Target Stores' Differentiation Strategies
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Case Details:
Case Code : BSTR164
Case Length : 15 Pages
Period : 1962 - 2005
Organization : Target Stores
Pub Date : 2005
Teaching Note : Available
Countries : USA
Industry : Retailing
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Differentiation Strategies
From the very beginning, Dayton's strategy was to position
Target as an upscale discount chain at which the prices would be just above the
lowest prices. To achieve this upscale image, it offered trendy and stylish
goods in an environment that was bright and attractive, unlike other discount
stores of the time.
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To be able to offer the most up to date styles and trends to the customers
Target focused on merchandising. Recognizing that just having the goods in the
stores was not enough, Target also worked on conveying this image to the
customer through its store layouts and displays, and through marketing and
promotions.
It consistently used its famous Bullseye logo and tag line, 'Expect
more. Pay less.'in its marketing and promotions. According to an article in
Advertising Age in 2003, its logo was recognized by 96% of Americans. Unlike
other discounters, Target itself had become a brand because of its successful
merchandising strategies, marketing, and advertising.
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Merchandising
Target's positioning as an upscale discount chain was reflected in its
merchandising strategy as well. Target managers felt that they needed to be
constantly in tune with what the customers wanted and anticipate trends and
demands. Warren Feldberg, Target's executive vice president of
merchandising, tried "looking at the world as our shopping basket and
finding ways to bring that basket to the average customer".
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Target developed an image and displayed products that
matched its customers'lifestyles and created enhanced merchandise
displays. It offered a mix of private labels and national brands in
creative and innovative layouts and displays. In the early 1990s, Target
had several private labels with merchandise at all price points.
'Favorites' was its opening price point label offering basics and its
'Honors'label was priced just above that. The label 'Sostanza' was a
better quality, more European look for the younger customer, and was all
predominantly ladies' ready-to-wear lines. Target also had 'Pro Spirit',
which was an active wear label. Its 'Greatland'label was positioned as
an outdoor wear label. |
"There's no question we want to continue to take advantage of
our own brands. We built some very successful brands that are well identified by
our own customers. We also know that we, in the company strategy, believe in
brands, so we will obviously balance those two approaches as we go forward",
said Feldberg regarding Target's view of private labels versus national
brands...
Exhibits
Exhibit I: Financial Summary of Target Corporation
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