Principles of Marketing Target Essay - 849 Words

Case Study: Target Target is one of the largest discount retailers in the United States and it competes with Walmart. For several years Target’s successful brand positioning assisted in slicing some of Walmart’s marketshare and for many years its’ business grew at a faster pace than Walmart. However, in 2008 due to economic conditions, global recession and higher unemployment, consumers became more frugal and Target experienced three straight quarters of flat same-store sales growth and a slight decrease in store traffic. During this same period Walmart experienced an increase in profits. In an attempt to stimulate Target’s sales growth, CEO Gregg Steinhafel executed a new marketing strategy in response to the turbulent economic†¦show more content†¦Due to the recession, consumers have now adapted a back-to-basics frugality in their lifestyles and spending patterns that will likely persist for years to come (Kotler pg. 78) †¢ Technological advances—i nternet and apps to find best prices for products have produced a more informed consumer base. By focusing on the â€Å"Pay Less† part of its slogan, has Target pursued the best strategy? Why or why not? Target reacted to flat sales during tough economic times. However, for years their customers viewed them as the â€Å"cheap chic†. This was the perception they had in the market place which resulted from their brand positioning. The numerous designer product lines helped Target to be successful for many years (Kotler pg. 94). Given their success, which was due to their value proposition, the strategy they used to focus on the â€Å"pay less† could hurt them since the â€Å"pay less† is not solely what they are truly known for nor is it something that most consumers expect. As stated in chapter 1, the challenge is to balance a brand’s value proposition with current times while also enhancing its long-term equity. In my opinion I don’t see how this strategy will enhance its long-term equity. Again, given the economy improved durin g Target’s new marketing strategy, there is no clear evidence that their new strategy actually improved their finances so the strategy was quite a risk which could negatively impact their long-term equity. 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