BMKT 161
Strategic Marketing Plan:
Target Corporation’s Entry into Canada
Chelsea McCulley, Ken Li, Tenzin Chodon, Grace C, Sep Saidi
Table of Contents:
Executive Summary……………………………………………………………………………….3
Marketing Strategy…………………..…..………………………….......3
Goals…………………………………………….……………………………….3
Strategic Focus and Plan……………………………………………………………………….4
Mission……………………………………….………………………………....4
Corporate and Marketing Objectives…….……………………….4
SWOT Analysis……………………………………………………………………………………..4-7
Strengths………………………………………………………….……………5
Weaknesses……………………………………………………….………….5
Opportunities…………………………………………………….………….5-6
Threats……………………………………………………………….…..........6-7
Target Market……………………………………………………………………………………….7-9
Geographic……………………………………………………………….........7
Behaviourist………………………………………………………………......7-8
Psychographic………………………………………………………….….....8
Demographic……………………………………………………………….….8
Points of Difference…………………………………………………………8-9
Positioning………………………………………………………………….…..9
Marketing Objectives relative to your target market……………………..…….9-10
Strategic Marketing Plan……………………………………………………………….…….10-16
Product Strategy
Product/Service components………………………….…...…10
Branding…………………………………………….…….…………..10-11
Pricing Strategy
Pricing Factors………………………………………….………...…11
Demand Oriented……………………………………….………….12
Competition Oriented………………………………….…..……..12
Pricing Objectives…………………………………………….........12
Distribution (Place) Strategy
Locations………………………………………………………………12-13
Regional Distribution Centers.………………….....………….13
Target Import Warehouses………………………………..……13
Target Food Distribution Centers……………..……………..13-14
Promotional Strategy
Advertising…………………………………………………………....14-15
Personal Selling………………………………..………………..…..15
Public Relations………………………………………………….…..15-16
Sales Promotions…………………………………………..…….….16
Direct Response………………………………………….………..…16
Budgets for the Promotions…………………………………………………………………17
Evaluation and Control………………………………………………………………………...17-18
2
Executive Summary
The strategic marketing plan for Target Canada maps the future evolution of the
company throughout their first international entry, into the Canadian market. Target
Canada’s strategic marketing plan cover the area’s including: strategic focus and plan, a
SWOT analysis, the target market, the marketing objective within the target market,
product, pricing, distribution, and promotional strategies, a budget for the promotions, and
finally an evaluation and control in regard to the marketing plan.
Marketing Strategy:
Here at Target Canada we plan on concentrating towards the promotional strategy.
Which encompasses such areas as, advertising, personal selling, public relations, sales
promotion, and direct response. However, within our marketing strategy we want our
customers to know what the Target brand stands for, which is to “Expect more. Pay Less. ”
The Canadian customer should be able to recognized our brand as stylish, on trend, and
affordable. In order to achieve this we will have such promotions as the REDcard, which
give a 5% discount on all purchases made by members and will in turn increase customer
loyalty to Target Canada stores.
Goals:
The corporate goals outlined for Target Canada will be used as a guideline
throughout future years when it comes to the success of the marketing strategies:
1. Complete the opening of 100-150 Target stores across Canada between 20132014 (Moin)
2. Achieve a revenue of $6 billion with next decade of store openings (Shaw)
3. Maintain the same unique, quality and brand recognition in Canada that was so
successfully acquired in the United States.
3
Strategic Focus and Plan
Mission:
Our mission is to deliver outstanding value, continuous innovation, and an
exceptional shopping experience and to make Target a preferred shopping destination.
Most of all, we want to always fulfill our Expect More. Pay Less. ® brand promise. (Target,
Mission)
Corporative Objective:
Target is working with Sobeys to deliver our grocery products. Sobeys is the secondlargest food chain to supply the mass merchant with food at its outlets across Canada (CBC).
We are also collaborating with Starbucks to enhance the shopping experience of our guests.
Target’s market is within the hip, fashionable and trendy demographic. At Target we
continue to make sure that we provide chic, impressive, designers garments at a discounted
price. We have been doing so in United States and will continue to do so in Canada. We will
make sure to keep the prices similar to that of the prices in the United States. As for social
responsibility, contributing 5% of the income to the community is a tradition of Target,
which we will continue to follow (Target, Charity). Target entering Canada is our first step
towards global expansion and we hope that by entering Canada we create many job
opportunities for Canadian citizens. During the next decade in Canada, Target aims to open
up to 200 new stores and generate approximate sales of $6-billion (Shaw).
SWOT Analysis:
Retailer Target Corp is making its first foray into an international market, taking
over Canadian leases for Zellers stores owned by Hudson's Bay Co. Here is a SWOT
(Strengths, Weaknesses, Opportunities, and Threats) Analysis for Target Canada:
Internal
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Strengths:

We are trying to provide our guest with great design and more choices. Our design
is consistent with protecting our environment resources (Target). For instance, “we
are encouraged to develop alternatives to the existing chemistry that were free of
PFOA (Perfluorooctanoic)” (Target). This has no impact to cost; however, it could
remove harmful PFOA chemicals from our products (Target).

Offering stylish products with affordable prices will attract new consumers from a
variety of income levels.
Weaknesses:

Learning from the experience in the United States, Target stores provide promising
higher quality products but also create a significant high cost in its operation. By
entering the Canadian market, high cost of operation can be risky.

The hiring of a large amount of new employees will incur a high training and
development cost for Target Canada.
External
Opportunities:

We will open 100 to 150 stores nation wide between 2013 and 2014 (Moin), which
will offer many employment opportunities in Canada.

“In Canada, where the U.S. brand has close to a 70% awareness among Canadians —
30,000 of whom already have a Target U.S. credit card — the retailer sees huge
potential for growth, Mr. Fisher said” (qtd. Shaw). After opening up 100 to 150
stores in Canada, we expect to sell $6.7 billion in credit cards (Ho and Wohl).

Tony Fisher, president of Target Canada, “who plan to have a long-term relationship
with Sobeys”. “We want to look into what future supply chain opportunities there
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might be with Sobeys (qtd. CBC). With this huge expansion of the company, we could
create connections with more local suppliers to reach a better deal of our supply.

Due to the current economic status in Canada, consumers are moving towards
affordable stylish products that Target can offer.

“Starbucks has been a valued partner for more than 12 years and an integral part of
the Target guest experience in the U.S.," said John Morioka, senior vice president of
merchandising for Target Canada “(Sullivan). “Starbucks has been a valued partner
for more than 12 years and an integral part of the Target guest experience in the
U.S.," said John Morioka, senior vice president of merchandising for Target Canada”
(Sullivan).

Tens of thousands Canadians already have target loyalty card, and there will be
more new members joining in due to its 5% discount with purchase (Shaw).

With in the next decade Target Canada expects to see generated revenue of $6
Billion. (Shaw) “It gives us the ability to achieve considerable scale and store density
almost immediately,” Mr. Fisher said. (qtd. Shaw)

In the United States, Target shoppers have the average median household income of
US$63,000 (Shaw). “ We imagine our Canadian guest will look quite similar,” said
Michael Francis, executive vice- president and chief marketing officer. (qtd. Shaw)
which is a good opportunity for Target Canada.
Threats:

It is very tough competition with Wal-Mart because both of them have similar
products range and services. However, we have to differentiate our brand to WalMart and stay away from the image of Wal-Mart as a cheap, low quality brand. For
example at Target in the US we partner with many globally known designers such as
Alexander McQueen to create an upscale experience for our consumers.
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
Getting the right products for majority of Canadian as well as those minority groups
with the same quality and affordable pricing will be a challenge.
Target Market:
At Target, the scope of our target market is based on a wide variety of styles and
products to serve the right customer. Our products aim to satisfy guests through outstanding
value, innovative designs, and unique products and offer a place for guests to have an
enjoyable and convenient shopping experience (Target). “Expect more. Pay less” (Target) is
our motto and is what customers can expect when choosing Target as their first chose of
retailer.
Market Segmentation:
Geographic
The areas we have chosen for the new stores are located in urban cities across
Canada including Vancouver, Toronto, Edmonton and many others. The focus we have is on
large populations in urban areas so we can mass market our products. Since Canada's climate
can get much colder than the US, we would bring in winter line of clothing and commodities
to complement with the snowfall.
Behaviouristic
Canadians tend to have an awareness of the environment and the health concerns of
products. Target stands by an Environmental Management Program which ensures the
proper way for waste disposal, having recyclable products and setting future goals to keep a
cleaning environmental (Target). Target keeps brand loyal customers through their
knowledgeable customer service and comfortable, fun atmosphere in their stores, which
allows Target to be different from our competitors. Winning awards including Fortune
Magazine's "World's Most Admired Companies" in 2010 and 2011 for being the highest cash
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giving company in America (2.1% of profits) (Fair Companies). Target has established a
philanthropic reputation in the eyes of many consumers in America and hopefully we can
establish the same positive reputation in Canada.
Psychographic
The hardest part is to determine how to market to a person's attitudes and
personalities and in combination with the multicultural population in Canada. To understand
what gives the spark to Canadians to buy Target's products we must know their interests and
how they relate to their demographic. We expect most Canadians to have similar spending
habits as Americans because majority of Canadians are aware or have been to Target prior to
our future openings in 2013.
Demographic
We supply products for all ages, from babies to seniors and individuals to families.
The median customer is around the age of 40 with an income around $60,000 (Target). 51%
of our customers are expected to have completed college and 33% have children. All in all,
our products are at an affordable price for the quality and brand (Target). The wide selection
on Target's furniture, patio, and kitchen appliances are the perfect choice for people looking
for a stylish new change. We also carry the latest electronics and designer brand clothing for
the younger groups. Laptops and tablets are for students planning to go to college or
university. IPod & mp3 players are there for individuals who can use it for fitness or
entertainment on the go. The diversity in cultures will vary around Canada which we will
need modification in order to find the right product to suit those individuals.
Points of Difference:
Target is an upscale discount retail store with main focuses on the high-quality,
trendy, everyday basics that all families need at an affordable price (Target). The emphasis on
style, quality, affordability and clean, all combined to make it an attractive one-of-a-kind
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retailer. Target has impeccable customer service and clean environment which customers
will find a convenient and enjoyable shopping experience. Another attractive part of being a
consumer at Target is 2% of Target's earning is giving back to the community such as
schools and charities (Fair Companies).
Positioning:
Currently Target is the second largest discount retailer in the United States, behind
Wal-Mart (Fair Companies). We plan on the same success in Canada, which is being known
for our quality products, at a value customer’s can really appreciate.
Marketing Objectives relative to your target market:
Target Corporation markets toward all groups; however mostly middle-aged female
parents with children living at home are our customers. A Target News release stated that,
93% of Target customers consist of females. By expanding our market toward males, we can
increase our revenues and attract more customers in the long term. Using commercials and
advertisements which highlight male products and services at Target, will possibly draw
more male customers. Emphasis on departments such as hardware, automotive and
sporting goods can have beneficial outcomes to the corporation, by aggregating their target
market to include males.
“ Various factors influence Target's corporate and marketing objectives. Strategic
marketing plan focuses on long-term profit growth and shareholder returns in Canada.
(tutor2u)
Other factors such as economy, competition, and market conditions have direct
impact on the marketing objectives.
Also as quoted by Hollie Shaw at The Financial Post, Mr. Francis said the median age
of Target customers is 40, and the Canadian guest is expected to be the same. If we target
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different ages such as children, seniors and teenagers, Target can achieve a wider consumer
age.
Differentiation is another objective Target is considering and focusing on to
compete with similar businesses for example Wal-Mart, in order to succeed.
Strategic Marketing Plan:
Product strategy
Products and Services:
We will sell furniture, electronics, toys, health and beauty, patio, accessories,
clothing, shoes for women, men and kids; we will also provide fresh grocery products that
are locally produced. Our mission is to deliver outstanding value, improving innovation,
and an exceptional shopping experience and to make Target a customers’ shopping
destination (Target). It means guests not only will be enjoying our design but will also have
more selection of what they are looking for. Our team members will always be happy to
help our guests to find what they are looking for, making sure the items guests want are in
stock and the checkout process is efficient. (Target) “We are working to ensure the
experience in Canada is as delightful and surprising as it is in the U.S. Target stores. We're
also aware that our Canadian guests are unique, so we'll try to address the unique wants
and needs of Canadians. “(Target)
Branding:
Our guests continue to discover our signature national brand and we continue make
great design accessible for most everyone. At Target home section, we will make sure our
guest’s decorating and entertaining need match their unique style and budget. We will offer
great basics as well as the right balance of quality, trends, through partnerships with
designers like Thomas O'Brien, Victoria Hagan and Dwell Studio for Target, our Target
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Canada stores can hope to have the similar quality when it comes to the home. One way to
do this is though our signature brand Fieldcrest that offers high quality at exceptional
values (Target).
Early 2008 in the United States’ market, Target launched mix-and-match patio
furniture in Garden Place. With a wide selection of coordinating chairs, tables, umbrellas
and accessories, this innovative concept will give our customers concepts to build their
personalized patio collection which will fit individual lifestyle needs within customer
budgets.
Whether in fashion, electronics, grocery, or home, we want to make sure our guests
will have an experience they will only find at Target Canada. Target’s logo is almost
universally known in the United States market, and building heavily here in the Canadian
market.
Here at Target Canada:
“We're just as excited as you are about our fashion line-up in Canada! Target is
always looking for the right opportunities to work with talented designers from
around the world. In fact, we attended Fashion Week in Montreal to learn more
about Quebec's unique fashion culture. We're still working through the specifics of
our Canadian products and hope to share more details in the coming months. Check
this site often for updates” (Target).
Pricing Strategy:
Pricing Factors
As a discount retailer, Target aims to satisfy customer's tastes and preferences by
securing the cost, profit and competition when setting the price level. Target uses a
combination of demand-oriented and competition-oriented approaches for approximating
price.
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Demand-oriented
In the discount retail industry, trying to differentiate the products are difficult
because of how common the products are from one company to another. Like any other
retailer, Target uses an odd-even pricing strategy to really grasp the value-seeking
customers. Even though odd-even pricing helps to attract customers, it does not capture
enough people to increase the demand. In composite with penetration pricing, Target offers
premium products and keeps the price affordable.
Competition-oriented
When Target enters Canada; the competition between companies, such as Wal-Mart
will be who can set the right price for the similar products among them. It has been known
to the company that Target has the highest quality products among its competitors however;
the company has difficulty in competing with our competitor’s price. Target needs a
competitive advantage because it is important for the company to gain more customers and
be able to grow and gain growing returns. The below-market pricing is an example of how
competitors try to compete with Target. To have the ability to set the price 50 cents to a
dollar cheaper will drastically impact consumer’s decision when they are choosing where to
buy.
Pricing Objectives
Target offers over 25,000 items and each product can be matched to any
competitor's printed ad for an identical product (Target). When shopping at Target, deals
are organized efficiently for customers to do their one-stop shopping.
Distribution (Place) strategy:
Target Canada Locations
In the next decade Target wants to open 200 new stores and plans to open the first
150 in 2013. Target will implement the stores across 10 provinces; 15 in B.C, 13 in Alberta,
12
two in Saskatchewan, five in Manitoba, 45 in Ontario, 19 in Quebec, one in New Brunswick,
two in Nova Scotia, one in PEI, and two in Newfoundland and Labrador (Shaw).
According to Hollies Shaw from the Financial Post, the American customer has an
average household income of US$65,000 and a median age of 40 and more than half of them
have completed collage, and nearly half have children living at home. “We imagine our
Canadian guest will look quite similar,” said Mr. Francis, executive vice-president and chief
marketing officer at Target. With this target customer in mind the locations of Target
Canada stores are set to be in urban areas. According to Target, they have “analyzed
extensive data on Canadian retail performance, demographics, competition and market
potential to identify communities that would be well served by a target store.”
Regional Distribution Centers
Here at Target Corporation we use our own Regional Distribution Centers that are
in place to receive shipments of store merchandise from suppliers then directly ships the
products to the Target stores nationwide (Target). Due to the fact that we want to give
Target Canada the same original Target experience the Regional Distribution Centers will be
implemented in the same way that is done throughout the U.S.A. Currently we are setting up
our own distribution networks for locations in Toronto, Calgary, and Vancouver (Canadian
Grocer).
Target Import Warehouses
We also use Import Warehouses, which are in place to directly receive shipments for
overseas manufactures and suppliers. The shipments received are then sent from the
import warehouses and to the regional Distribution Centers (Target)
Target Food Distribution Centers
This September we made an announcement stating that we entered into a long-term
wholesale distribution arrangement with Sobeys Inc. (Target). Sobeys Inc. will now supply
13
Target Canada stores with select food, grocery products and Targets private label brand
(Canadian Grocer). Sobeys national network contains 23 food distribution centers that will
provide high- level service to Targets store networks. Target and Sobeys have agreed to
leverage each other’s distribution networks to mutually reduce transportation expenses
(Target).
Promotional strategy:
The connection between customer loyalty and the effect of promotional strategies
such as advertising, personal selling, public relations, sales promotion, direct response
tends to be strong. In order to attract customer loyalty and increase in long term sales,
Target Canada needs to focus on promotional strategies.
Advertising
An effective advertising method tends to preserve the product’s image and
illustrates the product to fulfill the needs of the majority of the audience and relate to as
many audiences as possible. Communication creating bonds with consumers are considered
an important factor and the main focus in developing advertisement. Target spends 2.3
percent of its revenue on advertising. (Barwise)
As for Target Canada, recognition and loyalty has already been formed to some
extend through the past promotional strategies and personal experiences in US. In order to
develop customer loyalty in Canada, Target can consider advertising through media,
billboards, online advertising with a competitive website and compete with other
companies with similar structures and product offerings. Using the Target Canada website
will provide many benefits including the ability to increase through the introduction of ecommerce, and most importantly the ability to analysis Clickstream Data that the website
will provide. Clickstream Data will provide Target Canada information on customer
14
navigation through the website to the date and time spent on the website. Target has
decided to reposition itself as a mass merchandiser of affordable chic goods. (Storch)
In addition as stated here by Target:
“Ads could also be seen on walls of buildings in New York and in bus shelters from
Miami to Philadelphia. One showed a woman riding a vacuum cleaner through the
night sky. Another featured a fashionably dressed woman holding a waffle iron with
which she had apparently crimped her hair. Both ads used the tagline "Fashion and
housewares" in the lower right corner.” (Barwise)
Personal selling
Choosing knowledgeable and motivated sales associates will have a great impact on
the sales and revenue proportion of the company. Targeting the appropriate customers and
focusing on effective methods to understand customers’ needs can affect the personal
selling and upsell in the long term.
Target gets credit for being on trend, unlike some discounters that may have the
right looks but fail to display them in ways that make their customers notice," (Arlen)
In the previous years, Target has managed to keep their reputation at a high level and
customers are familiar with their differentiation in customer service and products.
A US customer testimonial stated that:
"From a merchandising point of view, Target has always been more trend conscious
than most in the discount trade. But it goes beyond that Target stores are very easy
to shop because they are well laid out.”
Public relations
Target has always maintained healthy public relations in the US since it is focused
more on providing exceptionally stylish products in discounted prices, offering outstanding
shopping experience to the customers and contributing a 5% of its income to charitable
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organizations which translates into more than $3 million every week (Charity). Target
constantly appears on the media for its fashionable designer wears. A high profile example
of this was when The First Lady Michelle Obama, was spot wearing a Jason Wu dress from
Target while marking the Anniversary of her “Let’s Move” campaign. (Michelle)
Target was also ranked number 33 on the Fortune 500 on 2010 and is a component
of the Standard & Poor’s 500 index (Fortune). Being ranked so high makes it seems like a
natural next step to enter into the Canadian market considering the mega success Target
has become in the US.
Sales promotion
In order to promote loyalty and seller power, Target gives 5% off to REDcard
members on their everyday purchases whether its in-store or online. Our members will
have the privilege of getting free shipping with no minimum purchase and they will not
charged with any kind of membership fee. Customers can also save using coupons
applicable on many of the in-store products which are printable on the website. Lastly, we
will have various new products on the clearance which is also visible on the Target Canada
website.
Direct response
Target has its own TV station called channel RED that broadcasts electronic,
music/movies, kids' entertainment and video games. Each channel runs on a bank of
screens in the appropriate area of the store. The program loop is a mix of vendor spots,
entertainment and information/education. (Direct) We also have the Target circular, which
is mailed, to a limited number of our customers. Each week Target circulars are delivered to
50 million households in the United States and we will most likely do the same here in
Canada.
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Budget for the Promotions:
Since 70% of Canadians are aware of Target (Shaw), according to Mr. Fisher, the
President of Target Canada, we believe using newspapers, TV commercials, and billboard
advertising will create more awareness of the brand to Canadians. We would like to use
.05% of our sales in each media advertisement per quarter. Target Canada projected to
reach 6 billion dollars in sales revenue when opening in Canada that results in, $9,000,000
(6 billion x .0005) expected to be divided among for advertising. The average TV
commercial price per ad for 30 seconds is $5000 that includes major stations like Fox, CBC,
ABC and NBC (Adweek). 600 (3million/$5000) Target TV ads can be run on average per
quarter however, Global explained “spring and fall tend to be the highest; summer is
generally around 15-20% lower than these rates and winter is usually around 10% lower”
(Card Online). These averages could consider the impact of other TV networks and Target
will focus most of their airtime during spring and fall. Billboard Advertising is roughly
$1000 to $3000 per month (Buzzle) and with a 3 million dollar budget; we could rent 1500
(3million/$2000 average) billboards per quarter. Newspaper ads vary from across the
country, and the largest ad that can be produced is 291 agate lines (Card Online).
Evaluations and Control:
Here at Target we want to know that our Marketing efforts are successful and are
moving towards our strategic goals. Knowing how our marketing efforts are being received
on our marketing budget allocations.
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Aspect of Marketing Plan
Aspect measured
Performance Measurement
Target Canada ® Website
Traffic, Time/Duration
spent on Website
Measuring the traffic of the
Website is a primary
determinant of the Websites
success (Baltzen, 2011).
This will give insight on the
ability of the Website to keep
consumers interested in the
site.
Tracks the exact pattern o a
consumers navigation
through a Web site
Shows; Number of page views,
pattern of web sites visited,
length of stay on a web site,
Date and time visited, Number
of customers with shopping
carts, number of abandoned
shopping carts
(Baltzan, 2011).
Time/Duration spent on
Website
Clickstream Data
PR Marketing
Newspaper or Magazine
article
TV commercial
The successfulness can be
measures by the amount of
write ups or mentions that are
written or said about the
newspaper or magazine
article
Measured by possible spike in
sales and/or website views.
Industry and customer
feedback on the commercial.
We also want to make sure
our commercials are during
the peak TV viewing times for
or target market.
18
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