Target Corp.

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TARGET CORPORATION

Introduction

The Target Bulls-eye logo has become instantly recognizable and synonymous with high quality and style at affordable prices. From its origins in 1902 as The Dayton Dry Goods Company in Minneapolis, Minnesota to the opening of the first Target store in 1962 in Roseville, Minnesota, Target Corporation has grown into one of top five retailers in the United States today with over 1,600 stores and 350,000 employees. Total revenues and net earnings for 2008 reached $64.9 billion and $2.2 billion respectively (Target Corporation, n.d.). Such results rank Target as the 28th largest U.S. Corporation with a market value of $25.7 billion as of March 2009 (Largest U.S., 2009). Innovative marketing strategies have certainly contributed to the company’s enormous success over the years. The “Expect More. Pay Less” strategy builds upon the company’s mission to deliver outstanding value, great brands, thoughtful innovation, exceptional design, and unique style (Target Corporation, n.d.). Target’s market positioning and value proposition have evidently helped build the company into one of the leading retailers today.

Strategic Planning

“Financial success often depends on marketing ability” (Kotler & Keller, 2009). Nothing could be truer in Target’s case. From its humble beginnings in Roseville, Minnesota, the company has grown into one of the largest retailers in the U.S. through organic growth and strategic acquisitions. Target differentiates itself from competitors by providing customers with high-quality and trend-forward products at affordable prices. The company incorporates this philosophy throughout the design of its stores, creative advertising, and unique product branding. As a result of this approach, Target was able to carve out a niche market among consumers that “are on average younger, better educated, and more affluent” (Barwise & Meehan, 2004). Successful design partnerships and clever advertising significantly contribute to Target’s value proposition of upscale discounting. The company has partnered with a number of high-profile designers across product lines as a strategic means of positioning its brands. Target’s strategic decision to form such partnerships provides a starting point for its creative advertising campaigns (Barwise & Meehan, 2004). Such innovative strategies have helped to build Target’s image into one of the most recognizable brands in the America today (Cuneo, 2003). Building customer value instead of focusing solely on price or quality is central to Target’s success. Companies like Target “not only learn their customers’ needs inside and out, they anticipate what those needs will be in the future, often before the customers themselves figure it out” (Beyond the bottom line, 2001). Target quickly figured out that in order to build long-term sustainability it would have to differentiate itself from other discount retailers. Although the current financial crisis has certainly impacted the company’s bottom line, Target is building upon the strategies that led to its success. To fulfill customer demand without compromising its vision, Target has emphasized price point competitiveness on an increasing assortment of products (Reena, 2008). In an increasingly competitive retail environment, Target has been quick to offer a wide array of consumer goods from clothing and house ware by famous designers to everyday products like groceries and prescription medication. In order to change customer’s perceptions that Target offers a higher price point than its competitors, recent advertising campaigns have focused on emphasizing value and promoting Target as a one-stop shopping destination (Cheng, 2008; Target to get into food fight, 2009). The company’s general-merchandise stores now carry groceries and perishables including organic produce options. In-store pharmacies use a distinctive prescription drug packaging emphasizing both functionality and design....
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