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Wal-Mart & Target – 2014 Holiday Season Strategy

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Submitted By gruiz285
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Wal-Mart & Target – 2014 Holiday Season Strategy
Retail stores Target and Wal-Mart have tacked holiday season in a different way this year compared to before. In previous years, there has 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 long-run profits. The way to achieve this higher sales volume is to increase their share of the market, which is obtained through low prices. However, setting the prices to meet their objectives…...

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