Target Australia: Problems, Analysis, and Marketing Solutions

This report provides a comprehensive business analysis of Target Australia, focusing on two primary problems: confusing brand positioning and an ineffective Everyday Low Price (EDLP) model. The analysis includes a review of Target's vision, mission, values, and objectives, along with a SWOT analysis highlighting industry dynamics, market competition, and internal strengths and weaknesses. The report examines the department retailing industry, competitive landscape, and the performance of key competitors such as Kmart, Myer, and Big W. A detailed marketing plan is proposed, covering positioning strategies, product offerings, pricing, promotion, and placement, with recommendations for improving brand image and market share. The report concludes with a set of SMART goals and references to support the findings, offering insights into how Target Australia can improve its business strategies and marketing efforts within the competitive retail environment.

TARGET AUSTRALIA

TWO PROBLEMS
Brand Positioning
• Target Australia has confusing
positioning strategy as its product
portfolio is occupied with range of
diverse products. Moreover, the product
portfolio has products even those not in-
demand (News.com.au, 2019).
EDLP Model
• The “Everyday Low Price (EDLP)” model is widely followed by
department retailing brands. Kmart, another subsidiary unit of
Wesfarmers has particularly been pretty successful with EDLP model.
• Target, on the other hand, has not been effective with EDLP because
of many reasons.
• The list of reasons include higher inventory management cost,
unnecessarily large product portfolio, ineffective brand positioning,
etc.
(News.com.au, 2019)

BUSINESS ANALYSIS
Vision, Mission,
Values and
Objectives
• Mission: To be the most preferred brand for the
community in which it operates. They want to become
the most loved department brand in the country
• Vision: To offer the products under the “everyday low
price segment” to the middle-income groups
• Values: Offering range of items in the most effective
pricing bracket. Target wants to satisfy customers
under all age brackets
• Objectives: Offering quality products under a
competitive price range and acquiring a leadership
position in the EDLP segment (
Target.com.au, 2019)
Strategic Planning
Process
• Target is in the department retailing industry
• The industry is majorly dominated by four
major brands
• It is important to know whether Target has
been able to sustain its competency
(Target.com.au, 2019)
SWOT analysis
• Large number of stores is a positive aspect for
Target
• Product portfolio is unnecessarily very large
• Brand image is pretty confusing
• Inventory management cost is on a higher side
• Market competition is extensively high
• Target faces competition from Kmart, Big W and
Myer
(Target.com.au, 2019)

BUSINESS ANALYSIS CONTINUE..
SMART Goals
Objective: To provide in-demand items
only at the most competitive pricing
Specific(S): Compact Portfolio
Measurable(M): With six distinct KPIs
Achievable(A): Require improved
forecasting for shorter product portfolio
and reduced inventory cost for attaining
EDLP model
Relevant(R): Require effective
management of brand positioning and
EDLP strategy
Time-Based(T): Needs to be done in
quick span as few of Target’s stores are
nearing a closure

INDUSTRY ANALYSIS
• The department retailing industry is highly
saturated Largely occupied by four major
retailers
• These are Kmart, Myer, Target and Big W
• Sales have kept on falling each year by 0.2%
since 2014 In 2019
• The drop percentage will increase to 0.5% due
to uncertain economic conditions and
increasing competition from online retailers
(Ibisworld.com.au, 2019)

COMPETITIVE ANALYSIS
Kmart
• Sales figures for Kmart have
fallen in the first half of 2019
• The drop percentage is 0.6%
(News.com.au, 2019)
Myer
• Myer is in sales decline for the
last 10 years
• The only way out for Myer is to
downsize, grow online by selling
exclusive brands and by
constantly building loyalty
(News.com.au, 2019)
Big W
• The drop in sales for Kmart came
as an opportunity for Myer
• The brand registered a sharp
increase in sales by 0.7% during
the same period
(News.com.au, 2019)

MARKETING PLAN
Positioning
• Target is a department retailing brand that
sells quality products
• At mid-range premium pricing
Market Strategy
Pricing: Mid-range premium pricing
Product: To be sold to consumers in the middle-income
group
Promotion: Social media channels such as redesigned
official website of Target, improved content strategy for
Search Engine Optimisation (SEO) and loyalty scheme
Place: Wait-time at cash counters should be reduced. More
spacious stores are required

REFERENCES
• Ibisworld.com.au. (2019). Department Stores – Australia Industry Research Reports |
IBISWorld. Retrieved from https://www.ibisworld.com.au/industry-trends/market-research-
reports/retail-trade/other-store-based-retailing/department-stores.html
• News.com.au. (2019). ‘Target is almost mimicking the Kmart model’. Retrieved from
https://www.news.com.au/finance/business/retail/a-tale-of-two-retailers-target-stores-
could-be-converted-into-kmart-following-profit-crash/news-story/
5192e281d208cc143e963dd1dc67c7b4
• News.com.au. (2019). Is Kmart’s golden run over?. Retrieved from
https://www.news.com.au/finance/business/retail/kmart-target-myer-performance-of-big-
name-department-stores-in-the-spotlight/news-story/f702a9a493e23f2c3755cef35a0cf925
• Target.com.au. (2019). Retrieved from https://www.target.com.au/