Marketing Excellence Target In the mid-1980s, then-dominant Kmart and up-and-coming Walmart were both communicating their low-price promise, but their merchandise was perceived as cheap and low quality. Target, founded in 1962, sensed a gap in the market for "cheap chic" mass retail and set out to distinguish itself from the other big-box retailers by building an up-market cachet for its brand without losing its relevance for price-conscious consumers. Through careful merchandising and a strategic marketing communications plan, the company successfully positioned itself as a high-fashion brand with trendy styles and quality merchandise at affordable low prices.

Target has fulfilled this brand promise in many ways. In the mid-2000s, for instance, the company introduced Europe's "fast fashion" strategy to the United States, gaining a strong competitive advantage in the process. Its merchandisers travel the world; once they have identified a trending style, product, or color scheme, they rush it to the stores' shelves faster than any other retailer. This speed-to-market approach also keeps the company's product selection fresh, leading to more frequent shopper visits.

Target has also partnered with world-renowned designers to deliver stylish and exclusive merchandise lines, including fashion from Mossimo Giannulli, maternity from Liz Lange, cosmetics from Sonia Kashuk, handbags from Anya Hindmarch, shoes from Siegerson Morrison, and beauty from Petra Strand. These items are either staples in Target locations or part of the Go International line, a special design collection available for only a few months at a time.

Target's collection of designer lines is just one part of its integrated marketing communications plan for communicating its "cheap chic" positioning. For instance, the company continuously works to improve every department's appearance and performance. It uses strategically placed low shelves, halogen and track lighting, cleanly styled fixtures and signage, and wide aisles to avoid visual clutter. The shopping carts have a slick plastic design with hundreds of holes resembling Target's bull's-eye logo. Checkout lines are intended to be efficient, clean, speedy, and pleasant. Even the roofs of Target stores near airports display a large red bull's-eye, attracting air passengers' attention.

Target's traditional advertising includes television ads, direct mailers, print ads, radio, and circulars. All prominently display its tagline, "Expect More, Pay Less," and feature hip young customers, a variety of strong name-brand products, and a lighthearted tone. The company also reaches specific demographic groups by aligning itself with a variety of events, sports, athletes, and museums through corporate sponsorships. These range from Target Field, home of the Minnesota Twins in Minneapolis, to Target NASCAR and Indy racing teams, Olympic snowboarder Shaun White, and major awards shows such as the Oscars, Emmys, Grammys, and Golden Globes.

Target reinforces its positive brand image by contributing 5 percent of its annual income, or more than $4 million a week, to community programs that focus on education, the arts, social service, and volunteerism. Employees also use company time to volunteer hundreds of thousands of hours in surrounding communities each year.

Target continuously updates its product mix to match customers' shopping behaviors and needs. For example, during the 2008-2009 recession, when consumers shied away from discretionary items like clothing and home accessories, the company tweaked its marketing message and merchandising strategy by adding perishables to its inventory, which proved highly successful. In 2012, it expanded with a new small-store format called CityTarget located in large cities and targeting urban consumers. CityTarget stocked its shelves with fresh food, apartment-appropriate household items, trendy fashions, and the company's latest designer collections.

As a result of its highly integrated marketing communications plan, Target has attracted many shoppers who would not otherwise shop at a discount retailer. Its customers are younger, more affluent, and more highly educated than typical Walmart or other discount shoppers. In addition, 97 percent of U.S. consumers recognize the bull's-eye logo. Target is the third-largest retailer in the United States (after Walmart and Kroger) with $73 billion in sales. The company continuously ranks as one of Fortune's "Most Admired Companies" and has also received awards for being innovative, ethical, and environmentally friendly. Its successful marketing communications have resonated so well with consumers that they often jokingly pronounce the company's name "Tar-Zhay" as if it were an upscale boutique.

Questions Describe Target's marketing communications strategy.

What has the company done well over the years?

How does Target compete against mammoth Walmart, which has four times the revenue?

What are the distinct differences in their marketing communications strategies?

What are the risks and challenges associated with Target's marketing communications mix?

Have these changed over the years? Explain.