Phase 1

Marketing 361, Section 2

September 17, 2018

Team 54
Omar A. Aparicio
Peyton Hitchcock
Abby Krulisky
Patrick Mckenna
Jeb Tompkins
Eddie Zuhric

Company Overview
Target Corporation is a retail giant with over 1,500 retail store fronts in the United States, 39
distribution centers, and more than 350,000 employees. In-store shopping is not their only
business platform, since over 25% of all their orders come from online. In fiscal year 2017,
Target’s total revenue reached $71.9 billion. Target has remodeled over 600 stores to include a
more widespread electronics and technology center, selling a range of Apple and Samsung
products. Due to this expansion of the technology center, Target is slowing shifting from the
Department Stores industry (IBIS World Report 45211) to the Warehouse Clubs and
Supercenters industry (IBISWorld Report 45291). In the U.S., Target still holds 35.8% of the
market share of the Department Stores industry. The major players in the is industry include
Target Corporation, Walmart Inc., and Macy’s Inc. This industry has revenues totaling $155.3
billion.

Top 3 Marketing Problems

There are many marketing problems and challenges in the retail industry with the information
age that leads to potential revenue loss from companies. One challenge would be a low response
to e-shoppers, consumers that shop online. These consumers are a double edged-sword for
retailers. The biggest liability being the easy access that consumers have to compare costs of
products in multiple retail platforms instantly. The second challenge being consumer behavior.
Companies must become experts at the way they approach their target markets based on their up-
to-date data. Lastly, having updated data of consumers’ shopping trends makes it hard to grow
consumer loyalty.

E-Shoppers
Having the ability to access virtual retail stores makes it harder for a company to stand out and
develop the customer loyalty every company needs. A large amount of the company’s
reinvestment is going into e-commerce development to help launch successful new brands into
the market (Wahba 2018). Not having the opportunity to interact with the customer to develop a
relationship makes it difficult to understand their behavior and what triggers their individual
buying decision.

Consumer Behavior
Even though online shopping has been a market that shows steady growth, traditional brick-and-
mortar retailing has the largest contribution of gross sales. However, consumer behavior has
changed due to the abundance of information available to them. This has caused a change in the
atmosphere of the customer experience (Vijay 2017). Trends for the new generation of shoppers
have become harder to discover because of how many “needs” are required to be met before
making the commitment to purchase an item (Peterson 2014).

Competition
Having the right location is a dynamic opportunity to become a leader in the retail industry.
Target’s marketing adapts to demographic factors surrounding the locations of each store.
However, for this to happen, they must overcome the lack of updated data of consumers reports.
Some of these reports occur every decade, such as U.S Census, which leads to a low accuracy
when creating marketing campaigns (Chutani 2018).
SWOTT Analysis
This SWOTT analysis will analyze Target’s strengths, weaknesses, opportunities, threats, and
trends in the retail space. It will also lay the groundwork for how Target uses these to market
towards customers and they compete with their competition (Refer to image A).

Current Competitors
The technological advancements that have been happening in 2018 are allowing big retail stores,
like Target, to grow their customer bases. This is due to the high demand for the newest gadgets
on the market. However, there are competitors that are seeking to outperform Target in sales and
popularity. Walmart and Costco are the most current competitors of Target as they both sell
virtually the same items at slightly different prices (See image B). Although Walmart and Costco
have much higher revenues as a whole, Target’s main focus is to understand how products, such
as electronics, are so successful and have such high demand from the customers on a daily basis
(Target Corp, 2018).

Unique Selling Proposition

Target values themself on their ability to offer many products at discounted prices. Overall, their
specific Unique Selling Proposition, also known as USP, stems from the idea that as one of the
biggest retailers in the United States, Target gives daily deals on top quality products you will
not find anywhere else. Target sends out weekly ads for their electronics section which includes
the best deals on the hottest products at the moment. In addition to this, Target offers free gift
cards to give to the customers who buy the specific electronic deals that were mentioned in the
weekly ad or in-store (See image C). Target believes that they should provide customers with an
incentive to buy expensive but popular items on their shelves while still coming away with a
little more value than what they would have gotten at a different retail store.

Top 3 Target Markets

Primary Market
Target’s customer base is about 60 to 63 percent female. They are a younger group of shoppers
that range in age from 18 to 44. The shopper ethnicity is mostly Caucasian with the Hispanic
group growing in size. The primary target of Target is females with a median age of 40, with a
household income around $64 thousand, that 43% have children and 57% have completed
college. The primary target group is defined by the Target Corporate fact sheet. The primary
group is extremely loyal to Target, but as said by chief executive Brian Cornell, they will be
“looking beyond the minivan-driving suburban mom to build its base of shoppers.” The
“minivan-driving suburban mom” that “wants it all” describes the primary group because Target
provides the products to fulfill their needs.

Secondary Market
The secondary target audience is female Hispanic millennials aged 18 to 34, that are mothers.
“Some 54 percent of Hispanic Millennials said it was their favorite” (Halzack 2015). The “it” in
this sentence is referring to Target. To attract this secondary group of Hispanic females, Target
has since made adds that were completely in Spanish and televised on the major channels. The
Latino buying power in 2014 was 9.7% within the U.S. which is $1.3 trillion and is continuing to
grow. “Hispanic women will comprise about 30 percent of the total female population by
2060”(Campbell 2015). So, if Target continues to attract this group, the future will be quite
profitable for Target since they comprise the secondary target market.
Tertiary Market
The tertiary market is females between the ages of 25 to 34 years old and who make $12,000
more per year than their counterparts. This third market focus could be “summed up in three
words, one might go with “female, younger and chic” (PYMNTS). They tend to be more affluent
than the other consumers that would shop at different one-stop stores. Of these affluent shoppers,
38 percent report that Target is their favorite store. As long as Target can appeal to these women,
Target should have a bright future.

Summary of Findings
Target is a growing and complex major retail store chain. Target is remodelling stores to carry
more products that consumers actually want to buy, which would be electronics and technology.
While Target tries to renovate their stores, they may also need to renovate parts of their
marketing strategy. Target needs to have better systems to predict what shoppers will buy next
online, provide all product information, and find updated data about the demographics living
near their many stores. By improving upon these three things, Target can be more profitable and
improve consumer loyalty.

All stores have their strengths and weaknesses. While I have mentioned some weaknesses,
Target has high profits and is working to become more online accessible. These strengths have
helped them compete with their main competition of Walmart and Costco. Target unveils new
deals weekly to entice customers away from the competition and choose Target instead. Using
incentives, such as free gift cards, is a great way to get new consumers who appreciate the added
value into stores.

Target needs to think female when deciding on who they should market towards. In the primary,
secondary, and tertiary market groups, women are the main focus. While they have different age
ranges, income, and ethnicities, they are all women. If Target can appeal to the suburban moms,
Hispanic millennials, and the young and chic women of the world, there is no stopping how high
the profits can rise. Target is a successful company and is moving towards greater success in the
future.

Attachments

Image A
Image B

Image C

Cohen, A. (2018, May). Department Stores in the US. IBISWorld Industry Report 45211.
Retrieved from IBISWorld database

References:
Campbell, Alexandra. July 1, 2015/ NBC News. Retrieved September 15, 2018.
http://www.nbcnews.com/news/latino/latinas-are-becoming-one-retail-industry-s-most-powerful-
consumers-n378086

Chutani, A. & Sethi. July 1, 2018. European Journal of Operational Research. Retrieved
September 16, 2018 from Business Source Ultimate Database

Halzack, Sarah. March 4, 2015. The Washington Post. Retrieved September 13, 2018.
http://www.washingtonpost.com/news/business/wp/2015/03/04/targets-new-strategy-we-need-
more-than-just-minivan-moms/?utm_term=.9240360bb48b

Masunaga, Samantha. April 18, 2015 Los Angeles Times.Retrieved September 13, 2018.
www.latimes.com/business/la-fi-target-latino-marketing-20150418-story.html#

Peterson, Hayley. June 27, 2014. Business Insider. Retrieved September 14, 2018.
https://www.businessinsider.com/generation-z-is-retailers-nightmare-2014-6

PYMNTS. November 3, 2016, PYMNTS. Retrieved September 13, 2018.

http://www.pymnts.com/news/retail/2016/average-target-shopper-customer-demographics/

Target Corporation. (2018). Competitors. Retrieved from Mergent Online database.

Target's Electronic Deals. (n.d.). Retrieved September 15, 2018, from

https://weeklyad.target.com/promotions?page=1

Target. Retrieved September 13, 2018. http://corporate.target.com/press/corporate

Vijay, T. S., Prashar. April 1, 2017. Journal Of Theoretical & Applied Electronic Commerce
Research. Retrieved September 15, 2018.
http://www.jtaer.com/

Wahba, Phil. August 22, 2018. Fortune Magazine. Retrieved September 16, 2018.
http://fortune.com/2018/08/22/target-sales-stock/