Comparative Analysis of Saudi Arabia's Retail Market

The assignment involves a comparative analysis of Saudi Arabia's retail market, focusing on its growth prospects, major players, consumer behavior, and market segmentation. It also explores the implications of Islamic finance and market segmentation for the cost of capital, as well as the importance of customer feedback and branding techniques in improving business performance.

RUNNING HEAD: Marketing & Management 0
Target corporation
Marketing & Management

Marketing & Management 1
Contents
Introduction................................................................................................................................2
Marketing function of Target Corporation, Saudi Arabia..........................................................2
Vision.....................................................................................................................................2
Mission:..................................................................................................................................2
Business objective..................................................................................................................2
Product and type of services...................................................................................................2
Marketing plan and SWOT analysis..........................................................................................3
Micro and Macro environment...................................................................................................6
Establishment, development and enhancement of mutual beneficial relationships with
customers and activities to establish customer sales..................................................................7
Various consumer decision processes........................................................................................8
Market research for making better decision to establish and enhance marketing......................9
Evaluation of market segments by KSA and how it will create value preposition to meet
requirement of target customers...............................................................................................10
How Target Corporation, KSA manage all products and services and steps taken for the best
development process of new products.....................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
Target Corporation was established in 1902. It is a general merchandiser and sells products
through stores and digital channels. The company has online business at target.com. The
company provides high quality and on trend merchandise at attractive prices (Wilson, 2017).
The target corporation decided to set up it’s discount store in Saudi Arabia. The management
of Target Corporation hired Marketing manager for it’s operations in Saudi Arabia. Being a
manger it is required to establish marketing department from the analysis of market to
formulate overall marketing goals, objectives, mission, vision and planning for the entire
function.
Marketing function of Target Corporation, Saudi Arabia
Vision
The vision of the company is committed to great value, community, diversity and the
environment. It outlines what Target Corporation wants to be. It is a long term view and
focuses on future.
Mission:
It is the mission of the company to make it most preferred destination in all channels. It also
believes in delivering outstanding value and innovation. It fulfils brand promise that is
expecting more and paying less. Along with the support to mission they are guided by
commitments to great value, community and environment.
Business objective
The objective of the company is to make it profitable by making it preferable destination
shopping destination by conveying outstanding value and continuous innovation.
Product and type of services
Target Corporation offers four product categories, household essentials, food and pet
supplies, apparel and accessories and hardlines. The household essential denotes more than
20% of sales and includes pharmacy, personal care, baby care, beauty and paper products.
The food and pet supplies is more than 20% of sales and consists of dairy products, dry

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grocery, beverages, candy, snacks and frozen food. The apparel and accessories generates
20% of sales and includes apparel for boys, girls, men and women, accessories and shoes.
The hardlines are more than 15% of sales and offers electronic items, movies, books,
computer software and toys.
Marketing plan and SWOT analysis
Introduction
Target Corporation has already large scale operations and is the largest discount store in
United States. The headquarter of Target Corporation is in Minneapolis, Minnesota. The
company is thinking to launch it’s store in Saudi Arabia. The environment of Saudi Arabia is
favorable which can make it one of the largest retailers in the country. It has massive buying
power and can enforce low prices (Wagner & Eggert, 2016).
Statement of marketing goal
Target aims at people’s contentment of looking good and feeling delighted. It can be made
possible by the hygiene products and nutritious food along with health care. The company
takes steps to keep in mind it’s value and long term profits and growth of company.
SWOT analysis
Strength
Strong presence: The company has already strong presence in other countries which can help
company to establish in Saudi Arabia. Target Corporation also has economies of scale which
allows huge buying power and can also enforce low price strategy (Schuetz, 2015).
Huge opportunities: Saudi Arabia has the largest industry. It is expected to grow constant in
next few years. Target Corporation has massive opportunity to set up in Saudi Arabia as it is
the perfect location for setting up and growing business.
Differentiation: Target Corporation offers products at affordable prices and it can be the
biggest advantage for the company in the economy of Saudi Arabia. The company has
contact with various dealers to provide differentiated merchandise at comparable prices.
Weakness
Dependence of economy on public spending: The economy of Saudi Arabia is dependent on
the spending done by public. More spending helps in generating more profits to company.

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Past legal cases: The past legal cases of Target Corporation can affect the brand image. In
2013 also company faced leakage of confidential data including information of customer’s
credit and debit card.
Opportunities
Acquisition of smaller retail chains: Saudi Arabia has various small retail chains and Target
Corporation can successfully acquire these chains. The chains which are already established
know about the taste of people. So, it is beneficial for the company to acquire small retail
chains.
Strong presence on on-line market: Saudi Arabia has strong presence on online market
considering changing behaviour of consumers. The e-commerce sales in country are
increasing at rapid rate.
Threat
Rising labor costs: The labor costs in Saudi Arabia have been rising and as a result wages
have been rising. It affects the profitability of country by increasing overall costs.
Increasing competition and fluctuating economic scenarios: Various stores are opening in
country which leads to increasing competition in the country. It not only increases
competition but also changes economic scenarios.
Competitors
The competitors of Target Corporation are:
Walmart
Macy’s
JCPenny’s
Marketing objectives
The marketing objectives of company include:
The main objective is to mark profit of company 10% every year in a justified way by giving
value to stakeholders and by maintaining loyalty of customers.
Increase percentage of sales by increasing manufacturing rate of basic brands.
Maintain significant amount of budget for advertisement and marketing.
Introduce adaptive products by innovation and investing in research and development.

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Overall objective
The overall objective of Target Corporation is to expand on global level. However the
products of the company penetrate into local market. The company aims to attain loyalty
from different market segments by making available innovative products.
Target market segments
The target market of Target Corporation consists of young, educated, sophisticated and
fashionable people also who have healthy eating habits and are concerned about organic food
items (Kauser, 2014).
Marketing mix
Product:
The company makes available 40% home and apparel items and 20% consumables like food,
healthy items and beauty items.
Price:
The price of the company is generally 1-2% lower than other supermarkets. Before deciding
price of any article strategies of competitors are kept in mind.
Place:
The company decides place in urban locations or in the malls. Target Corporation is
conducting it’s services in almost 100 countries and now it is planning to open discount store
in Saudi Arabia.
Promotion:
The company spends 2.3% on advertisement and sponsorship. The advertisement is done
through electronic and print media. The company also provides premium offers and sale to
attract major segment of customers.
Main strategies
Market penetration

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This strategy of company runs along it’s extension towards north US and Europe by
spreading it’s product range. The product innovation helps in stimulating the market and thus
it helps in market penetration.
Market Development
Target Corporation can extend it’s market development strategy by innovation and research
and development department for the development of new products. The company can focus
on it’s expansion, acquisition and partnership.
Diversification strategy
The diversification strategy focuses on the North America and the emerging economies. The
company is already serving in various countries and about to add more countries.
Monitor and control
The monitoring and control process is carried out by company through the balance control
card method which focuses on the four perceptions:
Financial perception
Customer perception
Internal perception
Innovation and learning outlook
Micro and Macro environment
The micro environment factors are close to the firm.
The supplier environment:
It consists of other business firms or retailers who provide raw material, service and finished
goods themselves. The retailers and manufacturers depend on the numerous suppliers. The
distributive environment:
Target Corporation makes sure that the products of company arrive at the final customer. The
intermediaries such as agents and distributors take part in this process.
The competitive environment:
Target Corporation should be aware about the potential threat of competitors of similar
products like Walmart. The company should have understanding of type, size and

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composition of competitive forces. Target Corporation will have greater opportunity to
compete effectively in the market of Saudi Arabia (Yue, Rao & Ingram, 2013).
The macro environment includes the PEST Analysis which is uncontrollable factor of the
company.
Political factors:
Target Corporation has a strong working connection with China because majority of the
products of company come from China only. There is good terms between China and Saudi
Arabia as various agreements are already made in both countries (Ju, Cheng, Hu, Lv & Chen,
2015). It can positively affect Target Corporation operations. It is affected by taxation, tariffs
and trade restrictions of the country where it is operating (Niblock & Malik, 2007).
Economic factors:
Saudi Arabia makes effort to attract foreign investment and diversify it’s economy. The
economy of country affects Target Corporation, but the company can be still a major
shopping choice in the market of Saudi Arabia (Alghamedi, 2014).
Social factors:
The way company treat with employees, community and consumers gets support from
shoppers. The website of the company gives access to the online catalogue. It also provides
target financial services for the credit cards (Saudi Embassy, 2017).
Technological factors:
Target Corporation can talk to customers by using social media platforms like Facebook,
Twitter, LinkedIn and Instagram. They have web pages for news and trends. Target
Corporation can showcase it’s products by reviews and product images (Aljarboa, 2016).
Establishment, development and enhancement of mutual beneficial relationships with
customers and activities to establish customer sales
Establishing, developing and enhancing relationship with customers helps to improve
customer service.
Listen:
The customers should be paid attention and question should be asked instead of talking. The
company can better serve customers with the knowledge shared by customers.
Seek feedback:

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Feedback should be taken by customers as it can help company to serve need of customers in
a better way. The customers will be more satisfied and efforts of the company will be
appreciated.
Provide an education:
Along with understanding business of clients it is equally important to know what Target
Corporation does. The information should be given to customers about background of
organisation and what it strives to achieve. It is also explains that how products and services
of company are better than other companies (Al Dossry, 2012).
The activities to establish, develop, and maintain customer sales of Target Corporation
in Saudi Arabia
Learn about customers:
The company should consider name, need and want of customers. A little research is required
to be done on customers. The company can think about the ways to add value to the
organisation. The company can easily differentiate itself by delivering best customer
experience.
Live for customer complaints:
The customer complaints provide opportunity to company to know what customers think
about the product and services of company. It helps to improve services and products. It also
provides how to handle and monitor customer complaints (Forbes, 2011).
Stay in regular contact with customers:
The problems of customers can be identified by keeping regular contact. There are some
ways by which regular contact can be keep with customers like follow up with customers via
phone, email or social media, by sending customers friendly reminders about product and
services of company.
Various consumer decision processes
The consumer decision process is also known as journey of buyers. It includes mainly these
three processes:
Recognising needs:

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The consumer making process initiates when the potential customer recognizes need or when
they require solution to their problems. It can involve anything from wanting a new product
to replacement of product. It is also noticed that customers do not realise what they need until
the products are exposed by the company.
Gathering information:
Once Target Corporation realises the need of customers it soon starts to gather information
through Google. The buying process can involve comparison of products or services. It
depends on price, quality, convenience, suitability and location. The search provides various
marketing channels including website, reviews and more.
Resolving problem:
After identifying the options and conducting proper research, the company can take decision.
Once the efforts of Target Corporation reach to customers and have created awareness in
their mind, the decision will include making purchase for company.
Market research for making better decision to establish and enhance marketing
There are various ways of market research by which Target Corporation can make better
decision to establish and enhance marketing.
Improve branding:
Target Corporation can improve brand image by brand awareness. It will help customers to
be aware and familiar with Target Corporation. The image of brand can also be improved by
comparison with competitors. The personification helps to improve brand image by
highlighting characteristics of company (Hughes, 2017).
Measure effectiveness of marketing:
Target Corporation does a better job for promoting company and generating sales. Market
research is useful in providing information for the effectiveness of marketing efforts.
Identify new opportunities:
The market research helps to identify new market opportunities. It can also help to identify
geographic regions for expansion of products and services of company. For instance, Target
Corporation could be looking for the right location for opening it’s retail store in Saudi
Arabia. The company also look for the distribution channels to determine how it’s decision is
going to affect customer base.
Insight into product features:

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At the time of launching Target Corporation in Saudi Arabia, the company like to know about
the right features and packaging. Research helps company to know about insights of company
which can be used to refine products.
Evaluation of market segments by KSA and how it will create value preposition to meet
requirement of target customers
The target corporation can be categorised into the following segments:
Household essentials:
The household essential denotes more than 20% of sales in the economy of Saudi Arabia. It
includes pharmacy, personal care, baby care, beauty and paper products. The preference of
consumers for the healthy lifestyle is changing lifestyle of the population of Saudi Arabia
(Opoku & Abdul-Muhmin, 2010).
Food and pet supplies:
The food and pet contributes largest in terms of sale and holds 40% of retail market in Saudi
Arabia. The food market continues to grow in country and it is giving opportunity to
international retailers like target Corporation to expand it’s operations in country. The food
and pet supplies is the best segment to serve as it can create value proposition to meet
requirement of customers. The customers ageing 18-65 are targeted by Target Corporation,
KSA as they are more conscious towards fitness and healthy lifestyle (Mordor Intelligence,
2017).
Electronic items:
Consumer electronics is one of the important segments of market. Saudi Arabia has registered
growth for the demand of electronic items in the last few years (Business Wire, 2012). With
the increasing income of population the demand for electronic items like mobile phones,
laptops, tablets and television is continuously increasing (Hearn, Piesse & Strange, 2012).
Apparel and accessories:
The segment of apparel is imported in Saudi Arabia from countries like Europe and US. The
apparels and accessories have great demand in the country. It contributes to high disposable
income (EuroMonitor International, 2018).

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How Target Corporation, KSA manage all products and services and steps taken for
the best development process of new products
Target Corporation uses roadmap to transform business. It helps company to manage
products and services and creates path to grow. It includes:
Channel-agnostic approach: The channel agnostic approach is used to grow business and
driving experience across stores. The website generates more sales in comparison to store.
The enhancement in technology creates better customer experience. It can help KSA to
manage products better and generate more sales by online platform (Kwon, Baig & Akoglu,
2017).
Merchant categories target: kids and wellness are being prioritised. Target Corporation
focuses on differentiation in these areas. This category accounted for more than a quarter sale
of company. Other categories of target Corporation delivers better shopping experience. So,
merchant category can better prioritise products related to the kids and wellness (Carlson &
Mowzoon, 2011).
Guest centric approach: The company has created guest centric experience by tailoring
relevant products with the other factors like climate, demography and locations. It can
strengthen the data, analytics and technology. KSA can make use of this approach by
understanding climate and demography of country.
Store opening plan: The store opening plan of Target Corporation focuses on the innovative
and flexible formats like TargetExpress and CityTarget. It can help KSA to open stores in the
community it fits.
Conclusion
In the above report, the marketing plan for Target Corporation have been discussed for
starting it’s discount store in Saudi Arabia. For this, the marketing function, marketing plan,
micro and macro environment of Target Corporation has been discussed. The process of
establishing, developing and enhancing beneficial relationship with customers has been
explained. The market segments are also evaluated to serve in the best one. Finally, the steps
taken to manage products and services of company have been explained.

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References
Al Dossry, T.M., 2012. Consumer Culture in Saudi Arabia (A Qualitative Study among
Heads of Household).
Alghamedi, A., 2014. Lack of diversification is a challenge facing Saudi Arabia. Journal of
Global Business Issues, 8(2), p.57.
Aljarboa, S. 2016. ONLINE SHOPPING IN SAUDI ARABIA: OPPORTUNITIES AND
CHALLENGES, , [Online]. Available at:
http://aircconline.com/ijmvsc/V7N4/7416ijmvsc01.pdf [Accessed on: 2 April 2018].
Business Wire. 2012. Research and Markets: Saudi Arabia Consumer Electronics Report Q2
2012, [Online]. Available at:
https://www.businesswire.com/news/home/20120724006805/en/Research-Markets-Saudi-
Arabia-Consumer-Electronics-Report [Accessed on: 2 April 2018].
Carlson, M. and Mowzoon, M.M., Visa USA Inc, 2011. Providing an announcement about
transactions of a target merchant to a consumer. U.S. Patent 7,937,291.
EuroMonitor International. 2018. Apparel Accessories in Saudi Arabia, [Online]. Available
at: http://www.euromonitor.com/apparel-accessories-in-saudi-arabia/report [Accessed on: 2
April 2018].
Forbes. 2011. 3 Reasons To Ask For Customer Feedback, [Online]. Available at:
https://www.forbes.com/sites/theyec/2011/12/14/3-reasons-to-ask-for-customer-feedback/
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Hearn, B., Piesse, J. and Strange, R., 2012. Islamic finance and market segmentation:
Implications for the cost of capital. International Business Review, 21(1), pp.102-113.
Hughes, J. 2017. 4 Techniques to Improve Your Business’ Branding, [Online]. Available at:
https://prettylinks.com/2017/06/improve-business-branding/ [Accessed on: 2 April 2018].
Ju, X., Cheng, Y., Hu, Z., Lv, M. and Chen, X., 2015. Determinants and consequences of
price-leadership strategy: Evidence from Chinese manufacturer exporters. Transnational
Marketing Journal, 3(2), pp.81-111.

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Kauser, Y. 2014. Saudi consumer’s shopping behaviour:Descriptive Analysis, [Online].
Available at:
https://www.researchgate.net/publication/287531379_Saudi_consumer's_shopping_behaviou
rDescriptive_Analysis [Accessed on: 2 April 2018].
Kwon, H., Baig, M.B. and Akoglu, L., 2017, May. A Domain-Agnostic Approach to Spam-
URL Detection via Redirects. In Pacific-Asia Conference on Knowledge Discovery and Data
Mining (pp. 220-232). Springer, Cham.
Mordor Intelligence. 2017. Market Entry - Pet food Market in Saudi Arabia: Analysis of
Growth, Trends and Progress (2016 – 2021), [Online]. Available at:
https://www.mordorintelligence.com/industry-reports/market-entry-pet-food-market-in-saudi-
arabia [Accessed on: 2 April 2018].
Niblock, T. and Malik, M., 2007. The political economy of Saudi Arabia. Routledge.
Opoku, R.A. and Abdul-Muhmin, A.G., 2010. Housing preferences and attribute importance
among low-income consumers in Saudi Arabia. Habitat international, 34(2), pp.219-227.
Saudi Embassy. 2017. SAUDI ARABIA and POLITICAL, ECONOMIC & SOCIAL
DEVELOPMENT, [Online]. Available at:
https://www.saudiembassy.net/sites/default/files/WhitePaper_Development_May2017.pdf
[Accessed on: 2 April 2018].
Schuetz, J., 2015. Why are Walmart and Target next-door neighbors?. Regional Science and
Urban Economics, 54, pp.38-48.
Wagner, S.M. and Eggert, A., 2016. Co-management of purchasing and marketing: Why,
when and how?. Industrial Marketing Management, 52, pp.27-36.
Wilson, R.E., 2017. Target Corporation: Maintaining Relevance in the 21st Century Gaming
Market. Kellogg School of Management Cases, pp.1-25.
Yue, L.Q., Rao, H. and Ingram, P., 2013. Information spillovers from protests against
corporations: A tale of Walmart and Target. Administrative Science Quarterly, 58(4), pp.669-
701.

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