Principles of Marketing
Case Study, Target: From “Expect More” to “Pay Less”
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. 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” and WalMart leading the industry with “Always Low Prices”. Just before the recession hit WalMart modified their marketing strategy by taking on some tenets of Target’s style and flavour by introducing new elements to its store layout and product lines. Now remember, the recession did not hit completely without warning. Many people were aware of the possibility of a coming storm but it seems that WalMart was prepared with what has been its main strength in the market… low prices. Once the recession was in full swing consumers naturally started to review the way in which their money was spent, hence a...
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