COMPANY Case Target: From " Expect More" slowdown, posting quarterly increases in same-store sales of close to 5 percent along with substantial jumps in profits. to "Pay Less" SAME SLOGAN, DIFFERENT EMPHASIS In fall 2008, Target acknowledged the slide and announced its in- When you hear the term discount retail, two names that usually tentions to do something about it. Target CEO Gregg Steinhatel come to mind: Walmart and Target. The two have been compared succinctly summarized the company's new strategy: "The cus- so much that the press rarely covers one without at least mention- tomer is very cash strapped right now. And in some ways, our ing the other, The reasons for the comparison are fairly obvious greatest strength has become somewhat of a challenge. So, we're These corporations are two of the largest discount retailers in the still trying to define and find the right balance betwoon 'Expect United States. Category for category they offer very similar mer- More. Pay Less.' The current environment means that the focus is chandise. They tend to build their stores in close proximity to one squarely on the "Pay Less' side of it." another, even facing each other across major boulevards. But even with such strong similarities, ask consumers if there's a In outlining Target's new strategy, company executives made it dear that Walmart was the new focus. Terget would make certain difference between the two, and they won't even hesitate. Walmart is all about low prices: Target is about style and fashion. The * cheap that it's prices were in line with Walmart's. Future promotions would communicate the "pay loss" message to consumers, while chic" label applied by consumers and the media over the years per- also highlighting the fact that Target is every bit the convenient fectly captures the long-standing company positioning: "Expect More. Pay Less. " With its numerous designer product lines, Target one-stop shopping destination as its larger rival. has been so successful with its brand positioning that for a number The new communications program included massive changes to in-store signage. Instead of in-store images and messages high- of years it has slowly chipped away at Walmart's massive market lighting trendy fashion, store visitors were greeted with large signs share. Granted, the difference in the scale for the two companies boasting price points and value messages. Similarly weekly news- has always been huge. Walmart's most recent annual revenues of peper circulars featured strong value headlines, fewer products, $408 billion are more than six times those of Target. But for many and clearly Labeled price points. In fact. Target's ads began looking years, Targets business grew at a much faster pace than Walmart's, In fact, as Walmart's same store sales bogan to lag in the mid- very much like those of Walmart or even Kmart. Further recognize ing the consumer trend toward thriftiness, Target Increased the 2000s, the worlds largest retailer unabashedly attempted to become emphasis on its own store brands of food and home goods. more like Target. It spruced up its store environment, added more While making the shift toward "Pay Less," Target was careful fashionable dothing and housewares, and stocked organic and gour- to reassure customers that it would not compromise the "Expect met products in its grocery ables. Walmart even experimented with More" part of its brand. Target has always been known for having Luxury brands. After 19 years of promoting the slogan. "Always Low more designer partnerships than any other retailer. From the Prices. Always." Walmart replaced it with the very Target-esque Michael Graves line of housewares to Isaac Mizrahi's clothing line, tagline, "Save Money Live Better. " None of those efforts seemed to Target boasts more than a dozen product lines created exclusively speed up Walmart's revenue growth or slow down larget's But oh what a difference a year or two can make. As the global for Target by famous designers. Kathryn Tesija, Target's executive vice president of merchandising, assured customers that not only recession began to tighten its grip on the world's retailers in 2008, the would Target continue those relationships but also add several dynamics between the two retail giants reversed almost overnight. As now designer partnerships in the apparel and beauty categories, unemployment rose and consumers began pinching ther pennies, Walmart's familiar price "rollbacks" resonated with consumers, while MOUNTING PRESSURE Target's image of slightly better stuff for slightly higher prices did not. Although Steinhafel's " Pay Less" strategy was aggressive, Target's Target's well-cultivated "upscale discount" image was turning away financials were slow to respond. In fact, things initially got worse customers who believed that its fashionable products and trendy ad- with sales at one point dropping by 10 percent from the previous vertising meant steeper prices. By mid-2008, Target had experienced year. Target's profits suffered even more. It didn't help matters that three straight quarters of flat same-store sales growth and a slight dip Walmart bucked the recessionary retail trend by posting revenue in store traffic. At the same time, Walmart was defying the economic increases. When confronted with this fact, Steinhafel responded From Target practices, identify the following questions: 1. Target changed its slogan.. analyse Target branding management. 2. Identify Target competitive edge and market offering in the tough competition with Walmart? In what way does Target handle its communication strategy? What is Target pricing strategy as well? Michael Porter used to indicate the importance of being competitive.. in which way Target stays competitive? State its competitive market strategy