riginally when news spread about Target opening stores in Canada, Canadian consumers were overjoyed and anticipated the first opening. Upon the initial start-up, consumers started to see that the company was a lot different from their US stores. Consumers were disappointed and let down from the high expectations of the retailer's original performance. Ultimately, Target had many issues that enabled their progression in expanding their stores in Canada. Target lacked the necessary knowledge and resources to uphold to the consumers expectations. So, all in all, the main issues were insufficient market research, their inability to differentiate themselves in a discount retail market, marketing pricing strategies and finally poor supply chain management.
“Target's expansion to Canada was very prompt, the company obtaining the lease to spaces of over 200 Zeller's stores took approximately a year and a half, and within a year Target had opened up over 120 stores all across Canada” (International Project Leadership Academy, 2017). Many families expected to find the vast selections of commonly used household's items that they expected from Target. Target U.S had been able to uphold the target reputation, but Target Canada failed to perform. The ultimate issue was the stocking of products as certain merchandises are only available to participating Target retailers in the U.S. the reason for this being, “warehouse and supply chain software weren't communicating, which led to empty store shelves and overstuffed distribution centers. The company forecast demand for different items based on information from U.S. stores, not a new chain launching in a new country.” (Northrup, 2018) Eventually, emerged from not having a direct marketing channel in Canada. Target failed to understand the needs of their target market, Canadian families, and in turn did not provide consumers with valuable merchandises that were promoted. The company had an advantage in terms of their sales promotions that motivated the consumers to buy now.
Although, the company did not anticipate the numerous issues that would arise from the launch. “The fall before the launch, the merchandising team realized that there was so much inaccurate data in the system that they would have to take a week and do nothing but verify with suppliers every piece of information, every item that the stores planned to carry.” (Northrup, 2018) Target's distribution strategy was flawed, in retrospect the company failed to establish and input proper channel objections. The company lost focus when switching countries that the customer service's channel objections was not present in Target Canada stores. It is obvious that the lack of product discouraged consumers from returning again; empty shelves equates to unhappy consumers. “Target's underdeveloped supply chain management became an issue that affected customer's convenience to enter a retailer and be able to buy the products they needed at one place, one of Target's main promises to its customers” (Castaldo, 2016). Canadian families value competence and accessibility and anticipated to walk into a Target and be able to obtain the household and everyday brands in front of them. Comprehending customer intelligence could have prevented their distribution system from failing and disappointing consumers.
Moreover, Target also failed to foresee its competitor's offerings and advantages prior to their expansion into Canadian retailing market. “Walmart, Target's biggest competition, has been present in Canada for over 2 decades with now over 400 stores across the country, an expansion comparably slower than Target” (Castaldo, 2016). However, within those 2 decades, Walmart was able to understand Canada market and adapt to them accordingly, leading to its successful growth in Canada in the past few years (Dalhoff, 2015). For example, Walmart used its competitive advantage and offered shoppers more of what they need and want. For instance, providing halal meat in consideration of the Islamic population. Furthermore, this could be said to be a successful retailing marketing strategy that has enabled them to position itself differently than other discount stores. Likewise, it further supports the reasoning for Walmart's success in terms of researching appropriate information for their target market. Canadian families itself are comparable to US families, but they carry differences that are projected with the proper information at hand. all-encompassing research should have been conducted to accurately capture customer value. Target's failure comprehends its' competitions advantages, especially competitors like Walmart, exemplifies how the company unsuccessfully failed to grasp the concept that the Canadian market varied from the US market.
With the insufficient knowledge of target market, this issue branched off to a sub issue; failure to effectively use competition-based pricing. The company did not take into account that Canadian families would be using other competitors such as Walmart, and Costco as a reference. “As such, this affected Canadians who were familiar with the Target brand, as in their minds Target Canada had not delivered the value that Target US had provided for them” (Dalhoff, 2015) Target should have used their customer-based perceptions with their previous experience at their stores to support the Canadian branch. It was “found 89% of Canadians thought Target didn't live up to its tagline, “Expect More. Pay Less.” Fifty three percent thought Target stores in Canada were inferior to US stores when it comes to offering low prices.” (Louis, 2018) This disconnect was a problem that suppose Target Co. had a decent supply chain management, the pricing would have still been a main issue. The discrepancy of pricing resulted in a decrease in consumers purchasing and visiting the Canadian retailing stores. The price could have been determined based upon the competitive market
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