Marketing in Action Case Real Choices at Target When can offering too many choices become too much to handle? Target has gone through a period of bad press as a result of an unacceptable level of stock-outs that upset customers and decreased sales. The discount retailer believes that it can solve the problem by reducing the number of brands and varieties of product options on the shelves. Brian Cornell, CEO, believes that the increased efficiency will allow for more focus on priority categories "like wellness, stylish home goods, apparel, and baby products." Target's distribution process became more complicated with the expansion of its grocery business to include per- ishables like meat, fresh produce, and dairy products. Then, the situation became even more complex when it began allowing online customers to receive orders directly from its warehouses or pick up their online orders in stores. Because of the mess, Target has committed to redesigning its supply chain to make it more streamlined. Target has a rich history of success. In 1902, George Dayton founded a company in Minneapolis, Minnesota, caled Dayıon Dry Goods Company. Over the years the company went through various retail format changes and in 1962, the first Target store opened in Roseville, Minnesota. It called itself the "new idea in discount stores" differentiated by merging key department store features with the lower prices of a dis- counter. Target became "a store you can be proud to shop in, a store you can have confidence in, a store that is fun to shop and exciting to visit." The retailer is the third largest US. store chain, operating over 1,800 retai locations throughout the efficiency. Amy Koo, an analyst with Kantar Retail, says, "In theory, everything can move faster, and they will have less stuff in the system." Target's supply chain transformation includes other changes as well. Store shelves are being physically restruc- tured to hold more product, pushing inventory out of back- rooms and onto the sales floor. Suppliers are being required to adjust case sizes (how many individual items are inside a shipped carton) to increase inventory turnover and decrease the number of times a store employee has to handle the merchandise. In addition, Target wants suppliers to give a single-day arrival date for shipments to Target's warehouses, eliminating the prior practice of a "grace period" that al- lows shipments to arrive a few days after the promised date without penalties. These and other changes will help Target achieve its goal of better inventory management. John Mulligan, chief operating officer, thinks that includ- ing suppliers in planning and executing the transformation is a key to success. Stock-outs not only hurt Target, the lost sales also mean that everyone in the supply chain suffers. How well the company uses this reinvigorated supply chain to deliver its value proposition to customers will be critical to its future competitive success. You Make the Call 11-34. What is the decision facing Target? 11-35. What factors are important in understanding this deci- United States. sion situation? 11-36. What are the alternatives? Despite this lofty history, more recently growth at its established stores has been hindered by unacceptable stock levels because of their overly complicated supply chain. Target is spending more than $5 billion (yes, BILLION), to upgrade its distribution network and technology infrastruc- ture to reduce stock shortages and facilitate the capability for online growth. In addition, the retailer is shrinking the number of different products it keeps in stock and reducing the number of sizes across those products. These changes will result in less overall inventory and improved handling 11-37. What decision(s) do you recommend? 11-38. What are some ways to implement your recommen- dation? Based oe: Fi Wata, "Thisla Haw Taget is Soung ts Os-eol Protlem:" FotuneMach 2,201, haportune.con/20rG/ne yaue (amead My 30n, Nanda Ra anlatan lana "Target fats ghaih landure Spand ih Ruaply Cain Radere May 4.219.meadescomarictlstirputeples-adshedSHOIDSE coasad tay 5, 21Nandta Base, Targut Ges Taugh win Vendos to Speadip Sppe Chain" Reus Mach 2, 2016), tpsas.antrickisapeattek-LBOO423 pcosset Ma, 0s
Marketing in Action Case Real Choices at Target When can offering too many choices become too much to handle? Target has gone through a period of bad press as a result of an unacceptable level of stock-outs that upset customers and decreased sales. The discount retailer believes that it can solve the problem by reducing the number of brands and varieties of product options on the shelves. Brian Cornell, CEO, believes that the increased efficiency will allow for more focus on priority categories "like wellness, stylish home goods, apparel, and baby products." Target's distribution process became more complicated with the expansion of its grocery business to include per- ishables like meat, fresh produce, and dairy products. Then, the situation became even more complex when it began allowing online customers to receive orders directly from its warehouses or pick up their online orders in stores. Because of the mess, Target has committed to redesigning its supply chain to make it more streamlined. Target has a rich history of success. In 1902, George Dayton founded a company in Minneapolis, Minnesota, caled Dayıon Dry Goods Company. Over the years the company went through various retail format changes and in 1962, the first Target store opened in Roseville, Minnesota. It called itself the "new idea in discount stores" differentiated by merging key department store features with the lower prices of a dis- counter. Target became "a store you can be proud to shop in, a store you can have confidence in, a store that is fun to shop and exciting to visit." The retailer is the third largest US. store chain, operating over 1,800 retai locations throughout the efficiency. Amy Koo, an analyst with Kantar Retail, says, "In theory, everything can move faster, and they will have less stuff in the system." Target's supply chain transformation includes other changes as well. Store shelves are being physically restruc- tured to hold more product, pushing inventory out of back- rooms and onto the sales floor. Suppliers are being required to adjust case sizes (how many individual items are inside a shipped carton) to increase inventory turnover and decrease the number of times a store employee has to handle the merchandise. In addition, Target wants suppliers to give a single-day arrival date for shipments to Target's warehouses, eliminating the prior practice of a "grace period" that al- lows shipments to arrive a few days after the promised date without penalties. These and other changes will help Target achieve its goal of better inventory management. John Mulligan, chief operating officer, thinks that includ- ing suppliers in planning and executing the transformation is a key to success. Stock-outs not only hurt Target, the lost sales also mean that everyone in the supply chain suffers. How well the company uses this reinvigorated supply chain to deliver its value proposition to customers will be critical to its future competitive success. You Make the Call 11-34. What is the decision facing Target? 11-35. What factors are important in understanding this deci- United States. sion situation? 11-36. What are the alternatives? Despite this lofty history, more recently growth at its established stores has been hindered by unacceptable stock levels because of their overly complicated supply chain. Target is spending more than $5 billion (yes, BILLION), to upgrade its distribution network and technology infrastruc- ture to reduce stock shortages and facilitate the capability for online growth. In addition, the retailer is shrinking the number of different products it keeps in stock and reducing the number of sizes across those products. These changes will result in less overall inventory and improved handling 11-37. What decision(s) do you recommend? 11-38. What are some ways to implement your recommen- dation? Based oe: Fi Wata, "Thisla Haw Taget is Soung ts Os-eol Protlem:" FotuneMach 2,201, haportune.con/20rG/ne yaue (amead My 30n, Nanda Ra anlatan lana "Target fats ghaih landure Spand ih Ruaply Cain Radere May 4.219.meadescomarictlstirputeples-adshedSHOIDSE coasad tay 5, 21Nandta Base, Targut Ges Taugh win Vendos to Speadip Sppe Chain" Reus Mach 2, 2016), tpsas.antrickisapeattek-LBOO423 pcosset Ma, 0s
Chapter2: Planning, Implementing, And Evaluating Marketing Strategies
Section2.1: Inside Tesla’s Strategy For Growth
Problem 1VC
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