Marketing Analysis of Target Corporation- Solution

Marketing Analysis of Target Corporation

(4800 words)



Target Corporation is among the leading retailers that operate within the vicinity of the United States. Being lined up as one of the highly competitive establishments of the same industry like Wal-Mart, Kmart and others, its continuous innovations and improvements on its marketing strategy is proven to be effective as seen in the increasing amount of accumulated revenues per quarter as well as its noticeable period of outlet expansion on other areas in the U.S. Target Corp. is a convenient one-stop department store that offers all basic commodities and needed supplies of the typical consumer at the most reasonable, or discounted price. Products ranging from groceries, foods, beverages, clothes, shoes, supplies (office, school, automobile, pet, etc.), and electronics are just few items that every Target outlet store is offering.

Competition among the various industries in every given economy is rapid and stiff. It is as if survival of the fittest, extinction of the weakest phenomenon. Today, as various industries are aiming for competitive advantage and sustainable development among its management and operations, there are numerous actions that are being implemented that are directed to the eventual success and growth of the company’s assets. In competition, there is motivation in every company to improve and develop their objectives. For an enterprise to succeed in global competition there is a continuous plan to develop marketing techniques such as new products with higher quality than its competitors.


The corporation’s marketing program together with its tagline and lifetime objective – “Expect More, Pay Less” make them continuously growing and competing. Target’s offering of more gift cards identifies the business from other retailers. As consumers become more knowledgeable and selective of the products and services being offered, Target’s management tries to go along with the ever changing demands of the market. The marketing program is relative to the goals of the corporation and its current status in the overall industry.

This paper presents a marketing analysis of Target Corporation as one of U.S. leader in the retail business. The primary section of the report includes the corporate background together with its current marketing program using the 4Ps or marketing mix, and the evaluation of effectiveness. On the other section, Porter’s Five Forces and SWOT analyses are done to study its macro and micro environments. All information included in this report is gathered from published sources as product of comprehensive research process.



Every business is subject to factors that affect its function as a whole.  These factors are the ones attributed for the success or even the failure of a business ( 1997).  In lieu, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the marketplace in terms of marketing. In a profit making business, the business organization obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit (1994). Considering Target Corp. as one of the leading retail industries in the U.S, it is imperative to identify its weapon in maintaining its competitive edge among other operating business in the same spectrum.



Founded on the year 1962 in Minneapolis, MN, Target Corporation is the sixth largest retailer in the United States ( 2005), ranked 27th on the 2005 Fortune 500, third largest seller of music in the US (NPD 2005), and holds the identity as the retailer who sells more gift cards than any other store in the whole country. As of April 2006, Target Corp. operates 1,418 stores (including 159 SuperTarget stores in 47 states (2006;  2006). Its wide variety of products ranges from retail goods and groceries, clothing and garments, office and school supplies, automobile and pet supplies, foods and beverages, consumer electronics, house wares and other consumer product line such as furniture and appliances. Under the management of CEO and Chairman  and other 338, 000 employees, Target Corp. revenue in 2005 is $52.620 billion (Target 2006).

Based on the dated background of Target Corp., the company started as a discount-store and evolved as a successful retail business through the management’s initiation of industrial innovations. From the store name Goodfellows, a series of company names transpired before the company was finally called Target. From being the Dayton Dry Goods Company in 1903 to Dayton Company in 1910, the company was the first fully enclosed two-level shopping unit and opened the first official “target” discount store in Minnesota in 1962. Five years later, the business offered its stocks to the public, merged with J. L. Hudson Company and started its acquisition strategies to expand the enterprise as Dayton Hudson Corporation. The acquired companies included Mervyn’s, Gemco, and Marshall Field’s. By 2000, the corporation changed its name to Target and operated under Marshall Field’s, Hudson’s and Dayton’s brand names as single store units ( 2000, ). In 2004, upon the recommendations of the results of the selling study conducted by Goldman Sachs Group, Target Corporation sold Marshal Field’s and Mervyn’s stores. Other merger and acquisition strategies were considered by the company’s management in the two years that followed. At present, the main headquarter of the corporation is located in Minneapolis near the original Goodfellows store operating its main retail subsidiary, Target Stores, under the banner ‘Target’ along with other subsidiaries of the company namely Target Financial Services, Target Sourcing Services/Associated Merchandising Corporation, Target Commercial Interiors, Target Brands and (Target 2006a).



In order to identify the marketing program, products, services and value drivers of Target Corp., the marketing mix model will be used. The marketing mix is actually made up of the four P’s, which include the product, place, price and promotion (1990). Hence, it is the appropriate model for assessing the company’s products and other relevant resources.


The product of the company is considered to be one of the main aspects of the marketing mix as it serves the major representation of the business. In addition, this is also considered as an important element of the marketing mix because provides support to the company, particularly in terms of profit generation and brand building. Target Corp. produces a wide array of products ranging from food, groceries, clothing, footwear, jewelries, health and beauty items, electronics, appliances, sporting goods, toys, other supplies like school, office, automotive, pet, hardware, seasonal merchandise like furniture, and special services like photo processing, pharmacy, and optical store. In several outlets, there are also specialized services that the customer can enjoy upon such as fast-food chains such as Pizza Hut Express and Starbucks for food and beverage.


Target stores offer great items but affordable in prices. As mentioned earlier, items present within the business are proven to be acceptable in standards and quality but never demands a high payment. The corporation prefers to be called as the latter instead of just department store. Expect more, pay less. With this tagline, the customers expect to purchase more items and pay the least amount possible. Not like other retail industries like its competitor Kmart and Wal-Mart, Target Corp. maintains retail value in terms of product offerings. They are known in their designer’s items in clothes, exclusive beauty products, categorized and functional goods, and seasonal offerings. It also sells the greatest number of gift cards among its rival business.


The place variable of the marketing mix theory refers to how the company is able to distribute its products to the consumers. This aspect of the marketing mix theory is important part as it enables the company to offer its products to the consumers. Being an American retail business, Target Corp. distributes its products to the local markets. The presence of 1,418 stores (including 159 SuperTarget stores in 47 states make it possible for the corporation to distribute its products extensively. Further, the presence of  domain to cater the needs of the online shoppers also facilitates a potent place of product distribution.


Promotion, a marketing mix theory variable, can be a combination of personal selling, advertising, public relations and sales promotion. Through promotion, the company will be able to relay marketing messages to consumers and potential consumers. In spite of the presence of various business challenges, promotion is one effective mean to increase product sales, enhance consumer support, and broaden market coverage. Similar to other businesses, Target Corp. uses all the possible ways to promote its products and build its name. In this case, the company promotes its products through online, print and television advertising. The partnership with AOL and is a great opportunity in expanding the promotion of Target Corp. (2000; 2002).


At present, Target Corp. continuously develops its traditional core values present in the management. The company’s mission to consistent delivers their “Expect More, Pay Less” promise to the American consumers and the creation a workplace environment that encourages and enhances the individuality of the staff and employees. This is the current marketing program of the business. The company pursues the attainment of 15% or more average annual earnings per share growth over time by demonstrating effective leadership and corporate governance (Target 2006a). Finally, ensuring the general welfare of the public and communities where the business organization operates through financial assistance to education, arts, and social action organizations, volunteerism and environmental efforts (Target 2006a).

Various marketing strategies are implemented not only to the products itself but also the corporation as a whole. As a result of the stiff competition among the retailers in the U.S., Target Corp. implemented several expansions of its store outlets (in Alabama, Arizona, Texas, Ohio, California, etc.) (Target 2006c) and distribution centers (Rialto, California) (Target 2006d) to extend the corporation’s marketing. According to the news releases accessible in their corporate website, the partnership that Target Corp. and had on e-commerce was extended until 2010 (Target 2006e). There are also seasonal marketing events like back-to-school shopping (Target 2006a).




The Target Corp. current marketing program is directed to the eventual increase and progression of profits as well as answering the demands of consumers and the call of stiff competition. As a retail business, Target Corp. has a number of resources that supported its current business success. These include low-cost labor, globalization strategies, distribution channels, pricing strategies, product variety, standard business processes and high prioritization for its customers. In addition to these resources, the company also values constant development; hence, the company’s multiple research and development centers also contribute to its success. Due to its continuous and effective business efforts, Target Corp. is able to gain constant increase in profit and its market is also growing continuously. However, despite the success of the company, certain factors can still affect its competitive advantages.

To fully acquire the effectiveness of the current actions, Target Corp. must have a common brand personality. What customers prioritize includes the benefits of a product’s or service’s features, as well as what customers see as the ongoing worth of a relationship with the company. Customers may see value, for instance, in the consistency of product performance and in the way they feel about business style or personality. They may also emotionally identify with company actions, goals, and values. Customers may also perceive value from their feelings when in contact with brand, such as feeling more secure, more comfortable, or more competent. This value adds to relationship depth whether or not customers are aware of their feelings. With the effective management and continuous innovation and improvement, Target Corp. is a brand that will continue to compete with the trends of the U.S. retailing industry. The competing capability of the corporation is among the numerous and still counting brand characteristics it possess.



In conclusion, Target’s progressive history in product and service providing among its clients is an important aspect in its current standing in the business. The marketing mix – product: basic commodities and consumer items; price: discounted and relatively low; place: numerous store outlets in the U.S.; and promotion: advertising – traditional or online/internet, personal selling, and other relevant subtle communication efforts is proven to be effective. The current marketing program focused on the ‘Expect More, Pay Less’ promise and corporate objective together with the seasonal marketing strategies of the company is highly relevant and seen to be an essential  and vital determinant of its increase in revenues.

All in all, with the given managerial implementation and strategic marketing management, Target’s marketing program will eventually take its highest peak of the corporate success ladder.



Analyzing the external environment of Target Corp. is also a significant part of a business analysis. For this purpose, Porter’s five forces model will be used. Michael Porter and his five forces model concentrates on the threat of entry, power of the buyers, power of the suppliers, threat of substitutes and competitive rivalry (1980). Below is the application of this business analysis tool to Target Corporation.


Rivalry and competition is considered as the strongest among all other forces in the model. The strength of rivalry or competition is determined if rivals are aggressively employing various means of overcoming competition as well as means of acquiring bigger sales and stronger market position. In the case of Target Corp., competition is intense. There are a number of factors that support this judgment. One is the presence of several businesses that operates in the retailing industry and targeting similar audience. The main rivals of Target Corp. or even the strongest include Wal-Mart Stores, Inc., The Home Depot, Kroger, Kmart Corp., and Costco Wholesale Corp. All of these competitors produce similar products as well as offer same services to consumers. Due to this, rivals tend to apply new consumer and marketing approaches that make their products stand out from others.

The growing advantage of e-commerce paved way to the utilization of the web in dealing with the culture and convenience of online shopping (2002). This tremendous growth of technological advancement has become the driving force of contemporary industries like Target Corp. The Internet, for instance, had made products and services across the globe a low-cost alternative to traditional international firms (2003). Its diffusion has revolutionized the business arena. It also changes high-tech marketing overnight while different industries have been trying to use it as part of their marketing strategy. It has not only reconfigured the way different firms do business and the way the consumers buy goods and services, but it has also become an effective instrument in transforming the value chain from manufacturers to retailers to consumers, creating a new retail distribution channel (1999).

To combat competition, Target Corp. ventured in online-based actions using their own website, internet advertising, partnership, and even merger and acquisition. From  as corporate domain concentrated in e-commerce, the corporation maintains a team called who owns and oversees the e-commerce (online marketing) initiatives. Using as their official corporate website, the corporation’s current position to the online marketplace is comparatively competitive. Its performance specifically to the online marketing is high. Today, research studies ascertained that online shopping was perceived to be more time saving than other traditional approaches of shopping by customers. R (2003) extenuated that Internet shopping helps to support the needs of busy working people as it is convenient for them to shop online.

Merging and acquisition is among the strategic actions that the management is taking into practice. This is a way to expand their market and distributional coverage. Among the partnership and cooperation engagements that they had are American Online on strategic alliance and in customer service. In June 2000, AOL and Target Corp. rollout marketing campaign and established the multi-year strategic alliance and joint marketing and promotion initiatives. It features a “special edition CD-ROM of the AOL service with co-branded features and packaging” being offered in more than 900 Target Corp. outlets nationwide. In the same manner, AOL members who avail the service in any Target Corp. outlet is entitled to a 10% discount year-round on products bought via (2000). Further, was made available in the Shop@AOL online shopping destinations and other areas across AOL, AOL.COM, Compuserve, Netscape Netcenter, and AOL Digital City (2000).

While in 2002, Target Corp. created a partnership with in providing order fulfillment and guest services. As of now, Target’s e-commerce site uses’s e-commerce system ( 2002). The two engaged into business-to-business (B2B) marketing strategy. With the collection of products available in, online marketers can just use the one-click-process to see their preferred items.

Today, Target Corp. is highly competitive and striving to go along with its competitors regardless of external conditions like the world economy. The management continuously create innovative marketing solutions hat may be perfect in its online shopping operation. These innovations are always directed to satisfactory, convenient, and customer-oriented service. However, the greatest threat among worldwide retailers today is the action of Wal-Mart to go on organic products (‘2006). With this introduction, Target and all other retail distributors must take antidotal engagement. Thus, IT solutions are needed so as to alleviate the emerging and following aftermaths.


The entrant factor of the five forces model is dependent on the barrier of entry. A barrier to entry pertains to a factor that can lower the market share potential of entrants upon entering a certain industry. Thus, if the barriers of entry are high, the threat on new business entrants is low. Government regulations, trade restrictions and access to distribution channels are some examples of barriers to entry. In the retailing industry, Target Corp. as well as other retailing outlets are protected by a number of barriers to entry, which makes it difficult for new business entrants to rise and compete. One of these important barriers present in Target Corp. is the large capital necessary to operate a retail company with various branches and considerable number of employees. In order to acquire the right workforce, supplies and distribution channels, the starting company must have a high initial capital. This barrier to entry then prevents other firms to compete effectively with other global companies such as Target Corp.

Another barrier is the difficulty of accessing distribution channels abroad. In order to carry out this important aspect of the retailing business, the corporation must have an effective globalization strategy and applies the right international practices. These important strategies on the other hand, take years to develop. Moreover, in order to acquire an international connection with foreign companies, certain requirements like business stability, market and revenue must be met. Thus, not all retailers are able to distribute their products abroad and acquire large international markets.


This factor of the five forces model refers to the power of the buyers over the company or manufacturer. The threat derived from the buyers is gained when buyer power is high. In the case of the retailing industry, the buyer power is high. There are a number of factors that support this claim. For instance, buyer power is high as many substitutes are made available to the market. With this source of buyer power, buyers tend to have a greater control over the manufacturers. Target Corp. is considered as the retail store that caters to the younger and more educated and well-off clientele as to compare with its rival. In a survey conducted, Target Corp. shoppers fall on a 46 years old age median, mostly female, have children at home, and attended or completed college (Target 2006a). Thus, the target market is perceived to be sophisticated and posses a strong power.


The power of the supplier is also an important aspect of the five forces model. Similar to buyer power, if the supplier concentration is high, the supplier power cannot be considered as a threat. In Target’s case, prime suppliers are used for its production and increase of product line. Through these suppliers, Target Corp. is able to offer products that are of high standards. Although there are a number of suppliers, a corporation like Target must have an established of high quality chain of suppliers so as not to affect its production. Considering that there are other similar businesses, suppliers will not be greatly affected if they drop a customer. Moreover, the supplies offered by the supplier are diverse; this means, suppliers are able to give supplies to an even greater number of companies or manufacturers. In response to restocking problems attributed to rapid growth, Target in late 1999 realigned its logistics capabilities and began working more closely with vendors to improve inventory flow (1999). However, it should also be considered that Target Corp. can find other suppliers that can provide its supply needs. Thus, the power of the suppliers in the industry is then counterbalanced by the availability of substitutes. With this, the degree of supplier power for Target Corp. is relatively fair.


Substitute pertains to the availability of alternative products in the markets. Naturally, if the degree of substitutes is high, the threat of this factor is high as well. For retail companies, it was mentioned that there a considerable number of competitors operating within this industry. This implies that consumers are exposed to a significant amount of product choices and options. The high rate of substitutes for products is then considered a threat for Target Corp. In addition, there are many major retailers and other global companies operating within the industry, making brand preference and loyalty a matter of concern. However, Target Corp. has certain features that could address the threat on substitutes, namely pricing strategy (the discount department store), more upscale and trend-forward merchandise.



In order to determine the different resources and capabilities of Target Corp., a SWOT analysis is appropriate. This specifically analyzes the strengths, weaknesses, opportunities and threats of a corporation. Situational analysis, where the SWOT technique is applied, is an integral procedure and a very powerful tool for businesses to instigate effective marketing plans.


As mentioned above, Target Corp. has been known as one of the largest and most competitive retail company in the U.S. It has been depicted as “the discount store with attitude – where department store customers feel very comfortable shopping” ( 2000). This recognition can be attributed to the strengths of the company. One of its strength is its ability to anticipate the demands of the customers and its ability to provide upscale, trend-forward, high-quality and innovative products which in return make their customers become loyal of availing all their services and products. The company has been able to implement a strategy that suits the needs to provide quality services and continually make the business become a tough competitor among its rival.

Target Corp. possesses the sophisticated and able technology that can cater to the fast changing global marketing management trends. It has core competence in its use of information technology that can support its management and marketing operations. E-marketing is a powerful tool used by its management. It is defined as the process of achieving marketing objectives through the use of electronic communications technology.  (2001) have provided a 5Ss’ mnemonic for how the internet can be applied by all business firms for different e-marketing tactics. These 5S’s are selling, serve, speak, save and sizzle. Thus, adding to its innovations in service providing among the wide range of clienteles. Its IT supports competent procurement of goods in e-marketing or online shopping aspect.

With such broadness and continuous expansion, Target Corp. holds a competitive practice in maintaining its human resources. Human workforces are the main players in the continuous development in the business and investment. Its diversity in HR is another strength that everyone in the company will benefit. In addition, of the Target’s strength is its strong environmental commitment. The company imposed an environmental management system which includes community consultation, proactive planning, compliance, sustainable development and auditing for continuous development. Target’s strength is also in line with the willingness of the management to adhere to the regulations and policies imposed by the government. Further, being open-minded to the suggestions of other helpful groups that know what will be the best for the whole company within the operating area can also be attributed as one of the strengths. Furthermore, the continued focus on controlling costs and increasing efficiency can also be noted as one of Target’s strengths to maintain is annual profit growth.

Lastly, its programs and activities that concerns socio-economic and humanitarian development serves as a reinforcing agent that will attract people – regular clientele and new as well – to continue patronizing and emancipating their decision to try their services/products.


Although the Target Corp. encompasses much strength to continuously fight for market dominance in the respective region, the company also has its weakness. One of the weaknesses of the company is the inability of the management to anticipate price increases which affects their operations. In addition, the company is also lacking the capacity to carefully manage their business because of the large entities and separated units of the business.  The company is faced with different unsolved issues because of lack of strategic decision making in several areas of HR like low hourly wage, opposition to labor unions, and its contribution to urban sprawl (2005). Further, due to the extensive coverage of products and services offered, the company may not allocate specific attention in the flexibility of some of its persistent rivals in the market. Considering its IT advantage, Target Corp. may not excel in some areas because of its vast coverage of control. These weaknesses, if not given attention may lead failure for the company to achieve its goal of providing quality products and services among its clients.


With the management system of the company and the strengths that it has, Target Corp. has bigger opportunities to still dominate and catch up with the competition in the American retail industry in terms of providing more quality and less price products and services to its clients or even have an opportunity to be the number one retail company in the whole region after its eventual application of its proposed plans in the future. Another opportunity that can be attached to the company is it would gain more customers if the company would be able to determine the latest trends for products to meet the demands of their target market. With the continuous innovation of Target Corp. and the support that it shows to different managerial and environmental, and more importantly societal and humanitarian issues and concerns, the company can gain loyalty from their customers to make them more competitive in the marketplace.

The continuous initiatives of the company in diversification of its revenue resources also open new opportunities to make the business become stronger to outgrow all its rival companies. Such opportunities will include e-business development by strategic alliances among global retailers as well as suppliers, leveraging the company’s investment in the World Class Customer Satisfaction Systems, and other business opportunities in both non-core and core areas.


Operating in the most competitive marketplace especially in the retail industry, Target Corp. is faced with the inevitable threat of stiff competition. For an enterprise to succeed in global competition there is a continuous plan to develop new products with higher quality than its competitors.  (1993) analyzes that new product and new business development must be highly effective and efficient, however that alone will not ensure its competitiveness.  The expansion of its operations to other areas means adjusting to the trade policies and political problems of the locality. The dynamic needs and demands of customers served to be a challenge to the management. Furthermore, consumer behavior and satisfaction with regards to the product/service procurement is also a risk. If the company will continue to be a vertically integrated corporation, the company may fail in terms of management ability. The division of the company may tend to have internal complexity. In terms of production and manufacturing, Target Corp. may encounter cost inefficiency in its procedures. Large retailers like Target Corp. is faced with the considerable pressure of keeping their prices low due to competition and the demands of price-conscious consumers ( 2002). Additionally, fast paced technological advancement may be a threat to Target Corp. as a whole.  In terms of the competitors, the company should be able to provide unique and more technologically advanced services to be able to survive in the stiff competition in the U.S. retail industry.



In order for the company to maximize its strengths and minimize or totally eliminate its weaknesses – both in the macro and micro set up, the company must be able to use or impose a strategic marketing management system that will help them enhance their operations. In addition, the company must not only focus on its strengths but must try to also pay attention to their weaknesses and find solution to solve such issues and maintain a competitive business operation and performances.