Target Marketing Plan Essay
Target Marketing Plan
Target Corporation is the second largest discount retailer in the United States. Target operates over 1,900 stores in the US and just recently 127 locations in Canada in 2013. The discount retailer sells hardlines, softlines, as well as groceries in some stores. Many stores also include optical, portrait studio, pharmacy, café, Starbucks, or Jamba Juice. Target’s commitment to providing a one-stop shopping experience lends the opportunity to introduce a retail clinic to the Northwest Indiana region. Market research indicates the growing need for convenient health care services in Northwest Indiana. The recent passing of the Affordable Care Act has created the need for alternative health care services in the region. The market strategy will be based on an approach to reach this market by utilizing resources to create awareness of this service, encourage existing customers as well as new customers to attach themselves to the brand, and remain an asset to the community in which this Target serves.
2. Situation Analysis
Target Corporation is primarily based out of the United States and is one of the largest retailers. Target sells a variety of products from apparel and accessories to household essentials. As of February 2013 it employed about 361,000 people. Their target markets are in the urban and suburban areas.
2.1. Company overview
Target was founded in Minnesota in in 1902 and was originally named Goodfellows. It was later changed to the Dayton Hudson Company before becoming Target. In 1970 they acquired the company Mervyn’s. In 1990 they opened their first Greatland Superstore. The Greatland Superstore consisted of photo services, better checkout lanes, and a larger pharmacy. Target’s core competencies are product differentiation, good reputation in the United States, and price positioning that aligns with consumer behavior. Target’s strategic assets are a multitude of brands including Cooking.com, Archer Farms, Circo, Embark, Cherokee, Converse, and Genuine Kids by Oshkosh. Target’s current product line are household items, apparels and accessories, hardlines, home furnishings and décor, food and pet supplies, and pharmaceutical, dining, and optical services. Target hopes to strengthen its market position with expansion plans. The expansion plans consist of expanding to locations outside of the United States into Canada. It also hopes to grow its business by creating new store small-formats which would be under CityTarget and be located in densely populated urban areas.
In the MarketLine, Target Corporation, document it discusses Target’s mission and vision. It states, “Differentiation with exceptional value, which represents the foundation of our “Expect More. Pay Less.” Brand promise, will continue to set Target apart in the marketplace. We remain committed to offering a truly unique assortment – through our design partnerships, outstanding portfolio of owned brands and curated selection of signature national brands. And we are equally unwavering in our commitment to provide a compelling value proposition, as we showed by expanding our Price Match Guarantee to include select online competitors. We’re also collaborating closely with our vendors on channel-management strategies that sharpen prices and improve selection of our guests.” Target’s current retail clinic activities consists of clinic locations in Florida, Illinois, Maryland, Minnesota, and Virginia to name a few. The clinics offer services from minor illness and injury treatments to vaccinations. Target conducted a survey that shows an increasing demand for retail clinic services based on the growing increase of new customers due to the Affordable Health Care Act.
2.2. Market overview
The people who use Target clinics are not exclusively a subset of the overall market that shops at Target. The customers are made of current Target customers and new customers that are looking for their needs to be met. The unmet needs of its customers is around the quick availability to be treated, the reduced pricing compared to general physician visits, and the ability to get treated for non-severe illnesses and injuries. In the article, Medical Society of Virginia, Retail Clinics, it states, “Roughly 70 percent of these patients become new pharmacy customers, 38 percent will buy an over-the-counter product during the visit and 80 percent will make a general merchandise purchase. Surveys have also shown that 95 percent of customers diagnosed at Target’s in-store clinics get their prescriptions filled at the same store. Ninety percent of the clinic customers came to the store for care, not necessarily to shop, but left having made a purchase.” It also states that 50 percent of retail clinic customers do not have insurance. There are 4 steps in the market segmentation process.
The target market for this marketing plan is the lake county area in Merrillville/Hobart due to the lack of retail clinics or minute clinics in that area between Methodist Southlake and St. Mary hospital. The age of the population of the residents of this area is also a factor as well as their income per household. For those who live in this radius their average income is $49,315 and their average age is 38.1. These sources of data are taken from U.S. Census. This area would have a great profit potential due to the lack of minute clinics in the area. Little to no insurance coverage is a big characteristics of retail clinic patrons.
This would be the same market for Target since there is already a store in Merrillville. Per the Ansoff Matrix the existing markets coincide with its existing products through market penetration and new products through product development. The demand for retail clinics decreased from 350 percent in 2007 to 30 percent in 2008 with most recently in 2009 trending at -5 percent. It is expected that by 2015 retail clinics will top off at 4,000 with acceleration at 30% from 2013-2014.
Since most of the staff at Target retail clinics are nurse practitioners they might have the opportunity to collaborate with nursing and medical schools to gain interest from students completing their residency. This could cause future doctors to gain interest in seeking employment at these retail clinics opposed to a traditional physician’s office. In addition, Target offers internships to medical and pharmaceutical students. There could also be an increase of customer demand if Target hires doctors in place of nurse practitioners. Their staff is part of the American Medical Association and the American Academy of Family Physicians.
The competitors for the retail clinics are Walmart, Walgreen’s, and CVS on the retail side and primary care physicians (in general) on the purely medical side. Its other competitors are Costco Wholesale Corporation, Best Buy Co., Inc., Sears Holdings Corporation, and Kohl’s corporation. Target’s strengths are is REDcard rewards program, its existing presence in the market, and its reinforced value market messaging.
The macroenvironmental factors of demographic environment, economic environment, sociocultural environment, natural environment, technological environment, political-legal environment will influence the development of Target’s strategy and its potential success. The company’s pricing strategy allows for the attraction of its current consumers through all economic times, increasing market penetration, and challenging retail climates. The expansion of Target stores into Canada is a natural market. Target’s integrates sustainability into its business through the focus on healthy, sustainable communities.
Its natural environment is focused on preserving natural resources such as water, reducing wastes, and greenhouse gas emissions. Its technological environment is focused on operating seamlessly, efficient communications and collaborations around the world. Target has a policy committee that is responsible for the decision-making process regarding its political activities. These factors will affect Target’s ability to expand its retail clinic operations into Lake County market that is being considered. Some of the sociocultural environment focus for Target consists of increased sustainable seafood selection, increasing organic food offerings, and improved owned-brand packaging.
Target focuses on being a trusted name in the community. The ultimate goal of the retail clinic is to use this brand extension to increase customer traffic and build brand loyalty. Target’s goal is to have a first class operating health care facility, providing the best care possible.
3.1. Ultimate Goal
With the ultimate goal being to increase customer traffic and brand loyalty, aim should be on opening new clinics at a rate of 20% per year. This would
increase market share
3.2. Market Objectives
To increase customer traffic, Target’s focus will need to be on increasing awareness of the new brand, promoting a positive image, and leveraging existing customer base. The lack of minute clinics on US 30 between Merrillville and Hobart should pose an opportunity for Target. After the data breach incident, Target will need to continue promoting an image of trustworthiness and concern for their customer. The selected clinic location has the potential of reaching over 400,000 Lake County residents alone, leveraging and existing customer base as well as attracting new customers.
3.2.1. Customer Objectives
Customer focused goals will need to be obtained by completing the following: maintain a high satisfaction rating (9 out of 10 or better), managing the rate in which customers make the switch to Target Clinic, ensure repeat business in order to create the brand loyalty.
3.2.2. Collaborator Objectives
Target – Lake County already has a pharmacy located inside the premises. Target Pharmacy in collaboration with Target Clinic will help leverage the existing customer base if these two entities are located side-by-side in the store. Also, sending any medications directly to Target Pharmacy once a visit at the clinic is complete will further strengthen customer loyalty to the brand. Target – Lake County should consider teaming with the other Target locations in Lake County to advertise and create awareness of the clinic.
3.2.3. Company Objectives
Target Clinic is another step in creating a one-stop shopping experience for Target consumers. A report by Trefis shows that retail clinics help retailers in three ways: boosting prescription sales, boosting pharmacy benefit management, and boosting sales of over the counter items such as bandages and pain relievers. All three will help Target boost their bottom line profits, especially with the pharmacy already inside the store.
3.2.4. Competitive Objectives
The primary competitive objective is to remain the leader in high end discount retail and continue to seek profitable avenues to grow the brand.
4.1. Target Market
The Target Clinics target market will consist of primarily residents located within a 10-mile radius of the Lake County Store. This would include mainly Merrillville and Hobart residents along with Crown Point, and those on the outskirts of US 30 and located in Valparaiso and Schererville.
The target market for Target Clinic are specifically women between the ages of 30 and 45 – women who seek quality customer service over price. In short, those that follow the ideal “Expect More. Pay less.” This demographic represents college educated individuals both single and married with families. Household income average is $63,000 and while their incomes are sustainable, these consumers desire a good value. Consumers want to enjoy the luxury of a designer or high end product without the hefty price tag. We expect this specific target customer to have a trickle down affect and by word of mouth attract other men, women, and children outside this range.
The Target Clinic medical team are major stakeholders. They are the forefront of Target Clinic’s success. The medical professionals are expected to provide top notch healthcare, participate in ongoing training and development, and operate ethically.
The competitors include other retail clinics such as CVS, Walgreens, and Walmart. As nearly 30 million Americans now have healthcare coverage, so increases the demand for primary care physicians. Consumers want conveniently located, fast, licensed professionals to take care of their symptoms and prescribe medications-as needed. The addition of Target Clinics will pose an opportunity for Target to take advantage of the demand.
In 2013, Target experienced a data breach in which millions of customer names, credit and debit card numbers, their expiration date, CVV as well as mailing addresses, phone numbers and emails were compromised. Target has since offered one year of free credit monitoring and identity theft protection to those guests who shopped during the time of breach. Target will need to promote their REDcard as a secure form of payment. It includes 5% discount on every purchase in store or online as well as free shipping. The REDcard can also add an additional layer of security as it is PIN protected and can only be used in Target stores, which should deter thieves.
4.2. Value Proposition
4.2.1. Customer Value
220.127.116.11. Value Proposition
Target Clinic offers numerous benefits to its customers:
Convenient one-stop shopping. Target guests can visit the clinic and pick up medication at the same location as well as shop in store for items to help soothe ailments. No appointment needed. Visit the clinic for minor illnesses, injuries, vaccinations, wellness checkups, or cosmetic procedures and more without an appointment. Printed visit summaries. Guests will leave with a summary of visit along with any care recommendations, follow-ups, or medication information. Convenient hours. Target Clinic is open 7 days a week as well as holidays to serve guests. Low cost. Target Clinic offers competitively priced services, lower than a doctor or ER visit. Flexible forms of payment. Guests can pay with cash, check, credit card, Target REDcard, Target Giftcard, and even online with Visa, Mastercard, Discover, and Amex. Same Target experience. You are considered a guest in all Target stores and the warm, and welcoming health care professionals treat you as such. You can expect the same attractive, clean, contemporary design in the clinic.
18.104.22.168. Positioning Statement
Target Clinic is no appointment needed, quick consultation healthcare service for men, women and children with minor or non-serious ailments, located conveniently in Target stores with flexible hours at a cost lower than an ER or doctors visit.
4.2.2. Collaborator Value
Target Clinic offers the following benefits to medical staff: Established patient base. Reap the benefit of servicing Target customers. First class clinic. Target has invested the dollars into providing everything needed to give the best care possible. No quotas to meet or time limits per patient. Healthcare professionals can focus on doing what they do best – take care of patients. Target benefits. Clinic employees get the same great benefits as the rest of Target team members. Including the Target discount.
4.2.3. Company Value
In 2013, our total revenues were $76 billion, gross margin was 29.8%. We expect to improve financial performance by increasing revenue by 15% and gross margin by 1.5% in 2015
The key aspects offered through the Target Clinic are high quality service, a get more for less brand identity, at a price point comparative to competition and equivalent to the quality of service, coupled with the discount incentives already prevalent (REDcard discount, Cartwheel app).
The same Target guest service quality relevant in stores today can be mimicked in the clinic. A polite, knowledgeable, friendly staff to assist ailing guests is the first step in achieving this. A fully staffed clinic during peak times contribute to the service characteristics of Target. The stores generally have fully staffed help to make sure the shopping experience is stress-free. (i.e. no long lines, stock available, help with locating merchandise)
The key elements of the Target brand are its red bull’s-eye logo and their slogan, “Expect More. Pay Less.” The slogan is part of their commitment to create a high end shopping experience at the lowest cost possible without sacrificing quality. Target customers are treated as “guests” and called as such creating a unique experience unlike any other discount retailer. Target partners with high end designers such as Michael Graves and Issac Mizrahi to maintain the high end look at a less expensive price point.
In the American Academy of Physician Assistants (AAPA) article, The Role of In-Store or Retail Health Clinics, it states that, “Located in supermarkets, pharmacies, and high traffic retail outlet stores such as Target or Wal-Mart, these clinics typically provide limited medical services for minor ailments. They are open seven days a week for extended hours and are staffed primarily by nurse practitioners. At the current time, a small number of clinics are staffed by PAs. Appointments are not necessary and most visits last about 15 minutes for treatments that cost $40 to $70, which are clearly posted on the walls.”
Target can incorporate many incentives to attract its current customer base into their retail clinics. Incentives can arrange to coupons and discounts with the printing of their receipt from their store purchase. Mail in rebates could be another avenue to attract customers. In addition, even Target gift cards can be used at its retail clinics.
The manner in which the key aspects of the offering of its product, service, brand, price, and incentives are communicated to target customers, collaborators, and company personnel and stakeholders are through direct contact. When the credit card data breach occurred the CEO, Gregg Steinhafel, send out a communications to every customer who purchased items within that timeframe. In addition, emails were sent and information were posted on their website. Target uses its online magazine, Bullseye View, to communicate to its customers and stakeholders. Also, Target advertises their sales, products, and promotions through weekly ads.
The manner in which the key aspects of the offering are delivered to target customers, collaborators, and company personnel and stakeholders are done through a couple of avenues. A consumer may go directly to the store to get their products and services. In addition, a consumer may order their items online and have them shipped directly to their home or business. Another avenue they are now heavily promoting is store pick up app. The consumer would make their product selections through the app, once the order is ready for pick up the consumer is automatically notified, and then the consumer can go straight to the store and pick up their order.
The metrics used to measure the company’s performance and monitor the environment in which the company operates are based on direct operational impacts, supply chain, and environmental goals. The goal on direct operational impacts is based on transportation and energy efficiency. The supply chain goals are based on finding the best procurement business advantage. The environmental goals are split into categories on waste, water, greenhouses gases, energy star certifications, and transportation efficiencies. In the article, Metrics and goal-setting in retail: Target Corporation, it states, “Target’s packaging goal is notable for translating a generic charge – “more sustainable packaging”- into specifics, targeting 50 products for a 10% improvement in either less material input or more recycled primary content.”
6.1. Performance evaluation
The criteria for evaluating the company’s performance and progress toward its goals should be dependent on the success of retail clinics in the market. Currently the Target clinic makes up 31% of the retail clinic market share. Walgreen’s Minute Clinic leads the way with 41%. Although the retail clinic growth has declined another performance evaluation would be the number of retail clinics that are newly opened.
Target Corporation’s Environment Goals as listed in the Metrics and goal-setting in retail: Target Corporation article.
Figure 5: Target Gross Profit 2009 – 2020 projected
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