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Dream Team’s Marketing Plan
Sheridan Blanford, Megan Ledig, Sandra Opokua, Chris Hansen, Justin Pahl & Alex Lao
Marketing 250
St. Olaf College
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Table of Contents
Mission…………………………………………………………………………….. 3
Goal…………………………………………………………………………………3
Current Target Market……………………………………………………………3
Competition ………………………………………………………………………..4
General Industry Considerations…………………………………………………5
CDSTEP…………………………………………………………………………….6-17
SWOT Analysis…………………………………………………………………….18
Competitive Advantage……………………………………………………………19
Segmenting………………………………………………………………………….19
Targeting……………………………………………………………………………20
Positioning…………………………………………………………………………..21
Marketing Mix……………………………………………………………………...21
Return on Investments …………………………………………………………….21
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Industry Analysis
Mission
“To make Target your preferred shopping destination in all channels by delivering outstanding
value, continuous innovation and exceptional guest experiences by consistently fulfilling our
Expect More. Pay Less.® brand promise.”
Goal
The goal of our marketing plan is to broaden our foundation of loyal customers by optimizing
our reach to changing demographics.
Current Target Market1
● According to Advertising Age, Target:
o On average, for every 5 Target customers entering the store, 3 of them are females
o 1 in every 4 customers are single and has never been married
o 1 in every 2 customers are married
o For every 20 customers, 3 target customers make $100,000 or more, come from
annual income of all households
o The largest income bracket for Target customers is from $50,000 to $74,999, with
23.7% of their customers falling within this range
o For every 20 customers
▪ 3 are between 18 and 24
▪ About 5 are between the ages of 25 and 34
▪ 4 are between the ages of 35 and 44
▪ About 3 are between the ages of 45 and 54
▪ About 2 are between the ages of 55 and 64
▪ 2 are 65 or older
● Target’s current target market is a middle-aged woman, between the ages of 25-44 years
old, who are married and are for the most part in the upper-middle class.
1 http://adage.com/article/adagestat/demographics-retail/233399/
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o Value quality and brand names, while searching for reasonable pricing2
● 96% of American’s can match Targets bull’s-eye logo to its brand3
● In 2013, Target began to offer collections from six brands offering products offering
products mainly in the home and clothing departments exclusively online4
o In order to provide a faster service to customers on the go, Target offers in-store
pick-up, where customers order their items online and can pick-up their order at
the store. This can usually occur within a 2 hour time frame5
● Target offers the Target REDcard as both a Credit and Debit card6
o When customers use their REDcard to pay in store or online, they receive benefits
such as 5% off, free shipping for online purchases and 30 extra days for returns
● Target stores offer customers “visually appealing building exteriors, to easy-to-navigate
store layouts, to innovative tools and systems”7
o Target divides it stores by clothing and accessories for all ages and genders, home
decor and furniture, electronics and entertainment, health/beauty and pharmacy,
grocery and household supplies, photo department, and seasonal products. 8
● Some of Target’s main campaigns focus on back to school items, women’s clothing and
increasing use of the in-store pickup
● Target is well known for offering special collections from well-respected brands like
Missoni, TOMS and Neiman Marcus9 10 11
2 https://corporate.target.com/about/design-‐innovation 3 http://hbswk.hbs.edu/archive/4319.html 4 http://business.time.com/2013/01/23/target-‐introduces-‐six-‐new-‐brands-‐that-‐you-‐cant-‐buy-‐in-‐stores/ 5 http://www.target.com/c/store-‐pickup/-‐/N-‐55fqz 6 http://www.target.com/redcard/main#next 7 https://corporate.target.com/about/design-‐innovation 8 http://www.target.com/np/more/-‐/N-‐5xsxf#?lnk=ct_menu_16_1&intc=1865103|null 9 http://www.abullseyeview.com/2014/09/target-toms-shoes-collaboration/ 10http://business.time.com/2011/09/14/tons-‐of-‐sold-‐out-‐missoni-‐for-‐target-‐goods-‐wind-‐up-‐on-‐ebay-‐at-‐3x-‐original-‐prices/ 11 http://business.time.com/2013/01/02/epic-‐retail-‐fail-‐where-‐did-‐the-‐target-‐neiman-‐marcus-‐collection-‐go-‐wrong/
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Competition: (Target Annual Revenue $72 Billion)12
Amazon ($74 Billion Annual Revenue)13
● One of the largest online retailers.
● Offers products such as books, car electronics, etc.?
● Incredibly effective and generous customer service.
● Provides fast and efficient shipping with its Amazon Prime service.
● Expanding to fresh groceries with their Amazon Fresh program. 14
o Which will allow…
Wal-Mart ($476 Billion Annual Revenue)15
● Largest retailer in the United States
● Established presence in many locations across the U.S, especially low income areas.
● Consistently has one of the lowest prices for it’s variety products.
● Pushing a sustainable initiative within its supply chain.16
One of Targets largest strengths is that fulfills its brand promise to its customers of expecting
more while paying less. Amazon is a direct competitor for many of the miscellaneous items that
could also be purchased at Target. With the ease of online shopping, consumers can get these
miscellaneous items they don’t necessarily need right away, with only a few clicks of their
mouse. Amazon is also rolling out a new program that delivers fresh produce, which could cut
into Target’s grocery sales. However, Target offers a better experience by giving customers the
ability to touch and feel products before purchasing. In addition to this, Target has floor
representatives, which can greatly enhance the customer’s experience that Amazon cannot
physically offer. Wal-Mart and Costco are also competitors to Target with regards to their
product selection, generally being slightly cheaper. I think maybe a sentence more about what
12 https://corporate.target.com/annual-‐reports/2013/financials/financial-‐highlights/ 13http://www.hoovers.com/company-
information/cs/competition.Target_Corporation.d874c3aa052df19e.html 14https://fresh.amazon.com/MembershipBenefits?pf_rd_s=slide-‐1&pf_rd_p=1929701982&pf_rd_t=101&pf_rd_i=1&pf_rd_r=0DKM7814S6R4Z7TQH3K7 15 http://financials.morningstar.com/competitors/industry-peer.action?t=TGT 16 http://www.greenbiz.com/blog/2014/04/30/walmarts-‐push-‐collaborative-‐sustainability-‐goals
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Costco and Walmart do in relation to Target could be used here. However, Target is a “preferred
shopping destination” for consumers who identify with a “fun and friendly culture.”
General Industry Considerations17
● Target is in a market where interaction with the customer and being engaging, is an
important piece now and in the future for?
● Many______ in this industry are reinventing their loyalty programs to customer rewards
to keep buyers happy and maintain loyal customers
● A rising trend is the need for requests or answering questions in the fastest way possible
to buyers
● Social media is playing and will play a bigger role in product development and marketing
campaign in this industry
● Using mobile devices to shop and purchase items is the most efficient way for customers
to get what they want, more efficiently
o Companies should be technology savvy in a way to fix bugs, update apps and help
customers get what they want in the fastest way possible
● In the retail industry, companies need to be able to adapt to the customer centric reality
o For example, Target is stocking a diverse range of products to suit customer
needs. Like what?
Environmental Analysis (CDSTEP)
Culture
The U.S. population is projected to increase with a rise in net immigration levels. This
change in population growth is going to be accompanied by shift in culture and social
changes. These immigrants hold and maintain a connection with their cultural values and
heritage.
Hispanic Americans 18
17 http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm
18http://www.cdc.gov/nccdphp/dch/programs/healthycommunitiesprogram/tools/pdf/hispanic_latinos_insight.pdf
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● Come from a collectivistic culture where group activities are dominant
○ 91% of Hispanic grocery shoppers will ask their family members “what
they want” as part of their planning19
● They tend to share responsibilities and shop together as a family.
● Language is a big aspect of the Hispanic culture, 49% of U.S. Hispanics who
watch television, watch Spanish language programming20.
● Children are a big part of the family households, according to the Centers for
Disease Control (healthy communities program) in 2008, there were 10.4 million
Hispanics households with children; 62% included children younger than 1821.
Hispanics Shopping Behavior
● The Hispanic population is attractive to differentiated styles that resonate with
their cultural background and style. 22They look for personalized and unique
product that connects to them.
● 23Because children are a big part of the Hispanic family, 44% of Hispanic grocery
store shoppers say they will purchase a brand because their children asked for it
Research shows that
● 24Latinos love to be surprised and delighted by in-store effort” “They love to
divide their shopping trips into categories by family member”
● “Freshness and abundance trigger memories of how shopping was done in the
market in Mexico, which revolves around daily and just-in-time pantry
management
● Emotional triggers that resonate, like interpersonal relationships with store
employees, have loyalty implications
● Connection to the store via the use of their language or someone from their
culture…research shows that Hispanics remember English language commercials
19 http://www.p2pi.org/sites/default/files/attach-‐2013/13SM_0913_PanaVista-‐Catapult_WP.pdf 20http://www.cdc.gov/nccdphp/dch/programs/healthycommunitiesprogram/tools/pdf/hispanic_latinos_insight.pdf 21http://www.cdc.gov/healthcommunication/pdf/audience/audienceinsight_culturalinsights.pdf 22 http://efox.cox.smu.edu/mktg6211/retailingtrends.pdf 23 http://www.p2pi.org/sites/default/files/attach-‐2013/13SM_0913_PanaVista-‐Catapult_WP.pdf 24 http://www.p2pi.org/sites/default/files/attach-‐2013/13SM_0913_PanaVista-‐Catapult_WP.pdf
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as well as the general population, but showing the same commercial in Spanish
bumps up ad recall by as much as 30%.
● Interact and connect with their suppliers via social media and other platform
● Research done by The Nielsen Company shows that Latinos exhibit significant and substantial growth in social media usage
● According to Forbes, “Soccer is the most effective marketing platform to reach the growing and complex Hispanic Millennial Market Segment.”25
Hispanic use of public transportation (need a citation)
% of Hispanics who use public
transportation to commute to work
% of Hispanics who use all
transportation to commute to work
Median Earning of Public
Transportation Users ($)
Phoenix, AZ 39 33 17,293
Los Angeles, CA 71 46 15,281
Miami, FL 71 73 14,380
Atlanta, GA 7 6 19,131
Charlotte, NC 17 12 20,975
Houston, TX 41 42 16,795
Demographics
Online Shopping via mobile 26
25http://www.forbes.com/sites/darrenheitner/2014/04/17/report-‐highlights-‐importance-‐of-‐soccer-‐to-‐hispanic-‐millennial-‐market-‐segment/ 26 http://www.plunkettresearch.com/retailing-stores-market-research/industry-trends
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27Research done by Experian Simmons, using 4,887 online shoppers shows that the 25 to 54 year-old age bracket makes up to 65.7% of online shoppers of which 59.1% are female, 57.3% of online shoppers have annual income of above $50,000 and education level of some college or higher.
By Each State28:
Population Hispanic Alone
Arizona 6,246,816 1,814,674 (29.05%)
California 36,637,390 13,456,157 (36.782%)
Florida 18,511,620 3,995,324 (21.583%)
Georgia 9,468,815 784,712 (8.287%)
27 http://www.iacquire.com/blog/study-online-shopping-behavior-in-the-digital-era 28 http://www.socialexplorer.com/6f4cdab7a0/explore
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North Carolina 9,271,178 723,408 (7.803%)
Texas 24,311,891
8,917,477 (36.67%)
Overall Population Growth Expectations
● The population growth of the US is expected to grow from 296,000,000 in 2005, to
438,000,000 in 2050.
By Race29
● Currently the Asian population growth is mainly due to immigration and in 2005 the
Asian community made up 5% of total the United States population 30
o The population is expected to double by the year 2050 and reach 9%
● The Hispanic population growth can be attributed to natural birth and in 2005 the
Hispanic community made up 14% of the total United States population
o In 2050 the population is expected to double by 2050, increasing to 29%
● The White, Non-Hispanic population is expected to decrease from 67% to 47% by the
year 2050, which will cause them to no longer be the majority
● The Black population is expected to stay level at 13% through the year 2050
● The immigrant population is expected to increase from 12% to 19% by the year 2050
Age Groups31
2005 2050
Children (17 years old and younger) 25% 23%
18-64 63% 58%
65+ 12% 19%
29http://www.pewresearch.org/fact-tank/2014/06/26/u-s-hispanic-and-asian-populations-growing-
but-for-different-reasons/ 30 http://pewsocialtrends.org/files/2010/10/85.pdf 31 http://pewsocialtrends.org/files/2010/10/85.pdf
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● Due to the baby boomer generation, the age group of 65+ will increase by the year of
2050, which can possibly lead to more multi-generational families living in the same
housing units.
For 65 and over
o The White population is expected to decrease by 19% (from 82% to 63% in
2050)
o The Hispanic population is expected to increase by 11% (from 6% in 2005, to
17% in 2050)
o The Asian population is expected to rise to 8% in 2050, from 3% in 2005
o The Black population is expected to slightly rise from 12% in 2005 to 14% in
2050
For Children (categorized by 17 years old and younger)32
o The amount of White students is expected to decrease from 59% to 40% by
2050
o The amount of Hispanic students is expected to increase from 20% to 35% by
2050
o ⅔ of Hispanic children live in low income households33
o The Asian student population is expected to rise to 10% in 2050 from 5% in
2005.
o The Black student population is expected to remain to similar, only increase
2% from 14%
Age group 18-64
• The age group 18-64, which is considered to be the ‘work force’ was made up of 15%
immigrants in 2005 but will increase to being 23% immigrants in 2050.
Expected Growth34
• The expected growth of the US by 2050 is anticipated to grow 142,000,000 by 2050. Out
of those 142,000,000 people, 117,000,000 (who arrived in between 2005-2050) are
expected to be new immigrants and their US born children/grandchildren. 32 http://pewsocialtrends.org/files/2010/10/85.pdf 33 http://www.nbcnews.com/news/latino/five-‐facts-‐about-‐low-‐income-‐latino-‐families-‐new-‐report-‐n226321 34 http://pewsocialtrends.org/files/2010/10/85.pdf
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Income35
● In 2012:
o For all races, the average median income per household is $51,017
o Average median household income for the Asian population is $68,636
o Average median household income for the White, Non-Hispanic population is
$57,009
o Average median household income for the Hispanic population is $39,005
o Average median household income for the Black population is $33,321
Social Environment
Increased Diligence of Customer Research
• More wary customers due to the recession.36
o More research done on products before buying them
• Shifts the diffusion of innovation to the right, less people are willing to be innovators
Growing Importance of Mobile Devices37
• 40% of millennial consider losing their mobile device more devastating than losing their
automobile.
• Only 16% of consumers over 35 said the same
• Increased reliance on mobile devices in the future as well
Health Trends 38
• One –third of adult Americans are obese.
• New market for organic and “all natural products”.
• Increase in medication used for obesity related issues.
• Increase in fitness product sales by 6% in 2013.39
35 http://www.businessinsider.com/heres-median-income-in-the-us-by-race-2013-9 36http://www.portal.euromonitor.com/portal/default.aspx?ybCKUf03Cdt5wSXbA0C3Dg%3d%3d 37 http://www.portal.euromonitor.com/portal/default.aspx?GTycikqRJG0w4FWuOklgkg%3d%3d 38 http://www.cdc.gov/obesity/data/adult.html
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Sustainability40
• Increasing awareness in environmental and economic sustainability
• Growing market for “green” products
• Increase in consumer demand for companies to operate environmentally responsible
• Increase in consumer demand for locally grown products41
Technology Online Retailing 42
• Increased amount of Internet connected computers.
39https://www.npd.com/wps/portal/npd/us/news/press-releases/retail-sales-of-sporting-goods-run-
fitness-products-in-the-u-s-increased-6-percent-to-10-point-5-billion-dollars-in-2013/ 40 http://www.trendsactive.com/#!/our-‐trends/societal-‐trends/ 41(http://www.foodmanufacturing.com/news/2014/05/consumer-trends-one-third-will-pay-10-
premium-local-food) 42 http://www.portal.euromonitor.com/portal/default.aspx?qT4hT5tEx0nNTpFdAC8mew%3d%3d
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• Increased computer storage space eliminates previous problems limiting online digital
purchases such as books, movies, and videogames.
• Increase percentage of people who own Internet connected mobile devices. Since 2012,
expected to see over a billion more users by 2017.
• Gamification of current applications. Waze a gamified GPS app recently sold to Google
for $1.15 billion dollars 43 44
• Shift in purchasing items online
• Online sales approach $1.5 trillion dollars worldwide with a 20% increase in 2014.45
• M-commerce (shopping via mobile devices including smartphones and tablets) eMarketer
estimates that m-commerce totaled $41.68 billion in the U.S. during 2013, a 68.2%
increase over the previous year (http://www.plunkettresearch.com/Retailing-stores-
market-research/industry-and-business-data)
Increase in Self-Checkout
• Wal-Mart recently added over 10,000 self-checkout stations.46
43http://www.yukaichou.com/gamification-examples/an-octalysis-look-at-the-waze-craze/#.VEgdWlt-RMY 44 http://www.linkedin.com/today/post/article/20140403204459-174756-a-unicorn-in-israe
45 http://www.emarketer.com/Article/Worldwide-‐Ecommerce-‐Sales-‐Increase-‐Nearly-‐20-‐2014/1011039
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• Fewer employees needed to run the cash registers.
• Allocate extra resources to the floor and improve other areas such as customer service.
Twitter’s New Market
• Twitter’s new Buy It Now Feature.47
• Over 241 million active monthly users on Twitter48
• Target has over 1.4 million Twitter followers
• These followers are already inclined to purchase from Target
Mobile Payments
• 44% increase in mobile payments around the world in 201349
• This number only increases as technology advances
• Apple, one of the largest phone manufacturers is rolling out its own version of mobile
payments.50
• Includes VISA, Mastercard, American Express and many more to come.
Economical
Economy in U.S51
• The dollar is currently the worlds reserve currency
• This means currency is held in significant amounts by government in order to help
conduct transactions in the global market
• It has emerged and gained on other currencies to stay the strongest type of currency in
the world
46http://business.time.com/2013/06/26/do-it-yourself-checkout-love-it-or-hate-it-barcode-scanning-is-in-your-
future/ 47 http://adage.com/article/digital/twitter-slowly-wades-e-commerce-buy-button/294856/ 48 http://www.statista.com/statistics/282087/number-of-monthly-active-twitter-users/
49 http://www.monitisemobilefi.com/44-increase-mobile-payments-nielsen/ 50 https://www.yahoo.com/tech/apple-pay-is-going-to-be-huge-apple-ceo-tim-100761243774.html 51 http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/
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• This shows signs of the interest rates in America to go up from the record low
• Inflation rates going up would mean a higher tax on essential everyday expenses
• In 2014 as expected for consumers to be more secure the consumer demand and exports
should rise as well
• Should help spending increase while income is rising due to the raise in GDP and
unemployment
Household Debt52
• Headed by a younger adult younger than 35 fell by 29% while the households over 35
went down only 8 percent
• Also, the share of younger households holding debt of any kind fell to 78%, the lowest
level since the government began collecting such data in 1983
• Since 1983 when the government began collecting data, the younger household has had
its lowest debt ever at 78%
• The graph shows the median debt of households from 2007-2010
Middle Class53
52http://www.pewsocialtrends.org/2013/08/01/a-rising-share-of-young-adults-live-in-their-
parents-home/
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• The graphs shows the decline of the middle tier
• The decline has households incomes going from 72 to 69 thousand and still on the
decline
• 85% of middle class thinks it is hard to maintain a standardized living
• In the wake of the great recession almost half the middle class believes they are in worse
shape than they were before
• While 32% of them believe to be better off in the economy
• The middle class distribution is declining to where the upper income is inclining and the
lower income is staying the same
Supplemental Nutrition Assistance Program (SNAP)
SNAP offers nutrition assistance to millions of eligible, low-income individuals and families and provides economic benefits to communities. SNAP is the largest program in the domestic hunger safety net. The Food and Nutrition Service works with State agencies, nutrition educators, and neighborhood and faith-based organizations to ensure that those eligible for nutrition assistance can make informed decisions about applying for the program and can access benefits. FNS also works with State partners and the retail community to improve program administration and ensure program integrity http://www.fns.usda.gov/snap/supplemental-nutrition-assistance-program-snap need help making this a footnote
53 http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/
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54
Target Political Analysis5537
• As the political debate over immigration reform receives more and more attention,
companies such as Target are expected to be “immigrant friendly” in their diverse
product offerings
• With the recent passing of Obama care, government benefits such as SNAP
(Supplemental Nutrition Assistance Program) are under more scrutiny from both the
government officials and the public
SWOT Analysis
Strengths:
• Clean, uniform, aesthetically pleasing (laid out well)
• One stop shop
• Strong presence in the mobile app market
o Target’s mobile app was the most browsed retail app in 2013
• Strong brand recognition (easy to remember logo), easily accessible
54http://www.pewhispanic.org/2014/04/29/statistical-‐portrait-‐of-‐hispanics-‐in-‐the-‐united-‐states-‐2012/#food-‐stamp-‐recipiency-‐by-‐race-‐and-‐ethnicity-‐2012 55 https://corporate.target.com/corporate-‐responsibility/civic-‐activity/political-‐contributions
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o Target has stores in 49/50 states in the US
• Partnerships with well-known brands (i.e. Neiman Marcus, Marc Jacobs, FEED Group,
Dyson, Starbucks, etc.)
Weaknesses:
• Prices are not as low as competition
• Not as diverse in offering as competitors (i.e. makeup, hair products)
o Not offering to different demographic groups racially and ethnically
• Poor presence in the global market
• Quality clothing, but not enough options
Opportunities:
• Be one of the first major companies to utilize Twitter’s Buy Now option to raise product
awareness and increase customer engagement
• Create an online presence that focuses on customer service (i.e. instant message with
customer service representative)
• Update technology, including self checkouts
• Start offering products and services that their competitors offer, that they don’t (i.e. auto
parts, global food section, garden center, etc.)
• More multilingual signs and labels
Threats:
• Losing customers to competitors that offer lower prices (i.e. Wal-Mart and Costco)
• Increase in raw material prices, that will cause Target to automatically increase their own
prices
• Inability to reach consumers that parallels large competitors (global market)
• They don’t have a diverse customer base
o Strong dependence on the middle class could lead to loss in revenues in an
economic downturn
Target’s Competitive Advantage:
One of Target’s largest advantages is the fact that their brand is very recognizable and
also associated with quality. The store is spotless and uniform leading to an incredibly positive
image associated with it as opposed to stores like Wal-Mart where it is not as well kept. Most of
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their competition such as Wal-Mart and Costco are associated with lower quality products as
opposed to Target. This positions Target above its competitors in terms of price to quality. In
addition to this, Target has the most browsed mobile app and is continuing to further this
advantage with each and every update. With the projected increase in the mobile market, this is
sure to give Target a competitive advantage.
Segmenting, Targeting and Positioning Segmentation (Hispanics)
• The population is projected to rise above 423 million in 2050 due to increase in
immigration specifically Hispanics56
• This continuous increase in the Hispanic population led to a purchasing power of $1
trillion in 2010 and a projected increase to 1.5 trillion by 201557
• U.S. Hispanic buying power will grow faster than African-American buying power
(54%), Native American buying power (65%) and Asian buying power (89%) 58
• Hispanics families tend to shop with their children and extend families and Hispanic
kids make up 23% of the 17 and under U.S population (over 17 million)59
• Hispanic households spent more on telephone services, men’s and children’s clothing and
footwear. They also spend more of their money on food (grocery items)60
• Hispanics are immersed in and engaged with online and emerging platform
• Research shows that 25% of Hispanics tend to follow a brand on social media
• 18% are more likely to follow a celebrity
• 40% of Spanish-dominant Hispanics regularly watch English-language programming
• 30% of English-dominant Hispanics regularly watch Spanish programming
• 49% of U. S. Hispanics who watch television during prime-time hours, watch Spanish
language programming61
56 (http://www.census.gov/population/projections/files/analytical-document09.pdf) 57 58(https://ahaa.org/default.asp?contentID=161) 59 (https://ahaa.org/default.asp?contentID=161) 60 (https://ahaa.org/default.asp?contentID=161) 61 (http://labrewery.com/brewery/sites/default/files/LatinoOpportunityNielsen052312.pdf)
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• Latinos accounted for 11%, or 2.2 billion, of total e-commerce purchases made across the
United States in the first quarter of 201262
• 29% of Hispanics used online content/ads for researching entertainment DVDs, music
and games, against 15% of non-Hispanics; and 30% of Hispanics used online content/ads
for researching computers/tablets, against 24% of non-Hispanics63
• The top ten states with the largest Hispanic markets in order are California ($253 billion
purchasing power), Texas ($175 billion PP), Florida ($101 PP), New York ($76 billion
PP), Illinois ($43 billion PP), New Jersey ($37 billion PP), Arizona ($31 billion PP),
Colorado ($21 billion PP) New Mexico ($18 billion PP) and Georgia ($15 billion PP) 64
• For Hispanics, brand loyalty prevails in three categories65
o Hair care, baby products, health care & beauty, etc.
• Hispanics responded differently than non-Hispanics when their favorite brand of products
was not on the shelf. 23% of the (1000 Hispanics surveyed) reported they will go to
another store to buy their favorite brand66
• More than eight-in-ten (82%) Latino adults say they speak Spanish and nearly all (95%)
say it is important for future generations to continue to do so67
• The Hispanic consumer is spends more dollars at retailers offering brand names with the fashion footwear styles they want. Hispanic women spent an estimated $3.3Billion on fashion footwear (June 2012 – May 2013), representing 18 percent of the total women’s fashion footwear market.
Targeting
Hispanics will continue to be the largest to be the largest minority group in the United
States. By the year 2050, the Hispanic population is expected to double, increasing by 29%. With
62 (http://adage.com/article/the-big-tent/advertisers-reach-growing-u-s-hispanic-market/236336/) 63 (http://adage.com/article/the-big-tent/advertisers-reach-growing-u-s-hispanic-market/236336/ 64 (https://ahaa.org/default.asp?contentID=161) 65 (http://labrewery.com/brewery/sites/default/files/LatinoOpportunityNielsen052312.pdf)
66(http://www.mediapost.com/publications/article/223038/brand-loyalty-and-us-hispanic-consumers.html) 67 (https://ahaa.org/default.asp?contentID=161)
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the rapid increase in population, we can expect the purchasing power of Hispanics to increase as
well.
To target this group, we will be focusing on multiple media outlets. Our studies show that
roughly 50% of Hispanics, who watch TV, also watch Spanish programming. Due to this fact,
we will incorporate TV ads and radio ads. Additionally, there is a strong culture of literature
among Hispanics, so we will focus on placing bilingual ads in popular magazines. We will
collaborate with Spanish speaking TV outlets and magazine subscribers to create
commercials/ads (in Spanish) that highlight diverse food offerings, seasonal items and soccer
collectables. Soccer is one of the most watched sports amongst Hispanics in America. That being
said, due to the fact that not many of the other industries having taken advantage of this
advertising opportunity, Target should use this as a unique way to cater to the Hispanic market.
For example, during the World Cup, Target can offer special items (apparel, jersey’s, disposable
party dishware, etc.), in relation to the teams participating in the World Cup.
Another way to attract this demographic is by focusing on advertisements in Spanish and
English on forms of public transportation. For example, in cities such as Los Angeles and Miami,
71% of Hispanics use public transportation to commute to work. By placing ads on the outside of
busses and at public transportation hubs, we can reach the Hispanic population using these
advertising outlets. In hindsight, this will show these people that we are willing to cater to the
needs/wants of all potential customers and not just focusing on our current target market.
Positioning Our main goal is to communicate to the Hispanic population that we are making an effort to
improve their shopping experience. We plan to implement this by prioritizing bilingual signage
to accommodate Hispanic guests who are not proficient in English. This not only applies to just
the physical store, but for the online channels as well. In order to demonstrate that Target is
actively thinking about the community, we plan on supporting programs that help Hispanic
families. We want to frame our Super Red Card so that is viewed as a card that makes the lives
of Hispanics easier. We want to especially show that we understand the stigma behind using an
EBT card. Through our understanding, we have created this card to create a friendlier, less
judgmental environment that is in line with Target’s goals.
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Marketing Mix
• Product: Our product is a Super Red Card that can be linked up with SNAP Benefits so
that consumers only have to use one card. This eliminates unwanted disclosure of their
financial situation from the EBT/SNAP card.
• Price: There will be no charge for the customer to use this new card. They need to have a
Target Debit Card to add their information to.
• Place: Customers will be able to order a Super Red Card online, as well as being able to
sign up for one in store.
• Promotion: We will promote this all in one card, on Target’s main website. For the first
thousand people that sign up in each state, they will receive $50 in Target Gift Cards
added to their Super Card.
Implementation Strategy
• Main objective is to utilize the strong sense of community in Hispanic culture
• Incorporating a referral program for customers to achieve a small bonus in the form of a
gift card to Target.
• Take advantage of the fact that a large portion of Hispanics use public transportation by
putting bilingual advertisements on the sides of buses and other places where public
transportation is prominent
• Soccer is an important part of Hispanic culture in the U.S
• We would target specific Spanish speaking TV channels that broadcast Spanish speaking
TV shows as well as soccer games
• Literature is also an important part of Hispanic culture so we would place ads in
magazines such as Vanidades
• Vanidades is one of the most popular Spanish based magazines, with over 2.3 million
subscribers and the only one to increase in subscribers from 2009-2013.68
• We would set aside an area where customers can sign up for the new Super Red Card.
• This would be coupled with our promotion giving the first few thousand customers a gift
card incentive to sign up earlier than later
68 http://editorial.televisa.com/publishing/pdf/VAN_Media_Kit_2014.pdf
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Return on Investment
Target’s return on investment for the second quarter of 2014 was 4.7%6938. This number is down from their previous quarter of 5.95%. Overall, Target has an average ROI of 8.49%, these numbers are expected to be lower due to decrease in net income.
Executive Summary
The top two competitors Target has are Wal-Mart and Amazon. These competitors offer similar products that Target does, but position they differently. Wal-Mart’s approach is to reach the absolute lowest price possible, without as much of a concern for the presentation or quality. In a price to quality relationship, Target allocates more emphasis on quality than it’s competitors while also offering competitive prices. Amazon is very similar to Target in terms of products offered, however they differ in the fact that they are an internet based retailer. Amazon has a broader and more efficient supply chain management that allows to ship items to consumers within two days on average. For smaller individual purchases, Amazon’s Prime program makes it much easier to purchase items by offering free two day shipping saving consumers a trip to the store.
One of the key components we found important in the industry today was that customer engagement is still crucial. Advancements in technology allow for an increase in customer feedback and also an increase in companies feedback to the customer. It is necessary to take advantage of the development in technology to improve the customer experience and build a competitive advantage.
Taking a look at the general environment in the US, we noticed a huge potential within the Hispanic demographic due to population growth from immigration and natural birth rates. Looking at the current target market of Target, this is an area where Target could expand greatly. In addition to this growing population, as a general cultural trend of the US, there is a steady increase of the level of integration of technology. Hispanics are immersed in and engaged with online and emerging platform. Research shows that 25% of Hispanics tend to follow a brand on social media. The Hispanic population purchasing power is projected to increase to 1.5 trillion by 2015. More and more of our devices are able to connect to the internet; more and more people are using mobile devices and even shopping on them as well. Finally, another trend that is noteworthy is the increase in consumers who are environmentally conscious. Aspects that people did not care about 20 years ago such as sustainability, organically grown and environmentally friendly products are now in consumers mind when they shop. Target does not necessarily offer a wide variety of produce, but it is an area in which they have opportunity for growth.
We chose to target Hispanic families because of they are profitable, reachable and beneficial to Targeoration. The population is expected to reach 430 million by 2050 and Hispanics are a reason for the big increase. They are profitable not only because the population is
6938 http://csimarket.com/stocks/TGT-Return-on-Investment-ROI.html
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growing but because there is so much room to improve in marketing Hispanics. Hispanics are reachable using bilingual advertising on buses, park benches, and other public places. Having this advertising will make this segment beneficial with the growth of the Hispanics, expansion of their market and knowledge of what Target does for everyone.
When thinking of how to improve the retail experience for consumers, especially low income Hispanics, we thought of the social stigma surrounding using government assistance such as EBT/SNAP benefits. Because of the Stigma associated with The EBT/SNAP, The Agriculture Department announced, it will encourage grocery stores and other retail outlets that accept food stamps to post signs reading “We Welcome SNAP Benefits” to encourage people on SNAP to shop confidently with their EBT cards.
Not being able to provide for your family and needing assistance from the government to purchase groceries is never a positive experience. There is strong social stigma attached to using government assistance. With the creation of a hybrid card that combines Target’s successful Red Card and SNAP benefits card, consumers would no longer have to pull out an ugly blue card that tells the world they’re being helped. Now, they can just pull out a beautifully designed Super Red Card and no one will know any better. Target would become a safe place where consumers would feel happy to go to knowing they do not have to pull out that ugly blue card.
One thing that we want to do well in our implementation strategy is utilize the strong sense of community in Hispanic culture. One of the ways we will do this is by incorporating a referral program. For every referral that a customer achieves, they would get a small bonus in the form of a gift card to Target. We will also take advantage of the fact that a large portion of Hispanics use public transportation by putting bilingual advertisements on the sides of buses and other places where public transportation is prominent. Soccer is also an important part of Hispanic culture in the U.S so we would target specific Spanish speaking TV channels that broadcast Spanish speaking TV shows as well as soccer games. Literature is also an important part of Hispanic culture so we would place ads in magazines such as Vanidades. Vanidades is one of the most popular spanish based magazine, with over 2.3 million subscribers and the only one to increase in subscribers from 2009-2013. With the major channels covered, the final area we would use to implement our product is in the actual store. We would set aside an area where customers can sign up for the new Super Red Card. This would be coupled with our promotion giving the first few thousand customers a gift card incentive to sign up earlier than later.
As shown in the data, Hispanics have a substantial purchasing power in the southwest region of the U.S. As a firm, we can use bilingual advertising to appeal to this untapped resource to expand our loyal customer base. To better attract our target market we plan to offer seasonal products such as World Cup collectibles to bring in customers. While optimizing our marketing strategy to this particular demographic, we can also offer the Super Red Card. This offering will help those who don’t associate themselves with Targets socioeconomic reputation feel comfortable and welcome in our stores. Not only will our target market buy their grocery needs with the Super Red Card, they will also take advantage of our diverse offerings in our beauty, electronic, and other non-food departments. If and when our target market no longer requires SNAP benefits they will remain a loyal Target customer after developing a relationship with us through the Super Red Card offering.
