With unemployment on a rise and wages decreasing drastically consumers had to

With unemployment on a rise and wages decreasing

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affected Target’s marketing strategy. With unemployment on a rise, and wages decreasing drastically, consumers had to become very careful about how they spent their money. An average consumer’s priority shifted from trendy & fashionable items to more affordable ones. That is why most customers didn’t think twice before they shifted their retailer to Walmart 1 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.
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which focuses on selling items at the lowest price. Target had to quickly change its marketing strategy so customers would see that you can also ‘pay less’ at Target and get more. Cultural Factors: A cultural environment is associated with the basic values, perceptions, and preferences a society holds, and there are institutions and other factors that can change or affect them. For example, Target initially focused on attracting customers based on a certain lifestyle culture where it emphasized that despite the slightly higher prices, its products were stylish, trendy, and up-to-date. However, due to the economic downturn, most consumers were no longer prioritizing being up-to-date with what’s in style, they wanted to save money. Target failed to forecast this shift ahead of time, but eventually had to use aggressive marketing strategies to emphasise lower prices, like the addition of the mini grocery stores and “up & up” products. Question 3 Since Target primarily allocates its money into remodeling existing stores, it is still catering to its current market, but with new and/or modified products. This analysis results in the conclusion that under these circumstances, Target’s growth strategy in the product/market expansion grid would be best described as product development. In an attempt to keep customers interested in its products and highlight its ‘pay less’ initiative, Target committed to several new designer partnerships in the apparel and beauty categories to reassure its customers that it wouldn’t compromise on quality. This implies that Target is not aiming to market to a new market segment, but an existing one with new and affordable products. Retaining quality and style at cheaper prices has always been a differentiating factor between Target and its main competitor, Walmart. Question 4 (20 marks)
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Michael Porter suggested four basic competitive positioning strategies that companies can follow as they conduct business: 1. Overall Cost Leadership: Offering the lowest prices in the industry, and winning a large portion of the market share. The idea is to offer a wide range of products at prices much lower than competitors.
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