Running head: Environmental and Consumer Behavior Analysis
ENVIRONMENTAL AND CONSUMER
BEHAVIOUR ANALYSIS
RACHEL FONG
THANH LE
SAMANTHA MAYR
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TABLE OF CONTENTS
Part I:……………………………………………………………………………………………………..2
Introduction…………………………………………………………………………………….2
Company Profile……………………………………………………………………………….2
Environmental Scan………………………………………………………………………….2
Demographic Forces……………………………………………………………….2-3
Competitive Forces……………………………………………………………………3
Socio-cultural Forces……………………………………………………............3-4
Technological Forces…………………………………………………………………4
Economic Forces……………………………………………………………………4-5
Regulatory Forces…………………………………………………………………….5
Part II: ……………………………………………………….…………………………………………..5
Introduction…………………………………………………………………………………….5
Influences on Customer Behaviour……………………………………………………….5
Marketing Mix………………………………………………………………………….5
Psychological Influences…………………………………………………………….6
Socio-cultural Influences…………………………………………………………6-7
Situational Influences………………………………………………………………..7
Bibliography……………………………………………………….…………………………….8
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PART I:
INTRODUCTION
A marketing environmental scan is the process of retrieving information continuously on events that
occur outside of an organization to pinpoint trends, opportunities and threats to a business. An
environmental scan includes a business analysis where people discuss the external factors that can
possibly have an impact on a business. This marketing environmental scan will be focused on Target
Corporation also known as Target. Target is a large retail establishment that is due to come into Canada in
the year 2013. A marketing environmental scan is “divided into six different categories: demographic
forces, socio-cultural forces, technological forces, competitive forces and regulatory forces” (Kerin et al.,
2009). This document will go through a detailed environmental scan about Target Corporation.
COMPANY PROFILE
Target is currently a United States based retail department store. It is one of the two largest retail
department stores in the country, currently falling in behind Walmart. Target was founded in 1902 by the
Dayton Dry Goods Company and expanded greatly throughout the United States of America; it has been
“ranked at number 33 on the Fortune 500 as of 2010” (Wikipedia), and in 2011, Target made the
announcement that they are bringing over one hundred new store locations into Canada by 2013 through
“the purchase of leaseholds” (Wikipedia) in Zellers. Target stands by their “Expect More. Pay
Less.”(Target.com) brand promise, and maintain an active commitments to the surrounding communities.
ENVIRONMENTAL SCAN
A: DEMOGRAPHIC FORCES
Target focuses on two major market segments that make up their demographic. One of which is the
family-oriented market, which includes families of all sizes. For this demographic, families are usually
‘know what you want shoppers’. Families are constantly on the go and have very busy schedules;
therefore, when they come to Target they know what they need to buy. They are more likely to stick to a
schedule. The second major market segment that make up their demographic are young women ages 1824. This is a huge demographic because of all the trends and collections Target offers. For example,
Target has many collections that are aimed towards teenagers and young women, which include both
make-up and clothing. The clothing collection includes the Missoni Collection which may appeal to
young women. This collection has accessories, clothing, and shoes. Target also has a few exclusive CD
deals with artists such as Adele and Taylor Swift. The current trends, especially for young women, are
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clothing and make-up. These young women want to fit in and remain up to date with the current style.
Target focuses on fulfilling those needs by adding collections that are more youthful and are suited
towards younger women. These customers are often not in a rush to make purchases, which differs greatly
from the family oriented demographic.
B: COMPETITIVE FORCES
There are two major competitors that Target faces within the retail market: Walmart and Superstore. All
three retail stores are selling similar to identical products such as groceries, clothing, hair products, and
electronic devices. Also, both of these companies have similar departments within their stores. Walmart’s
Marketing Mix is as follows:
Product: Walmart sells a variety of products such as electronics, movies, music, books, school supplies,
toys, jewelry, grocery, clothing and many more.
Price: Walmarts’ prices are all discounted and advertised as the “rollback” which, in summary, takes
everyday items and sells them in store for less. This alone makes Walmart extremely appealing to many
consumers.
Place: Walmart is a huge network of apparel stores, small markets, and outlet stores. Walmart has outlet
centers in Mexico, Japan, India, Brazil, Canada, United Kingdom, South America, and China.
Promotion: Walmart allows customers to place orders online making it easier for busy customers to
access. Their website is quick and easy to understand, and each item has a detailed description and it is
overall well organized.
The second major competitor that Target faces is Superstore. Superstore used to be a grocery store; now it
has also added in the new Joe Fresh clothing line that takes up a large fraction of most locations.
Superstores’ Marketing Mix is as follows:
Product: Superstore sells a variety of items such as food, toys, books, electronics, hair products, and
make-up. Superstore also now has its own company brand called Presidents Choice. Superstore also
offers a “Presidents Choice MasterCard”.
Price: Superstore also has discounted retail prices for groceries, which other local grocery stores do not
have.
Place: Superstore is currently located only in Canada.
Promotion: Superstore has an online website that lists current items that are on sale. In addition,
Superstore also sends out monthly fliers so that current and potential customers are aware of their
upcoming deals and discounts.
C: SOCIO-CULTUAL FORCES
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Target understands the concept of diversity, which is why Target is now growing as a company and
adding more aspects, such as grocery products. Target is a family-oriented store; they have different
departments to help satisfy different needs. They sell toys, bikes, cosmetics, workout gear, clothes, you
name it. Canadians appear to be family oriented, and to have the ability to go to Target to find a little
something for everyone is definitely a benefit for most families. Since Target is growing as a company by
adding groceries into their store, there is room to add different styles of food to the mix. They may now
want to look into adding food that is multicultural, such as Asian and Indian cuisine. Going into a store
and being able to find ingredients quickly and easily is something that Canadian customers would love,
since most people are on a busy time schedule.
D: TECHONOLOGICAL FORCES
In the past decade or so, technology has skyrocketed and become such a big part of most consumers’
lives. Companies have currently been able to take their marketing to the next step with these
technological improvements and changes. Companies have been able to market and sell products via the
internet. This allows consumers to shop from the comfort of their homes and receive items directly to
their front doors. This broadens the market that Target may focus on because it is not just about the in
store purchases. They may direct their advertisements to the consumers who are strapped for time and can
then shop in their spare time at home. Target has already implemented a Canadian website that they will
eventually add products and more information to. The great thing about viral marketing is that there are
now sites such as Facebook and Twitter where Target may create accounts and offer special promotions
through these forms of social media.
E: ECONOMIC FORCES
In Canada, we have been experiencing a slight depression and economic downturn in the past few years.
Recently though, things have been looking up. The Department of Finance Canada has stated that “the
economists raised the possibility of additional drag on the economy … [which] translate[s] into higher
unemployment rates in Canada”. This, in part, also means that households will be making less money. For
a large retail department store such as Target, this may be good as well as bad. Since Canadians are
making less money, they will be more likely to shop at less costly stores in order to save their money.
Target is fairly reasonably priced and therefore will likely draw in many consumers. Though Target has
reasonable pricing, it is in a monopolistically competitive market alongside stores such as Superstore and
Walmart. All of these stores sell identical products with some variance between brand and other similar
products. This additional drag to the economy will impact the amount of impulse buys Canadians make.
Target will benefit from being in a market where they can implement competitively low prices on items.
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In the long run, Target should be able to successfully survive in this economy.
F: REGULATORY FORCES
Target will have to deal with the typical regulations that are set for the sole purpose of preventing retail
business from creating unfair markets. The main regulation that Target will need to be cautious of while
entering the Canadian market has to be the Competition Act. According to “The Core”, the Competition
Bureau promotes “fair competition so that Canadians can benefit from lower prices, product choice and
quality services” (Kerin et al,. p. 36). As Target is a very large company in the United States, it is unlikely
that they will be overlooking these regulations as they have experience in the competitive markets in the
states.
PART II:
INTRODUCTION
A consumers’ behavior plays a key role in decision making when it comes to any type of purchase,
whether small or large. It is essential to understand the many parts that contribute to a consumers’
behavior and the key factors that influence their choices. The four elements that make up consumer
behaviorism are: the marketing mix, psychological, socio-cultural, and situational influences.
INFLUENCES ON CONSUMER BEHAVIOR
A: MARKETING MIX
Product: Target Canada will be offering a wide range of products for consumers of all ages as well as
both sexes. Target offers a variety of clothing lines for men and women, in addition to furniture, home
appliances, electronics, entertainment, and cosmetics.
Price: Consumers are always looking for a place to purchase day to day products at their convenience and
at an affordable price. With Target’s daily deals, clearance items, discounts, and monthly promotions, the
price is definitely affordable and will influence the consumer’s decision on their purchases.
Promotion: Target’s market is more directed to families and young teens. Utilizing fliers and placing ads
in the newspaper with coupons and discount promotions will likely attract parents when they are reading
the daily paper. Target may also want to look into placing fliers at their current and potential customers’
doorsteps each morning. Advertisements on billboards, newspapers, and especially social media sites will
be influential given the high usage of technology for young consumers.
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B: PSYCHOLOGICAL INFLUENCES
Motivation: Motivation is one of the many psychological influences that affect every individual when it
comes to consumer purchasing behavior. Target’s goal would be to create an atmosphere that is inviting
and fun for consumers all ages. Referring to the Hierarchy of Needs, the most important is the
psychological need. This is the need for basic necessities to survive, such as food and water. Target is
able to provide these essential needs with their wide variety of food and beverage products.
Lifestyle: Lifestyle influences are based on three aspects: activities, interests, and opinions. Target not
only markets to families but specifically to fast paced families that are constantly on the go. If these busy
families are always on the go, they would likely be interested in a type of retail department store that is
organized and fast paced; but also has friendly service to keep their busy days enjoyable. Target’s goal in
terms of maintaining individuals’ psychological lifestyle needs would be based on helping make the
consumers life easier and less stressful.
Brand Loyalty: Brand loyalty is a key factor in maintaining and establishing lifetime customers;
therefore, building trust with their consumers in the first place would be highly beneficial. A consumer’s
family usually has a huge impact on his or her life. If Target is able to build and maintain the brand
loyalty with these consumers, then the rest of their family members and close friends will also be more
likely follow their lead in becoming a life time customer. A first impression is always the lasting one;
therefore, when Target opens in Canada in 2013, this will be the time to build new connections and
establish friendships with families and targeted consumers.
C: SOCIO – CULTURAL INFLUENCES
Family: As our target market is directed to families, it is important to recognize the influence one makes
on the other family member(s). Reconnecting with the brand loyalty influence, if one family member
enjoys shopping at a specific place, then their kids and relatives would take the opinions on where they
shop seriously. Individuals trust their family members and if Target can build that trust with that
individual, then they can soon build the same trust with the rest of the family. One of Target’s goals
would be to create that family oriented environment for each consumer.
Personal: Due to our second target market being young women and teens, utilizing opinion leaders or
celebrities would be highly beneficial. Having top fashion icon celebrities to represent Target’s clothing
brand would attract many young girls. Word of mouth is also a key factor in personal influences and if
teens like a brand they will most likely tell their friends.
Reference Groups: Being a part of reference groups are one of an individuals’ needs in life; falling under
self-actualization in Maslow’s Hierarchy of Needs. There are two types of reference groups that would be
applicable to Target’s market group and they are: membership groups and aspiration groups. Membership
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groups would apply to a group of family members, because Target is aiming for a family oriented
environment. If consumers are happy with the service and products we supply then they could want to
join our membership group in some way. Also, Target has a reputation of demonstrating and fulfilling
corporate social responsibility, and consumers may see that as inspiring and want to build a trust with
their company and join Target’s aspiration group.
D: SITUATIONAL INFLUENCES
Social Surroundings: Social influences are the people who impact the consumers when making a
purchase. With Target’s market directed to families, it is likely that parents will be shopping with their
kids. Once a child wants a specific brand of cereal, the parents will most likely buy it for them. This
example demonstrates how social surroundings are influential when it comes to consumer buying
behaviour.
Physical Surroundings: The atmosphere and mood is definitely influential in a consumers purchasing
behaviour. If consumers are upset at how loud and unorganized the department is, they may become
extremely frustrated which could cause them to want to leave as soon as possible. Target will want to
create a fun, organized and clean atmosphere to make a consumers shopping experience more bearable.
Target’s goal is to make their consumers shopping fun and not just another thing they check off on their
to do list.
Temporal Effects: With the short time that some busy families have in their life they will not be willing
to wait in line or even take more time that is required to shop for the things they need. Target’s
department retail stores will need to try to be organized and neat so that consumers can get around quickly
and easily. Customer efficiency is crucial and more workers lead to less line ups, which makes Target the
place consumers want to go to when they are in a rush to grab what they need.
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BIBLIOGRPAHY
Department of Finance Canada (2011). Update of Economic and Financial Projections 2011. Retrieved
from http://www.fin.gc.ca/efp-pef/2011/efp-pef-02-eng.asp#s2.7.
Kerin, Hartley, Rudelius, Clements, Skolnick (2009). The Core 2nd Ed. McGraw-Hill Ryerson. Canada.
Marketing Mixx (2011). Walmart Marketing Mix. Retrieved from http://marketingmixx.com/marketingbasics/marketing-mix/149-wal-mart-marketing-mix.html.
Presidents Choice Financial (2012). Presidents Choice MasterCard. Retrieved from
http://www.pcfinancial.ca/whyjoin1/?gclid=CM2Wh4Oimq4CFQo0hwodTQP8og.
Stolberg., S.G. (2011). Wal-Mart Shifts Strategy to Promote Healthy Foods. The New York Times
Online. retrieved from http://www.nytimes.com/2011/01/20/business/20walmart.html.
Target Canada (2011). Retrieved from www.target.ca.
Target USA (2011). Retrieved from www.target.com
Wikipedia (2012). Target Corporation. Retrived from http://en.mmwipedia.org/wiki/Target_Corporation
on Feb.14, 2012