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To break brand loyalty, there are a variety of aspects that should be addressed. Target would have to have a great environment (Brick and Mortar), the convenience of getting multiple items in one place, and catching customers during major life events, which in turn is considered a timesaving. In the process of breaking brand loyalty, Target would need new age technology, data mining and market segmentation. This case will attempt to address the following questions regarding Target Corporation: How does Target use predictive analytics to increase revenue and sales? How can Target use Market Segmentation to assist with ad marketing to potential customers? Description of The Study When consumers shop for everyday items they tend to shop based on history. If as a child your parents always visited Kroger’s store for fresh baked goods and groceries, visit Walmart for clothes and stationery items, and visited Home Depot for household repair you will follow suit, unconsciously. These trends that are ingrained into our lives are considered consumer buying behaviors. This is defined as the “sum total of a consumer’s attitudes, preferences, intentions, and decisions regarding the consumer’s behavior in the marketplace when purchasing a product or service (Grimsley, 2018).” This concept is great when it works in your favor because you are grandfathering in customers based off of habits of the generation before them. However, when you are attempting to garner more customers breaking their loyalty is tough. Target Corporation recognized this phenomenon as only being able to be addressed during a pivotal time in consumers lives. This is when they are welcoming a new child into the world. There are transitory periods in a person’s life when traditions fall apart and buying habits are suddenly changing. When parents are, tired and overcome with stresses and worries their shopping patterns and brand loyalties are now considered up for the taking. In order to capitalize on this change in dynamics, Target would have to be strategic on how they present ads and commercial to garner new customers. One would also ask; how would you even know if someone was pregnant? This is where Targets genius comes into play. Solution Strategy for Change The business strategy and solution for Target is to customer market segmentation and predictive analytics to increase sales. In addition, create a great environment for customers to enjoy shopping and get all their items in one place. Market Segmentation It is vital to understand your core audience and how that is broken down by demographics. Segmentation is essential because it does just that, breaking down a larger target audience into smaller, more concise groups of patrons. This effort is needed because it allows you to funnel your marketing efforts into ads, campaigns, and sales that connects with customers most likely to buy your product. In addition, this assists you with all potential markets that you may want to pursue and assesses the markets based on their possible for viability to your company. Segmenting isn’t a small feat because if done incorrectly finances and investments will be spent in the wrong places causing potential bankruptcy for some companies. In efforts to better segment the market, it is based this on 4 traits; Demographics, Behavioral, Geography, and Lifestyles. Demographics play a huge part in any business because what a 20-year-old Hispanic males needs are can vary from the needs and expectations of a 55-year-old Caucasian female customer. When addressing demographic segmentation age, race, gender, marital status, income, education, and occupation will all play its role. Some having more weight than others based on the products that are being marketed. Behavioral Demographics are huge because it studies trends, usage, and decision making. Trends are important because they can be classifying as trendy and short-lived or trends that have been established over time based on loyalty to products. For example, in the early 2000s younger adults preferred baggier jeans vs older consumers preferred fitted jeans. Another example would be a preference in deodorant depending on your daily duties, whereas a sports player would need a stronger deodorant vs a person who doesn’t do any active sports. You see this clearly being done with Target and its competitors. Geography demographics are based on where your customers are located, which require varying needs. Target stores located up north like Chicago would certainly need to carry a product like a snow shovel whereas a Target in Texas would not. Understanding this difference can limit you in wasting resources in places where it is not profitable. Lifestyle segmentation looks at from the angle of how you like to shop. Online shoppers are different from shoppers that go to the stores. Typically, online shoppers know what they are looking for, don’t have much time, and cost conscience. They want coupons, things delivered to their doors without interruption in their daily schedules. Shoppers in-stores usually make the time to go to the store and may not clearly know what they want in all cases. For example, if a woman that isn’t a frequent makeup shopper, she would need to go to the store to test out pigmentations, and how the makeup feels to them. This wouldn’t be the case for an online shopper because most of the time they are re-ordering based on prior uses. All of these factors play a major role in predictive analytics. If you have all the variables captured in one place, now, the task is to figure out how to use this information. Technology and Additional Distribution Infrastructures With market segmentation gathering valuable intel, now it is time to address what target views as catching customers during the transitional years. As mentioned before, Target realized that when customers are welcoming a new child into the world, traditions fall apart and buying habits are suddenly changing. This means that they can now garner new consumers. Because birth records are traditionally public, the moment a couple has a baby, they are almost immediately flooded with offers and ads from all sorts of companies. Target realized this and wanted to be ahead of the curve and catch them earlier. Targets marketers stated that “they wanted to send specially designed ads to women in their second trimester, which is when most expectant mothers begin buying all sorts of new things, like prenatal vitamins and maternity clothing (Duhigg, 2018).” They figured if they could get them at this point then they would have them for years to come. Conclusion Retailers all know that “experience” matters, and now we’re seeing more innovation in this area than ever before. Target’s Predictive Analytics has changed the way retailers use and obtain data. As stated by a former president, “Gregg Steinhafel, explained that the reason for the intensified rise in revenue was due to a “heightened focus on items and categories that appeal to specific guest segments such as mom and baby (Duhigg, 2012).” This is the result of being able to predict shopper’s experiences based on shoppers’ trends and behaviors. www.szdhsjt.com |
