Colby Grab Adam de Laveaga Brett Bartell

1. Colby Grab Adam de Laveaga Brett Bartell Hitting the Bulls Eye

2. Entities of the Target Corporation The Target Corporation, formerly known as the Dayton Hudson Corporation, consists of three companies: • 1. Target Stores - Upscale Discount • 2. Mervyn’s Stores - Moderate Priced Retail • Marshall Field’s Stores • - Upscale Retail

3. Target Retail Stores Target Retail Stores Mission Statement:“To give guests the best product at the best value, and to give generously to the communities where Target does business.”

4. Target Retail Stores- Success Success in 2003 is highlighted by: • Placing 25th on the Fortune 500 List. • Placing in the top 50 in Forbes’ top 500 list. • Placing in the top 5 in the General Merchandisers industry ranking. • Rated “one of the top 100” by Business Ethics • Earning 2003 revenues of $48 billion.

5. History of Target Stores • Executives from the Dayton Corporation recognized the growing demand for reasonably-priced goods available at convenient locations. • As a result, the first Target store was opened in Roseville, Minnesota in 1962. • Built upon strong values of community giving, Target stores continued to grow. • During the 1980’s, Target began to expand into new parts of the United States, opening stores on the west coast. Also, during this time, Target implemented electronic scanning. • In 1995 Target opened their first SuperTarget store • As of 2003, Target operates 1,147 stores in 48 states.

6. SWOT Analysis Strengths • Convenience • “one stop shopping” • Strong Brand Identity • Strong Financial Performance • Target “Experience” • Innovative Advertising

7. SWOT Analysis Strengths: Financial Performance • In 2003: • Total Revenues reached $48.163 billion. • Target Retail Stores alone: $41.346 billion. • Net Earnings reached $1.84 billion.

8. SWOT Analysis Weaknesses • Marshall Field’s and Mervyn’s • - Poor Performance • Failed “Smart Card” • - Insufficient Promotion • Customer Service Systems • - Feedback Avenues • Employee Benefits • - Versus Competitors

9. SWOT Analysis Weakness: Poor performing Mervyn’s and Marshall Field’s

10. SWOT Analysis Opportunities • Potential target markets • - Hispanic Americans • Multicultural marketing • - “Tweeners” • Potential market opportunities & social trends • - SuperTarget stores • Technological opportunities • - Internet and online media retail • Environmental involvement

11. SWOT Analysis Opportunities: Hispanic-American consumers • Facts: • Since 1993, the Hispanic-American population has increased by 14 million individuals. • The current total population of Hispanic-Americans has risen to 35.3 million people. • Internet Marketing: Hispanic consumers spend 2.5% more time online than non-Hispanic consumer. • By 2020, the number of Hispanic teenagers are expected to increase by 62% versus a 10% increase in total teenagers. • Hispanic teenagers hold $19 billion in spending power, and spend 4% more than non-Hispanic teens.

12. SWOT Analysis Threats • Competition • SuperTarget store success • - New competitors • - New markets • Resistance to Target stores • Saipan sweatshop concerns • Economic Threats

13. Target Market Strategy Market Segments: An understanding of these target markets is vital. Trends play a large role within each demographic. • Gender • Geography • Age • Income • Ethnicity • Family Cycle

14. Target Market Strategy Store Distribution (random sample of states)

15. Target Market Strategy • Median household income of $54,000 • Median age of 44 • 80% female • Family-oriented

16. Target Market Strategy Baby Boomers: • Convenience • Example: online shopping • Easy access to advertisements Generation X: • Creative marketing • Focus on specific product categories • Example: electronics; luxury items • Promotional events

17. Target Market Strategy Generation Y: • Media-saturated • Brand conscious • “BullsEye Online” • New brand introduction Tweeners: • Growing segment • Increase in buying power • Name brands

18. Target Market Strategy • Amenities include: • Bank • Bakery • Food Avenue • Photo studio • One-hour photo • Optical center • Pharmacy • Starbuck’s • Krispy Kreme Donuts

19. Target Market Strategy • Ultimately, service is the key differentiator between competitors in any field. • Discount retailing isn’t simply selling products at low prices, but understanding that customers need the highest level of quality to be satisfied. • Aesthetically pleasing environment • Service-driven employees • Quality partnerships

20. Target Market Strategy Built amazing brand equity through innovative marketing campaigns.

21. Product Core Product: • Convenient and exciting shopping experience • Perfect mix of fun, excitement, convenience • One-stop shopping location • Store Environment • Large signage, superior lighting, minimal aisle clutter, cleanliness Actual Product: • Wide range of quality items – tends to have one brand of each • House brands – Sostanza, Merona, Honors, Cherokee Benefits: • In-store services • Financial services

22. Product Product life-cycle = growth stage • Increase in sales and profits • Emergence of competitors – Wal-Mart, Costco, Kmart • Heavy advertising to build company/brand loyalty

23. Product Brand name: “Target’s bull’s eye still “hitting the mark with consumers” • “Target” has certain charisma – accuracy, fun, excitement • Flashy red symbol recognized by 74 percent of consumers on the first try • Goal – make the Target logo “as big as the Nike swoosh” Customer satisfaction • In the core product – maintain energetic/appealing atmosphere • Offering desirable products and competitive prices • Universal return policy

24. Product Customer value • Store positioning • Recognition • Inconvenience: further distance, heavier traffic • Less adequate customer service and higher prices • Element of shopping experience are added value • Incredible selection of unique and name brand labels • In-store services Customer service • Representatives • Feedback – with manager or guest service hotline

25. Distribution Online shopping • Contracting separate shipping company – UPS • Limits overhead expenses – trucks, drivers, organizational systems Distribution centers • 19 centers owned and operated nationwide • Marshall Field’s: Illinois, Michigan, Minnesota • Mervyn’s: California, Texas, Utah • Target: New York to Florida to California

26. Distribution Access to facilities • High access • Stand-alone stores vs. stores attached to malls • Improvements • Parking lots • High traffic = high stress and high anxiety Location and visibility • Chosen based on target markets • Strategic expansion • Recognition of bull’s eye logo – extreme or subtle

27. Distribution Atmosphere • Wide aisles, clear of clutter, well-lit and organized • Friendly and helpful employees • Noise • Music from electronics section • Metal hangers • Cash registers • Two customer types: edgy vs. leisurely

28. Advertising • Target employs a number of various effective media sources • They don’t look at advertising as purely paper and film • Dominated awards shows – most winning retail organization • Television • Direct mail • Magazine • Internet

29. Advertising • Focus on pop-culture; especially in the last 2 years • First retailer to put its name on a stadium • Timberwolves Arena • $250,000 • Co-branding • Lowers costs • Maximize exposure • Consistency • Logo • “Fun & friendly”

30. Public Relations • Community giving • Give away $2 million per week • Education • Arts • Social services • Recent bad publicity • US Veterans email • Response / recovery • Critical to this corporation

31. Personal Selling • Relationship selling • Satisfaction for customer and seller; mutual benefits • Building, maintaining, and enhancing customer interaction

32. Personal Selling • Employee compensation • Less attractive than competitors’ • Discounts at all store locations • Savings on prescriptions, discounts on airfare, car rentals, and hotels • Flexible scheduling • Structured sales force • Managers provide direction • Match sales staff with target groups • Cosmetics vs. electronics

33. Sales Promotions • Rebates • Premiums • Point-of-Purchase • Target acts as an intermediary • Link between producer and consumer • The “specials” aren’t necessarily efforts on behalf of Target • Consent of the parent company

34. Sales Promotions • Weekly Ad • Found in newspapers, stores, and online • Feature a large variety of products • Target Guest Card / Target Visa • “Rewards programs” • Encourage loyalty • Another element of community-giving • SmartCards • Actually on behalf of Target • Consumers reap huge benefits

35. Price • Determines what the customers buy and where they buy it! • Penetration pricing • Captures large portion of the market with low pricing • Can’t compete on price alone • Focus on quality of products and services • Differentiate to remain competitive

36. Price • Disadvantage: • Don’t employ a specific program to evaluate customer satisfaction in relation to prices • Psychologically… • Price can subconsciously affect consumers’ buying decisions • Low price = better deal? • Low price = lower quality? • All types of payment options accepted • Consistent convenience for the consumer