution to the problem of dropping sales and develop a viable course of action also affected Target’s performance. Another micro environmental factor was the thriftiness of customers all over America, which endeared them to Wal-Mart. The impatience of Target’s shareholders and the pressure they exerted on the company’s board to deliver was also a major factor. The marketing strategies that were adopted by the management also failed to turn things around. However hard the company tried, they were unable to establish a firm grip on the market. 2. What macro environmental factors have affected Target’s performance during that period? Target’s performance was affected by the global financial crisis that hit the world during that time. The crisis caused a fall in GDP and massive unemployment. This affected the buying habits of customers who then preferred to buy from Wal-Mart due to their legacy as a low-cost discounting store. Wal-Mart, Target’s main competitor, was attracting more customers because of its low-cost selling strategy. Consumption...
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...public as a retailer that offers “design and innovation” and “value as more for less”. Since more consumers are stretching their dollar by purchasing store brands these days, Target has use an excellent marketing strategy by being one of the pioneer in its field developing, launching and integrating more than a dozen store brands. One of its most well-known store brand is “Up & Up” which replaced the general “Target” brand couple of years back. The company’s massive success in recent years has been attributed to their diverse store brands, expanding from three different food brands which include “Archer Farms” promising a line with healthier products to “Simply Balanced” an organic line promoting no GMOs in their products. Consequently, this benefits Target tremendously since it has positioned itself as the only store in the market that could offer an array of store brands at a reasonable price and delivers its costumers expectations and needs; thus attracting more loyal consumers to its store and continuing to grow in popularity, size and revenue. 2. Is Target’s store brand strategy working? Explain. • I believe given the mogul’s annual revenue and nationwide popularity, one could conclude that Target’s store brand strategy seems to be paying off extremely well. Target’s exclusive innovations have placed the company in terms of popularity and loyal followers in the frontline, as well as distinguished itself from any other retailer in its league including Wal-Mart. In the...
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...CHAPTER 3 Jerica Robison Discussing the Concepts 1. Describe the elements of a company’s marketing environment and why marketers play a critical role in tracking environmental trends and spotting opportunities. a. A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. Like Xerox, companies constantly watch and adapt to the changing environment. b. More than any other group in the company, marketers must be environmental trend trackers and opportunity seekers. Although every manager in an organization should watch the outside environment, marketers have two special aptitudes. They have disciplined methods-marketing research and marketing intelligence-for collecting information about the marketing environment. They also spend more time in customer and competitor environments. By carefully studying the environment, marketers can adapt their strategies to meet new marketplace challenges and opportunities. 2. List some of the demographic trends of interest to marketers in the United States and discuss whether these trends pose opportunities or threats for marketers. a. Changing Age Structure of the Population Changing American Family Geographic Shifts in Population A better-educated, more white-collar, more professional population Increasing diversity ...
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...Term Paper Social Media Target Corporation Introduction Social Media has really transformed since May 9, 1961 when George Dayton, Founder of Target Corporation placed and ad in the Minneapolis Tribune announcing future plans for a new retail chain store. The article expressed that the store will have the best of the fashion world with the best of the discount world. Even without the store having its official name, Stewart Widdess, former Director of Publicity, knew the importance of media and getting customers excited about the opening of a new discount store. Throughout Target’s years of growth, targeting key products, target markets, development, and branding, they know what is needed to connect with their consumers and to keep them returning to experience the Target brand. Key Products Target has continued to offer their customers with key products at a discounted rate. The company has really evolved since they first opened in Minneapolis in 1962. They offer a wide variety of products ranging from a photography center, grocery store, jewelry department, personal care department, and electronics department. Target, from the very beginning liked the concept of being able to provide all your family, personal, and home care needs at a discounted rate. In 1995, Target introduced Archer Farms to their store locations. Archer Farms is a premium line of grocery products designed exclusively for Target. In the same year, they also launched their...
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...micro-environment are the actors close to the company that affect its ability to serve its customers such as the company itself, suppliers, marketing intermediaries, customer markets, competitors and publics (Kotler and Armstrong, p.66) The company itself definitely played role in affecting its performance over the past few years. Target wanted to be perceived as a discount retail store but also carry top designer products (Kotler and Armstrong, p.94). The marketing plans for the company affected its sales negatively and compared to the retail giant Wal-Mart, it was not doing as well as expected. At one point Target was continuously struggling that one of its biggest shareholders openly chided them and sought to take control of five of the board’s seats (Kotler and Armstrong, p. 95). The competitor retail store Wal-Mart is what had the most impact on Target’s microenvironment. Many Target stores are build right across the street or in the same vicinity and many consumers compare the two and usually assume Wal-Mart is the cheapest and better buy. Wal-Mart’s revenues have always exceeded that of Targets’ and during the recent economic issues it was posting quarterly increases of up to 5% along with larger jumps in profits (Kotler and Armstrong, p.94). This became a big issue for Targets success because according to Kotler and Armstrong, the marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do (Kotler...
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...International Marketing Management Target in Canada I. Executive Summary In this report I will talk about the American retailer; “Target” failed attempt to conquer the Canadian market. I will first give a detailed introduction of the company and what were the circumstances of such event. I will then describe the different problems the company encountered during their stay in Canada. I will briefly showcase the different guidelines that Target should have used going into this international market. Afterwards I will give my market research of the retailer’s market in Canada to then give a new marketing plan that Target should have followed in order to succeed internationally. I will end by a brief conclusion of the case and give my personal opinion on the subject. II. Introduction Target, the US supermarket founded in 1962, decided to expand into the international market in 2013. It only seemed like the logical next step for the 3rd biggest supermarket in America. After 50 years, they had conquered the American market with their great customer service and products and it was now time for the world to experience the Target culture. The timing was perfect, as the previous year, the Canadian supermarket Zeller had gone out of business. This meant their 220 retail stores in Canada were for sale. It was the perfect opportunity for Target to finally expand beyond the US. Canada was a considered an easy step into the foreign market, as there was a similar culture...
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...Walmart/Target Study Case Questions for discussion: 1. What microenvironmental factors have affected Target’s performance over the past few years? Any business faces several microenivronmental factors that would affect their performance, which is a self-contained microenvironment that stands alone but somehow interacts with the other factors. Some of them affect the business directly, and the others affect the business in an indirect way. The factors that affect Walmart are Target itself, suppliers, marketing intermediaries, customers and competitors. All of these factors have contributed one way or the other in the performance of Walmart. 2. What macroenvironmental factors have affected Target’s performance during that period? Target and Walmart were always thought of by the consumer as the discount retail brands, and the comparison between the two has been going on for as long as they have been in the market. Even though Walmart was associated with the cheaper stuff, Target was known for its sense in style and fashion. Target has always been the one with the higher revenues until recently. That change of revenues is affected by a couple of macroenvironmental factors. Those factors are as following: * Economic: Recession was a major factor in the drops of revenues at Target. As many of their customers have lost their jobs and accordingly, have a much less income. That made Walmart more attractive as they promote for the cheaper products...
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...1. What microenvironmental factors have affected Target’s performance over the past few years? I. Microenvironmental factors that have affected Target’s performance over the past few years would be marketing intermediaries, customer markets, and competitors. 2. What macroenvironmental factors have affected Target’s performance during the period? II. Macroenvironmental factors that have affected Target’s performance during the period would be economic and possibly demographic factors. 3. By focusing on the “Pay Less” part of its slogan, has Target pursued the best strategy? Why or why not? III. Honestly, I think Target would have been better off by focusing on their whole slogan instead of just a portion of it. Why they think customers expects them to only live up to half of their slogan baffles me. If Target is going to portray “Expect More, Pay Less”, then I would expect more for my money at a lower price, not just seeing lower prices everywhere. Sometimes just lowering the price can make it seem like Target is groveling to compete with Wal-Mart. 4. What alternative strategy might Target have followed in responding to the first signs of declining revenues and profits? IV. Target should have promoted itself more and created better quality items at lower prices. They should have fulfilled their slogan and focused on their customers instead of being so worried about their competitors. In the end they are still overpriced on a lot of their items. Customer service should have been...
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...refer to the Preparing Assignments page (a link is also provided in the Evaluation block on the course homepage). Read the case “Target: From ‘Expect More’ to ‘Pay Less’” on pages 103 to 105 of the textbook and prepare answers to the questions below. Do not answer the questions at the end of the case in the textbook. Question 1 (20 marks) Identify four actors in the microenvironment that have affected Target’s performance over the past few years. Over the past few years there have been many actors that have affected Targets Performance, the four major ones are, Competitors, Customers, Publics and The Companies Operations. The first major Actor in Target’s microenvironment is the Competitors. When the economic crisis hit in 2008 Target lost market share to its major competitor Walmart. The reason for this Loss was because Walmart positioned themselves in the marketplace as always having low prices on their products, whereas Target positioned themselves as having better brands than Walmart. In this case Walmart as the competitor is a major actor in Target’s microenvironment kick starting a change in philosophy to a more of a Pay less side of things. The second major actor is the customers. When the crisis hit it caused the customers to have a more “frugal” approach to their spending...
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...been a trend to bring Black Friday’s discounts earlier in November, however, this year Wal-Mart and Target went beyond all market expectations. Wal-Mart’s strategy for the holiday season is “to offer the best brands, to make shopping experience easier, and to continue providing low prices than competitors to bring joy to their customers”, says Duncan Mac Naughton, Wal-Mart Us Chief Merchandising Officer. For 2014 Holiday season these retail stores have begun the season sales on November 1st, providing Black Friday and Cyber Monday discounts from the first week of November all the way till the week before Christmas, stretching the holiday season almost an additional month compared to previous years. Brian Cornell, Target’s Chairman of the Board and CEO, says “Target’s promise is ‘Expect More. Pay Less’, and when we do that, Target is impossible to beat”. Retail stores depend largely on their pricing in order to be competitive and successful in their industry. In order to be able to achieve success, these stores need to implement a pricing strategy that goes in accordance to their mission. In the case of Target and Wal-Mart, their pricing strategy is based on a maximum market share pricing objective. When looking and this retail stores, they possess a huge part of the market and they achieve this by maintaining their prices constantly low, assuming the market is price sensitive, and in retail, it is. In maximum market share, higher sales volume leads to lower unit costs and higher...
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...Target continues to embrace strong financial performance, innovation, and opportunities for profitable growth despite several setbacks. Current and projected income statements (Appendix G), displays strong performance 2011-2013. Projected financial statements for 2014 reflect weaker than anticipated sales due to a security data breach which plagued Target during the fourth quarter 2013 and first quarter 2014. Additionally, fourth quarter 2014 and first quarter 2015 reflects the discontinuance of Canadian operations and the closing of 133 stores abroad. Forecasted 2014 profits are indicative of the organizations struggle as they worked hard to regain trust and profits from massive data breach. Although Target’s 2014 Annual Report has not been made available, information listed at marketwatch.com indicated a decline in sales from $73.3 billion 2013 to $72.6 billion in 2014. Considering the potential damage that a massive security breach and troubled global expansion could cause, the modest decline noted an overall .4% fall in store sales (Marketwatch, 2015b)....
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...Table of Contents I. Executive Summary 2 II. Environmental Analysis 2 A. The Marketing Environment 3 B. Target Markets 4 C. Current Marketing Objectives and Performance 5 III. SWOT Analysis 6 A. Strengths 6 B. Weaknesses 7 C. Opportunities 8 D. Threats 8 E. Matching Strengths to Opportunities/Converting Weaknesses and Threats 9 IV. Marketing Objectives 9 V. Marketing Strategies 10 A. Target Market(s) 10 B. Marketing Mix 11 VI. Marketing Implementation 13 B. Activities, Responsibility, and Timetables for Completion. 14 VII. Evaluation and Control 15 A. Performance Standards and Financial Controls 15 B. Monitoring Procedures 16 Target Corporation Marketing Plan I. Executive Summary Target is an upscale retail store offering trendy, high quality merchandise at discount prices. Their slogan is “Expect More-Pay Less”. Target Corporation operates Target.com, an online, electronic retail store, as well as Super Target, which offers a full line grocery store in addition to the Target retail operation. The company’s other key business include Target Financial Services, which encompass the Target Red and Target Visa card business. Target Corporation, originally called the Dayton Corporation, was formed in 1902 by George Dayton. The company recorded revenues of $59,490 million during the fiscal year ending January 2007. Target Corporation prides itself on its corporate responsibility which includes charitable contributions...
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...Table of Contents I. Executive Summary 2 II. Environmental Analysis 2 A. The Marketing Environment 3 B. Target Markets 4 C. Current Marketing Objectives and Performance 5 III. SWOT Analysis 6 A. Strengths 6 B. Weaknesses 7 C. Opportunities 8 D. Threats 8 E. Matching Strengths to Opportunities/Converting Weaknesses and Threats 9 IV. Marketing Objectives 9 V. Marketing Strategies 10 A. Target Market(s) 10 B. Marketing Mix 11 VI. Marketing Implementation 13 B. Activities, Responsibility, and Timetables for Completion. 14 VII. Evaluation and Control 15 A. Performance Standards and Financial Controls 15 B. Monitoring Procedures 16 Target Corporation Marketing Plan I. Executive Summary Target is an upscale retail store offering trendy, high quality merchandise at discount prices. Their slogan is “Expect More-Pay Less”. Target Corporation operates Target.com, an online, electronic retail store, as well as Super Target, which offers a full line grocery store in addition to the Target retail operation. The company’s other key business include Target Financial Services, which encompass the Target Red and Target Visa card business. Target Corporation, originally called the Dayton Corporation, was formed in 1902 by George Dayton. The company recorded revenues of $59,490 million during the fiscal year ending January 2007. Target Corporation prides itself on its corporate responsibility which includes charitable contributions...
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