Discuss about the Marketing for Target Corporation in Kingdom of Saudi Arabia.
Business expansion is one of the major actions of a company to gain more business growth and success. After establishment in home country, each and every organization plans for business expansion in new and emerging country markets (Kipley and Jewe, 2015). This report includes various marketing aspects about the Target Corporation. After developing its business operations in several developed countries, now Target Corporation is planning to open its discount store in Saudi Arabia and to establish its marketing function in the country. The major objective of this report is to establish the vision, mission and business objectives for Target Corporation, Saudi Arabia. The report includes the marketing plan and SWOT analysis of the company in Saudi Arabia. In addition to this, macro and micro environmental analysis are conducted by using different strategic frameworks. Moreover, some significant points regarding Target Corporation in Saudi Arabia are included such as activities to develop customer relationships, customer decision making process, evaluation of market segments and its value proposition.
Target Corporation is one of the largest discount store retailers in the United States of America. This organization holds second position in the industry after Wal-Mart. The organization was established by George Dayton in the year 1902 and it is headquartered in Minneapolis, Minnesota. Currently, it is operating its business in United States and it has opened total 1834 retail outlets throughout the country (Target Corporation, 2014). The organization has emphasized on the needs of younger and image-concerned shoppers. Now, it is proposing to expand its business in Saudi Arabia and it aims to increase its sales with this business expansion. The mission, vision and objectives of Target Saudi Arabia are given below:
In Saudi Arabia, the mission statement of Target Corporation is “to provide high quality, on-trend merchandize at affordable prices in spacious, clean and customer-friendly retail stores.” By opening the store in Saudi Arabia, Target aims to make it most chosen shopping store for all the shoppers in the country (Target Corporation, 2018).
The vision statement of Target Corporation is to fulfill the commitment to customer i.e. “Expect More, Pay Less (Target Corporation, 2018). The organization has the guided promises to community, diversity, great value and environment.
Target Corporation is the second largest retailer of America and it aims to provide everyday fashionable and essentials, unique merchandize at affordable and discounted prices. In Saudi Arabia, the company targets to become customer oriented and it will be focused on needs and demands of customers that in what products or services market to operate (Target Corporation, 2018).
Target Corporation Saudi Arabia will operate its business by offering different product categories at discounted retail stores. The product categories of organization include household essentials, beauty products, baby care, food and pet supplies, cleaning and paper products, grocery and dairy products etc. In addition to retail services, Target Corporation will be offering other services such as financial services and target sourcing services. Under financial services, it will offer the credit cards in Saudi Arabia (Target Corporation, 2018).
To expand its business operations in Saudi Arabia, Target will create a marketing plan that includes all target segments in country and marketing strategies (Armstrong, et al, 2015). Marketing plan for Target Company is stated below:
Target Corporation is introducing itself as discounted store in Saudi Arabian retail sector. The organization is offering its products with higher quality, extraordinary value and a place to shop while saving their money with discounted prices. In Arab world, Kingdom of Saudi Arabia has the lowest poverty rate (ADHRB, 2017). It indicates that there are various people in the country who prefer to purchase the products at discounted prices.
In Saudi Arabia, Target Corporation will target the customers by looking at different characteristics i.e. demographic, behavioral and psychographic. In this country, the target audiences of Target Corporation will be:
By targeting the above customer groups, Target Corporation will create and implement effective marketing strategies, which are given below:
Product
In Saudi Arabia, Target Corporation will offer various products in its discounted stores. Different product sections at retail stores are stated below:
Other services of the company include financial services, sourcing services and pharmacy services (Vida, 2015). The company will offer its products with higher quality and it will make efforts to diversify its product range in Saudi Arabia.
Price
As the organization is targeting the people from lower and middle income level so it will make an effective strategies to attract them. Considering this, the organization will offer its products and services on discounted prices in Saudi Arabia (McDonald, and Wilson, 2016). To set its pricing strategy, the company will consider the prices of existing retailer in Saudi Arabia. It will continue its operations with its current pricing policy i.e. discounted pricing and cost effective.
Place
Under this business expansion, Target Corporation will establish a distribution center in major city of Saudi Arabia. The organization will set an extensive distribution network in the country. The products of Target will be delivered directly to end customers by opening retail stores and via its website.
Promotion
By the use of effective promotion strategies, Target Corporation will communicate its brand message to Saudi Arabian customers. It will give the advertisements on offline and online media. This organization will give the ads on television and regional newspapers of Saudi Arabia (Al-Malkawi, Mansumitrchai, and Al-Habib, 2016). It will develop partnership with online websites such as Amazon.com, Flipkart etc. To retain its customers, it will personally contact to its regular customers through e-mails and gift cards. Thus, this marketing plan will assist Target Corporation to attract more customers in Saudi Arabia.
The SWOT analysis of Target Corporation Saudi Arabia is stated below:
|
Strengths |
Weaknesses |
|
· Low Cost Model is the biggest strength of company. · Target has strong brand image in the country. · The company is working on its commitment i.e. Expect more- Pay less. · It will offer diversified range of products and services in Saudi Arabia. |
· The company has limited presence in Saudi Arabia and other international markets. · Hiring of workers in Saudi Arabia will lead to higher costs of training program. · The company has accused of various laws related to hiring practices (Madhavaram, Hunt, and Bicen, 2017). |
|
Opportunities |
Threats |
|
· The organization can open its retail stores in different cities of Kingdom of Saudi Arabia. · It can diversify its product range in its grocery stores by including sustainable seafood and organic foods (Jin, Almousa, and Kim, 2018). |
· The company may face competition from already established retailers. · It will be new entrant in the Saudi Arabian retail sector. |
Industry Rivalry (Moderate)
Saudi Arabia has a vibrant retail industry and about 63% of the Middle East’s food imports from Saudi Arabia that puts the nation as a leading player in food production (Hussey and Bia, 2014). One of the major competitors of Target Corporation Saudi Arabia is Almarai Company. In this sector, the competition is moderate as other players do not have strong presence in Saudi Arabia.
Bargaining Power of customers (Low)
In Saudi Arabia, the bargaining power of buyers is low because of limited number of organizations operating in retail sector relative to the high population of Kingdom of Saudi Arabia. The company is retaining its customers by providing higher quality product on lower prices.
Bargaining Power of Suppliers (Moderate)
Bargaining power of suppliers is moderate as Arabian Government has a control on the raw material for food and retail products (Vida, 2015). The suppliers are unable to demand higher products from organizations.
Threats of new entrants for Target Corporation are low in Saudi Arabia. It is not easy to set up a supermarket business as it requires huge capital investment. Target has a strong brand image and it is very difficult for new entrants to match that standard of Target Corporation in Saudi Arabia.
The threat of substitutes is moderate for Target Corporation Saudi Arabia as people can buy the retail products from small retail outlets, grocery stores, departmental stores etc. People prefer to shop at their nearby departmental stores rather than super markets.
In Kingdom of Saudi Arabia, government plays an important role in the businesses. The government has created a business friendly regulation that will be beneficial for the establishment of Target Corporation in the country. The political situation of the country is the major strength of the retail industry.
The economy of Saudi Arabia is attaining a significant growth due to price spikes of oil. It has grown this country to be among the wealthiest countries in the world. Economic factors of Saudi Arabia provides favorable environment to Target Corporation. Target Corporation can create more employment opportunities in the country and it can enhance the employment rate in Saudi Arabia (Jin, Almousa, and Kim, 2018).
Saudi Arabia has one of the lowest poverty rates in the world. This country is the 10th lowest in this category. The poverty rate in Saudi Arabia is 12.7% (ADHRB, 2017). Target Corporation is providing its products to lower and middle income level population so Saudi Arabian market is very profitable for the Target Corporation because this group is growing in Saudi Arabia.
Advancement in technology can assist the retail organization in leading towards the operations and cost effectiveness (Kipley and Jewe, 2015). In Saudi Arabia, Target Corporation can use social media sites to approach the customers. It can contact the customer through media sites like Instagram, Facebook and Twitter. Advanced technology can assist the organization in creating a customer base.
In United States, Target Corporation is operating its business by developing better relationships with the customers successfully. The company understands that customers are the lifeblood of a business so creating a strong relationship with them is vital to the growth and success of organization. Under this business expansion, the organization will approach the customers through social media sites and events. First, it will understand the needs and demands of Saudi Arabian customers and then offer the services to targeted audiences. In addition to this, it will make personal contact with its regular customers through e-mails. The staff at retail stores will be customer-friendly and supportive so that they can shop at Target’s stores easily. Moreover, one of the best ways to enhance and empower the relationship with customers is to make them feel cherished. Target Corporation will send a thank-you-note and vouchers to the customers so that they can stay loyal to the company. In this way, the organization will be able to make better relationships with customers and improve customer sales in Saudi Arabia (Sharp, 2013).
Furthermore, Target Corporation will make efforts to maintain the customer sales. However, the making better customer relationships will lead the Target Corporation towards maintaining and enhancing the sales. The company will take the feedback from customers after their shopping and it will work on them. Discounted prices of products are the best way to enhance and maintain the sales of company in Saudi Arabia.
Target Corporation will analyze different processes under consumer decision making process. The process will start from need recognition which is the most important step under decision making. Target Corporation will identify the needs and wants to Saudi Arabian people and act accordingly. It will enable the organization to enjoy the success because they will be able to meet the needs of customers. It will attract the customers who are in the search of retail products such as grocery, baby care, personal care, household items etc. After that, the organization will go under next step i.e. search for information. After analyzing the needs, the customer will search for the alternatives of needs for retail products. The store employees will assist the people to resolve their query related to product selection (Rani, 2014). After considering various alternatives in retail sector, the customers will evaluate all retailers. In Saudi Arabia, the number of retailers is less so it is very easy to make decision regarding Target Corporation. Once the evaluation process is over, the customers make the final purchasing decision regarding the products. Target Corporation is offering a variety of products so it is very easy for the customers to make final buying decision from number of products at Target Corporation. After this, company will take the feedback and response from customers. It will assist the organization in fulfilling the needs of customers.
Target Corporation will conduct market research by considering different components like target audiences, brand awareness, customer acquisition and customer retention. Brand awareness will assist the Target Corporation in determining the image of organization in the point of view of Saudi Arabians. It will facilitate the target audiences to create a communication message which reverberate with them. Under this, the organization will understand the needs of customers and focus on offering the products on discounted prices. Team of Target Corporation will search for the people who want retail products on lower prices (Babin and Zikmund, 2015). Opening discounted stores in Saudi Arabia will assist the Target Corporation to acquire new customers. Market research will assist the organization in getting customer information and making decision regarding product offering.
There are various factors which can assist Target Corporation to evaluate the market segment and choose the best one. First the organization will evaluate the market potential of a segment by considering the number of customers, their income and their needs towards retail products. Competitive situation can also assist the organization in analyzing the customer segments. If the total sales of current suppliers are below the market potential in Saudi Arabia, then Target Corporation can attain the sales without carrying the operations away from competing brands. In this situation, the company will attract the lower income people by lowering the prices. For selecting the best market segment, the company will analyze the sales from a separate market. The lower and middle income people are the best target market for Target Corporation KSA (Sheth, and Sisodia, 2015).
Considering the target market in Kingdom of Saudi Arabia, the company will create an effective value proposition. It will assist the organization to meet customers’ requirements. In order to deliver the best value to customers, Target Corporation KSA will emphasize on its pricing strategy (Kipley and Jewe, 2015). It will offer everyday fashionable, essentials and differentiated products at discounted prices for all the customers. In this way, the company will fulfill the needs of customers and their commitment i.e. “Expect more, Pay less”.
In KSA, the Target Corporation will make several efforts to manage its products and services. The organization will focus on keeping the top selling products like detergent, paper towels and diapers on the stores at all the times. To accomplish this, Target will establish an effective supply chain which can get the products from distribution centers to the stores quick and cost effectively. It will try to avoid the situations of excess stock and stock out of products at stores (Eppinger and Ulrich, 2015). For developing new products, Target Corporation can use the below-mentioned steps:
In this way, the above steps can assist Target KSA to develop and provide new product in the Saudi Arabian retail market (Gopalakrishnan, et al, 2015).
Conclusion
Thus, it is hereby concluded that Target Corporation is one of the biggest retailer in United States. Now, the organization is expanding its business in Saudi Arabia. By this expansion, the company may have various benefits and it can increase its customer base. From the above analysis, it can be founded that external environment in KSA will be favorable for Target Corporation. The above given marketing plan and strategies will enable the Target Corporation in establishing its business in Kingdom of Saudi Arabia. Thus, it can be concluded that Target Corporation should expand its business in other emerging markets.
References
ADHRB, 2017, Overview: Poverty in Saudi Arabia, Americans for Democracy & Human Rights in Bahrain.
Al-Malkawi, H.A.N., Mansumitrchai, S. and Al-Habib, M., 2016, Online banking in an emerging market: evidence from Saudi Arabia. International Journal of Electronic Finance, 9(1), pp.1-17.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015, Marketing: an introduction. UK: Pearson Education.
Babin, B.J. and Zikmund, W.G., 2015. Exploring marketing research. UK: Cengage Learning.
Eppinger, S. and Ulrich, K., 2015. Product design and development. UK: McGraw-Hill Higher Education.
Gopalakrishnan, M., Libby, T., Samuels, J.A. and Swenson, D., 2015. The effect of cost goal specificity and new product development process on cost reduction performance. Accounting, Organizations and Society, 42, pp.1-11.
Hussey, M. and Bia, B., 2014, The Kingdom of Saudi Arabia – Retail Market Overview, available from https://www.bordbia.ie/industry/manufacturers/insight/alerts/pages/thekingdomofsaudiarabiaretailmarketoverview.aspx (Accessed on 3 April 2018).
Jin, B., Almousa, M.O. and Kim, N., 2018. Retailing amid regulation and religion: The unique cultural challenges and opportunities facing market ventures in Saudi Arabia. Journal of Cultural Marketing Strategy, 3(1), pp.70-81.
Kipley, D. and Jewe, R., 2015, Effective Strategic Management: From Analysis to Implementation, US: Cognnella Publications.
Lavenda, D., 2013, 10 Steps for Successfully Launching A New Product or Service, available from https://www.fastcompany.com/3004920/10-steps-successfully-launching-new-product-or-service (Accessed on 3 April 2018).
Madhavaram, S., Hunt, S.D. and Bicen, P., 2017, The FREE (Firm Resources and External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.
McDonald, M. and Wilson, H., 2016. Marketing Plans: How to prepare them, how to profit from them. US: John Wiley & Sons.
Rani, P., 2014. Factors influencing consumer behaviour. International journal of current research and academic review, 2(9), pp.52-61.
Sharp, R.A., 2013, Target’s plastic bag backdown a loss for the silent majority”. The Conversation Australia.
Sheth, J.N. and Sisodia, R.S., 2015. Does marketing need reform?: Fresh perspectives on the future. UK: Routledge.
Target Corporation, 2018, Target Corporate: Social Responsibility, Careers, Press, Investors, available from https://corporate.target.com/ (Accessed on 3 April 2018).
Target Corporation, 2018, Target: Expect More. Pay Less, available from https://www.target.com/ (Accessed on 3 April 2018).
Target Corporation, 2014, Target 2013 Annual Report, available from
https://corporate.target.com/annual-reports/pdf-viewer-2013?cover=6725&parts=6724-6726-6727-6730-6728 (Accessed on 3 April 2018).
Vida, I., 2015, Retail Expansion into International Markets: The Case of United States Retail Chains. In Proceedings of the 1998 Academy of Marketing Science (AMS) Annual Conference (pp. 502-503). Springer, Cham.
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