Target Marketing Plan
Section One Major Competitors Target, as well as their major competitors, is in the Variety, Discount Store Industry. Their competitors are greater and larger in terms of size. Their competitors are Costco Wholesale Corporation, Wal-Mart Stores. Target operates 1682 stores in 49 states, 34 distribution centers, 23 Super Targets, 439 pharmacies and 8 multi-level stores. Costco Wholesale, one of the largest membership warehouse club chains in the world today, it operates 550 locations.
There's a specialist from your university waiting to help you with that essay topic for only $13.90/page Tell us what you need to have done now!
Wal-Mart operates 971 discount stores, 2,447 supercenters, 132 neighborhood markets, and 591 Sam clubs in the United States. Target focuses on the hottest trends in merchandise and on everyday basic family needs such as general merchandise, including consumables and commodities; electronics, entertainment, sporting goods, and toys; apparel and accessories; and home furnishings and decor, as well as a line of food items primarily under the Target and Super Target brands.
It also sells its merchandise under private-label brands, including Archer Farms, Boots & Barkley, Choxie, Circo, Durabuilt, Embark, Garden Place, Gilligan & O’Malley, Itso, Kaori, Market Pantry, Merona, Playwonder, Room Essentials, Sutton and Dodge, Target Brand, Target Home, Trutech, Vroom, Wine Cube, and Xhilaration. Target Corporation also offers merchandise through programs, such as ClearRx, GO International, and Home Design Event.
In addition, it markets its merchandise under licensed brands comprising C9 by Champion, Chef mate, Cherokee, Converse One Star, Eddie Bauer, Fieldcrest, Genuine Kids by Osh Kosh, Kitchen Essentials by Calphalon, Liz Lange for Target, Michael Graves Design, Mossimo, Nick & Nora, Perfect Pieces by Victoria Hagan, Sean Conway, Simply Shabby Chic, Smith & Hawken, Sonia Kashuk, and Thomas O’Brien.
Target Corporation also operates in-store amenities, such as Food Avenue, Target Clinic, Target Pharmacy, and Target Photo, as well as leased or licensed departments, including Optical, Pizza Hut, Portrait Studio, and Starbucks. Costco Wholesale, on the other hand, provides produce, meat, dairy, seafood, baking goods, flowers, clothing, books, computer software, vacuums, home appliances, home electronics, solar panels, jewelry, tires, art, fine wine, hot tubs, and furniture. Many stores have tire garages, pharmacies, hearing aids centers, optometrist, photo processors, and gas stations.
Wal-Mart offers general merchandise, including apparel, domestics, fabrics and notions, stationery and books, shoes, house wares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture and accessories, sporting goods, toys, pet food and pet accessories, cellular phones and cellular service plan contracts, cameras and supplies, health and beauty aids, pharmaceuticals, jewelry, and optical; and grocery merchandise, financial services and products, and photo processing services through supercenters, discount stores, and neighborhood markets in the United States, as well as through walmart. om. It’s Sam’s Club division that provides various products including, institutional-size grocery items, and selected private-label items under the MEMBERS MARK, BAKERS & CHEFS, and SAM’S CLUB brands; software, electronics, jewelry, exercise equipment, outdoor goods, tires, office supplies, and books; and photo processing, pharmaceuticals, optical departments, and gasoline stations through warehouse membership clubs in the United States, as well as through samsclub. com. Target stores are located in 48 states in the United States, including 88 in Great Lands, 28 stores in the state of Arizona.
Its headquarters is located in Minneapolis, Minnesota. Costco operates in the following countries: United States, Puerto Rico, Canada, Mexico, United Kingdom, Japan, South Korea, Taiwan, Australia, and its headquarters are located in Hillsboro, OR, USA. Walmart operates in the following countries: United States, Argentina, Brazil, Canada, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, and in the United Kingdom, as well as operating joint ventures in China.
The company is based in Bentonville, Arkansas. Number of Target stores per state Alaska| 2| Indiana| 34| Montana| 7| Pennsylvania| 51| Alabama| 19| Iowa | 21| Nebraska | 14| Rhode Island | 4| Arizona| 48| Kansas| 19| Nevada| 17| South Carolina | 18| Arkansas| 7| Kentucky | 12| New Hampshire | 8| South Dakota| 5| California| 243| Louisiana | 14| New Jersey| 42| Tennessee | 31| Colorado| 41| Maine 4| New Mexico | 9| Texas| 147| Connecticut| 19| Maryland| 36| New York| 62| Utah | 11| Delaware | 2| Massachusetts| 31| North Carolina | 47| Virginia| 55| District of Columbia | 1| Michigan| 60| North Dakota | 4| Washington| 35| Florida| 124| Minnesota| 74| Ohio | 63| West Virginia | 5| Georgia| 55| Mississippi | 5| Oklahoma| 12| Wisconsin| 36| Idaho | 6| Missouri | 35| Oregon | 18| Wyoming | 2| Illinois| 85| | | | | | | Relevant Consumer Trends Retailers agree that consumer trends override all other considerations when investment decisions are to be made.
In a study conducted by Retail Systems Alert Group, results show there are ways to compile information about consumer trends in an effort to efficiently use that information. They talked about retailers using data points. This is a system that will record the demographics, government and technology used to make informed decisions. Target is in a unique situation to keep up with the trends. They are small enough to make changes quickly, but not so small that they don’t have sufficient resources.
Target is currently trying to hit the higher end customers by joining with known furniture designers to create fashionable products. Target’s everyday products do well because they are competitively priced to Wal-Mart’s products. Targets customers include precision consumers. These are consumers who like to get all their shopping done in one place. With Target’s differentiated products they are able to service all customers, with almost any type of need. Economic Trends
With much of the manufacturing and automation being done in other countries, this has left a large permanent void. Many Jobs that were once held by American workers are now performed overseas. The U. S. is now gearing toward more of a service industry. Some businesses are having a hard time dealing with this situation. Workers are finding it more challenging to make ends meet. Unfortunately, this trend seems to be accelerating. The United States will have to make some drastic changes to get back to the prosperity we once enjoyed. Technology Trends
In today’s modern, high tech and fast paced society, consumers as well as business have utilized the latest technology trends to efficiently produce market, and purchase goods and services. Since the company was founded by George D. Dayton in 1902, Target Corp. has taken dramatic steps to improving its products and services through the integration of the latest technologies. This includes the design and distribution of its products, internet shopping, supply chain development, corporate systems development, and infrastructure support.
In 1985, Target introduced electronic point of sale scanning which enabled employees to scan products at check out. All products up to this point were inputted into an inventory database which registered a price and description of any particular product. Before this new technology, all products and prices were manually entered, which resulted in some inaccuracies and wait times. This change enabled Target to be more efficient, accurate and faster at the check-out line.
While at check-out consumers would either purchase products using cash, checks or third party credit cards, but in 1995 Target introduced its first store credit cards and in 2001 the Target Visa was then introduced. This credit card technology enabled consumers to purchase products without having the cash at the point of sale, at the same time Target was able to increase sales revenues, consumer traffic and product turnover with a highly competitive interest rate as compared to third party credit card companies. In 1999, Target launched Target. om as well as its Gift Cards respectively. In retrospect, the internet technology today has grown tremendously in the last decade, and has allowed consumers to shop conveniently, effectively with the current state of our economy, and the rising prices of numerous products and service, enable them to save money at times. In 2007 Target introduced an innovative and creative new way to shop for furniture, particular storage spaces. In 2005, Target introduced its innovative ClearRx pharmacy system. Its features included an easy to read bottle and color coded ID rings.
ClearRx helped minimize the chance of taking the wrong dose or confusing medications between family members. This innovative pharmacy concept improved medication packaging and design, and makes prescription and health information easier to use. At this moment most of the technology trends have been on the side of the consumer, but in order for Target to provide a great product and efficient service, they must improve, implement and integrate new technologies internally. In January of 2006, Target unveiled a new program with Microsoft to outfit Target retail stores in the U.
S. with server, database and development software in critical areas of store operations. These included point of sale, back office, inventory cash management, supply chain management and shelf audit applications. Under the terms, which are a part of Microsoft’s Smarter Retailing Initiative, Target migrated all of its 1,400 stores in 47 U. S. states from its current mishmash of legacy systems to Microsoft infrastructure, including Microsoft. Net Framework 2. 0, Windows Server 2003 and Microsoft SQL Server 2005.
As stated by Microsoft’s Director of Retail and Hospitality Industry Unit, Tom Litchford says “that the new technology is expected to be fully deployed throughout all phases of Target stores by the end of 2009 or early 2010. ” In addition to new product design, advanced developmental and database management and web based applications, security respectively is top priority in regards to technological advancements. Target is taking strides in surveillance and forensics as well. With new sophisticated cameras and advanced computer tracking systems, Target slowly but surely is reducing shoplifting and making an impact on crimes in its stores.
On top of that, Target has one of the most advanced crime labs in the country at its headquarters in Minneapolis, Minnesota that was initially set up to deal with things like theft, fraud, and personal injury cases in their stores. Now, Target also helps enforcement agencies nationwide solve crimes, even murders and that list includes the Secret Service, the ATF, and the FBI, to name a few. Stage in Product Life Cycle for the Industry The United States totaled $3 trillion in annual sales in 1999. That was a 36% increase in sales from 1994. Target is at a mature level in its life cycle. 007 revenues – $63,367,000 y/y change – 6. 5 2007 earnings – $2,849,000 y/y change – 2. 2 number of stores – 1,591 y/y change – 7. 0 Wal-Mart (US) v. Target, 2007 | | Wal-Mart | Target | Total Sales (millions) | $378,799 | $63,367 | Growth from 2006 | 8. 6% | 6. 5% | Same Store Sales Increase | 1. 6% | 3. 0% | Sales per Store (mm) | $52. 1 | $39. 8 | Sales per Square Foot | $436 | $305 | Operating Margins (%) | | Wal-Mart | Target | 2007 (ttm* ending Jan-07) | 6. 14 | 7. 56 | 2006 (ttm* ending Jan-06) | 5. 50 | 7. 34 | 2005 (ttm* ending Jan-05) | 5. 60 | 6. 47 | *ttm – trailing twelve months
Domestic Sales of “Big Three” Discount Retailers | Total Retail Sales | Wal-Mart | Target | Kmart | “Big Three” | Year | Sales (mm) | Sales (mm) | % of Total | Sales (mm) | % of Total | Sales (mm) | % of Total | Sales (mm) | % of Total | 2005 | $2,821,926 | $249,709 | 8. 85% | $51,271 | 1. 82% | $19,094 | 0. 68% | $320,074 | 11. 34% | 2004 | $2,671,210 | $228,944 | 8. 57% | $45,682 | 1. 71% | $19,701 | 0. 74% | $294,327 | 11. 02% | 2003 | $2,445,320 | $208,757 | 8. 50% | $40,928 | 1. 67% | $23,253 | 0. 95% | $272,938 | 11. 12% | 2002 | $2,296,630 | $188,823 | 8. 22% | $36,917 | 1. 61% | $30,762 | 1. 4% | $256,502 | 11. 17% | 2001 | $2,212,890 | $168,526 | 7. 62% | $32,167 | 1. 45% | $36,151 | 1. 63% | $236,844 | 10. 70% | Section Two Target’s strengths include an innovative and influential retail store. Their mission statement focuses on four core roles: great guest service, clean stores, in stock merchandise, speedy checkout. They focus on new ideas and exclusive products, such as Clear Rx. This invention has grossed the company over 7% of their total sales and contributes to about 33% of the guests. Target is committed to having their location accessible to many of their current and potential guests.
Top designers have signed agreements with Target to sell their items at affordable prices under an agreed upon name. In some states, the police department will rely on Target’s Asset Protection systems to catch thieves and monitor fraudulent activity. Target’s weaknesses include that they are not a global retailer, which means they don’t have a presence in countries worldwide. Pharmacy guests account for over 7% of their total sales. The turnover rate for Pharmacists is very high, since they are required to work 12-hour work day schedules. In some markets, Target’s prices are higher than competitors.
Target is an American retailing company originating in Minneapolis, Minnesota under the Dayton Dry Goods Company in 1902. Target was held by the parent company of Dayton-Hudson Corporation as a business unit until January of 2000 when the Dayton-Hudson Corporation changed its name to Target Corporation. By this time Target Stores had become 75% – 80% of Dayton-Hudson’s of total sales of the corporation. Target had built up it total sales revenues and acquired many of its subsidiaries throughout this time. The Target Corporation has under its corporation many subsidiaries are under the corporation umbrella.
The Target Corporation consists of the Target, Target Greatland, and Super Target stores each carrying Target brands and national brands, which flow through Target Distribution Centers. Their subsidiaries are Target Financial, Target Sourcing Services, Target Commercial Interiors, Target Brands, and Target. com. Target has an ingenious way of doing business. Target is very customer friendly, stakeholder friendly, and has created a marvelous way of bringing national brands and inside brand to forefront this company that 92 percent of all US customers recognize from it bull’s-eye logo.
Target uses designers to design the most cutting edge furniture, accessories, and food products that are chic, trendy, and solely designed for customers that want these types of merchandise at affordable sales. Target handles and oversees the brand label. Target focuses on innovation, value, diversity, community, and is one of the companies that are environmentally friendly. Target is one of the top notch marketing firms that build their brand for the long-term. You will see Target ads in every aspect of media. Target has used high profile magazines, television ads, and newspapers.
There is no doubt that when someone sees the bullseye most all of the national customers know who and what the logo means. Target uses in –store advertizing in its electronically departments called, “Channel Red,” promoting current CD’s and DVD’s. Target has promotional events that have been very successful for sales. What Target does better than the rest is build their brand and building their sales, only behind one of their competitors Wal-mart. Target is not the top seller, but has created an ever growing company within the lifespan of the company.
Target started from one store to a nationally known company with thousands of stores across the continental United States. Target is now open in Hawaii taking off the continental US to new broader territories. Target may one day be more visible and accessible in the global economy as the Target Corporation grows. Income Statement for Target Corporation| | | | | | | | | | | | | | | | | | | | | | | Q3| Q2| Q1| Q4| | | | Oct-08| Jul-08| Apr-08| Jan-08| | | Operating Activities| | | | | | | Operating Revenue| 15114| 15472| 14802| 19871| | | Total Revenue| 15114| 15472| 14802| 19871| |
Adjustment to Revenue| 0| 0| 0| 0| | | Cost of Sales| 10131| 10303| 9898| 13762| | | Cost of Sales with Depreciation| 10130| 10304| 9898| 13762| | | Gross Margin| 0| 0| 0| 0| | | Gross Operating Profit| 4983| 5169| 4904| 6109| | | R&D| 0| 0| 0| 0| | | SG&A| 3648| 3500| 3311| 3829| | | Advertising| 0| 0| 0| 0| | | Operating Profit| 0| 0| 0| 0| | | Operating Profit before Depreciation (EBITDA)| 1335| 1669| 1593| 2280| | | Depreciation| 468| 449| 435| 434| | | Depreciation Unreconciled| 469| 448| 435| 434| | | Amortization| 0| 0| 0| 0| | | Amortization of Intangibles| 0| 0| 0| 0| | |
Operating Income After Depreciation| 867| 1220| 1158| 1846| | | Interest Income| 6| 10| 8| 0| | | Earnings from Equity Interest| 0| 0| 0| 0| | | Other Income, Net| 0| 0| 0| 0| | | Income Acquired in Process R&D| 0| 0| 0| 0| | | Interest Restructuring and M&A| 0| 0| 0| 0| | | Other Special Charges| 0| 0| -18| 0| | | Total Income Avail for Interest Expense (EBIT)| 873| 1230| 1148| 1846| | | Interest Expense| 240| 227| 191| 180| | | Income Before Tax (EBT)| 633| 1003| 957| 1666| | | Income Taxes| 264| 369| 355| 638| | | Minority Interest| 0| 0| 0| 0| | |
Preferred Securities of Subsidiary Trust| 0| 0| 0| 0| | | Net Income from Continuing Operations| 369| 634| 602| 1028| | | Net Income from Discontinued Ops. | 0| 0| 0| 0| | | Net Income from Total Operations| 369| 634| 602| 1028| | | Extraordinary Income/Losses| 0| 0| 0| 0| | | Income from Cum. Effect of Acct Chg| 0| 0| 0| 0| | | Income from Tax Loss Carryforward| 0| 0| 0| 0| | | Other Gains (Losses)| 0| 0| 0| 0| | | Total Net Income| 369| 634| 602| 1028| | | Normalized Income| 369| 634| 620| 1028| | | Net Income Available for Common| 369| 634| 602| 1028| | | Preferred Dividends| 0| 0| 0| 0| | |
Excise Taxes| 0| 0| 0| 0| | | Per Share Data| | | | | | | Basic EPS from Continuing Ops. | 0. 49| 0. 82| 0. 75| 1. 23| | | Basic EPS from Discontinued Ops. | 0| 0| 0| 0| | | Basic EPS from Total Operations| 0. 49| 0. 82| 0. 75| 1. 23| | | Basic EPS from Extraordinary Inc. | 0| 0| 0| 0| | | Basic EPS from Cum Effect of Accounting Chg| 0| 0| 0| 0| | | Basic EPS from Other Gains (Losses)| 0| 0| 0| 0| | | Basic EPS Total| 0. 49| 0. 82| 0. 75| 1. 23| | | Basic Normalized Net Income/Share| 0. 49| 0. 82| 0. 77| 1. 23| | | Diluted EPS from Continuing Ops. | 0. 49| 0. 2| 0. 74| 1. 22| | | Diluted EPS from Discontinued Ops. | 0| 0| 0| 0| | | Diluted EPS from Total Operations| 0. 49| 0. 82| 0. 74| 1. 22| | | Diluted EPS from Extraordinary Inc. | 0| 0| 0| 0| | | Diluted EPS from Cum Effect of Accounting Chg| 0| 0| 0| 0| | | Diluted EPS from Other Gains (Losses)| 0| 0| 0| 0| | | Diluted EPS Total| 0. 49| 0. 82| 0. 74| 1. 22| | | Diluted Normalized Net Income/Share| 0. 49| 0. 82| 0. 76| 1. 22| | | Dividends Paid per Share| 0. 16| 0. 14| 0. 14| 0. 14| | | Additional Data| | | | | | | Basic Weighted Shares Outstanding| | | | | | |
Diluted Weighted Shares Outstanding| 7566| 7739| 8096| 8508| | | Last updated: 2009-03-07 22:42:41| | | | | | | | | | | | | | Key numbers for fiscal year ending January, 2008: | | | | | | | Sales: $63,367. 0M| | | | | | | One year growth: 6. 5%| | | | | | | Net income: $2,849. 0M| | | | | | | Income growth: 2. 2%| | | | | | | Target had annual revenues in excess of 63. 3 billion as of February 2, 2008. This is an increase from prior years, showing Target continues to thrive. Target spends approximately 2 percent on advertising. This equals to 1. billion dollars on advertising per year. This is about 44 percent of the net sales. This may seem like a lot, but without advertising Target would not be doing so well. In comparison Wal-Mart spends about . 3 percent on advertising. However, Wal-Mart is selling volume and shoppers are primarily looking for a bargain, not necessarily product quality or service. Target advertisements can be very trendy. I believe these advertisements influence young and old. They speak to working moms and dads, children and anyone who is looking for just about anything. It is these advertisements that get eople into the store. Once there I believe Target shoppers find what they are looking for and more. Since its inception, Target continues on focusing and introducing new products that provide top quality value and services which successfully have stand out over the years among other retailers. They not only focus on the new products but on the design of the product and the ways they are displayed. Target feels that it is very important to them and want to give a welcomed image “exceptional guest experience” to their customers hoping to attract and keeping loyal customers.
Since 1990 Target has launched products such as household products, electronics, clothing, foods, cosmetics, and medicines to offer variety for its customers. Recently, in Feb 2009, Target has announced that in the fall of 2009, they will bring the “Shaun White 4 Target” clothing label back. Denim, hooded sweatshirts, jackets, graphic tees, woven and shorts would be available under this label. The clothing is targeted for young males and which will be now available all throughout the year. The clothing line will also be available for online shoppers as well.
After offering the profitable limited edition of the Shaun White label in 2008, the continuance of this line would definitely be of greater success in terms of profit for Target Corp. The great advantage to this new product is that since this was already introduced as a Target brand, it is likely to succeed and keep loyal customers happy for its availability once again. Target has recently introduced a partnership with McQ Alexander McQueen where together they will be launching several lines of clothing for women. The seasonal time frame will be from March 4 to April 14, 2009 only.
The contemporary collection, and swim ware will be available throughout all Targets nationwide. The advantage of this new products is that it is being designed by the “one of most respected fashion designer” well known and consumers are most likely to buy these collections over any generic clothing label. The second advantage is that this clothing line would be available at affordable prices that anyone can purchase it. Section Three Market Segments Target has been serving its consumers, regardless of age for over a century.
The broad ranges of products that they offer vary from groceries, furniture to electronics and jewelry. As a leader in its respective industry, Target has done an exceptional job in accessing the needs of its consumers and marketing its image to the public. Whether it is a single parent seeking to save a little money on kitchen supplies, or groceries or a teenager on a budget, Target has projected an image to the general public that it can provide high quality products at low, competitive prices. In a recent poll conducted by CNN, consumers were asked to choose between Target, Wal-Mart, and K-Mart.
The results found a sliding scale upwards: -16% of people in the less than $20,000 annual income chose Target -23% of people with $20,000 to $29,000 annual income chose Target -26% of people with $30,000 to $39,000 annual income chose Target -29% of people with $40,000 to $74,000 annual income chose Target -47% of people earning more than $74,000 annual income chose Target The results show a high level of educated consumers lean more towards Target than they do their competitors with 59% of people with annual income of $20,000 or less preferring Wal-Mart.
Target likes to view its retail position as a “discount department store”, instead of a primarily a discount store. This could be due to the companies desire to go above and beyond the basic customer needs of a discount store. They are trying to perceive themselves as a store presenting name brands at low prices by cutting expenses, then lowering prices on lower quality items similar to Wal-Mart. In a recent statistic, 96% of the general population recognized the Target BullEye Logo, more so than Apple or the Nike Swoosh and in addition, Fortune Magazine ranked Target 11th as “Americas Most Admired Companies. ” Consumer Segmentation: . Cost 2. Quality 3. Convenience Brand Vision: “To make Target the preferred shopping destination for the guest by delivering outstanding value, continuous innovation and exceptional guest experience by consistently fulfilling the Expect More Payless brand promise. ” As of October 2008: 1685 Stores in 48 States (including 218 Super Target locations) Target| 2007| 2006| 2005| Number of Stores| 1,591| 1,488| 1,397| Perceptual Map: Section Four Marketing Mix Product Mix When consumers are starting the consumer decision process many would start by looking at the physical surroundings when deciding which store to frequent.
Target stores have been designed to display items in a clean, organized and welcoming environment (Roger). Most Target Supercenters are laid out in a fashion so that crowding is not an issue for customers to deal with. Target tries to make the stores more intuitive by placing related departments close to each other; such as toys and sporting goods, as well as home improvements near the home decorations (Roger). Rather simple things like these are important to the customer. It shows that Target is thinking about the customer and their needs when making design/layout plans; and it makes customers want to return to their store.
Target’s goal is to attract more affluent and better educated customers, and attract them they do; consumers that shop exclusively at Target are more likely to shop at more high fashion retailers such as Nordstrom and Macy’s (O’Donnell). These customers are less likely to be “one-stop” shoppers. Target consumers are more likely to fall into the nominal decision making category. They recognize the problem and after doing an internal search, they have their solution by choosing to go to their preferred store or buy their preferred brand. Consumers go to Target to purchase items that they have purchased there before.
Target’s clothing for example is of great quality and that is recognized, especially by women shoppers. Women spend more each year on business/casual clothes and health and beauty aid products at Target each year than any other products in the store (O’Donnell). Time plays a huge role in the consumer decision process. Consumers have less and less time to spend on things like shopping each week, so many are turning more and more to online shopping to fulfill their needs. Online shopping helps to reduce the time it takes to actually purchase the product as well as allow the consumer more control as to when the purchase is being made.
Of all Target exclusive customers 58% made online purchases last year; 45% of them spent over $100 in online purchases last year (O’Donnell). Women are emerging as the stronger internet buyer in recent years. The key items that women have been purchasing online are clothing or accessories, consumer electronics and toys or games (O’Donnell). Women Online Purchases: Target has had the ability to offer designer as well as store brands in their stores Mossimo, Isaac Mizrahi ,and Sonia Kashuk are just some of their product designers.
These store brands are important attributes to the company; if consumers like the designers, they have to go to Target to get the product due to the fact that no one else carries them. These high quality designers/products attract the type of customer that Target is looking for: affluent, better educated, younger and more upscale. The shopping orientation of Target customers would best fit into the Chameleons category. Their shopping styles are situation specific and can frequently change. Their approach is different for different products and for different purposes of shopping (gifts, personal, etc. . Target customers could also fall into the Scavengers category. They enjoy shopping and consider it to be a form of entertainment and many are prone to make unplanned purchases. Target offers a wide array of products for every type of consumer. A recent study illustrates ? of all U. S. primary household shoppers visit a Target store at least once a month (“Chain Store Age”). Consumables and commodities make up about thirty percent of Target’s sales (Hoover’s). In September 2006, Target launched organic foods and beverages, sold under the Archer Farms label, into their stores.
The purpose of the move into organics was to attract younger, female shoppers. Electronics, entertainment, sporting goods and toys make up twenty-three percent of sales (Hoover’s); however, Target, along with other entertainment retailers, have begun to struggle with the profits from entertainment items because of online web sites that offer music and movie downloads at a discounted price, such as iTunes. Apparel and accessories account for twenty-two percent of sales (Hoover’s). Target offers chic, inexpensive yet trendy apparel and accessories which attracts more young and affluent consumers.
Eighty percent of Target’s products have private label from big name designers such as Colin Cowie, Behnaz Sarafpour, Tara Jarmon, Paul & Joe, and Isaac Mizrahi. Home furnishings, decor, and other items, such as seasonal products, make up the remaining twenty-five percent of sales (Hoover’s). Each store has “The One Spot” which is a section of the store usually located near the entrance and contains products that only cost one dollar. The items change frequently and consumers sense they have found a bargain. Target currently has 1,494 stores in forty-seven states.
The corporation has three types of physical store formats; Target, Super Target, and Target Great Land. A regular Target is an upscale discount store that is usually 123,000 square feet. Super Target carries groceries and general merchandise while Target Great Land is about seventy percent larger than a regular Target store (Hoover’s). Target. com is the third most visited retail web site only to be surpassed by EBay and Amazon. The online store currently offers 90,000 products and that number is estimated to exceed 200,000 by the end of the year.
According to a study conducted by Scarborough, Target has a higher market penetration than Wal-Mart (O’Donnell). Market Penetration: Promotional campaigns play a vital part to the success of Target. Advertisements and inserts in newspapers allow the company to reach a large segment. The company spends a lot of money for advertisements and inserts in the newspaper weekly. Free shipping is offered periodically at Target. com. During the holidays, Target offers special extended holiday hours as well as special promotional pricing for new products or products with a high demand. The stores open early and close late.
Private label designers are usually featured in commercials for Target. This is a very good promotional strategy because it allows the designer to get their name and product lines into the market, and it also gives Target the competitive advantage because the designers’ products are only sold at Target stores. Clearance items and prices change every week. This promotional strategy is beneficial because it makes the customer return to the store. Everyone wants a good deal and they are willing to take the risk to see how much the product’s price will be reduced and if the product will still be available when its price is marked down.
Communication Mix The visual perception of a Target store is very important to the company. Target Corporation takes great pains in the presentation and appearance of the store and merchandise. Using wide aisles and drop ceilings, the store portrays more of a department store feel. By using this strategy Target is understandably executed as more upscale than its competitors by many of its consumers. This strategy is also portrayed in the way Target Corporation presents itself. The customers of the stores are called “guests”, employees are “team members” and supervisors are “team leaders. With this approach, Target presents more of a comfortable environment; it also proves effective as many of targets customers refer to it as “Tarje” or “Tar-zhay”, as if it were an upscale French department store. Target became one step closer in achieving its desire to have the appearance of a department store when they collaborated with designer Todd Oldham. This partnership will pave the way for a newer, more youthful brand to appeal to the younger consumer. Think about what Martha Stewart has done for Kmart.
Now make the endorser less relevant to middle aged homemakers and shift them toward the left of the culture, where it’s less about environmental conformity and more about self-expressive art. Now putting them amid what has become the trademark artsy, rock ‘n’ roll TV spots for Target. In recent years, Target’s spectacular co-op advertising in this vein has put profoundly younger frames on such vendors’ brands as Tide and Coca-Cola. When a Target commercial appears you wonder why such a direct approach is taken to market their product, then the red Target logo appears.
Oldham, bringing his new artistic designs for clothing and home furnishings – back to college, kids – builds this aesthetic on the fashion end of Target’s business with a kind of edge that Stewart could never claim. In addition to its new acquisition for its clothing line, Target has also enlisted the help of designer Michael Graves to design a set of distinctive home furnishings and appliances (Grimm). Target is known for the bullseye of the store logo. Whether it is the dog with the bullseye over the eye or just the bullseye in advertisements, promotions, or the store logo, the company is well known for this symbol.
Bullseye is a Miniature Bull Terrier and trademark of the Target Brands, a subsidiary of Target Corporation. It has a pure white coat, and has Target Corporation’s bullseye logo painted around its left eye. It is featured in Target’s commercial campaigns and in store sale signing and is used in various marketing campaigns. Target also offers the dog as a stuffed toy for special events or employee recognition. The original Target dog was American Kennel Club CH Kings mere Moon doggie, affectionately known as “Smudgie”. “The Target ads are fresh and hip so we were thrilled to be a part of this campaign,” says Amy Hassler Executive Producer. Pay Less + Expect More”- is how Target sets its self apart from its competitors and research shows that 96% of people recognize the Target bullseye over Apple and Swoosh . Target seems to offer high quality products at low prices. Target is seen as an upscale discount store, because it has many major designers that design a line of products just for Target (Berman). Since Target seems to focus its marketing toward women, they offer a variety of clothing and intimate apparel that would appeal to just about any woman. They also offer power tools for women (Hawkins).
Target’s mission statement focuses on “great guest service, clean stores, in stock merchandise and speedy checkout. ” (Lhe). This corporation is a “purveyor of all that is cheap, yet chic. ” (Biesada) Target’s influence on consumers differs from other leading retailers. Their image and product offerings provide for a wide range of customers. Target strives to differentiate its products through an image of inexpensive stylish and elegant clothing (Yerak). Target consumers are families, as well as young singles, who shop at Target because they offer products that are fun and trendy.
There is also a good availability of general merchandise. Their niche is based on young, affluent families that are typically cushioned from economic fluctuations (Bullseye on Target). Based on their customers, there are a number of internal influences that affect the customers. Target has positioned their stores from other retailers, particularly Wal-Mart, as being a chic, upscale discount chain that is a hipper alternative to Wal-Mart. This brand image is evident in current distinctive marketing campaigns developed for Target. They are positioning ads to reinforce the concept to the consumer that they offer “style. The ads show consumers that they do not have to pay top dollar for lucrative well designed products. The ads are being designed and finished so that they can stand beside ads for luxury items, and to help bring style to the masses by making “inexpensive” look cool. Thus they are making the product the key focus, instead of the offer. They are able to balance price and image to build the brands and brand loyalty (Tilley). An examination of a Target commercial further reveals the use of signs. The commercial never shows toothpaste, laundry detergent or a CD, which are items sold at their branches.
The bullseye brand is the entire commercial—on walls, dogs and dresses. Through associating the brand with upbeat music and light-hearted people, the brand is viewed positively. The logo is still the bullseye and it represents a happy, convenient, and affordable, discount retail store. The brand that Target has established with the customers can be conveyed through the use of personality in their marketing practices. Target’s chic, upscale, discounter images, used as their focus in building and enhancing their brand personality, with the ability to better target key customer groups.
Of the five dimensions of brand personality, which include sincerity, excitement, competence, sophistication and ruggedness, Target belongs in the excitement area. They could possibly be in the sophistication area, but this pertains to mostly upper class, higher end items. Target represents real customer value. They are focused on the daring, spirited, imaginative and up-to-date excitement brand personality. Their product offering includes modern designs, fashions, styles and merchandise items.
They have to make sure they stay on top of the trends as products in this category tend to fade in excitement over time, thus keeping current on consumer preferences is important. (Hawking, Mothersbaugh, Best) Target has been able to tie in the perception of their logo design with their marketing strategy. Target bullseye logo can stand alone, as almost 94% of Americans recognize it. They also focus on keeping their marketing, store design, product offering and website consistent in an effort to further their brand message. The interpretation associated with the brand keeps individuals expectation consistent. Brown) Target is able to understand that sales are made in the head and the heart. They are able to take ordinary products and make them desirable. Inexpensive products to some are presented through Target in a way that makes them “cool. ” Their ads are used in a way that makes the company stand out. The look, tone and message all respect the reader. They do not pack every available space of an ad with a “selling, selling, selling” mentality. Target makes the product, not the offer, the important aspect. They are able to balance the price and the image, to drive sales and build brand loyalty, day after day.
Sales Promotion Target has many different techniques of sales promotions within its goals to reach out to existing and new customers. They use in-store sales, sponsorships to market the name of the store and bring the Target logo to areas they target for sales. Target has learned from many of the acquired company’s throughout its inceptions to become second to one of its competitors, Wal-mart, in the retail business. They use many different ways to promote sales, which has been very effective for the Target Corporation. Direct Sale Promotions Walking into a Target store most visible is, “The Spot. These items are simple in nature, but valuable to customers that search the bins. Customers do not miss the store items on special in the newspaper ads directly to the right as you enter the store. Chances are that many people have already seen the ad via the newspapers or the mailers sent to all the surrounding neighborhood homes. Target has regular ads running on television commercials to promote the store and items sold within the store appealing to people who want more value for their dollars. The store features the “Red Channel,” in the electronics department directly to advertise CD’s and DVS’s in their store all at value pricing.
Target does not offer coupons, but rather offers many selected sale items that are not as cheap as their competitors Wal-mart and K-mart. They are skimming prices that set a higher standard to which they believe they cater too. This would include all seasonal items that are part of Targets target market. Targets motto is, “Expect More, Pay Less. ” All year round, Target’s customers can pick up gift cards to any value the customer wishes to purchase for them. Gift cards are one of Targets biggest sellers and most profitable by both dollars and units available to shoppers.
Their gift cards have specially designed backgrounds and some have even become high priced novelties sold as collector’s items. Target has patented the designs and has distinguished the gift cards from all their competitors. Target uses e-commerce sales complimenting store items featured in Target stores. Target has not used the order online pick-up at your local store due to believing customers want the products delivered directly to their doors. Their competitor Wal-Mart has, “Shop n Pick up” where 90% of shoppers are regular customers, but coupled with having half of all new customers to their website.
Shopping online is one of Targets work in action projects. Target slowly warmed up to e-commerce, but has placed a database online that updates every 15 minutes specifically to target teenagers for Nintendo games accessible to purchase as soon as they are in Targets possession. They have “Cyber Monday,” online shopping, which has been closely linked with in store sale ads. They also have available the “Gift finder, gift giving suggestions, and gift registry” online that is one of their featured links promoting sales. Other Promotional Tactics Sponsorships of different projects are another way Target reaches customer and sale volume.
Target is a well known NASCAR sponsor along with Indy car racing. They are known to be big supporters of racing and targeting that population has been synonymous with Target. The products sales of NASCAR products in Target are closely related to sales for the store and NASCAR. Target hosts many promotional events and has been featured in high profile magazines like Forbes. Target Visa donates a percentage of money on purchase for schools the cardholders designates. Target promotes sales by associations and donations to the Salvation Army, the United Way of America, and the Red Cross.
Target has supported efforts with the Salvation Army allowing them to solicit outside stores, but the high volume of requests from other organizations caused to change that policy. Target still donates large amounts of money to both the Salvation Army and the United Way of America which the Salvation Army is a member of. Target wishes to create a distraction free shopping experience for customers attracting current and potential customers. Target assists with disaster relief. They donated 1. 5 billion dollars, bug spray, water, and stores to be used for command posts in the Katrina Hurricane disaster.
Target supports other projects all bringing attention to the company, potential new customers, and potential sale profits. The company sponsors museums giving visitors a hosted day free or low cost for admissions to many different museums, which include the Museum of Modern Art’s “Free Friday Nights” after 4pm, Los Angeles County Museum of Art’s “Free after Five,” Museum of Contemporary Art’s “Free Tuesdays,” Walker Art Center’s “Thursday Nights,” Boston’s Children’s Museum’s “$1 Friday Nights,” and Minnesota’s Children’s Museum’s “Target Third Free Sunday s. Finally, one of the biggest seen awards ceremonies the public views Target host. Target has hosted the Oscars, the Emmys, the Grammys, and the Golden Globe awards. All of these things that Target sponsors add to their sale promotions. They are well known throughout the United States along with their bullseye logo and their motto, “Expect More, Pay Less. ” Not only does the Target Corporation use direct sale promotions, but they are very successful in promoting sales through marketing themselves with sponsorships.
All of these combined efforts make Target a well known name and that will ultimately end with higher sales promotions and profits. Packaging One of the major distinctions in Target’s packaging is the red bullseye target emblem they use. When consumers see this target symbol they immediately know it is a target product. Target stores themselves are a type of packaging. They consider everything from product placement to who they hire and what the employees have to wear. Their goal is to have the store work as a cohesive unit. They place like product departments close together to enhance the shopping experience.
In 1974 Target developed “plan-o-grams”, this was a uniform layout of each store so customers could have a consistence experience no matter which store they frequented. In 1995 Target introduced the wedding registry Club Wedd and a year later introduced The Lullaby Club, the new baby registry. These ideas help consumers to have a central organized place to buy gifts for the many events in people’s lives. In 2000 Target introduces its on line ads on target. com. All of these ideas basically package the name Target and gets the word out through print, the internet (on-line ads and shopping), and in store experience.
Pricing Target offers many hot trend items as well as electronic products. Keeping up with technology Target offers their products online as well as their competitors. In conducting a minor analysis of three items against its competitors, it was determined that the price for these products were a higher on 2-3 products than its competitors. According to their internet website, three items came very close in pricing. Wal-Mart Stores seemed to focus more on low prices for its consumers while Costco Wholesale focused on offering discount prices for its private labels.
Target focused on style and quality offering a higher price in return for trendy products/brand names. See Exhibit A Exhibit A Price Analysis Grid| | | | for (Target, Inc. )| | | | prepared by (Maricela)| | | | as of (April 3 2009)| | | | | | | | | | | | Products| Target| Wal-Mart| Costco| | | | | Halo 3 Video Game| 39. 99| 39. 96| 33. 99| Availability| Not offered online| Online/Stores| Online/Stores| Price Discounts Offered| Yes| Vary| Yes| Returns| Online/Stores| Online/Stores| Stores| | | | | Safety 1st Infant Car Seat| 119. 99| 75. 00 | 93. 9| Availability| Online Only| Online/Stores| Online Only| Price Discounts Offered| Vary| No| Yes| Returns| Online/Stores| Online/Stores| Stores| | | | | Vizio – 32″ Television 1080p| 599. 99| 547. 00 | 549. 99| Availability| Online/Stores| Online/Stores| Online/Stores| Price Discounts Offered| Vary| No| Yes| Returns| Online/Stores| Online/Stores| Stores| Distribution Products are shipped directly to Target stores from Regional Distribution Centers, who receive shipments of store merchandise from suppliers. Target operates twenty six Distribution Centers in twenty one states.
Import warehouses receive shipments directly from overseas manufacturers and suppliers. The merchandise is sent from the Import Warehouse to the Regional Distribution Centers. Target operates four Import Warehouses. Target Fulfillment Centers handle fill orders from Target. com. Target operates on fulfillment center in Woodbury, MN. Target has partnered with SuperValu to convert two of their facilities to build the first Target owned and third-party-operated perishable food distribution center, which is located in Lake City, Florida. WORKS CITED http://www. crm2day. om/content/t6_librarynews_1. php? news_id=114457 http://www. mckinseyquarterly. com/The_vanishing_middle_market_1687 http://www. biz. uiowa. edu/krause/Spring_2007/TGT_sp07. pdf Inc.. (n. d. ). WMT: Profile for WAL MART STORES – Yahoo! Finance. Retrieved March 24, 2009, from http://finance. yahoo. com/q/pr? s=wmt TGT: Profile for TARGET CP – Yahoo! Finance. (n. d. ). Retrieved March 25, 2009, from http://finance. yahoo. com/q/pr? s=TGT Foundation. (2009, March 24). Costco – Wikipedia, the free encyclopedia. Retrieved March 24, 2009, from http://en. wikipedia. org/wiki/Costco#Products ttp://www. crm2day. com/content/t6_librarynews_1. php? news_id=114457 http://www. mckinseyquarterly. com/The_vanishing_middle_market_1687 http://www. biz. uiowa. edu/krause/Spring_2007/TGT_sp07. pdf http://hbswk. hbs. edu/archive/4319. html http://sites. target. com/site/en/company/page. jsp? contentId=WCMP04-031698 http://en. wikipedia. org/wiki/Target_Corporation http://finance. yahoo. com/ http://www. sbtdc. org/pdf/retail. pdf http://www. wikinvest. com/stock/Target_(TGT) http://www. stores. org/Current_Issue/2008/07/Sidebar_9. asp http://www. stores. org/pdf/08Top100Chart. pdf