Target Corporation Marketing Mix: 7P's
|Company Name||Target Corporation.|
|Industry Served||Retail (Physical & E-commerce)|
|Markets served||The U.S.A.|
|Headquarters||Minneapolis, Minnesota, United States.|
|Founded||1902. (first Target store in Roseville, MN, in 1962)|
|Founder||George Draper Dayton|
|Net Revenue (2018)||$75.4 billion|
|Net Income (2018)||$2.94 billion|
|No. of Stores. (2019)||1,868.|
|Tagline||Expect More, Pay Less.|
|Leading Competitors||Walmart, Best Buy, Costco, Amazon, Lowe’s, Kroger, Walgreen’s Boots Alliance, Home Depot.|
A Marketing Mix of Target Corporation: 7 P's
Target Corporation was founded in 1902 as Dayton Dry Goods Company and the first Target store opened in Minnesota in 1962. It is a general merchandise retailer with stores operational across all the 50 states in the US. Due to the high density of stores, more than 75% of the US population has a Target store with easy reach (10 miles). Apart from its 1.868 stores, the company also operates 41 distribution centers. However, in recent years, Target has also experienced sharper growth in e-commerce sales. The company owns 41 brands that are unique to Target. National brand merchandise is a major source of revenue for Target. In 2018, the company achieved more than one-third of its sales from company-owned and exclusive brands. Target has focused on offering a differentiated set of merchandise to its customers and a unique shopping experience where the highest focus is on customer convenience. The company sources from suppliers all over the world. However, company-owned brands are a significant part of the merchandise offered at Target stores and on its e-commerce channels. In the past few years, the company has been reinventing itself which involved redesigning its stores and investing in the team to provide customers a superior and distinct shopping experience. Another key reason behind the success of Target is its effective inventory management.
Read more about Target Corporation's business and promotions strategy in this marketing mix including the 7 P’s.
Target sells a wide range of general merchandise and food. The company sells a large range of national brands that its customers based in the US already know as well as a large range of items that are found only at Target. About one-third of the products Target sells are exclusive to the brand including its private label and owned brands. Target launched 20 of these brands since 2017. The company-owned and exclusive brands include but are not limited to:
- A New Day
- Archer Farms Knox Rose
- Smith & Hawken
- Art Class
- Kona Sol
- Sonia Kashuk
- Ava & Viv
- Made By Design
- Boots & Barkley
- Market Pantry
- Sutton & Dodge
- Bullseye's Playground
- Cat & Jack
- Original Use
- Universal Thread
- Cloud Island
- up & up
- Who What Wear
- Gilligan & O'Malley
- Project 62
- Wild Fable
- Goodfellow & Co.
- Room Essentials
- Wine Cube
- Shade & Shore
- Hyde & Eek! Boutique
- Simply Balanced
- C9 by Champion
- Hand Made Modern
- Kid Made Modern
- DENIZEN from Levi's
- Hearth & Hand with Magnolia
- Nate Berkus for Target
- Isabel Maternity by Ingrid & Isabel
- Oh Joy! for Target
- Genuine Kids from OshKosh
- Just One You made by carter's
- Umbro for Target
Time to time, the company also partners with designers or brands for a limited edition collection exclusively available at Target. The company sells a wide variety of food and general merchandise including:
- Food & beverages
- Apparel & accessories for men, women, and kids
- Household essentials
- Home decor
- Patio & garden
- Kitchen & dining
- Musical instruments
- Movies, music, video games & books
- Sports & outdoors
- Personal care
- School & office supplies
- Party supplies
Moreover, the product range available at each Target store is customized to the neighborhood and the needs of the local people. The company also generates revenue from other in-store amenities like Target Cafe or leased and licensed departments like Target Optical, Starbucks, and other food service offerings. Moreover, the company generates annual occupancy income from the CVs pharmacies and clinics operational within Target stores. Shipt is also a wholly-owned subsidiary of Target Corporation.
Target Corporation’s main market is the United States where the company generates nearly all its revenue from. The company has its headquarters in Minneapolis, Minnesota. It has 1868 stores and 41 distribution centers across the 50 US states. Moreover, the company has 20 regional offices across the world, several of which are dedicated to sourcing. The countries from which Target sources products for selling in the US include Argentina, Austria Bahrain, Bangladesh, Belgium, Cambodia, Canada, Chile, China, HongKong, India, Indonesia, Israel, Jordan, Korea, Japan, Malaysia, and others. A very large part of its supply chain is located in China.
Apart from the offline channels of shopping, Target also offers its customers the privilege to shop online and pick the ordered products from one of the Target stores in the US. The Target stores are within the easy reach of more than 75% of the US population. According to the company website, more than 75% of the US population lives within 10 miles of at least one Target store.
The US retail industry has grown highly competitive and challenging. The two leading players in the physical retail industry including Walmart and Costco use a competitive pricing strategy pricing their products lower than competitors to grow sales. However, Target’s business model and pricing strategy differ from these two. Target utilizes an economy pricing model. This pricing strategy is useful for companies that are interested in keeping their overhead low. Moreover, instead of using a very wide assortment like Walmart, the company deals in a limited assortment and combines it with private label brands and company-owned or exclusive brands to achieve sales and generate revenue.
Target also offers its members branded debit and credit cards which are collectively called Red cards. When using a Red card, a Target customer receives a 5% discount on nearly all purchases apart from free shipping. Other offerings for Red card members include personalized offers, in-app coupons as well as 1% earning on every Target run nationwide for free.
The largest product segment of Target Corporation based upon revenue is beauty and household essentials which generated $17.73 billion in fiscal 2018, followed by apparel and accessories which generated $15 billion in net revenue in the same year. The total net revenue of Target was $75.36 billion for 2018.
Target has adopted a multi-channel marketing strategy to promote its products and services. Apart from the online and offline channels of marketing, it has also adopted other creative promotional tools and tactics to promote the image of a reliable retail brand.
The common promotional channels used by Target corporation include media, digital advertisements, and newspapers. In fiscal 2018, the company spent around $1.5 billion on advertising. The company is also marketing and engaging its customers through digital channels including its own website and app. It has added several new privileges for online shoppers in order to grow customer loyalty and promote itself as a customer-friendly brand. Apart from extra discounts and great deals for the customers shopping through the app, it has also brought several delivery options including product delivery to the car once a customer drives into the parking and pick up from a store as well as 2 days free shipping. Other types of marketing strategies employed by Target include partnerships with other brands and designers to run Target exclusive deals as well as branded credit and debit cards which are called Red cards. Moreover, Target Corporation is using social media for promotions and customer engagement and to grow its customer connection. Its Facebook account has 24 million followers. The company also invests in CSR to maintain a strong social image.
“Our long legacy of giving 5% of our profits helps strengthen our communities, and our volunteers serve 1 million+ hours in their communities each year.”
Target Corporation refers to its employees as team members like Walmart refers to its employees as associates. As of Feb. 2019, the company employed around 360,000 fulltime employees. The CEO of Target Corporation and in charge of its global business operations is Brian Cornell.
According to the Target website, the company invests in its employees for their career development and strives to provide them a work environment and culture that fosters innovation and creativity.
A few years ago, the company implemented a plan to reinvent the shopping experience that Target corporation offered to its customers. This was done in order to drive customer loyalty higher and make shopping at one of the Target stores a more convenient and pleasant experience. Apart from changing the look of its stores, the company also started investing in its team as a part of the plan. Target is known as a retail brand that is obsessed with customer experience. The company has continuously improved the processes to increase operational efficiency and provide its customers with a differentiated and unique shopping experience. Shipt, a wholly-owned subsidiary brand of Target Corporation is an online same-day delivery platform. Target Corporation acquired it in 2017 to make delivery easier, faster and more convenient for its customers. The Target app allows for easy management of orders and payment. Moreover, Target accepts contactless payments like Apple Pay, Google Pay, Samsung Pay and contactless cards for payments to make shopping a seamless and hassle-free experience for guests.
In the digital world, the scope for physical evidence has reduced since apart from making payments digitally, customers are now using apps and e-commerce sites for shopping. However, retail brands like Target use branded packaging which apart from branding and promotions helps with differentiation. Moreover, Target has a large range of company-owned and exclusive brands. Apart from that, it has a very large physical infrastructure located throughout the 50 states of the United States. The Bullseye logo of Target also makes it an easily identifiable brand.
|APA||Pratap, A. (2020, February 9). Target Corporation Marketing Mix: 7P's. Retrieved February 9, 2020, from https://notesmatic.com/2020/02/target-corporation-marketing-mix-7ps/|
|MLA||Pratap, Abhijeet. “Target Corporation Marketing Mix: 7P's.” Notesmatic, Notesmatic, 9 Feb. 2020, notesmatic.com/2020/02/target-corporation-marketing-mix-7ps/.|