Group #2 Group Members M. Ali Raza Kamil Farooq Fatima Akram
Company case TARGET‘Target has Guest,Walmart has Customers’
Agenda• The Journey So far• Where it stand today?• Industry Analysis• Brand Identity Prism• Customer Thinking• Recession• Recovery• Conclusion
Journey So Far Discount store Electronic bull’s eye logo scanning Present Department store 1920 1960 1980 20001895 1940 1970 1990 Shop within a shop Plano grams Loyalty program online stores
Where it stand Today Exclusive US retailer Target is 5th largest retailer after Wal-Mart No of stores 1803 Revenue FY08 $65bn Profit Fy08 <$3bn 96% people recall Bulls eye logo Expect more payless Cheap Chick
Brand identity prism Self image: Self image: value, forward conscious, lively thinkingPhysique: red Physique: Culture:targeted logo Culture: Mammoth logo American, American, high workshop, Ruth on csr initiative. less Relationship: Reflection: Reflection: Relationship: Next door stylish, price Intelligent Handy man stylist conscious spender Personality: upper Personality: middle 40, aggressive, class, innovative, ur unsophisticated ban
Customer Analysis Target WalMartTarget Customer Young, educated, Middle age cost sophisticated, conscious customer fashionableCustomer Value Cheap Chic Best value for money
Retail strategy target Wal-MartProduct Home items – 40%. Consumable items like Consumable items like food etc-45%. food, health items-20%.Place Mostly In urban areas. Mostly in small town and cities.Price Little high 1-2% then Prices are very low. Wal-Mart.Promotion Spend 2.3% on on Spend only0.3% on advertisement. advertisement.Presentation Attractive promotions. Congested budget Larger then life products presentation. pictures.People Highly trained and Low trained, motivated motivated workers. contract workers.
RecessionRecession of 2008 sales of Target was falling for 8 months.Sales Wal-Mart was increasing.Problem lied in mix of the Target 40% shelf space was given to home and apparel goods. 20% shelf space was given to consumable goods like food45% of Wal-Marts retail mix consist of consumable products.Wal-Mart has always undersized targetWal-Mart annual revenue was 406 billion$.Target annual revenue was 65 billion$.
During Recession• But in recession Wal-Mart bottom line increased to 5.9%. target profit Drooped down to22.3% which is 2.2billion$.• They faced loss of 155 million $.• Out of which135million$ per credit loss in forth quarter.• Target also 47% of its receivable to Jp Morgan chase.
Recovery• IN 2010 Target sales rose to 5%.• Profit up was whopping 54%.• Perception of target’s value was increased.• They study micro and macro environmental factors.• They made it better and followed it.• Targets “Pay less” strategy continued without wavering.• Some wall street analyst expressed that target will loose its distinctive feature if continued like this.• Target also made mark on customers heart “ Target is a nice place to go. Wal-Mart may have good prices, but I rather tell my friends that I came back from shopping at target”.
Conclusion• changing direction of large corporation is an up hill task •It like reversing a freight train. •Company has to be determined. •It must have patience •By better planning