Kathmandu University School

of Management
Balkumari, Lalitpur

Target – A case of IMC

―Group – 1‖

Submitted by: Submitted to:

Abinash Adhikari (17301) Sunanda Sharma

Ginish Jung Dahal (17307) Faculty of Marketing Decisions
Astha Gyawali (17313)
NaveenNeupane (17319)
Monika Rajbhandary (17325)
Ajay Shrestha (17331)
7th September, 2017
Q No. 1-1 What has Target done well over the years in terms of its integrated marketing
communications strategy?

In 2002 the Minneapolis-based Target Corporation leapfrogged Kmart to become the United
States‘ second-biggest discounter behind the $218 billion giant Wal-Mart. Target's success was
attributable to two key factors: the right kind of differentiation and distinctive marketing
communications. An early strategic choice to build a brand around the Target name fostered the
company's steady growth. Gerald Storch, Target's vice chairman, explained that the company had
faced three strategic choices to tackle the increased competition in the retail market: "to
specialize, to become the low-cost producer, or to differentiate." The first choice would have
thwarted future growth, and Wal-Mart was already a low-cost producer, so Target chose the third
option and decided to reposition itself as a mass merchandiser of affordable chic goods.

Target adopts an integrated cost leadership / differentiation strategy where customers ―Expect
more and pay less‖, literally. One of the major pillars for its success is communication strategy
and its use of integrated marketing communications is exemplary. Target has done everything
well in terms of an integrated marketing communications strategy—its messages are consistent,
accessible and recognizable to customers‘ world-wide, it has strong sales promotions, public
relations and publicity, it sponsors major events and experiences all around the world, it has a
strong online presence and positive word-of-mouth selling, and also engages in direct marketing.
Target has developed an effective communication strategy by following the eight steps required:
identify, determine objectives, design communications, select the channel, budget, mix, measure
results, and manage the process.

1. Advertising
Target spends 2.3 percent of its total revenue on advertisement. With the help of more than half a
dozen agencies, it regularly comes up with innovative ad campaigns—a singular strategy for a
discount store. Target regularly makes posts regular advertisements through television,
billboards, magazine, catalogs, newspaper etc. to reach their target audience. Through consistent
marketing and communication, Target has transformed its signature bull's-eye logo into a
lifestyle symbol. The bull's-eye is recognized by 96 percent of American consumers and
considered a brand icon in a class with Nike's swoosh and McDonald's arches.
More recently, the "bull's-eye world" spots, displaying a funky retro pop culture place where
happy blondes serve red bull's eye-shaped Jell-O molds, was awarded the Marketer of the Year
award by Advertising Age

2. Sales promotion
Target makes it even more convenient to shop there with the credit card that they offer and the
Target perks you can receive when you have one of their card. The Target RED card gets
consumers 5% off of every purchase and free shipping if you order off of target.com. Target
also looks at the purchase histories of the consumers and sends coupons that are directly related
to their purchase history. This is a huge strategy because it keeps consumers coming back for
more products.

3. Events and experiences

Events and sponsorships are company sponsored activities and programs designed to create
special brand related interactions. Target sponsors discounted or free days at art museums around
the country, including the Museum of Modern Art in New York and the Museum of
Contemporary Art in Chicago. The list of museums that Target sponsors are:-

 Museum of modern art, Manhattan

 Museum of contemporary art in Chicago
 Brooklyn museum
 Walker Art Center
 Boston Children‘s Museum
 Minnesota Children‘s Museum

As a result of its integrated marketing plan, Target has attracted many shoppers who would not
otherwise shop at a discount retailer. Target also aligns itself with a variety of events, sports,
athletes, and museums through corporate sponsorships. From Target Field, the home of the
Minnesota Twins in Minneapolis, to Target NASCAR and Indy racing teams and athletes like
Olympic snowboarder Shaun White, these sponsorships help Target pinpoint specific consumers,
interests, attitudes, and demographics. Target also advertises on and sponsors major awards
shows such as the Oscars, Emmys, Grammys, and the Golden Globes.
4. Direct and Interactive marketing
Target also has a strong presence in social media platforms. It engages customers and prospects,
raises awareness and elicit products through platforms like twitter, youtube, pinterest, tumbler,
facebook, instagram and LinkedIn. All of them combined give the brand a very interesting
audience of at least 26.4 million people. It also uses Target.com as a critical component in its
retail and insight into consumers‘ shopping preferences, which ultimately allows for more
targeted direct marketing efforts. It offers exclusive deals and responds to user‘s comments and
needs quickly. The site also features in-store items alongside Web-only items in hopes of driving
traffic into the stores. On social Web sites such as Twitter and Facebook, Target builds loyalty
and encourages young consumers to share their experiences, discounts, and great finds with each
other. In addition, it sells products through its own website i.e. target.com which provides
various types of products at affordable prices. Target sends direct mails to its customers and
potential customers about its new offerings as well.

5. Public relations
Target reinforces its positive brand image by contributing significantly to surrounding
communities. The company donates 5 percent of its annual income, or more than $3 million a
week, to programs that focus on education, the arts, social service, and volunteerism. Target
donated more than 16 million pounds of food in 2008 to Feed America, the nation‘s food bank
network. Other successful programs include:
 Sponsorship of the restoration of the Washington monument
 Take Care of Education program
 Partnership with Coca-Cola in the Color My World red line campaign
 Sponsorship of the CBS program Survivor

6. Word of mouth marketing

This company has also gained a positive push from word of mouth marketing. It provides online
platform to share views, experiences and opinions of its customers which increases its sales.
7. Personal selling

Additionally, Target has developed an effective communication strategy by following the all
eight steps required: identifying & determining objectives, designing communications, selecting
channel, establishing budget, mix, measuring results, and managing the process.

Q no. 1-2 What should it do going forward?

In the move to compete against Wal-Mart and survive through recession, Target forsook its
identity and this meant its product were no longer different to that of rivals‘. Now that times are
rosier, Target should try to cater to middle-class and the upper-class shoppers too. It needs to
differentiate its product and try to collaborate with budding designers, inventors to bring that old
charm back. It should provide unique merchandise and thus giving itself the pricing power and
use the opportunity to present itself a clear point of differentiation.

As they move forward, Target should also make more use of the technology or the digital paths
to marketing. Social media at present has become a very sought after tool for marketing, it has
been proven that using social media to communicate have helped in increasing sales. Target
should try to improve e-commerce without discarding the brick-and-mortar part it. It should try
to find a balance, a crossover between the two. And then there are mobile phones, more and
more companies have started developing applications in an attempt to simplify the buying
process of their consumers. Communication too can be greatly improved; customers will have
all the information right on their finger tip.

Target should also look into its store layout and design, renovating it to the modern taste. New,
shorter, digitalized displays can be used and trendy lights, signs can also be used. A modern and
more upbeat look will bring in more customers; especially the youths and those previously shy of
visiting the store. This change will also send a clear message that Target is evolving and help
build is brand image.

Target can use some of the below mentioned practices to boost its sales.
  Cash back offers
 Expand to growing market like India and China
 Improving E-commerce
 Membership cards

All in all, Target should keep its focus on the eights steps required in developing an effective
communications strategy; identify the target or new target audience, determine the
communications objectives, design or fine tune the communications, select the communications
channels, establish the budget, decide on the communications mix, measure the results and
manage the integrated marketing communications process.
2) How does Target compete against mammoth Wal-Mart? What are the distinct
differences in their IMC strategies?

Target has focused on differentiating itself from manmoth Walmart on various aspects over the
past years. Walmart and other discount retailers such as K-mart have been providing cheaper
quality products at lower price whereas target being a retailer in a large variety of product
differentiated itself by marketing as ―Cheap Chic‖. This communication strategy by target
focused on achieving the up-scale market with quality products at affordable prices. In
comparison to Walmart, target is involved in bringing new trends in market to their shelves faster
and has integrated ―fast fashion‖ resulting in more frequent shopper visits. Target used
advertising campaigns such as ―Expect more, pay less‖ which helped the company to reach its
target customer faster as well. Target has appealed their customer‘s market ―category need,
brand awareness, brand attitude and brand purchase intention‖. Target has also used various
advertising practices and been involved in various events through sponsorships. It has also been
associated with corporate social responsibility which differentiates it from mammoth Walmart in
terms of annual turnover and market share as well.

Target and Walmart are quite similar in their integrated marketing communication strategies as
both companies focus on making their products and services known and readily accessible to the
consumers and target market. Both companies provide many of the same services and products
for sale. They have been using radio/television commercials, print ads, direct marketing and
promotion as well as digital media in their IMC strategy.

The difference in their IMC strategy is evident with Walmart‘s low price strategy. Walmart is
well recognized for being the cheapest option among competitors in the retail industry. It spends
only about 0.3% of revenue in advertising. The marketing messages of Walmart communicate
their low price promise and their merchandise is perceived as cheap and low quality. In order to
lure shoppers into stores, Walmart offers deeper discounts and a broader assortment of
merchandise at lowest price.
Target, on the other hand, is recognized for its emphasis on strong and quality customer service
as well as product differentiation and higher quality products. It offers everyday essentials and
fashionable differentiated merchandise at discounted prices and is perceived as high-end
affordability. As Target seeks to deliver a shopping experience preferred by its customers who
are referred to as ‗guests‘, it is committed to higher marketing expenditure.

Target spends about 2.3% of revenue in advertising. It has aligned itself with various events and
sports through corporate sponsorships. It has a strong online presence which allows for its more
targeted direct marketing efforts. Moreover, Target has reinforced a positive brand image
through significant contribution to education, arts, social service and volunteerism which is not
evident in Walmart IMC strategy.