Target's Marketing Niche and Strategy

Introduction 

Target boasts in being one of the nation’s largest general merchandise retailers, specializing in providing discounts to large stores. The company has close to 1700 stores with their greatest concentration being in California, Texas, and Florida, (Sander & Bobo, 2011). It provides a range of products through the various stores in operation and the digital platforms. The stores differ in the items they stock with the general merchandise stores offering food ranging from groceries, dairy, meat, while the Super Target stores offer a full line of food items similar to traditional supermarkets, (Target, 2014). They equally offer broad access to fashion items, which explains why the market base predominantly consists of women. 

Most people who shop at Target do so by the feeling the store gives them. According to Rowley (2003), most customers mention feeling good when roaming the aisles of the discounter. This follows that they experience fascination with the whimsical merchandise, fresh advertisements, clean stores, fast service, and community giving. Target, in this sense, relies on the psychological essence of employing a human touch in the delivery of services, which explains the popularity of their services. 

Brief History of Target 

Target traces its origins back to 1902 where George Dayton founded it. It initially started as a subsidiary of Dayton Dry Goods Company in Minnesota. Throughout the course of time, more stores operating across the United States opened (Tongue, McDonald, Doutkevitch, et.al, 2012). From then especially in the 1980s to early 2000, Target embarked on an expansion exercise that involved the acquisition of other retail stores operational at the time such as, Fed-Mart, River Town Trading Company, Fed Co. Since 2000, the company took the spotlight in being the second largest retailer in the United States. The company prides in offering customers access to everyday essentials at discounted prices. Through capitalizing on its strong supply chain, access to updated technology, and an interest in investments, the company experiences tremendous growth, (Target, 2014). 

Over the years, Target had managed to branch out by providing unique services such as credit and debit card services, (Tongue, McDonald, Doutkevitch, et.al, 2012). It positions itself against its main competitor, Wal-Mart by being a more upscale and trend conscious entity. It equally prides in associating with the International Community for instance, by venturing into the Canadian market. However, the annual report of 2015 reveals an exit from Target, centering on operational costs and complex supply chain. 

Key Competitors 

In comparison to other stores, what gives Target its competitive edge, is the difference in operations. As explained by Rowley (2003), when you get into a Target store, the first distinguishing feature is the apparent peace and silence. There is no loudspeaker static, and the lighting carries an attractive edge by being bright, inviting, with the organization of items making shopping easy and fun. As opposed to other retail stores that crowd individuals and have items distributed all over without order, Target helps the consumer through the buying process. 

With the retail industry involving multiple players, the ideal way to have a favorable advantage is to compete based on price. This follows that multiple retailers can easily offer access to the same products they have meaning the effective way of outdoing them is by having lower prices on their products. One of Target’s largest competitors is Wal-Mart, with it having a wider scope of merchandise and market share as opposed to Target. The distinguishing factor with Wal-Mart is that it offers low prices whereas Target aims to encourage customer satisfaction and improve its marketing strategy. 

SWOT Analysis of Target 

The strengths, weaknesses, opportunities and threats model of analysis provides a framework that helps understand the operations of any business. The SWOT analysis of Target Corporation is as follows: 

Strengths 

Target boasts of having a high brand recognition and reputation centering on quality goods at affordable prices, (Gowda, Rentsch, Sapick, Smith et.al, 2007). It equally makes the shopping experience fun for the customers. Through the online platform, customers get a unique and convenient shopping system. With the brand being a major strength of the company, the choice of colors being red and the bull’s eye logo get recognition by consumers everywhere. The design of the logo is cool, hip, and stylish carrying an underlying, message of hitting the bull’s eye explaining how precise Target is in its operations. The unique advertising campaigns and unique marketing strategies bring out the company as a cool discount store. 

An important and overlooked strength Target has is supplier power. It has extensive product assortments with numerous vendors providing access to these products, (Hahn, Kwak, Palys, 2005). Over the years, the corporation prides in acquiring small retail stores to increase the flow of its operations. Another predominant strength most customers mention is the serenity and high standards of cleaning maintained in the stores, which makes the stores a favorable place to be having in mind the busy nature of most discount shops (Rowley, 2007). 

Weaknesses: 

Target stores require a significant amount of space, which poses a challenge in real estate costs especially in urban areas where space is an issue, (Gowda, Rentsch, Sapick, Smith et.al, 2007). In the cities, real estate tends to be expensive. This means that renting a 13000 square feet space is difficult requiring extensive financial resources. Another challenge Target Corporation experiences centers on the fashion line that is guilty of poor performance. Currently, multitudes of fashion online-based stores exist that offer more discounted prices than target. In as much as Target boasts in having an extensive customer base, keeping up to date with the trends in fashion is a challenge the company has to address to compete favorably with the online-based stores. 

A recent challenge that affects business operations of Target involve the lawsuits they go through from time to time. As a result, the company spends a significant amount of time trying to resolve them, which could improve operations. 

Opportunities: 

The major opportunities for Target center on expansion into the global market. Through the development, Target can emerge at the top. Currently, Target is operational in most parts of the country except Alaska, Hawaii, and Vermont that do not have Target presence. The opportunity to expand exists as Target has an extensive customer base in other states. Another growing opportunity is the use of e-commerce especially in fashion, (PESTLE Analysis, 2015). For example, the promotion of Lily Pulitzer on target.com attracted many consumers to the point of crashing Target’s website. There still exists an opportunity for growth with most consumers being young millennials. Having products that are hip and can cater for the above clientele will help expand the market base. 

Threats: 

The impending threats towards Target’s operations involve the growth of smaller retail stores, (PESTLE, 2015). Through their growth, more consumers shy away from Target following the attractive feature associated with the small retail stores. Another threat revolves around online-based operations with it receiving competition from other sites such as Amazon. Still, in the issue of competition, Target faces cutthroat competition from Wal-Mart, which forms a significant share of the retail industry. Sander & Bobo (2011) assert that expansion into the global market by Target will make it the number one retailer in the country. 

Marketing of Hardware Products 

With the strength of Target resting on having an extensive customer base, the customers are predominantly women, which explain redirection of focus to the male clientele. Hardware products seem to be favorable with men needing constant access to tools to facilitate repairs for their cars, home, and in most of their activities. Through an examination of various online platforms such as Amazon and eBay, there is a wide collection of hardware items. The items are broad ranging from tool sets, farming equipments, and other range of products. This means that there is a need to provide a broad range of hardware products, which is possible by having the important suppliers in place to encourage cheap bargains. Hardware supplies have the tendency to be on the expensive side, making them more competitive will attract more consumers. With Target expanding by drawing in suppliers for small automotive shops, sports departments, and hardware retailers, it is then possible to broaden the market scope by offering equipment that are usable in any context. For example, if fixing a part of the car that is not functional, providing the consumer with access to supplies from the automotive shops will help them make the repairs. 

Segmentation Approach and Rationale 

Segmentation as explained by Larsen (2010), is a process that involves dividing the market into several groups based on demographic, geographic, psychological, and behavioral factors. Target offers a broad range of products from clothes, groceries, electronics and many other products. To this end, approximately eighty percent of Target customers are female which explains the need to expand to the male clientele. In an examining the potential customers, reaching out to young people seems more viable as part of demographic segmentation. This follows that Target has a median of forty-one concerning the age of its consumers. With Target having operations in most states, the geographical area is limited to the United States following that it does not have operations outside the country. The use of hardware products to appeal to the male clientele relates to the psychology of gender where gender roles posit that men are the caretakers. In their role of caretaking, they need tools to help them build materials for their family. In as much as women are equally involved in the building and construction industry, Target market analysis suggests a need to have more men buying their products. Behavioral factors support the idea pending that men enjoy carrying out activities in the house that involve the construction and deconstruction of items. Capitalizing on the growth of the engineering industry, the availability of such items in abundance in the stores helps boost sales. 

Positioning Statement 

Target as a corporation centers on the idea of pay less and expect more which is how it sets itself apart from its competitors, (Target, 2014). Being that it is an upscale discount store, targeting the hardware products to expand the market base helps in expanding operations. By capitalizing on the online platform to sell the products, more men will have access to the products. Now, the online platform registers more sales in the fashion sector, which explains the need to diversify into a broader niche. The existence of positioning advertisements in the website and the distributed stores through new discounts will help in this regard to target the male clientele. 

Marketing Mix Details 

Hardware items at Target exist, however they center mostly on household essentials such as outlet and switch plates, showerheads, switches, towel bars and rings. In this sense, the hardware items center on home on home improvement from flooring, furnace filters, automotive products. An analysis of Target website in the hardware categories reveals a shortage of tool sets. For example, there are only three anchors available, two camping tools, and five drill bit sets. By having the products in few numbers, it discourages most consumers from buying the product. In comparison to Amazon, which is Target’s main online competitor, it provides access to more items. For example, a Black and Decker drill set are eight hundred and fifty two in quantity, each going for $ 79.99. The offer from Amazon is flexible in that it provides lower prices for items that are second hand. This means that if an individual cannot afford the new item, they can easily buy the used one. Target on another hand, does not provide access to the large number of items Amazon does. It only provides a master drill bit set going for $10.39. A search through the website does not provide access to other tools whereas Amazon consists of a multitude of tool sets. If Target gets access to reliable vendors who can provide the equipment, and standardize the prices, the market structure will change significantly. Wal-Mart as a competitor, takes advantage of having different vendors, which is something that Target ought to embark on. With a focus on the products being on hardware items, some of the items that encompass this include drills, saws, fixtures, wood, and many other appliances. Target need to increase the supply of the above products to the stores to increase its market base. It can also revamp its system of e-commerce to not only target the local market, but also the global one. With the help from other small retail stores that specialize in hardware items, it will be possible to get access to a wide range of products that meets the needs of the consumer. 

Success Metrics to Measure the Marketing Strategy 

Metrics play a major role in evaluating if the mechanisms in place facilitate growth. In marketing, particularly, in a large corporation such as Target, tracking website activity, visits, and having consumers fill out surveys helps determine if the market strategies in place are effective. In monitoring website activity, the reliance on the online platform by Target facilities the ability to track products, advertisements, and the progress of each item sold. For example, some companies use landing pages to track metrics of each marketing initiative. Having such a system in place to monitor the sale of the hardware items will help boost sales. The Target website as it is now, does not have provisions to encourage the sale of items as it simply displays the items available in inventory. Tracking visits is another metric that involves going to the various stores to gauge how customers perceive the business by asking them questions about the potential services to be improved. Another metric that reinforces the tracking visits is the use of surveys to gauge customer satisfaction and the potential areas of improvement. With surveys, it is possible to gather qualitative information and generate better mechanisms of marketing their products. 

International Considerations for Business 

There are various considerations in encouraging the success of the marketing plan such as growth, price projection and the appeal of the products to the customers. One of the major factors that determine the success of a strategy is growth. Target has the potential to grow through expansion of the market base to involve a significant share of the male clientele. By having a consortium of tool sets and marketing them online, the market presents the potential to grow. With the urban areas presenting the potential for development, having the stores that specialize in such products is helpful. For example, Target could liaise with Black and Decker to have the items restocked in the stores in large quantities. 

Target has to have consideration for making their prices affordable with the price being the contributing factor of expansion. Favorable prices increase demand and if Target capitalizes on the law of demand, then gaining dominance in the market is easier. This follows that if the customers perceive the products as affordable, then they capitalize on Target being their central store, offering them the services they need. 

The appeal of the goods is another factor to consider. By engaging in active advertising through online platforms and in the stores, branding Target as an authority in the supply of hardware materials is possible. Advertising forms an important component of marketing contributing to either success or failure of a product. With Target having a reputation for providing quality products to the clients, providing customers with top range hardware appliances at an affordable price helps promote growth especially in the foreign market. With the online platform, having an avenue that encourages global access through favorable shipping arrangements helps strengthen marketing of the products. Having a friendly user interface also encourages sales as customers have easy access to the products. This borrows from the system Amazon has that encourages the sale of products. The provision of services such as free shipping costs, or reduced costs to distant areas encourages a wider customer base. 

Summary 

Marketing of hardware items presents an opportunity for growth following the gap already existence in the sale of such items by Target. By working with hardware suppliers to get large quantities of the items especially tool sets will expand the market base. Target mostly specializes in hardware items aimed at home improvement as opposed to items that apply in a broad range of settings such as construction. With Amazon, presenting competition and the idea that is possible to have a wide reach globally, the need to diversify the hardware items explains why this plan needs funding. While most funding centers on the areas that are succeeding, the focus on hardware items presents an opportunity for growth that has long-term benefits. With hardware being a representative of the manufacturing industry, investment is beneficial with the products having a long shelf life and less likely to depreciate in value over the years. 

Conclusion 

Target has the potential to be the number one retailer in the country through the provision of specialized hardware supplies. By focusing on the male clientele, the probability of growth is high. Introducing a broad range of hardware suppliers encourages the diversification of the retail operations of the company. Hardware vendors’ present potential benefit as the growth of the real estate industry requires that most contractors have access to the hardware supplies. By operating on such terms, the marketing of the hardware products is beneficial. 

References 

Gowda, Rentsch, Sapick, Smith et.al, (2007). Target Corporation: Expansion into Urban Markets. Print. 

Hahn, Kwak, Palys. (2005). Target Corporation Strategic Report: Sage Group Revolutionizing Corporate Strategy Print. 

Larsen, N. (2010). Market Segmentation Print 

Pestle Analysis. (2015). SWOT Analysis of Target Corporation Web Retrieved from http://pestleanlaysis.com/swot-analysis-of-target/ on 6 Sep 2016 

Rowley, Laura. (2003). On Target: How the World’s Hottest Retailer Hit a Bull’s Eye. New Jersey: John Wiley & Sons Inc. 

Sander & Bobo. (2011). The 100 Best Stocks you Can Buy in 2012. Massachusetts: Adams Media. 

Target Corporation. (2014). Annual Report Print 

Tongue, McDonald, Doutkevitch, et.al, (2012). Target Corporation: Case Synopsis . Simon Fraser University. Print.