Retailer name, history of operation
Classification of Retailer
The Target Customer
Analysis of Store Building
Method of Management
Customer Services Offered
Comparison of Both Retailers’ Overall Strategies
Retailer name, history of operation
Target is among the leaders in retail trading in the U.S. The company offers perishables, dry grocery, dairy and frozen items and all food items comparable to traditional supermarkets. The company has three primary types of stores — SuperTarget, CityTarget and TargetExpress. The company recorded a loss of 1.9% in 2014-2015 compared to the previous year with a fall in net earnings of 9.1%. The total sale in the period was $U72.6 billion.
The company has 1,799 stores in the U.S. along with 38 distribution centers. The company has staff strength of 347,000 worldwide. It also does business online through its website ‘target.com’.
With the aim of easing the shopping experience for customers and discounted prices, the first store of Target was opened in 1962 in the Minneapolis suburb of Roseville (Target Corporate, 2015).
The company offers differentiated merchandise and value through its ‘Expect More- Pay Less’ program.
The company claims to be pioneer in innovation and first in the store design aspect in terms of innovation.
The first store of the company was opened in 1934 by Hendrik Meijer, a barber by profession. Meijer initially wanted to take care of the customers who visited his barbershop and purchased $328.76 worth of merchandise and opened North Side Grocery.
Newspaper ads and fancy metal shopping carts were used by the company to broaden the reach of the store as the owner tried to innovative and find out ways to offer higher levels of service to the clients. The company utilized the baby boom era and the emergence of new technologies to ease ways of shopping for customers. For example, the company claims, it was the first to use the automatic conveyor belt to speed up shopping and reduce checkout lane (Meijer.com, 2015).
The signature store brand of the company “Thrifty Acres” was viewed as an innovative concept that helped the growth of the retail phenomenon.
The specialties of the company are its supercenters or hypermarkets which are a combination of groceries and department store goods under one roof. The company also has innovated into convenient stores in front of Meijer-branded gas station which often offer alternative fuels such as E85, biodiesel, and compressed natural gas.
Meijer was ranked 19th in the Forbes list of top 20 Private Companies in 2013.
Classification of Retailer
Target is a chain of retail stores that run across the length and breadth of the U.S. The company is completely focused and aims to exceed the expectations of the customers. As a part of this aspiration, the company continually innovates in its stores that include its reinventing its store layout presentation and merchandise offered to customers. The aim is to make the stores more comfortable for the customers to shop.
Meijer Inc. runs its business as a combination of a grocery shop and a departmental store. The super stores of the company offer the products from both the categories thus making the stores a one stop shop for customers. The company also lays special emphasis on the The Target Customer
The primary customer targeted by Target Inc. is the typical mothers between the age group of 30-45 years and most are Caucasian. The company’s targeted customer generally would belong to the middle to upper middle class as the company has tried to create a niche with quality for products as the priority.
In an interview to The Washington Post earlier in 2015, Target’s new chief executive, Brian Cornell said that the company has been increasingly targeting the Hispanic shopper. The company is trying to focus on the baby department and wants to portray it as their one of four signature categories. The marketing campaigns are also directed towards the Hispanic millennial moms.
However the latest strategy for the company is put in the words of Brian Cornell as “we need more than just minivan moms” (Halzak, 2015).
“Our guest is going to be increasingly a Hispanic shopper,” said the company CEO at the investor event earlier in 2015. This makes it abundantly clear target’s target customer post the economic slowdown of 2008 (Halzak, 2015).
The company is also aiming to widen its base of customers and wants to set up stores beyond the suburbs (Halzak, 2015).
Meijer is a convenience store that integrates the grocery store and the departmental store into one. The company also has tradition of offering low priced products that are of a significantly good quality. Hence the target customers for the company would include people from the common household (Meijer.com, 2015). According to company documents, the company targets the moms who are walker shoppers and who go out for shopping on a regular basis to get their household goods or their weekly grocery shopping. The company is still driven by the concept about customers. The company believes that they need the customers and not vice versa. Hence while the company welcomes everyone as their customers with the offer of discounted products, the aim of the company is to meet and exceed the needs of the customers (Meijer.com, 2015).
Competitors for Target
Target is a retailer that offers both price discounts as well as niche products. With the Hispanic mom being the primary target customer for the company, it has a number of competitors in the market. Target’s major revenues however come from the sale of discounted products. To of the major competitors that are in direct confrontation with the company in terms of market share are for Target are Wal-Mart, Costco and Meijer.
All the three companies in question here offer a broad range of products that are often competitive in terms of price discounts. All the companies generally rely on certain staple products like basic clothing, household products and food.
The companies are always competing against each other in discount pricing and the use of creative methods and strategies. The general economic conditions are closely and directly related to their sales and profitability.
One of the major advantages of Target in comparison to competitors like Wal-Mart and Costco is the staff of the company and experts claim makes a difference in the total shopping experience of a customer. The innovation that the company does with the stores often makes a difference in relation to competitors.
On the online platform Amazon is the biggest competitor for Target.
The company stand about competition is stated as: “retailing is a fast-paced business that demands continuous improvement. Meijer is committed to keeping our competitive spirit strong and staying nimble and flexible to win in the marketplace” (Meijer.com, 2015).
The major competitors for Meijer include The Kroger Co and Wal-Mart. Like Meijer, Kroger is one of the more traditional retail-chain which specializes in grocery stores. Kroger has more than 3,800 stores that included 2,600-plus supermarkets and multi-department stores. Like Meijer, Kroger also runs more than 780-plus convenience stores and around 330 jewelry stores. Like the Meijer chain of stores, Kroger also has a combination of groceries, merchandise, and jewelry through the 130 supercenters of the company.
On the other hand Wal-Mart is the largest retailer in the U.S. with 5160 stores that include 4,400 Wal-Mart stores and 650 Sam’s Club warehouses. Similar to Meijer, Wal-Mart also pays special attention to its grocery business and hence is considered to be a competitor for Meijer.
However Meijer also has another set of competitors that are essentially very local in nature and yet among the some of the fierce competitors for the company. These competitors include the small locally-based retail chains in various regions of the country which are essentially small and cater to local communities through smaller utility stores. For example, in June of 2015, when Meijer opened 12 stores in Wisconsin, Wisconsin-based chains such as Festival Foods and Sendik’s also prepared to provide tough contest for the company at the local level (Milwaukee Business Journal, 2015).
Analysis of Store Building
Target Store Review
The exterior of the Target stores looks fresh and modern even from the parking lot as one enters the stores through the parking lot. The parking lot gives a sense of safety during the day shopping experiences. However the area, especially the parking lot is darkened at night and as one walks the large darkened wooden space at night to reach the main store building, it feels relatively unsafe. Many customers prefer to park their vehicles outside of the building and not in the parking lot.
The store that was visited would have been better of the entrance of the store was more centrally located or that it had an entrance on either side of the building so it would not have been a long walk from the parking to the front gate of the store.
Despite the low evening lights in the parking area, the exterior is very clean and tidy. As soon as one enters the store, it is noticed that it is very well lit and has a pleasant atmosphere. The smell of Starbucks coffee permeates the air as a greeting for the customers. This generally spurs on the customers to get more engaged in shopping. However it was noticed that some more attention should have been paid towards the restrooms. Some of the stalls did not have toilet paper and they were somewhat untidy when one gores to shop at night.
The aisles and displays are in a rectangular or grid iron pattern as the store has a straight grid iron traffic flow. This helps people who are short of time to complete their shopping effectively as the system creates an efficient shopping atmosphere for the customers. While the staff are very friendly and helpful, they always carry a smile on their face which makes the shopping more pleasurable. There was however one element that the location lacked. It was the self -service check out areas for times when one is in a hurry and do not want to wait for a long time after large purchasers behind the long cashier lines.
The store is so located that it has direct closed aisles and displays are in a rectangular or grid iron pattern that leads directly to the primary trading area. The store that was visited was located at a distance of about two miles from the customer’s residence. The store itself was so located that it had residential neighborhoods in its surroundings and also had smaller strip malls that draws more people in the shopping district. Hence it can be aid that the store was located strategically that was within range for most of the targeted customers and could easily accessed from the main freeway.
Meijer Store Review
A visit to a Meijer I shop revealed that it had a clean exterior. But the building itself was not as fresh and modern as one would have expected from a large company like Meijer and a little bit shabby in comparison to Target. It is said that the first impression is created by the looks and Meijer stores can do well with some exterior updates as the exterior has an older look and could use some updated paint schemes and faAade changes to the stucco and teal paint exterior on some areas of the storefront.
However unlike the Target store, the parking lot had been recently re-surfaced is very well lit. This exuded a feeling of safety and safe shopping during the day and night at the store location. The sense of security was compounded by the presence of a security vehicle driving around the store area.
One would feel valued by the greeting as one enters the store and the welcome that is given by the store staff and the store itself is quite refreshing and makes one be a part of the store. However some shortcomings in the facilities were noticed as it was felt that the store needed more small carts for small quantity shoppers. It was felt that such smaller carts were always missing in adequate numbers from the cart area of the store. The store was very bright and well lit. The restrooms are clean and stocked.
Shopping at the store was comfortable as the traffic pattern in this store was designed in a straight grid iron traffic flow. The isles were very wide so moving through the store was easy. Unlike in the Target store it was noticed that the Meijer store offered self-service checkout lanes for faster checkout as well as cashier lanes if one did not feel like bagging their own items and were not in any great hurry.
Location wise the Meijer store was well placed as it was located right off a freeway exit and was visible from it as well. The trading area includes other small retail strips and gas stations and fast food establishments that draw potential customers.
The company is known to offer products that are trendy and hip and it ha marketed itself as retailer that offers products that are of high quality, excellent value and the store are a fun place to shop where people can also save money due to the discount prices. The catch line of the company is “Expect More, Pay Less.” ”
The company has placed itself as a moderately priced chain of department stores. The company markets itself through customer loyalty cards like the Target Red and Target Visa cards which are intended to convenience the consumer during shopping and entice consumers into shopping at the company stores. The company also expends a section of its profits for social causes and this way is manages not only to establish its social responsibility aspect but also help in promotional activities within the communities.
As a part of their marketing mix, the company regularly uses the traditional and the new age media for promotional activities. Newspaper circular and television commercials form the major constituents for traditional medium promotions. The company has a target of reaching to 50 million households with their advertised messages every week (Kotler & Keller, 2009).
Such and similar ads are regularly posted by the company on the Internet for viewing. The promotional techniques also include direct mailings to the best customers of the company. Apart from this in store marketing and promotional events are organized through its network called Channel Red.
Meijer is a low priced retail chain that offers discounted products to its customers. The company started off as a grocery store and this aspect has been retained throughout its history. The company stores combine a unique blend of grocery and departmental store products that essentially makes its superstores a one stop shopping destination for the customers. This is the primary aspect for its promotional strategies apart from the price discounts that the company offers from time to time (Dogan, 2010). The company also offers a range of online and off line discount coupons on a weekly basis that customers can use to get further discounts.
The company has positioned itself as a low priced retail chain and its weekly promotional codes are one of the major tools of promotion. The company uses innovative promotional strategies for increasing sale and brand building. For example, the “earn $5 for every $15 you spend” (Mperks.meijer.com, 2015) is a mode where customers can win money while shopping.
The company uses the traditional media as well as the new age media for promotional campaign. Newspapers and TV are the primary modes of traditional advertising. The company also uses the digital media for advertising. Direct mailing is one of the digital strategies that is used by the company. The company also has several applications that customers need to download on their mobiles which can later be claimed to get discounts. Hence the marketing promotional of the company utilizes both the traditional and the new age media (Ziliani, 2006).
Method of Management
The company is headed by the Chairman of the company who is the also head of the board of directors appointed by the shareholders of the company. The board of directors appoints the chief executive officer of the company for the smooth running of the business. The company is assisted by and under the direct control of the chairman are the departments of audit and the legal departments. Under the CEO is the management board with a host of directors below him who look after specific business processes. They are assisted by managers and junior managers for the day-to-day functioning of the company.
The Board of director are responsible for the formulation of the broad policies of the company under the leadership of the chairman. The day ot day functioning policies are formulated by officials lower in the hierarchy that include recruitment, selection, training and marketing (Investors.target.com, 2015).
This is one of the largest privately owned company in the U.S.A. and has a steep hierarchal structure. The company is given direction by the owners and the major shareholders of the company. The daily functioning of the company is handled and headed by the Chief Operating Officer of the CEO which serves directly under the President of the company. Then there are host of vice presidents in-charge of various company functions like sales, marketing, finance, IT and consumer affairs. The VPs report to the CEO. Then there are a number of managers who assist the VPs who are in turn are assisted by other junior managers and employees. All the policies of the company are formulated by the president in consultation with the CEO that includes the marketing policy, training regimen and the recruitment policy.
The selling methods that are utilized by both eth companies are almost identical. Both the companies allow self-service at the stores. The stores are so designed that the customers can move around at ease and do their own shopping. Some of the stores even allow the customers for self-payment. There are however staff to assist the customers and sometimes help them in shopping at the stores. The companied also have free home delivery services available for online customers who buy products online. The companies have a direct selling model at most of the stores. However they do grant some franchisees for some of their products in some regions. For both the companies the internet is an important medium for sale and revenue generation and the companies have a back office to cater to the inquiry calls of the customers to assist in shopping. While Target uses loyalty cards to entice shoppers in to shopping, Meijer makes use of weekly discount coupons in downloadable formats to be used online or at the stores.
Target offers a wide range of products that range from grocery to electronics to kitchen war to FMCG and food products. Meijer specializes in grocery products but also sells general items that are available at the departmental stores in general. Both the companies offer a wide range of products and strive to make the stores or the internet a one stop shopping experience for the customers.
Target has two price lines — the discounted products and the niche products for niche customers.
Meijer has two types of product categories — the grocery and the general departmental products.
Customer Services Offered
Customer satisfaction is the ultimate aim of both the companies. Target tries to offer a host of loyalty cards and additional benefits like the attachment of the Starbucks to its stores to make shopping more comfortable and enjoyable for its customers. On the other hand Meijer convenient stores that are located at gas stations are ideal locations to offer shopping and gas filling facilities to customers. Apart from these differences, most of the services like free ho=me delivery and product return facilities are standard at the stores of both the companies.
Comparison of Both Retailers’ Overall Strategies
Target Corporation is at a better position in terms of strategies as a company. Target has more lenient structure and has scope for flexibility in its organizational structure. The product range of the company is such that it is truly a one stop shop. The stores are strategically located close to freeways and within residential areas that helps in attracting customers to the stores. The external and internal lay out of the Target stores is also somewhat better than the Meijer stores as was evident from the visits to the stores. Starbucks at the Target stores is another added attraction and a competitive advantage for the company. The Target stores provide almost all the comfort of customers shipping although some betterment can be made at the rest rooms of the stores. The exterior of the stores, though large could do with a little more parking lighting — this is not a problem with Meijer stores.
The promotional strategy for Target is however better than that of Meijer. The customer loyalty cards not only helps entice customers to the stores but also serves as a source of customer information about shopping habits that can help create marketing strategies and promotional strategies. With respect to other customer facilities like free home delivery and phone and online shopping, there is not much to choose between the two companies. Target does better in the wide range of advertisements and promotional campaigns that they indulge in increasing reach and scope of the promotional campaigns (Ziliani, 2006).
From the above considerations it can be stated that the Target stores are better equipped in terms of customer centric and promotional strategies compared to Meijer stores.
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