Strategic
Marketing
Plan
For:
Executive Summary
The following report has been conducted to determine how effective the Target
Corporation will be in entering the Canadian market. The report conducts the
SWOT analysis, Target market, Strategic plan, Budge for promotions, Evaluation and
Control. The SWOT analysis covers the strength, weaknesses, opportunities, and
threats of Target. This will help Target understand the pros and cons of their
company. Maintaining the pros and to improve on the cons. Target market describes
the marketing uses of geographic, psychographic, behavioural and demographic
segmentation. A strategic plan consists of four points: product strategy, pricing
strategy, distribution strategy and promotional strategy. Budget for promotions are
the calculations of Targets costs for advertising. Evaluation and control are the two
methods to measure the successfulness of a marketing plan.
COMPANY BACKGROUND
Take over his father’s fourteen million dollar business, Nelson Dayton
opened the first Target Corporation chain in Minneapolis, formerly known as
Dayton Hudson Corporation. Now operation 1,556 stores in 47 states, Target has
become one of the largest retailers in the United States, trailing behind Wal-Mart
Inc. Target offers a wide range of merchandise including men’s and woman’s
apparel, electronics, furniture, toys, health and beauty and food.
Strategic Focus and Plan
Mission
Targets mission is to provide customers with the drive to shop at Target
through the deliverance of our outstanding product values, our continuous
innovation, and an extraordinary guest experience. They know that they will be able
to find what they are looking for and that it will be priced right and are good quality.
Corporate and Marketing Goals
Targets Corporate and Marketing goals are based on the strategic focus and
planning of the company. Setting goals will help Target within its own borders and
have employees strive to do their best.
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Increase conversion rate of potential consumers by 5%
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Increase customer satisfaction by 80%
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Ensure brand name products meet consumer expectations
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donate 2 million dollars back into the communities every
year
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Increase sales by 5%
-
Increase consumables by 15%
-
increase positive customer and employee interactions
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Minimum of one media notification a month to alert
consumers of store locations
Location of
Types of Factor
factor
Favourable
Strengths
Internal
-
-
Changing demographics.
for giving back to the
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Not dealing globally.
community. For example.
-
Not being able to sell alcohol
thousands of dollars on the
Ellen show.
They run different stores
such as Targets Green
Lands, Super Target, and
Urban Stores.
-
Weaknesses
Target is very well known
Target gives away
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Unfavourable
In the Core, it is estimated
that the total revenue is
$59,490 in millions in 2006.
The company has increased
to having revenue of
$67,390 in billions today.
Opportunities
-
External
Company expansion to
Threats
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Consumers moving towards
Canada running 100 – 150
lower price then higher
stores.
quality.
-
Private label growth.
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Giving people work.
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Some of the Top designers
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Not satisfying customer needs.
have agreed to work with
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Other retail stores such as Wal-
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America.
Target and sell their items at
affordable prices under a
Only operates in North
mart, Costco, Sears ext.
-
Given the recent downturn
brand name to its
affecting the Canadian economy
customers. Victoria Secret is
there is an increasing number of
one of these designer wear
Canadians looking for value in
companies.
their everyday purchases which
they may not have previously
Target market
Target audience
Multicultural consumers who want to purchase a wide variety of name brand
products for the most competitive prices and live in a suburban community.
Primary
Our primary target markets are women who have children at home, consumers with
a median age of 46, and consumers that are employed in managerial or other
professional positions. These consumers have a comfortable median income of
$63,000 and are looking to purchase products to satisfy all needs of the family
household.
Secondary
Consumers who are more brand loyal, and because of this are willing to pay more
for what they get. They put a lot of thought into how they should spend their money
and where they should shop. For these reasons consumers demand a wide range of
high quality products at the most competitive prices from the brand-names they
expect. In addition they want to shop in stores that have a friendly and relaxed
atmosphere. Finally these consumers want to continue to support a franchise that
gives back to the community.
Tertiary
Consumers that are looking for the convenience of a one-stop shopping experience.
These are consumers of all ages with a desire to purchase everything from school
supplies to food and beverages. They also want stores to be easily accessible from all
methods of transportation within their suburb. Moreover, these consumers are
attracted to products with the lowest of prices.
Marketing Objectives
The following are strategic corporate goals that are set by the marketing team, and
are to be achieved by the end of each year.
Issues
Objective
Strategic goal
Market share
Gain male consumers
Increase conversion rate
Attract younger
of potential consumers by
generations
5%
Meet social, lifestyle and
Increase customer
personal needs
satisfaction by 80%
Meet product assortment
Ensure brand name
expectations
products meet consumer
Consumer loyalty
Product
expectations
Perception
Maintain good public
donate 2 million dollars
perception
back into the communities
every year
Financial return
Increase profit
Increase sales by 5%
Convenience
Create a one-stop
Increase consumables by
shopping experience
15%
Generate a friendly and
increase positive
fun store image
customer and employee
Store atmosphere
interactions
Accessibility
Ensure consumers are
Minimum of one media
aware of store locations
notification a month to
alert consumers of store
locations
Pricing Strategy
Target is one of the major discount retailers in North America, competing against
primarily Walmart. Walmart is already well established in the Canadian
marketplace as the main low-cost producer. Instead of competing only in this field
Target also differentiates itself by offering chic, trendy merchandise that may not be
offered at other store at lower costs. () Targets objective is for design to “be
accessible and affordable for everyone.” (Site)
The two main pricing strategies that Target, when moving into Canada needs to use
are:
Competitive-Oriented Approach - Setting the price of products in line with the
prices charged by direct competitors. () Target does not want to lose potential
customers to rival companies. With any hope of competing with Wal-Mart in
Canada, Target must have an at- or below-marketing pricing with like items that
Wal-Mart also carries. (book) This strategy entices customers into purchasing
Target's goods rather than competitors. With a wide choice of who to buy from
already, customers will have knowledge of what is the best or reasonable price in
that market. By offering competitive prices Target does not start out with a
disadvantage in Canada.
Target Pricing - The second way in which Target needs to price its products in
Canada is by target pricing. Being extremely customer influenced this “demandoriented approach emphasize[s] factors underlying expected customer tastes and
preferences … when selecting a price level.” (book) This method of pricing allows
Target to determine the price “of a product to achieve the target price to customers.”
(book)
To successfully implement these pricing strategies the major adjustment that will
need to be made is in the US versus Canadian prices. Canadians do not want to pay
more for products they can get cheaper across the border.
When choosing pricing strategies Target must examine business and financial goals,
the condition of the market and the prices of competitors. Target needs to assign
strategies that will allow them to succeed in the Canadian marketplace.
Quarterly Projections for Target 2013
( In Millions )
2013
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total Year End
Total Revenues
$1,319.25
$1,319.25
$1,319.25
$1,319.25
$5277
EBIT
$102.75
$102.75
$102.75
$102.75
$411
Net Earnings
$57
$57
$57
$57
$228
For references and calculations see Appendix A
Product
It is not enough for Target to just have well planned pricing strategies. Building
brand recognition and loyalty is key when expanding into Canada. Target is already
strong and memorable in the United States and have to bring that into Canada
through their products. Target needs to stress their high quality products and
differentiate themselves from being just a low-cost product provider. The mission is
“to make Target the preferred shopping destination for our guests by delivering
outstanding value, continuous innovation and an exceptional guest experience by
consistently fulfilling our Expect More. Pay Less. brand promise.” (Site)
Target offers a range of products in the following departments:
Womens fashion and accessories
Mens fashion and accessories
Childrens fashion and accessories
Baby fashion accessories
Home decor
Furniture
Patio
Electronics
Entertainment
Toys
Health and Beauty
Targets services include:
Target Photo
Pharmacy
Food Avenue Restaurants
Optical
Portrait Studios
Health Clinics
Target Baby Registry
Distribution Strategy
Target needs to use multichannel marketing when entering Canada. By using
multichannel marketing Target is combining different forms of communication and
delivery channels that reach “consumers who shop and buy in the traditional
marketplace and in the online marketspace.” (book 188) This method allows Target
to integrate the unique Target experience into the store and online, giving each
customer the same consistency no matter what channel is used. When considering
the marketing channels these main factors must be reflected in the choice (book):

“Which channel and intermediaries will best reach the target market?”

“Which channel and intermediaries will best serve the needs of the target market?”

“Which channel and intermediaries will lead to the most cost-efficient profitable
results?”
Promotional Strategy
For expanding into Canada, advertising Target coming at a certain date
would be the most effective. Commercial’s saying, “where coming” with the target
dog sitting in an airport waiting for a flight heading to Canada. This would show
consumers that we Target are a fun, easy- going company that only wants the best
for its customers. Transit billboards and highway billboards are another way to get
the message across about us expanding. Knowing how popular transit is in the
major cities across the country, I’m positive that will be one of the most effective
ways of advertising.
What we are doing from the public relations point of view is after a month of sales
we are going to at every target across the country we are going to have a barbeque
during the weekend for all the customers who have spend over 2,000 dollars. How
we know that customers have spent over 2,000 is we are going create membership
cards that will track their purchasing history. Serving the customers the finest
hamburgers and hotdogs they will have ate in years.
Are sales promotions are going to be through the roof! The first week of
being open in Canada, Everything in the store is going to buy one get one free
(except items over $100). This will be a good way to show are large list of product
that we have at Target; also by showing what great sales we are able to offer our
customers. After the first week of being open, we will have weekly promotional
flyers that will be sent in the mail to our target members. With the Target
membership card you will be able to collect points for a cash credit that they will be
able to redeem after they save up 5 dollars, or keep saving their points if they so
wish to.
How we will get a direct response for our sales will be simply how much we
sell. Also knowing roughly how many consumers sign up for our membership cards
and how many points they have saved up. Hearing from the wholesalers will be
useful valuable information and knowing if we are one of their regular buyers.
Budget for Promotion
Budget for advertising- in ’06= $1, 170 million
There are 1,770 stores in the USA. Target is purchasing 220 stores in Canada.
Of the 220 stores in Canada that is 12% of the stores in the US.
The estimated budget for promotion in Canada is 12% of 1,170 million and that
would equal $204 million.
Estimated Budget for Promotion is $204 million.
Commercials
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30 seconds during American idol on CTV (prime time)= $620,000x 40
(40 episodes)= $24.8 million.
30 seconds during Desperate Housewives= $394,000x 22 (22 episodes)= $ 8.66
million.
30 seconds during Grey’s Anatomy= $344,000x 24 (24 episodes)= $8.27 million.
30 seconds during Survivor= $296,000x 14 (14 episodes)= $4.14 million.
Billboards
Vancouver- $2500 every 4 weeks x12
Calgary- $2,500 every 4 weeks x12
Edmonton- 2,500 every 4 weeks x12
Toronto- $14,000 every 4 weeks x12
Montreal- $25,000 every 4 weeks x12
Total Cost for Billboards= $558,000
Transit
Advertising through local transit services across the country will be an easy
effective way to advertise Target coming to Canada, knowing that a good percentage
of the Canadian population in major cities use transit. Knowing from experience
riding the bus in downtown Vancouver, that people will read the mini billboards
atop the bus.
Online
On YouTube it will cost $2 per CPM (cost-per-thousand impressions). CPM means,
for every ad viewed on a video Target will have to pay $2.
$2 x 1 million views= $2 million.
Facebook it is the same thing, every time the ad is viewed (clicked on) you can set
your CPM at whatever you like. But it cannot be free for the company.
CPM= $3
$3 x 500,000 views= $1.5 million
Majority of the company’s advertising goes though TV commercials and
newspapers, sidebars on websites and billboards along highways. But the greatest
way to get the message across about our promotions is word of mouth with our
customers. Sending emails to current customers of Zellers is a easy and free way to
promote Target coming to Canada. Also since Zellers is apart of Hudson’s Bay
Company, sending emails to HBC MasterCard holders would be another effective
way to get the word across for free.
Effectiveness and Control
How we will measure our effectiveness and control for our marketing plan is
having each store that opens monitor how many customers go through the doors at
target and having the mangers send weekly quotas for sales analysis. After the first
month, we will now how the stores are doing compared to the other stores across
the country. Also by knowing the different demographic and geographic locations of
the stores, supplying slightly different products to help the customers withstand
surrounding will benefit the company and most importantly, the customer.
Having the Marketing director follow the marketing plan will be essential to
the success of Target coming to Canada, having every marketing project and
assignment go the marketing director to make sure that everything that leaves the
drawing board will be the best it can possibly be. If there are any new ideas,
programs, promotional sales or anything in that area has to go through the
marketing manager. Being really strict about following the budget and not going
over by a large amount, this will measure the effectiveness and the control of the
marketing directors and the regional marketing directors.
Knowing after a few months of Target being in Canada, seeing how many
regular customers the company builds and how loyal they become to the company.