Answered: Target is a customer centric retail…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

See similar textbooks

Related questions

Question

Transcribed Image Text:COMPANY Case Target: From "Expect More" to "Pay Less" slowdown, posting quarterly increases in same-store sales of dose to 5 percent along with substantial jumps in profits. When you hear the term discount retail, two names that usually come to mind: Walmart and Target. The two have been compared so much that the press rarely covers one without at least mention- ing the other. The reasons for the comparison are fairly obvious. These corporations are two of the largest discount retailers in the United States. Category for category, they offer very similar mer- chandise. They tend to build their stores in close proximity to one another, even facing each other across major boulevards. But even with such strong similarities, ask consumers if there's a difference between the two, and they won't even hesitate. Walmart is all about low prices; Target is about style and fashion. The "cheap chic" label applied by consumers and the media over the years per- fectly captures the Íong-standing company positioning: "Expect More. Pay Less." With its numerous designer product lines, Target has been so successful with its brand positioning that for a number lof years it has slowly chipped away at Walmart's massive market Chare. Granted, the difference in the scale for the two companies has always been huge. Walmart's most recent annual revenues of $408 billion are more than six times those of Target. But for many years, Target's business grew at a much faster pace than Walmart's. In fact, as Walmart's same-store sales began to lag in the mid- 2000s, the world's largest retailer unabashedly attempted to become more like Target. It spruced up its store environment, added more fashionable clothing and housewares, and stocked organic and gour- met products in its grocery aisles. Walmart even experimented with luxury brands. After 19 years of promoting the slogan, "Always Low Prices. Always." Walmart replaced it with the very Target-esque tagline, "Save Money. Live Better." None of those efforts seemed to speed up Walmart's revenue growth or slow down Target's. But oh what a difference a year or two can make. As the global recession began to tighten its grip on the world's retailers in 2008, the dynamics between the two retail giants reversed almost overnight. As unemployment rose and consumers began pinching their pennies, Walmart's familiar price "rollbacks" resonated with consumers, while Target's image of slightly better stuff for slightly higher prices did not. Target's well-cultivated "upscale discount" image was turning away customers who believed that its fashionable products and trendy ad- vertising meant steeper prices. By mid-2008, Target had experienced three straight quarters of flat same-store sales growth and a slight dip din store traffic. At the same time, Walmart was defying the economic SAME SLOGAN, DIFFERENT EMPHASIS In fall 2008, Target acknowledged the slide and announced its in- tentions to do something about it. Target CEO Gregg Steinhafel succinctly summarized the company's new strategy: "The cus- tomer is very cash strapped right now. And in some ways, our greatest strength has become somewhat of a challenge. So, we're still trying to define and find the right balance between 'Expect More. Pay Less.' The current environment means that the focus is squarely on the 'Pay Less' side of it." In outlining Target's new strategy, company executives made it clear that Walmart was the new focus. Target would make certain that its prices were in line with Walmart's. Future promotions would communicate the "pay less" message to consumers, while also highlighting the fact that Target is every bit the convenient one-stop shopping destination as its larger rival. The new communications program included massive changes to in-store signage. Instead of in-store images and messages high- lighting trendy fashion, store visitors were greeted with large signs boasting price points and value messages. Similarly, weekly news paper circulars featured strong value headlines, fewer products, and clearly labeled price points. In fact, Target's ads began looking very much like those of Walmart or even Kmart. Further recogniz- ing the consumer trend toward thriftiness, Target increased the emphasis on its own store brands of food and home goods. While making the shift toward "Pay Less," Target was careful to reassure customers that it would not compromise the "Expect More" part of its brand. Target has always been known for having more designer partnerships than any other retailer. From the Michael Graves line of housewares to Isaac Mizrahi's clothing line, Target boasts more than a dozen product lines created exclusively for Target by famous designers. Kathryn Tesija, Target's executive vice president of merchandising, assured customers that not only would Target continue those relationships but also add several new designer partnerships in the apparel and beauty categories. MOUNTING PRESSURE Although Steinhafel's "Pay Less" strategy was aggressive, Target's financials were slow to respond. In fact, things initially got worse with sales at one point dropping by 10 percent from the previous year. Target's profits suffered even more. It didn't help matters that Walmart bucked the recessionary retail trend by posting revenue increases. When confronted with this fact, Steinhafel responded

From Target practices, identify the following questions:
1. Target is a customer centric retail store in what way Target follows marketing orientation to ensure
customer experience?
2. Identify Target competitive edge and market offering in the tough competition with Walmart clarifying its
competitive strategy?
3. Target is about "Customer delight" identify Target market mix integration to achieve this objective
In what way does Target handle its communication strategy?
5. What is target pricing strategy?
4.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here