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Market Issues

• People are concerned about healthy eating.
  
• There are growing concerns over genetically altered foods,  and food safety (E.coli)
  
• Concerns about obesity. Parents want foods that are healthy for their kids
  
• Parents are concerned that toys are safe for their children
• Be green and environmentally friendly. Target is undergoing an investigation for alleged violation of the Clean Air Act.  

Target has many healthy food options. In 2010, Target expanded 462 stores to include a fresh grocery section. Their private brand Archer Farms Simply Balanced is a line which contains no trans fats, artificial flavorings or synthetic colors. Super Target stores offer more than 700 organic foods. Target is a founding member of the Alliance to Make US Healthiest, a national movement for health and well being. In 2010, Target began an environmental commitment by setting milestones for efficient operations to reduce waste, water usage and greenhouse gas emissions. They also strive to increase the efficiency of their buildings and transportation of merchandise. They track these things on their website at Target.com/hereforgood.

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Market Segments

• Middle Class Moms
  
• Highly Educated
  
• Average to high income
  

 Target’s largest customer segments now are families with average income. The average Target customer is 40 years old. Also, 43% of Target customers have children living at home. Median household income is $64,000 and they aim to attract customers with a high education level. 57% of their customers have completed college.

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Needs and Demands

• Customers expect satisfactory service, clean & safe stores, items to be in-stock and items to keep up with trends
• Desire for green products and companies
• Desire for healthy food options
  
• Desire to buy local foods
• Desire to buy groceries, health, beauty products and clothes in one place.
  

 
In 2010, Target remodeled many of their stores to give them better lighting, wider aisles, and more attractive displays. They aim to keep their stores clean, up to date and stylish. Target has a commitment to reduce harmful waste and to help the environment with their Here For Good program. Target has many healthy food options, including more fresh grocery sections and organic foods. Target’s fresh foods began as a response to customer surveys. Customers stated that they wanted Target to be their one-stop shop so they could get everything they needed in one convenient place.

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Switching Costs

• How convenient is it to drive to Target?
  
• Can customers get national brands?
•  Price Sensitive
  
• How easy is it for customers to go to competition?

 Target has 1,750 stores in over 49 states, with approx. 100 new stores open each year, making Target a very convenient shopping place for many people. Target’s owned and exclusive brands (Market Pantry, Up & Up, Merona) have a higher margin than national brands and account for a growing portion of Target’s overall sales. (1/3 of sales in 2010). These owned brands are more affordable than name brands and are great alternative for customers looking for a cheaper option.  Consumers who are loyal to name brands will be more likely to shop at Target because they have access to many name brands in one place. Target has a disadvantage compared to Wal-Mart in the fact that Wal-Mart has a very large International presence. Target is only in the US, and has just begun expansion into Canada. Customers who travel often or who come from another country may be more loyal to Wal-Mart because they recognize it.

Revenue Attractiveness

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• Some customers are willing to pay extra for a brand they are loyal to and they want to be able to find that brand
  
• Some brands are not easy for customers to find somewhere else
• Convenience of being able to buy everything in one place
• Consumers who are loyal to name brands will be more likely to shop at Target because they have access to many name brands in one place.

Target has many brands that are private and exclusively owned by them such as Market Pantry, Archer Farms and Choxie. Once customers become loyal to these brands, Target customers will not be able to find them anywhere else. Super Target customers can might pay a little extra for some products because they enjoy the convenience of being able to buy everything they need in one place.

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