Principle of Marketing

Presentation:
Submitted To: Prof. Dr Samar Rahi
Submitted By:
Group Members: (Section B)
Haider Raza. E18MBA83
Shahroz Kafeel. E18MBA111
Daniayl Yousaf. E18MBA140

Company Case No. 3

 Target: “Expext More” to “Pay Less”
Synopsis:
This case is about comparing Target and Walmart. These are the two largest discount retailers
in the United States. They are usually compared with one another because they sell similar
merchandise category to category. But even with these similarities the consumers
differentiate them, According to them the Walmart is all about low prices and Target is about
style and fashion. Walmart’s most recent annual revenues of $408 billion are more than six
times those of Target. But for many years, Target’s business grew at a much faster pace than
Walmart’s.

In fact, as Walmart’s same- store sales began to lag in the mid-2000s, the world’s largest
retailer unabashedly attempted to become more like Target. It spruced up its store
environment, added more fashionable clothing and housewares, and stocked organic and
gourmet products in its grocery aisles. Walmart even experimented with luxury brands. After
19 years of promoting the slogan, “Always Low Prices. Always” Walmart replaced it with the
very Target-esque tagline, “Save Money. Live Better.” None of those efforts seemed to speed
up Walmart’s revenue growth or slow down Target’s.

But what a difference a year or two can make. As the global recession began to tighten its grip
on the world’s retailers in 2008, the dynamics between two retail giants reversed almost
overnight. As unemployment rose and consumers began pinching their pennies, Walmart’s
familiar price “rollbacks” resonated with consumers, while Target’s image of slightly better
stuff for slightly higher price did not. By mid-2008, Target had experienced three straight
quarters of flat same-store sales growth and a slight dip in store traffic. At the same time,
Walmart was defying the economic slowdown, posting quarterly increases in same-store sales
of close to 5% along with substantial jumps in profit.

Steinhafel refused to give up on his strategy. Instead, he intensified Target’s “Pay Less”
emphasis. In addition to aggressive newspaper advertising, Target unveiled a new set of
television spots. Ads showed ordinary people consuming commonly purchased retail products
but with a unique twist. In addition to the new promotional efforts, Target made two
significant operational changes. First, it began converting a corner of its department stores
into mini-grocery stores carrying a narrow selection of 90 % of the food categories found in
full-size grocery stores, including fresh produce. In second operational change, Target
surprised many analysts by unveiling a new package for its main store brand. One without the
familiar target bulls-eye! It was replaced with big, colorful, upward- pointing arrows on a
white background, with the new brand name, “up & up”.

Target’s journey over the past few years demonstrate that changing the direction of a large
corporation is like trying to reverse a moving freight train. Things have to slow down before
they can go to the other way. But after 18 months of aggressive change, it appears that
consumers may have finally gotten the message. The spending per visit and number of store
visits both increased. The effects of recession were starting to loosen up and consumer
confidence was stabilizing. Walmart’s sales growth was slowing down this same period and
even showing signs of decline.

Instead of opening more new stores, Target mainly focuses into remodeling existing stores to
better accommodate the shifts in inventory. According to some analysts Target’s recent value
strategy may weaken the brand as customers lose sight of the distinctive features that set it
apart from Walmart. But customers showed a positive feedback towards Target’s value
strategy of “Pay Less”.

Questions And Answeres

Q.1: What micro environmental factors have affected Target’s
performance over the past few years?
Over the past few years, following are the factors that have affected Target’s performance:

1. Competitors: Walmart’s distinct strategy of providing merchandise at a really low worth,

resonated with customers within the financial condition of 2008

2. Customers: because the recession hit, state rose and folks started changing into capable
with cash, the buyer priority modified from modern to budgeted purchase.

3. Publics: Target had a breach among its varied stakeholders, with the activist shareowner
William Ackman, whose company lost eighty fifth of the $2 billion invested with in Target.

Q.2: What macro environmental factors have affected Target’s

performance during that period?
Monetary factor was the macro economical factor that influenced Objective's execution
during that period. The efficient condition in the course of the most recent couple of years
since 2008 was harsh as the economy was in downturn and swelling was on rise. With
ascend in Joblessness, individuals began to have a recently discovered feeling of cheapness
furthermore, money related duty. This drove Objective to detail its "Save money"
methodology what's more, stress forcefully on it.

Q.3: By focusing on the “Pay Less” part of its slogan, has Target
pursued the best strategy? Why or why not?
Target has been accomplishing things directly since the start. They were the first to
construct themselves on an exceptionally differentiated and one of a kind technique and
method for business. They set themselves separated and prevailing as their trademark
"Anticipate More. Save money." took off what's more, had clients in affection with their chic
in items. As they arrived at a pinnacle they committed one little error and that was focusing
on a lot on "Anticipate Progressively" as it were. At the point when the Downturn hit, clients
were low on assets and imagined that shopping at Target would be an over the top treat or
extravagant, as well as "Progressively" costly then what
Q 4: What alternative strategy might Target might have followed in
responding to the first signs of declining revenues and profits?
As Target's Chief Steinhafel yielded that the retail monster's Offer was not as solid as that of
its adversary – Target could have endeavored in evolving the client observation. Their
aphorism "Anticipate More" "Save money" could be utilized with the present methodology
to tell clients that they merit better as well as better garments, machines, and different
items, which different stores don't give. Like including, "You Merit it" toward the finish of
the present adage will have individuals thinking and saying.

Q 5: Given Target’s current situation, what recommendations would

you make to Steinhafel for his company’s future?
A large portion of the clients in a retail location's objective market love to set aside cash no
matter what monetary stage, I prescribe that Target would give more coupons out in papers
or potentially offer more limits in store like a store participation card. With the card, the
clients apply for and can set aside cash and get offers that non-cardholders are not ready to
get. With these advantages, the clients will feel progressively self-esteemed, more
noteworthy worth, and fulfilled. This at last will make faithful clients and will proceed to
acquire new clients.

Company Case No. 4

 Harrah’s Entertainment
Synopsis:
By year 2000, Harrah’s Entertainment Inc. was well-known name in the gaming industry that
operated casinos in more markets than any other casino company. Harrah’s had 21 casinos in
17 different cities, including operations in all five major traditional casino markets (Las Vegas,
Lake Tahoe, Laughlin, Renu, and Atlantic City). At the time when the geographic expansion of
legalized and state supervised gambling broadened the industry’s customer base in U.S.,
Harrah’s operated land-based, dockside, riverboat, and Indian casino facilities in all of the
traditional and most of the new U.S. casino entertainment jurisdictions.

Harrah’s tapped on customer loyalty which was their key competency and worked around this
skill to retain it using IT to carry out decision making for strategies. The dynamism which
Harrah’s CEO Stare demonstrated by his strategies at various points in time define a well
thought investment in its operations. The marketing initiatives which were designed to build
long-term relationship with the three types of customers (new customers, loyal customers and
those who had exhibited signs of attrition) paid well to Harrah’s as the customer was inclined
to visit Harrah’s again and again and consolidate reward points. With the help of IT and
decision science tools, Harrah’s developed a variety of direct marketing programs to build
customer intimacy. As the CEO realized that their marketing efforts were not so effective, he
focused in the right direction by working with Loveman. The three major initiatives were taken
with a focus on target customers: changing the organization structure, building the Harrah’s
brand, delivering extraordinary service, and exploiting relationship marketing opportunities.

With the efforts such as above, Harrah’s motive which was mentioned in their customized
messages to all target customers ‘WE WANT YOU TO BRING ALL YOUR PLAY TO HARRAH’S’ was
accomplished to great extent. However, with the competitors taking initiatives to build grand
facilities and exploiting technology to their benefit, Harrah’s had to explore new ways to retain
customer loyalty. They knew that in order to sustain their competitive advantage which was
customer intimacy to huge extent; they needed to understand their customers well so that the
switching costs for target customers were substantial. How much was the contribution of
marketing efforts towards Harrah’s overall performance? Was this marketing success a one-
shot event or could be achieved year after year? These are some of the questions which we
have tried to analyze through this case. Apart from this, the case also provides some insight on
the following:

1) The competitors invested heavily in facilities leaving the Harrah’s behind in this regard.
Should Harrah’s continue to grow profits by investing in information technology or should it
also focus on building facilities? The investment in Total Gold program to 1 encourage cross-
marketing visitation had realized profits but will it continue and for how long?

2) There always remained the threat of copycat marketing possibly limiting the return on
future investments in business intelligence.

Questions And Answeres

Q1: Discuss Harrah’s Marketing Information System ?
Harrah’s Marketing Information System can be discuses with the help of following points

1 Assessing information needs (From Total Reward card system)

2 Internal databases (For every customer)

3 Marketing intelligence (Calculating, analyzing and giving forecast based on data collected)

4 Marketing research (Conducting surveys, researches on customers)

5 Analyzing and using information (Advanced analysis then support for decision making of
managers).

Q2: Describe the relationship between Harrah’s marketing information

system and manager and employees?
The manager and employees hold up in a party regularly to exchange information . Managers
and employees give their customers presents or notice their special days. Provide proper
services to customers through MIS and Manager make sudden visit to employees.

Q3: Why does Harrah’s system work so well compared to MIS efforts by
other companies?
“Based on client services score, workers have their own system for accumulating points and
redeeming them for a good variety of rewards, from iPads to pool equipment”

Harrah’s combines its service culture with the brain center of Total Rewards

Training employees

Improving technology

Giving customer satisfaction.

Q4: To what extent is Harrah in danger of a competitor copying its

systems?

Competitor
Will be only around the corner of marketing strategy

Have lower ability to invest in developing MIS

Harrah’s
Always keep innovating in their strategy

Find the engagement with the customers in order to continue winning loyalty.

Thank you 