4. Beyond the Bullseye
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Great brand recognition
• Strong relationship with community
• Diverse employees
• Target Sourcing Services
• PFresh
• Minority market: 1/3 of US Population
• Customized Marketing: Location& Ethnicity
• Social Media i.e. Facebook
• Minority Designers for Apparel
• Cultural food produce
• Late to enter global market
• Not international, brand recognition among
immigrants not strong
• Low association with specific product
segments
• Large retailer already opening stores
targeting specific ethnicity
• Current ethnic-specific stores already
established
• Economy still in recovery
Strengths
Weaknesses
Opportunities
Threats
5. Demographics
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
San Fransisco
Los Angeles
Whites 48.5%
Asians 33.3%
Latinos 15.5%
Other 2.7%
Latinos 48.5%
Whites 9.6%
Native American 11.3%
Asian 3.2%
6. Understanding Our Guests
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Anne Chou
Anna-Maria
Young, well-educated,
moderate-to-better income
families
Median Age of 42
Median Income of $60,000
51% with college degrees
33% with children
Consumer Behavior: Family
Oriented, purchase things in
bulk
7. Competitors Analysis
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Fred
Meyer
JC
Penney
Kohl’s Sears Target
Product Variety
Product Quality
Experience
Price Low Low Moderate Moderate Moderate
8. Strategy Criteria
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Effectiveness
Brand/Quality
Community
Outreach
Existing
Synergy
Capital
Expenditure
9. Decision Matrix
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Effectiveness Brand/Quality Community
Outreach
Existing
Synergy
Capital
Expenditure
Full Integrated
Store
Partner with Local
Market
Online Only
Integration
National Shift
Localization
Integration
10. Localization Integration
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Food
Apparel
Cultural
Holiday
In-Store
Presentation
Localized
Marketing
11. Cultural Products: Food
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Asian Hispanic
12. Cultural Products: Apparel
Focus on Minority Designers
National Jersey for World Cup 2014
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
13. Cultural Holiday: Customization
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Gift Card liabilities:
$ 422 million as of
January 29th, 2011
Product Variation & Store Environment
14. Market Research Strategy
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Surveys (Online & Offline)
• Test Product
Individualized Marketing Research
• Facebook
• Website Cookies
• Consumer Feedback
Consumer Demand Research
15. In-Store Presentation
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Center Piece In P Fresh Area
• Target In-Store Catalog
• Emphasize products during
cultural holiday
16. Localized Marketing
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Localized Online Ad
Ad Views on Online Video Site
Ethnic Food Page
17. Strategy Review
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Quick implementation timeline,
advantage over slow competitors
• Geographic specific
• Low-risk
• Scalability
Great timing: include project in Canadian
stores opening in 2013 (e.g. Richmond,
BC, Canada)
Online marketing may not reach some
market segments
Asian American market very diverse.
May be hard to capture that market
Strengths
Weaknesses
Opportunities
Threats
18. Short Term Implementation Timeline
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Move to CA, FL, TX
Heavy Community
Outreach
Targeted Survey & Ads
Rollout in 2 Locations
Saturate the 3 States
Re-evaluate
Nation Saturation
Move to Re-grow
Expand Premise
Move to Other States
M3 M9 M12 M15M6
19. Long Term Consideration
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Y 2013 +
Ethnic Fresh
Produce
Target in
Canada:
population is
ethnically diverse
20. Predicted Cash Flows
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
0
1000000
2000000
3000000
4000000
5000000
3 6 9 12
Net Cash Flows
Net Cash Flows
21. Sensitivity Analysis
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• 4% APR, Δ10% Purchases
• $29,078,087 NPV
Best Case
• 2% APR, Δ5% Purchases
• $14,777,521 NPV
Initial
Assumption
• 1% APR, Δ2.5% Purchases
• $7,449,223 NPV
Worst Case
22. Risks & Mitigation
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Slow Product Turn Over
Reduction of Product Quality
Increase in Cost
Start with packaged goods.
Last longer than fresh produce
Use of TSS to ensure product
quality
Implementing project in multiple
stores – reduce cost through
trade discounts
23. Summary
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
25. Appendices
L i f e i s a M o v i n g Ta r g e t
Presentation Slides
Beyond the Bullseye
Demographics
Understanding Our Guests
Competitors Analysis
Strategy Criteria
Decision Matrix
Localization Integration
Cultural Products: Food
Cultural Products: Apparel
Cultural Holiday: Customization
Market Research Strategy
In-Store Presentation
Localized Marketing
Strategy Review
Short Term Implementation Timeline
Long Term Consideration
Predicted Cash Flows
Sensitivity Analysis
Risks & Mitigation
Summary
Target
Brand Recognition
Distribution Center
Imports Warehouse
Target’s Community Outreach
Understanding Consumers
Cultural Holiday
Demographics: CA, TX & FL
Competitor
Current Competitor Localization Efforts: My Macy’s
Current Competitor Localization Efforts: Wal-Mart de Sup...
Statistics
HULU
Cash Flow Calculations
26. Brand Recognition
• “Expect More, Pay Less”
• 97% American Consumer recognize the
bullseye logo as Target
• Bullseye Dog is a trademark, and the
Bullseye Design and 'Target' are
registered trademarks of Target Brands.
L i f e i s a M o v i n g Ta r g e t
27. Distribution Center
• Regional Distribution Centers: 26
– 4 in CA
– 2 in TX, etc
• Food Distribution Center for Perishable
Food:
– Phoenix, AZ
– Lake City, FL
– Ft. Worth, TX
– Cedar Falls, IA
L i f e i s a M o v i n g Ta r g e t
28. Imports Warehouse
• Import Warehouses receive shipments
directly from overseas manufacturers and
suppliers. Merchandise is then sent from the
Import Warehouses to the Regional
Distribution Centers. Target currently
operates four Import Warehouses.
– Rialto, CA
– Lacey, WA
– Savannah, GA
– Suffolk, VA
L i f e i s a M o v i n g Ta r g e t
29. Cultural Holiday
• Asian
– February
• Chinese Lunar New Year
• Tet Nguyen Dan (Vietnam)
– October
• Diwali
• Hispanic
– February
• 24 - Flag Day (Mexico)
– May
• 5- Cinco de Mayo
L i f e i s a M o v i n g Ta r g e t
30. Demographics: CA, TX & FL
L i f e i s a M o v i n g Ta r g e t
People QuickFacts California Texas Florida USA
White persons, percent, 2010 (a) 57.60% 70.40% 75.00% 72.40%
Black persons, percent, 2010 (a) 6.20% 11.80% 16.00% 12.60%
American Indian and Alaska Native persons, percent, 2010
(a)
1.00% 0.70% 0.40% 0.90%
Asian persons, percent, 2010 (a) 13.00% 3.80% 2.40% 4.80%
Native Hawaiian and Other Pacific Islander, percent, 2010
(a)
0.40% 0.10% 0.10% 0.20%
Persons reporting two or more races, percent, 2010 4.90% 2.70% 2.50% 2.90%
Persons of Hispanic or Latino origin, percent, 2010 (b) 37.60% 37.60% 22.50% 16.30%
White persons not Hispanic, percent, 2010 40.10% 45.30% 57.90% 63.70%
31. Target’s Community Outreach
• Donate 5% of revenues to charities
• Partner with schools and libraries
• Community-based projects
• Scholarship/sponsorship of minorities – i.e.
Hispanic Scholarship Fund, National Urban
League
Our Recommendation:
• Community projects in International Districts
• Sponsor ethnic resource centers
L i f e i s a M o v i n g Ta r g e t
32. Current Competitor Localization
Efforts: My Macy’s
• Customer-centric localization, 20 select
geographic markets beginning in spring 2008.
• Focused on local customer needs and preferences
• 13 of Macy’s top 15 best-performing geographic
markets in December were My Macy’s pilot
districts
• My Macy’s will be implemented nationally to new
local markets.
• Conclusion: Largely successful. Similar
implementation plan of starting in select
locations and expanding to new locations.
L i f e i s a M o v i n g Ta r g e t
33. Current Competitor Localization Efforts:
Wal-Mart de Supermercado
• Opened 2 Supermercado de Wal-Mart
stores in Houston and Phoenix in 2009
• The company also will be opening up new
locations in Hispanic submarkets of
Dallas.
• Mas Club, the Hispanic version of Sam’s
Club
• Conclusion: Was successful. Creative
retail strategy
L i f e i s a M o v i n g Ta r g e t
34. HULU
• 48.1 ads per viewer, over 50% more than the
average for the top ten video properties by
ads viewed
• Hulu now has 289 advertisers on board who
all need to get their ads shown
• 224.3 minutes average per user
• Users view ads every 4.66 minutes.
L i f e i s a M o v i n g Ta r g e t
35. Cash Flow Calculations
L i f e i s a M o v i n g Ta r g e t
Percentage
Minority in
Target Market
Sales Volume
Per Store Per
Day
Change in
Purchasing
Number of
Stores
Implemented
Notas del editor
NPV
Objective: target the minority population that is growing in US
Departments will have ethnic aisle/ shelf placement
So consumers would be able to find ethnically relevant product
Hispanics in United States have an estimated spending power of $175 billion
Align with their merchandising strategy
Innovative offering
Value – great quality and price
Great shopping experience because of the high performing Target team!
One stop shopping place
Product: snack foods, brand trust
Localization – store – from survey etc
Marketing localization – website and facebook
Synergy with Target – P fresh existance
Capital Expenditure – won’t cost much, just making shelf space.
Thank you Evan. As my colleague, Evan, here has mentioned. Localization integration is a comprehensive strategy that is specifically developed for Target to gain market share in the growing minority population in the United States.
There are 5 critical pillars to this strategy: Food, apparel, cultural holiday, in-store presentation and localized marketing.
Among many products that Target offers, we choose to add variation to Target’s food products to be more ethnically relevant to the local community.
It is our priority to increase the Target’s existing customers visit frequency to your stores. Food is something that people buy in consistent manner- this is how Target will be able to gain market share in the minority population.
Additionally, This is also aligned with the new Target intiative, P Fresh
Popular Asian and Hispanic food products are listed
We also choose apparel/clothing products because Target gain most revenue because of the high margin
Additionally, Most target’s customers are women, young, well educated and have moderate income level. Fashionable apparel is definitely one of their interest.
Finally we also want to bring in the world cup aspect, this could be something to consider as we approach 2014, to attract Men customers to come to the store.
Cultural holidays are very important to the minority populations. This strategy emphasize on customization that is dedicated for those special days.
Customization means adding product variation for the week/month or creating a warm store environment that embrace their culture.
Finally, customized gift cards is a great way to push to customers. As of Jan 2011, Gifts card liability make up a significant amount of unearned revenue 422 million
Market Research is essentials in understanding customer’s wants and preference.
Facebook is a great tool to advertise surveys as Target has approximately 5.6 million likes on the facebook page.
Another facebook utilization to gain individual customers profile, is to integrate facebook to Target’s online customer log in process.
A visible sign in the store for the ethnic food is definitely very effective to attract customers.
We suggest placing food products as the center piece in P Fresh area.
Also putting them on catalog and especially emphasize the products during cultural holiday
Target website has been the most visited website for several years. This is a great place to advertise ethnically relevant product by using the localized online ad. Additionally, Target can also create a page dedicated for ethnic products as well as store locators for such products.
Continue with online marketing, Youtube, Hulu, and Telemundo have 1 similarity. Millions of people go to this website and watch videos for hours every day. Many retailers have been using these website to advertise their products and we believe this is a huge opportunity for Target to do the same. Especially telemundo whose viewers are mainly hispanic.
Overall, our strategy is very comprehensive and quick to implement, geographic specific and involve low risk because it can be scaled at any level.
Thing we might consider is that online marketing may not reach some market segments.
However, looking at the opportunities, ti