“EXPECT MORE” TO “PAY LESS”

Group membersno.1

Minal muzammal

Sumaira munsif

Asma shafiq

Malik umair mahmood

Wall mart time line 1960___ 1962 1972 _ 1980s 21st century_______

Birth of discount retailing Sam WaltonResearch on discount retailing

Wal-Mart begins put 95% money In “Roger Ark.”

Wal-Mart goes public 15 Wall-Mar stores 267 stores in 11 states

Wal-Mart comes of age warehouse store in 1983 complete grocery store 36 department of general merchandise

1402 wall mart stores 123 Sam's club location

one of the most successful retailers in the world today 9884 stores location in 28 countries Employs 2.1 millions Serving more than 176 million customers per year

• All about “low prices”• “Cheap chic” name by customers • WALL MART >target• Began to lag in 2000• Experience with luxury brands• “Always low price always”• “Save money live better”• Familiar price “rollbacks”• In 2008, defying economic slowdown• Increase in sales ------5%

Features

Target time line 1960__ 1962_ 1972 1980 21th century __

Founding of Target in 1962 Dayton's Dayton dry good company Turnaround family store chain 1975 company's top revenue producerworld largest discount store 151 units and $2.05 billion in sales

Nationwide expansion 912 units in 44 states , sales reaching $26.0 billion E- commerce

Target Corporation 1000 stores in 47 states decline in 2008 closing 262 garden centers

• All about “style & fashion”• Chipped away from massive

shares• Target grew much better than

wall mart• Unabashedly attempted to

become more like target• Slight dip in store traffic in

mid , 2008

Features

CEO address to investor:• Consumer held perception that target’s not as

strong as of it biggest rival.

• Investor should be patient, its value message would take time to resonate with consumer.

• Wal-Mart had a decades-long lead building, cost structure , competitive advantage.

• Ackman, founder, Pershing Square Capital Management

• Ackman's investment $2billion in 2007.

• Target's third largest shareholder • company's own share price is down

41% from its July 2007 high• while rival Wal-Mart is up 3%.

William letter • "The deficit of experience on Target's board has

contributed to the company's underperformance,“

• claims that the company's directors lack expertise in retailing, credit cards, and real estate

• Steinhafal refused to give up on his strategy.

• He intensified target “pay less” & “expect more”

• Focused on advertisements.

Emphasis on Pay less

This is brand new day

1) Converting department stores into mini-grocery store carrying 90% of food categories.

2) Provide new package for its main store brand.

3) Introduce new brand up & up which was replace with target bull’s-eye.

• Wal-Mart advertises that all their products & mention that are made in America, and they even use an American flag in their advertising. But if you check it out, that's not true.

• In fact, they buy $15 billion dollars worth of goods from China every year.

Target‘s return policy:

• Target customers with receipts can make an unlimited number of returns or exchanges within 90 days.

• Products can’t be used, and must be in their original packaging

Return gift card

• customers to make just two non-receipt returns of up to $35 each, over 12 months.

• If you decide to exchange the returned item for something that costs less, Target will give you a gift card for the difference. But you’ll have to use it in the same department.

• Steinhafel characterized the current economic environment as “somewhat unstable” and “fragile.”

• He predicted: “There's going to be good months; there's going to be bad months.”

• first quarter ended May 2, earnings rose 28.5% to $671 million,

• sales increased 5%

• its higher profits private label lines – up & up,

• Archer Farms and Market Pantry • which now account for more than

20 percent of all food products sold, up from 18 percent in 2007,

• increased gross margins from 30.8 percent a year ago to 31.3 percent

• another sign of improvement and effective expense controls

• company has "unique top-line drivers that aren't dependent on a macro recovery

• " such as Fresh, the roll out of fresh groceries at many of Target’s 1,743 stores.

• Total assets was $43,705.• Profit increased 54%.• Spending per visitor increased.• Wal-Mart sales was slowing at

that time showing sign of decline.

• All strategy will continue with few adjustment.

• Target has increased same-store sales in the past year, including 1.6 percent growth in the third quarter.

• Doug Scavenger said: “It’s fairly clear that Target’s customers are doing

better than Wal-Mart’s because Wal-Mart has more of those lower- income customer.

Neil curie recommends buying Target’s shares.

comparisonWall mart

• Services: Staffer is equal in professionalism to some Wal-Mart managers.

• Price: little higher and sometimes MUCH higher

for example : Archer Farms• More Speed: slow in their actions than

target

Employees: 3 times more employees then a Target., but Wal-Mart does not offer a real health plan

VS Target• Services: Target’s staff is much more

professional by leaps and bounds

• Prices: lower than wall-ma • More speed:. 1.They actually move 2. They are generally friendlier than

Wal-Mart. 3. THEY OPEN MORE LANES when it

get's busy

Employees: has less Employees and oddly enough everything works out faster and better

• Wall mart is the US best discount retail store by times.• Wal-Mart's revenue is 6times more than target. • when recession times start people try and expect to pay less and

get lots of items• need of an ordinary person is capture by target • they try to adapt such strategy by which people pay less and

expect more.• target roses its slogan of EXPECT MORE AND PAY LESS.• target CEO is so determined in his policy that he didn’t listen to

his any investor and stay strict to his policy. • time comes when the dream of CEO has came true and target

becomes the worlds best discount retail store of USA.

What micro environmental factors have affected target’s performance over the past few years

One of the largest and successful retailers in the US is Target

There have been many micro environmental factors that have affected its performance over the past few years.

The microenvironment factors close to the company that affect its ability to serve its customers such as the company , suppliers, marketing intermediaries, customers, competitors and publics .

Target wanted to show itself as a discount retailer store but also it shows designers wears. Target is known due to its style and fashionalable items which is slightly higher in price as compared to other stores.

Many Target stores are build right across the street or in the same vicinity and many consumers compare the two and usually assume Wal-Mart is the cheapest and better to buy.

The marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do .

Media also affect its performance because it carry the news, feature and editorial opinion

What macro environmental factors have affected Target’s performance during that period

There are l

ots

of c

ha

nges

whic

h affects t

he target

perf

or

ma

nce a

nd t

here c

ha

nges are

diffic

ult t

o

oppose. T

hese c

ha

nges are

Demographic affects in such a way that as time passes the fashion and scenarios are changed .

Economic Presently there is inflation, “too many people chases too few good” so its also a factor which affect performance

Natural Factor There are also some natural factors which effects a lot if GOD forbid earthquake or any other incident occur than might be possible the performance of company is affected.

Political. If there is political instability than also company’s revenue may affect.

Technological As technology got progress retail stores try to dramatize the market place so that customers got the reason to visit target.

Cultural It also affect the market because people use to make shop, to be a part of or up-to-date of the culture or fashion.

By focusing on the “pay less” part of its slogan, has target pursued the best strategy? Why or why not

Target pursued the best strategy by focusing on PAY LESS.

in

whic

h t

hey

ma

nge a

box

wit

h l

ots

of t

hi

ng a

nd

offer at l

ow

price a

bout

30

% less t

o

us

ual

market.

Why alternative strategy might target have followed in responding to the first signs of declining revenues and profits

Target only focus on to facilities its customer by offer more in low price instead of only focusing on paying less. That alternative strategy is adapted to attract customers.

EXPECT MORE AND PAY LESS

Given target’s current situation, what recommendations would you make to Steinhafel for his company future

the present situation of target is very good

In 2003 to 2007

Profit.

Wal-Mart 10.3%

Target 16%

Wal-Mart 6%Target 20%

Target have to work more keenly on payless but target still be retaining the EXPECT MORE part of its image .most customers who visited target are the age of 42 they usually use coupons so to attract more customers they offer more discounts ..