Target: From “Expect More” or “Pay Less”
The micro environmental factor that affected Target’s performance over the past few years where more center related to itself. The internal managers were not focused on the trends of society. At the time, gas prices had been rising and many people were putting more into each trip and one stop shopping was on a rise. Marketing managers were more focused on product rather than what the customer wanted and failed to achieve the goal of the company. Their competitor, Wal-Mart, was able to offer name brands and fashion that was affordable in addition to functional. Consumers were looking for ways to stretch their buying power. The purchasing managers were able because of quantity; buy in bulk with savings passed onto the consumers. These savings were focused upon in advertising campaigns with “falling prices” or “rollbacks” from Wal-Mart. This caught the attention of the consumers and increased their sales and profits while Target was seeing stagnation or decline in their sales. The image portrayed by Target was they were an upscale discount store with higher prices and this turned away customers who were pinching pennies. Target’s flop can be blamed on itself and the management team. Each level was unable to change the image of the store. From the marketing, purchasing, and advertising teams, no one was able to jump in and start a change, so Wal-Mart wins.
The biggest macro environmental factors have affected Target’s performance was the effect of the recession and inflation. Consumers were looking for low price not quality. The general public felt that they could shop at Wal-Mart and get almost the same product for a lower price. Price was the most important factor. If someone could save twenty or thirty dollars here or there during the recession, it left the consumer feeling good about them self. When one feels good, they continue to go to the same place that brought that feeling. Target still had the...
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