Target Corporation Essay

Target Corporation was founded in 1902 by George Dayton in Minneapolis, Minnesota. It was originally called “Dayton Dry Goods Company” and then later became Dayton Company in 1910. By 1962, Dayton Company opened its first discount store in Roseville, Minnesota by the name of “Target”. By 2000, all Dayton Hudson Corporations changed their name to Target Corporation. It opened three operating divisions including Target, Mervyn’s and the Department Store Division.

In 2001, Target’s division generated about 80 percent of retail sales and operating income while Mervyn’s generated only 12 percent and the Department Store Division only generated 9% of sales therefore Target merged their e-commerce team and direct merchandising unit into one organization creating Target Corporation opening 74 new stores within the same year. Target’s operating strategy is built on providing great value to their consumers. They distinguish themselves from the competition by differentiating their inventory from other competing retail stores such as Wal-Mart and K-Mart.

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They are also known as being environmentally responsible. Target’s Corporation Associated Merchandising Corp. is a global sourcing organization that is involved with other souring companies to source goods to other parent companies. Target has developed a very unique store personality since its inception to ensure that it is core targeted market is reached. Targets store image is designed to reach its “target” market that is understood to be a step above its competitors of Wal-Mart and Kmart.

The typical target customer is 44 years old with an average household income of $54,000 per year with 80% being female and over half being college graduates. Target reaches this core market through a strategic and well analyzed store development and retail site selection process. The Target real estate department identifies potential markets for new stores through an extensive search of analyzing population growth, existing stores performance, competition, demographics, and market potential. Target actively seeks the local communities input to ensure new stores are sensitive to local market needs and concerns.

Once these market conditions have been met and local communities are on board Target will then construct one of the two possible Target prototype stores, The General Merchandise Store or The super Target. Target strives to open the stores at precise times being either March, July, or October as to ensure maximum exposure as construction on new stores ranges 9-12 months and store openings are planned well beyond 12 months in the future. The General Merchandise Store maintains a mixture of everyday needs including, electronics, household products, limited assortment of non-perishable and perishable food in addition to seasonal items.

These stores on average employ 150-250 persons with a planned square footage of 128,000 square feet. The Super Target as the name implies is designed and constructed on a larger and grander scale and is located in large population areas with upscale demographics. The typical Super Target Store provides all the offerings of The General Merchandise Store with the added accompaniments of a full grocery store including fresh organic produce, deli, and bakery. These stores employ on average 200-300 persons and are constructed to be between 180,000 and 190,000 square feet.

Target will locate these stores in suburban and urban markets with the urban market stores being single level raised elevation stores. In addition to these new store designs and openings Target breeds its store image and personality in several other ways to maintain its strong and affluent customer base. These objectives are also reached through store remodels, rebuilds, relocations, and in some cases store closings to preserve the brand name. Target is committed to its loyal customers and extensively reinvests in older store remodels to maintain the expected “store image” Target customers’ desire.

Target Real Estate department analyses store sales volume, age of store, new store opportunities, and times since last update when considering a store for its remodel program. In some instances Target will do a complete rebuild of a store when factors allow. Target on average owns 85% of its buildings and land which enables Target in some situations to rebuild the store on the same site while the existing store remains in operation. In all of these situations Target will always to a simultaneous opening in conjunction with a store closing, the older store will close that fternoon with the new/remodeled store opening in the morning. This seamless transition ensures there are not any lapses in employee’s employment as well as customer’s ability to shop. With all of the in-depth site analysis, store analysis, demographic study, traffic count consideration, and local community reach-out that is placed in every new Target store selection, remodel, rebuild or store closing it is very easy to understand how Target has developed a “cult” like following based somewhat solely on its store image and personality.

When a Target store, the bricks and mortar, and contrasted with its counterparts Wal-Mart and Kmart the Target hope is there is simply no comparison. In order to establish a business, Target Corp. had to first start with their marketing mix which includes their products, prices, place, and promotion also known as the four P’s. Their products and services consists of a wide variety including women’s, men’s and children’s fashion, baby equipment, home accessories, furniture, electronics, toys, fitness equipment, bath and bedding, baby and wedding registry, photo, pharmacy, optical and much more.

They offer discount prices and clearance items in order to help consumer’s wallets while still offering quality products. (“Expect More, Pay Less”) Target Corp. has 26 regional distribution centers, 5 import warehouses and stores located in 47 states. They ship all their items directly to consumers from the Target. com Distribution Center. Their promotion strategies consists of newspapers, television commercials, internet and direct mailing lists and Channel Red, an in store network. Target Corporation has a unique market segmentation that makes consumers different from one another. Target Corp. as median age of forty-six years of age which is the youngest among other retailers. They target young customers with higher incomes than their competitors. The median household income of Target consumers is $55,000 and they typically live in suburban areas. About thirty-eight percent of consumers have children at home which is also more than any another competing discount store. Eighty to ninety percent of Target’s consumers are female and forty-three percent have completed college. Although Target’s main consumers are women (93%), they still target men by establishing an automotive, hardware and sporting good departments.

Target’s positioning (or market) strategy is centered on a “cheap chic strategy”. Instead of competition for the lowest price to their everyday competitors, Target wanted to build an attractive clientele and venue. They have attracted a much younger and better educated clientele therefore their consumers are known as “guests” instead of being known as your everyday “customer. ” Because of their upscale discount prices and products and their concept of associating style and quality, Target created their cheap but chic strategy; setting them apart from competitors.

In order to offer quality products, Target uses several marketing tactics in order to keep existing consumers and establish new ones. Television, newspapers, magazines, brochures and testimonials from existing consumers help Target increase their client base and differentiate them from the competition. Another strategy Target Corp. uses in order to lure in younger audiences (both new and existing and typically ages 13-21) is established by running thirty second commercials featuring current celebrities.


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