watching the prices of its competitor Walmart, and simultaneously taking care of its customers’ needs. Question 6 The value proposition of a brand is basically a term used to summarize why a customer should buy a certain product or use a service; it answers the customers main question, “why should I buy this brand?”. Through value propositions companies can convince customers why their product or service will add value to their lives. There are five winning value propositions through which companies can position their products: more for more, more for the same, more for less, the same for less, and less for much less. As the case states, before the economic downturn Target was famously labelled as the “cheap chic” brand and consumers everywhere recognized its tagline, “Expect More. Pay Less”. This translated to “slightly better stuff for slightly higher prices” 2 in the minds of consumers because Target was all about adding style and fashion to its products and offering ‘more’ to its customers at prices slightly higher than Walmart’s. Hence, Target’s emphasis before the recession was clearly on the “more for more” value proposition because it was marketing its products as providing more value and satisfaction to customers despite the prices. After the recession however, Target’s emphasis quickly shifted to the ‘pay less’ part of its famous “Expect More. Pay Less” tagline after it understood that customers were looking to purchase more budget-friendly items to help them get through the tough economic downturn. Since customers assumed that Target’s trendy items would mean higher prices, the company spent time and money on large in-store signs that advertised lower prices, clearly highlighted strong value headlines in weekly newspapers, and clearly labelled their 2 Kotler, P., Armstrong, G., Trifts, V., & Cunningham, P. H. (2014). Principles of marketing. (9th Canadian ed.) Toronto: Pearson Canada Inc. Reproduced with permission of Pearson Canada Inc.
prices on products. This new emphasis on the ‘pay less’ part of its existing tagline would be best describes as the “more for less” value proposition because despite the price cuts and emphasis on paying less for items, Target reassured its customers that it wouldn’t be comprising on the ‘expect more’ part of its business; Target continued its partnership with designers, and also agreed to several new designer partnerships in the retail industry. Target wanted to convey to its customers that even at lower prices, customers would still be getting more added value through their purchases in comparison to other discount retailers.
You've reached the end of your free preview.
Want to read all 8 pages?
- Spring '15