Target Case StudyGroup B: Nawal Harris, Megan Osborne & Cristina Villarreal

• Target’s Origin From the Dayton Dry Goods Company which was founded in 1902 by George Draper Dayton.

• First Target store Roseville, Minnesota

• Original Business Goals Excel in terms of price, product offerings, customer service, community involvement, value and the consumer shopping experience.

• Target is leader in strategically creating methods to grow their business In 1988, Target redeveloped technological efforts of their UPC bar codes. The company became the first mass merchandiser to introduce UPC scanning at Target stores and distribution centers.

• Target has continuously a leader in cultivating community efforts Has began to capture its latest target demographic, the Hispanic female. Target has expanded its Hispanic grocery assortment, healthcare and entertainment departments in the Houston, Dallas, San

Antonio, San Diego and New York markets.

Introduction

• By 2050, 1/3 of Americans will be from Latin American descent• Increase in Hispanics, highest purchasing power nationwide

• Improving education levels, technological skill and a narrowing average household income gap

• Median age: 28 years old • In the range of new homebuyers• In the next decade Latinos will represent a large portion of residential purchasing, as well as groceries, clothing

and electronics

• The Millenial Generation• Born between 1980 and 2000• Largest generation in history• Extreme buying power• Texting, social media and all things internet

Changing Demographics

Economic Power Is Shifting

• Hispanic women pursuing independence and personal achievement • Challenging household dynamic • 86% are making purchasing decisions• Needs reflect those of large families and include products such as many food

categories, oral hygiene products, bottled water, laundry detergent and paper products

• More connected to technology• Use to stay connected and maintain culture

Current SWOT AnalysisSTRENGTHS WEAKNESSES1. Strong existing presence within the community.2. Continuously remain relevant to consumers by

providing a unique merchandising mix.3. Bright-spot mobile service, Cartwheel App and

increasing mobile presence.4. More prestigious than other discount retailers.5. Expanded Hispanic grocery store assortment,

health care, and entertainment.6. Spanish store navigation boards.7. Spanish language Coupons.

1. Store operating hours.2. Perceived value vs. benefits.3. Higher price-points than other discount retailers.

OPPORTUNITIES THREATS1. Increased marketing efforts to attract the affluent

Hispanic female.2. Social media connections thru mobile APP for

Cartwheel.3. Customer Service experience.

1. Number of profitable channels.2. Lower profits than Wal-Mart .3. International Presence.

2012 Sales Growth By Department

25%

20%18%

18%

19%Sales Growth

Health, Beauty & Household Essentials Food & Pet Supplies HardlinesHome Furnishings and Décor Apparel & Accessories

What’s Missing?

• Increase in usage of technology within Hispanic Demographic• Smartphones

• 28% of Hispanics are more likely to own a smartphone than non-Hispanics

• Deficiency in mobile marketing • U.S. companies are not doing enough to make mobile apps accessible

Age

18-25 37 responses 36%26-35 30 responses 29%36-45 17 responses 17%46-55 14 responses 14%56-over 5 responses 5%

Gender

Male 22 respondents21%

Female 81 respondents79%

Ethnicity

White 23 responses 22%African American 24 responses 23%Hispanic/ Latino 46 responses 45%Asian/Pacific Islander 7 responses 7%Other 3 responses 3%

Education

High School/ GED 9 responses 9%Some College 33 responses 32%2-year College 19 responses 18%4-year college 29 responses 28%Masters 13 responses 13%

Employment Status

Student 26 responses 25%Unemployed 7 responses 7%Employed 71 responses 69%Other 5 responses 5%

Annual Income

Under $25,000 35 responses 34%$25,001 - $49,999 29 responses 28%$50,000 -$74,999 23 responses 22%$75,000 - $99,000 7 responses 7%$100,000 and over 9 responses 9%

Marital Status

Single 51 responses 50%Married 39 responses 38%Divorced 11 responses 11%Widowed 2 response 2%

Number of Children

None 54 responses 52%One 25 responses 24%Two 11 responses 11%Three 4 responses 4%Four or more 9 responses 9%

Basic Demographics

for Primary Data

Total number of responses: 103

What do you find most attractive about Target?

Price 15 responses 15%Product Selection 59 responses 58%Customer Service 5 response 5%Location 5 response 5%Atmosphere 18 responses 18%

How may times a month do you shop online?

Once a day 13 responses 13%Once a week 31 responses 30%Once a month 45 responses 44%Never 14 responses 14%

How many times a month do you use your smartphone to shop online?

Once a day 17 responses 17%Once a week 16 responses 16%Once a month 35 responses 34%Never 34 responses 33%

How do you compare the value Target provides against their competitors?

Competitors are better 23 responses 23%Same as competitors 29 responses 28%Provide better value 50 responses 49%

Do you follow Target on social media websites such as Facebook or Twitter?

Yes 23 responses 22%No 80 responses 78%

As a consumer, what compels you to follow a retailer on social media?

Contests 8 responses 8%New product announcements 19 responses 19%Fashion tips & trends 28 responses 27%Deals & Discounts 66 responses 65%Don’t follow any 24 responses 24%

Would you consider using a bilingual mobile app?

Yes 47 responses 46%No 56 responses 54%

Were you aware Target had a mobile app?

Yes 46 responses 67%No 23 responses 33%• Target

• Social media

• Online shopping

• App awareness

Survey Questions

If your preferred language is not English, would you be more interested in using an app that was in your preferred language?

Yes 29responses 42%No 2 responses 3%Prefer English 38 responses 55%

Approximately how many game apps have you downloaded on your mobile phone in the past year?

0 10 responses 14%1-5 41 responses 59%6-10 12 responses 17%10+ 6 responses 9%

Would you be more interested in a company’s mobile app if there was a game that allowed you to earn discounts?

Yes 47 responses 66%No 24 responses 34%

Total number of responses: 103

Making Target’s App Multilingual

• Focus on Spanish• Increase brand recognition and loyalty among Hispanic market

Inclusion of a Game

• 2012 Hispanic Mobile Consumer Trends Study• 504 respondents stated that 48.3% of apps purchased

were games

• Ipsos Public Affairs Survey• 76% of 10,000 surveyed said saving money was at least

somewhat important• Almost half though saving money was very important

and actively searched for discounts daily

• Game will be included in existing app for mobile coupons, Cartwheel by Target• Option of connecting to Facebook

Game Format

• Name: Archer, reminiscent of private label brand Archer Farms• Object: Shoot arrows

through produce and household items to conquer levels• Levels include 5-10 individual

games

Game Format

• After each game: choice of 3 coupons, coupon goes to Cartwheel list• Assures discount is

relative to shopper preferences

Game Format• After each level: shoppers gain a badge and another spot on

their Cartwheel

• Game will be modelled after popular games among female Millennial generation: Angry Birds, Candy Crush Saga, Plants vs. Zombies

Promotion

• Social networking & in-store promotions• Promoted on Facebook• Catalina promotions• Coupons are highly sought after, ensures shoppers will see the promotion

• Contests among sales associates• Motivation for employees to market

Post Solution SWOT AnalysisSTRENGTHS WEAKNESSES1. 24 hour information source2. More prestigious than other discount retailers3. Easier access to information4. More bilingual options for customers5. Fun way to interact with Target 6. Faster way to connect and receive information

1. Not all customers enjoy gaming applications2. Amount of time spent trying to earn discounts

rather than exploring the rest of Target’s app3. Less time spent in store

OPPORTUNITIES THREATS1. Bilingual app that allows a variety of

consumers to shop comfortably and relate culturally

2. Broader demographic3. Customer service experience4. Special rewards and discounts

1. Competitors’ innovations and ideas2. Possibility of customers disinterest in the app3. Lack of smartphone usage4. Confusion on how to change the language

option