Principles of Marketing
Statement of the Problem(s)
In this particular case, there is one major dilemma and all other problems seemed to have risen from this one. For the past few years there has been a recession globally. In the year 2008, the recession was at its peak and all industries suffer tremendously. For many years Target grew at a much faster pace than Wal-Mart, but the economy made a radical turn affecting everyone. Target rapidly started to experience low sales as the time pass. As a result, the most important shareholder, William Ackman, demanded a rapid and effective strategy to bring Target’s sales up once again (Armstrong & Kotler, 2012).
Summary of the Facts * Target is known for its products in style and fashion. * Numerous designer product lines. * Customers view Target as a retail store with higher prices * Target’s customers went for the lower prices at its competitors retail store * Wal-Mart changed is mission statement to “Save money. Live better.” it mimics Target’s mission statement (Armstrong & Kotler, 2012). * While Target’s image of higher quality products remained, Wal-Mart use “rollbacks” to attract customers. * Target started to greet customers with value messages and big signs promoting sale products (Armstrong & Kotler, 2012).
Target’s mission statement has been, “Expect More. Pay Less.” After the recession the company focused on the “Pay Less” part of their slogan. At the middle of the year 2008, Target had experienced three quarters of same-store sales growth (Armstrong & Kotler, 2012). Customers did not respond as rapidly as the company hoped. They seemed to be more interested in low prices than quality. Wal-Mart took over Target’s customers during the recession.
The CEO, Gregg Steinhafel, came up with a strategy to help the business. Using the same mission statement, they focused on the “Pay Less” part of it. On the
References: Armstrong, G., & Kotler, P. (2012). Principles of Marketing (pp. 94-95). Upper Saddle River, New Jersey: Prentice Hall. Wal-Mart and Target: Strategic Differences. (2011). Retrieved February 19, 2013, from http://www.ftsmodules.com/public/texts/valuationtutor/VTehn3/tonic8/tonic8htm. Young, A. (2012 August, 23). Target Vs. Wal-Mart: Target Wins on Pricing, Barely, And Probably Not for Long. Retrieved February 19, 2013, from http://ibtimes.com/target_vs_wal-mart_target_wins_prining_barely_and_probably_not_long_htm.