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Target Case Study: Emerging Through the Challenges of the Future

By Edited Jan 17, 2014 0 0

Executive Summary

  • Target is well-known for its "Expect more, pay less" philosophy, which gives customers quality products and services at affordable prices.

  • During a time of an economic recession and a new CEO, Target is trying to maintain its unique identity while still being competitive against competitors such as Wal-Mart.

  • The best way for Target to improve its competitive edge against competitors is to modify its message of "Expect more, pay less" motto.

  • Instead of just sending the message of paying less for good quality, Target should also show customers that they deserve these products and services, no matter their income.


· The central problem for 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.

· Another issue is that Target's motto of "Expect more, pay less" can be contradictory.

· Shoppers perceive Wal-Mart to be cheaper than Target, even though Target prices are within one to three percent of Wal-Mart prices.

· One last problem is that Target's pioneering efforts to have high-fashion designers do not seem as innovative anymore because other stores are beginning to collaborate with high-fashion designers as well.


· The first alternative to these problems is for Target to have a strategy that focuses more on the "pay less" motto. They can portray Target as a more price sensitive store, and make ads that focus more on their low prices of clothes, food, and commodity items.

o For: This presents a great opportunity for Target to tap into some of the customers who shop at places such as Wal-Mart. Target may have a chance to take away some of the market share from Wal-Mart during this economic recession.

o Against: Wal-Mart owns the message of "lower prices," and this approach could pose too much of a risk for the branding of Target. There is a chance that Target could lose its advantage in its current strategy of emphasizing quality as a reason to shop here, not because of low prices.

· The second alternative to these problems is for Target to modify its current strategy and motto of "Expect more, pay less." Target can add to the message to not settle for less because you deserve good quality at affordable prices.

o For: Adding on to the message of "Expect more, pay less" by telling customers they deserve good quality, and that this quality can be bought no matter what type of income a customer has. Some customers shop at Wal-Mart not because they want to, but because they think it's all they can afford. This could give target a chance to tap into a market segment that Wal-Mart or other low-price stores have not yet tried.

o Against: There is a chance that this message will not resonate with consumers, and they will continue shopping at stores that they perceive to be cheaper no matter what. It could put Target back at a "square one" position in terms of finding a way to generate more revenue.

· The final alternative suggests that Target tries to market itself as the "go to" store.

o For: Target is known for a place where you can find innovation and good quality and services, but this may not be enough. Focusing more on the Super Target attributes such as selling items that Wal-Mart sells could work because Target can emphasize that they have better quality.

o Against: This is a risk because emulating Wal-Mart could cause serious damage to the Target brand. Target could end up like the other stores such as Bradlees and Caldor, because these stores also tried to capitalize on low prices while still trying to appeal to upscale consumers. These stores ended up going bankrupt.


· The best solution for Target is to modify its current strategy and motto of "Expect more, pay less" by portraying to consumer that they deserve better quality than they are getting from other stores. The reason I chose this solution is because it provided the best way to tap into a new market segment, and it provided the lowest risk.

· The other two solutions both present a chance for Target to either lose its competitive edge or go bankrupt.


· The first thing to do in order to ensure effective implementation of the solution is to communicate within the company about the current strategy. Integrating all of your departments in the company creates a better chance for this strategy to work.

· Next, the marketing team should implement in the advertisements the "you deserve it" line. To best use the phrase, it should be you deserve to "Expect more, and pay less." The goal of the company is still the same, but now there is an added element that can motivate consumers to shop at Target.

· Continue to provide great quality and service, because this is a key component of the message of differentiating Target's quality brand with other stores.

· All of these actions will contribute to future success of this company.



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