Starbucks Case - Case Study for Target Corporation

Case Study for Target Corporation

Problem Statement: Target is maintaining their goal of being chic at affordable prices against a weakening economy and competitors who have an advantage over them when it comes to price. Targets “Expect more, Pay less” motto can be contradictory when shoppers already perceive other competitors to be cheaper than Target on most every day consumables. Target’s edge of partnerships with high-fashion designers is not much of an edge anymore because competitors have adopted the idea. Target must find a way to differentiate from competitors with indifferent pricing in order to gain or maintain its profit share in the retail industry. (Pearson, 94)

Alternatives: Target must change its marketing strategy to put more focus on the “pay less” motto. They can market more ads that focus more on their low prices for clothing, food items and commodity items.

“Shoppers go to Target for a selection that includes detergent and batteries, in the tradition of all discount stores, but also for designs from Philippe Starck, Stephen Sprouse, Sonia Kashuk and Todd Oldham that can be found only at Target. (Executives say good design should be democratized.)”(Hays, 2002)

For: Target should put emphasis on the value cost of its products. Each associate should be knowledgeable of the design factors of the products sold by attending in-house training on the competitive difference of products offered. This step alone will increase the customer experience and not only will the customer be informed before they buy, but it will also increase the chances of the customer referring other customers to the brand. Just like a car dealer has a base model car and other models that add on luxuries, Target must be able to explain why bells and whistles equal value to the dollar so customers understand what they are purchasing. One selling point is to make the customer aware of any coupons, manufacturer rebates, warranties available and the store’s policy on merchandise returns.

Against: Although selling value can be a hard sell when comparable items are available across the street, associates must be ready for the uncertainty of the shopper to spend money. Most consumers are not interested in buying an additional warranty for items under $200 but you should inform them of what’s available to decrease the chances of them spending the money twice for the same type item. If you are talking about every day commodities, value will not be a conversation, because price is the selling point on these items. Store brands usually aren’t a factor in everyday items unless you can show they contain the same ingredients or value as the name brand item that most consumers are not flexible about such as personal items, detergents and bath soaps.

Another alternative is for Target to modify its current strategy and marketing