Question

Q1. Develop a Marketing Plan for Target Corporation. Define the SWOT analysis for Target Corporation.

Q2. Analyze the Micro and Macro environment of the Target Corporation.

Answer 1

1) The aim of an effective marketing plan & strategy is to help the organization to meet its business objectives. Marketing plan and SWOT analysis are effective tools that helps to strengthen an organization's internal & external performance. Target was established by George Dayton in Minneapolis, Minnesota in the year 1902. It had undergone several name changes before the Target name brand came to fruition. Target is one of the largest upscale retail & speciality store, with specialization in general merchandize & selling them at attractive discounted prices. It offers a wide range of goods from from clothing for men, women & children, groceries, electronic goods, pet supplies, beauty products, sports items, etc. Its competitors are Walmart & Kmart. Both of them are considered to be retail discount Superstores or Big box stores. Target retailing niche is to sell quality upscale, trendy merchandise at low cost and staying away from low priced goods with poorer quality. Good quality & low pricing is what sets its apart from its competitors. Most Big Box stores will complete on the price for standardized products while seeking domination that far exceeds other retail competitors. Although they do not want to share space with other competitors, for customers, they favor sharing customers over losing them to the entire retail market. The Big Box strategy is to attract more customers and this is why they carry such a wide variety of merchandise anywhere from clothing, groceries, electronic appliances, household furnishings. Big Box companies are always seeking ways to match their products with their competitors. Target Corporation should intentionally seek out and target new markets based on demographics, consumer profiles, and economics.

SWOT Analysis of Target Corporation:

STRENGTHS:

a) It is an established brand, highly respected by its customers. It has a good relationship with customers that has built a high level of brand loyalty.

b) It has strong expertise in marketing in highly profitable segments of the retail market, including fashion and household furnishings.

c) Target has the ability to present itself as a middle-class brand. This enables it to attract shoppers that find traditional discount stores like Walmart lower class or distasteful.

d) Target is viewed as a fun place to shop with ability to create an enjoyable shopping experience for customers.

WEAKNESSES:

a) Target has only recently made an aggressive push into online retail. Its efforts in ecommerce still lag behind aggressive competitors like Amazon.com and Walmart.

b) Target is not as large or as diversified as other retail giants, including Walmart and Amazon.com. This makes it more vulnerable to economic downturns and changing shopping patterns than those retailers.

c) Target has failed to tap some potentially lucrative areas of retail, including filling stations and financial services.

OPPORTUNITIES:

a) It should focus on ecommerce especially in the field of fashion. Target’s reputation as a fashion retailer has strong appeal to online customers.

b) Target is an urban brand in a country that is becoming more urbanized. Target has strong expertise in retailing in popular urban areas where younger Americans prefer to live.

c) Declining middle-class incomes in the United States could increase Target’s customer base because people with less money are more likely to shop at discount stores.

d) It should also focus on new sales channels, such as small neighbourhood stores, this will help to increase target sales volume.

THREATS:

a) Competitors such as amazon who are well established online. Amazon has a good reputation with ecommerce shoppers than target. Amazon.com offer very low prices and the convenience of shopping at home.

b) Falling income of Americans means that their purchasing power is also declining. This could reduce profitable purchases, including those of big ticket items at Target and make people less inclined to shop.

c) There has been a significant increase in dollar store or small box discount retailers, which offer convenience and low prices.

d) Walmart has made aggressive moves into some of Target’s areas of business in recent years. Also it is expected that Walmart will ramp up these efforts as its traditional supercenter business becomes less profitable.

e) Younger shoppers, including millennials, that are less inclined to shop at large general merchandise discount stores like Target. Some news stories indicate that millennials prefer to shop online or at more convenient dollar stores and Neighborhood Markets.  

Target Corporation is facing stiff competition at present. It needs to make strategies that help it to deal with competition & also to survive and expand effectively.

2) Micro & macro environmental factors affects the performance of an organization significantly. Micro environment factors of target corporation include marketing intermediaries, customer markets, and competitors. Target has been facing stiff competition from Walmart, Amazon, Cotsco wholesale. Also, there has been a significant increase in dollar store or small box discount retailers, which offer convenience and low prices. Youngsters usually prefer these stores or they prefer to buy things online. This changing trend in the tastes & preferences of customers is affecting Target Corporation significantly. Target Corporation needs to make marketing plan & strategies that will help it to attract & retain its customers. Microeconomic factors affects the competitive advantage of the firm so they need to addressed effectively.

Macro environment includes the political, economic, social, technological & legal factors that affect an organization.

a) Political factors play a significant role in determining the factors that can impact Target Corporation's long term profitability in a certain country or market. Target Corporation should closely analyze the factors such as level of corruption - especially levels of regulation in services sector, political stability and importance of discount, variety stores sector in the country's economy, pricing regulations,etc. before entering or investing in a certain market.

b) Economic factors that Target Corporation should consider are government intervention in the free market and related services, exchange rates & stability of host country currency, infrastructure quality in discount, variety Stores industry, inflation rate, etc.

c) Social factors that target corporation needs to analyze are education level as well as education standard in the Target Corporation ’s industry, demographics and skill level of the population, class structure, hierarchy and power structure in the society, culture, attitudes, etc.

d) Technology analysis involves understanding the impact of recent technological developments by Target Corporation competitor, technology's impact on product offering, impact on cost structure in discount, variety stores industry, rate of technological diffusion, etc.

e) Some of the legal factors that Target Corporation leadership should consider while entering a new market are
copyright, patents / intellectual property law, anti-trust law in discount, variety stores industry and overall in the country, consumer protection and e-commerce, employment law, health and safety law, data protection, etc.

So, microeconomic and macroeconomic factors needs to be addressed carefully for the effective and efficient functioning of an organization. The survival & growth of an organization depends on these factors significantly.