Carmakers Target Generationy

In: Business and Management

Submitted By gwambua
Words 1912
Pages 8
Case Study 3: Carmakers Target Gen Y (Case 7-2)

2
Explain the strategy behind Asian automakers targeting generation Y The strategy behind Asian automakers targeting Generation Y could be explained in a number of ways. Asian automakers customer base is aging hence the need to identify a different segment to cultivate loyalty to support present and future sales. Generation Y consists of young Americans born in the mid 1970s and mid 1990s. This segment consists of around 71 million with a purchasing power estimated to be $200 billion. With such a sizable population and impressive purchasing power, Generation Y is poised to be that fastest growing segment that could soon outgrow that of baby boomers. Generation Y is educated, diverse, and tech-proficient. This is a unique segment that has unique needs. Asian automakers understand that a company's product can only serve some but not all demographic groups. It is with this in mind that the automakers are focusing on serving generation Y as a distinct segment, with unique needs and preferences. The strategy behind targeting Generation Y (Gen Y) by the Asian automakers seems to be driven by the 80/20 rule. According to Keegan and Green (2011), “ This rule (also known as the law of disproportionality or Pareto's law) suggests that 80 percent of a company's revenues or profits are accounted for by 20 percent of a firm's products or customers” (p.213). Generation Y is a large segment that is still growing and has the potential to sustain the automakers growth now and in the near future. By targeting Generation Y, the Asian automakers are pursuing growth in a country-the United States, where they are already well known and popular rather than in new markets that would take long to turn in profits because of lack brand awareness. Asian automakers could easily attain the 80/20 rule by targeting Generation Y. The…...

Similar Documents

Target

...TARGET CORPORATION Executive Summary Target Corporation is the second largest retailer in the U.S. with over 1700 Target and Super Target stores. Targets around the country offer everything from household essentials to computer software to groceries, and sell many of their products under private label brands. In addition to their retail segment, the company also offers credit and debit cards to its frequent shoppers. In 2002 the Minneapolis-based Target Corporation became the United States second largest discount retailer behind Wal-Mart. Target has transformed its signature bulls-eye logo into a lifestyle symbol. The bulls-eye is recognized by 96% of American consumers and considered a brand icon. We analyze company's capital investment decisions. Their accounting disclosures and overall financial performance based on Darden School of Foundation’s case study. According to case there are 10 capital investment project $300 million in capital expenditure request. Five of the projects representing about $200 million in requested capital, would demand the greater part of the committee’s attention and discussion time during the meeting. The company is highly successful at promoting its brand awareness with large advertising campaigns its advertising expenses for fiscal 2005 were $1.0 billion or about 2% of sales and 26.6% of operating profit. Target executives do for the customer shopping experience, Target offered credit to qualified customers through its REDcards,......

Words: 2163 - Pages: 9

Target

...While standing in the middle of a huge retailer such as Target, a person could easily observe one of history's greatest logistical triumphs. Target sells tens of thousands of items from all over the world. Target alone stocks items made in more than 70 countries, according to its corporate Web site. With those kinds of numbers, having an effective and efficient inventory control system, an inventory management system is imperative. Target's inventory system helps it maintain its signature slogan "expect more, pay less" guests (customers) can expect more of a better quality product while paying less for it. At any given time, “the Minnesota-based retailer manages an average of $32 billion in inventory,” reports Supply Chain Digest. The inventory system and the related cost of sales are accounted for under the retail inventory accounting method (RIM). Since a physical inventory is taken only quarterly or once a ye ar, Target uses the last-in, first out (LIFO) method. The inventory is stated at the lower of LIFO cost or market meaning if the cost of the replacing inventory is lower than its recorded purchase cost, this method is used to value the inventory. Cost includes purchase price as reduced by vendor income. Target’s inventory is also reduced for estimated losses related to shrink and markdowns. The LIFO method is calculated based on the inventory levels, markup rates and internally measured retail price indices. Under the inventory costing method, the inventory......

Words: 968 - Pages: 4

Targets

...Targets Targets are good when managed properly. They have become the most trusted tool for managing the public sector in the UK. Once you have identified your key performance indictors and found the best way to measure them, you should then start to set performance targets. This will give everyone in your business an idea of the targets they need to aim for, individually and collectively, Advantages Good targets help to reveal an organization’s objective and/or the problem in a process or system. In cases where a feasible target has not been met, good measurement and management of time and resources should be applied. They act as the foundation for any project Disadvantages 1. When targets are set, they are automatically perceived to be of utmost importance, therefore, employees pay more attention to achieving them rather than doing the right thing (doing them well). 2. Targets only show part of the picture. According to Blastland and Dilnot, targets go wrong mainly because of an attempt to find one measurable thing to represent the whole. On the other hand, there is a tendency for the parts that are not being measured to do odd things. Example: Call centers * Agents often feel under pressure to meet targets such as queuing times, call duration, number of calls etc. Providing quality services whilst trying to stay within these constraints becomes a difficult task e.g., meeting targets and losing loyal customers. 3. Targets are subject to game......

Words: 647 - Pages: 3

Target

...Target Corporation’s supply chain helps drives its sales, reduces costs, and ensures the availability of products their guests most want and need. Target pursues initiatives that they believe will increase customer satisfaction and their profitability through continuous operational improvements. Target prides itself on being the first in the industry with new merchandise. Therefore, shortening their lead times is a way of maintaining their leadership position within the industry. The company has welcomed and taken advantage of information technology by using sophisticated online tools to design products, and negotiate terms for pricing, production and delivery. Target’s efforts in recent years have produced a crucial reduction in their supply chain length, and have committed to achieving further improvements. Target continues to expand its distribution ability and invest in cutting-edge technology. 90% of merchandise flows through its 19 regional distribution centers and import warehouses. They have also been expanding self-distribution of grocery products; therefore, 50 percent of the items have been handled in-house since 2003. The import warehouses permit Target to store seasonal and imported merchandise, and allow for the transfer of goods through regional distribution centers to stores on demand. The distribution abilities have led to the increase in Target’s effectiveness, and have allowed them to put a higher priority on highly demanded products. Technological......

Words: 335 - Pages: 2

Target

...Case 19 – Target Corporation 1. Why does Target use different hurdle rates for the store and the credit cards (9% and 4%, respectively)? What process would you use to estimate these discount rates to see if they are reasonable? Target uses different hurdle rate for the store and the credit cards because they want to make as much revenue as possible. With the low credit card rate Target is able to get a lot of people to sign up for the credit card because the interest rates are extremely low. Since Target has such a low credit card rate they raise the store interest rate to make up for the difference. I would use the IRR, NPV, or the discount payback method to estimate these rates. 2. What is Target’s capital-budgeting process? Is it consistent with the company’s business and financial objectives? The Capital Expenditure Committee (CEC) stated that the capital-budgeting process of target was to add one hundred stores a year while maintaining a positive brand image. This capital budgeting method goes hand to hand with the company’s business and financial objectives. 3. Which of the five CPRs did you accept? Which project attributes did you consider as part of your decision? I first accepted the Whalen Court CPR. I chose this CPR because this location had the highest percentage of college educated people than any other project after examining exhibit 7. Since Target wants the college educated mother with children as the ideal customer, the Whalen Court project......

Words: 373 - Pages: 2

Target

...Target SWOT Strengths One of the strongest features about Target is that the consumer enjoys being there. There store is always clean and the way it is set up is so aesthetically pleasing it's as if each shelf were specifically shelved just for you. Even the setup of the store is maneuverable and the bright colors draw you into the store. What makes the experience even better is that there are great deals here. Things are cheap which is not so expected from a place that is so nice. Since this is still a mass merchandising place there are things from clothing to electronics. The way the aisles are set up too makes it easier to shop. Another thing that is great about Target is that they focus on design. They always have designers come in to work on a product for Target alone. This just proves that there is a great product here for a great price. These designs vary from home décor, to clothing to electronics. It's all about beautiful design at target. Weaknesses With their much strength also come some weaknesses. One of them is that they do not have as many stores as their competitor Wal-Mart. Even with Target's great advertising, it makes it difficult for the consumers to shop here when there aren't that many around. Another weakness with target is that although their prices are low, they just aren't as low as Wal-Mart's prices. AS a matter of fact, compared to Wal-Mart's prices, Target may even seem expensive. Another problem with Target is that they keep a low overhead......

Words: 455 - Pages: 2

Target

...Undrea Louis Allen University Undrea Louis Allen University E-commerce Target E-commerce Target  Targets primary center is focusing on supportive shopping at discount costs, also to make Target your favored shopping destination in all channels by conveying exceptional worth, ceaseless advancement and remarkable visitor encounters by reliably satisfying our Expect More. Pay Less. ® brand guarantee Target stays concentrated on giving a one-quit shopping information for guests by passing on differentiated stock and remarkable quality. Target uses a business to consumer transaction. Which means a business selling to customers. With 40 distribution centers and 1,924 store Target operates under click-and-mortar. Target entity is a partial entity because targets merchandise can be delivered to customers. Target has been extremely successful in assigning their web assets. They have blogs, wikis, and twitter and Facebook accounts, yet there are still approaches to better themselves. On target website they have great ways in marketing themselves, however to help enhance it they can include the recommendation emphasize that permits them to recommend things based off of past obtained things. They do have the choice to get restrictive offers and advancements, yet they can likewise incorporate an e- inventory for individuals. Additionally they ought to look into offering rebates to their reliable customers. Target should offer ways in getting customer more involved in purchasing......

Words: 1552 - Pages: 7

Target

...what our target market wants? External Analysis o PEST Analysis o Competitive Analysis o Industry Analysis Financial Analysis o Ratios  If you have to calculate do at least two years, and as many of the bolded ratios in the chart below as possible o Cash Flow Statement  Generally:  Operations = Current Assets, Current Liabilities, and Amortization  Financing = Long term Liabilities and Shareholder’s Equity  Investments = Fixed Assets  There are exceptions, but more the most part this is how the accounts are split up. Your numbers will not be affected if you put an account in the wrong section.       Differential o Discussion of the qualitative pros and cons of each option o Differential Analysis Decision Projections o Projected Income Statement o Projected Balance Sheet  Depending on your professor you will do:  Both Options, one year  One Option, two years  One Option, one year Marketing o 4 P`s (Product, Place, Price, Promotion – likely a budget with options in the exhibit) Action Plan Contingency Contribution Analysis Variable Costs: any cost that increases with the production of one more unit (i.e. raw materials) Fixed Costs: any cost that is not sensitive to the number of products produced (i.e. telephone) Unit Contribution = Selling Price/Unit – Variable Cost/Unit Contribution Margin Rate = Breakeven Units = Breakeven Sales $ = Cash Breakeven Units = Cash Breakeven Sales $ = = Target......

Words: 1046 - Pages: 5

Target

...Target Corporation The Dayton Company opened the doors of the first Target store in 1962. In 1965, the first Super Target store opened in Omaha, Nebraska, and in 2000, the parent company, Dayton Hudson, officially changed its name to Target Corporation. By 2005, Target had become a major retailing powerhouse with $52.6 billion in revenues from 1,397 stores in 47 states. For the Target, Wal-Mart and Costco are the two important competitors. 1、Wal-Mart operated store formats similar to Target, and most Target stores operated in trade areas where one or more Wal-Mart stores were located. Wal-Mart had become the dominant player in the retail industry. Much of Wal-Mart’s success was attributed to its “ everyday low price” pricing strategy. In addition to growing its top line, Wal-Mart had been successful in creating efficiency within the company and branching into products lines that offered higher margins that many of its commodity type of products. 2、Costco, on the other hand, attracted a customer base that overlapped closely with Target’s core customers. But Costco used a membership-fee format. It provided discount pricing for its members in exchange for membership fees. Over the previous five years, sales excluding membership fees had experienced compound growth of 10.4%, while membership fees had grown 14.6% making the fees significant growth source and highly significant to operating income in a low-profit-margin business. A precondition for effective capital......

Words: 984 - Pages: 4

Target

...Wolf 1 Target is Making Gains Target is a Minneapolis-based retail chain in the United States that has over 1,700 stores with plans to open some in Canada starting in 2013 (Wohl). Target has tried to compete with Wal-mart, the largest retailer, with their “cheap chic” clothing and household items. In order to keep up with the times and grow their customer base, Target is utilizing social media, college campuses and making connections with a popular Italian designer along with adding a grocery department to their stores. Target reported a $555 million profit from their third quarter, which is up $20 million from this time last year (Talley). They are having a slow start to the Christmas season as far as toys are concerned due to Wal-mart bringing back the layaway program after five years for toys and electronics. College campuses have become one large marketing campaign for many retailers from American Eagle to Hewlett Packard to Target. College students spent $36 billion on items like clothing, computers and cell phones during the 2010-11 school year (Singer). Target is permeated 66 universities and colleges in 2011 with a private shopping event that they have created for college freshman. Target started this tradition at the University of North Carolina in 2007 and it has been a hit. Target student representatives wear red t-shirts that say “COLLEGE” punctuated by Target’s bull’s eye logo (Singer). Target sponsors a welcome dinner on the Friday of the first weekend......

Words: 1110 - Pages: 5

Target

...Top of Form 1 Bottom of Form 1 &&&& Home page » Business and Management Target Corp. Ethics And Corporate Responsibility In: Business and Management Target Corp. Ethics And Corporate Responsibility I chose to do my research on the Target Corporation. I feel they have a reputation of service to their customers, employees and community. Target’s mission is great value, the community, diversity and the environment. Target takes 5% of its income and puts back into the community. The Reading and Education Program, The Military and Veteran Support Program and The Social Services Program are just a few of several programs Target Corporation offers to the community. Target has a great reputation to be a positive fixture in the communities they serve. I think it says a lot about a company and the way it does business. I would feel good about working for a corporation like this. The Target Corporation has good ethics and is socially responsible. Target invests in their employees and their community. Target Corporation is the 4th largest retailer in the United States and the 2nd largest discount retailer in the country just behind Wal-Mart. Target reflects its founder, George D. Dayton in the sense of persistence and hard work. Dayton’s father was a physician who could not afford to send his son to college because he would offer his services to the poor for free (Target). In 1902, George D. Dayton bought Goodfellow’s Dry Goods Company in Minneapolis, MN. Early on, his......

Words: 368 - Pages: 2

Target

...PART I: Overview of the Corporation: The year 2012 marks Target’s 50th anniversary. In the years since the department store evolved, Target has “watched our innovations lead to retail revolutions, and our team, guests and partners build better communities where we live and work” (1). With a mission to “make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and exceptional guest experience,” (1) Target has become known as an upscale retail store that does in deed offer trendy, high quality merchandise at discount prices. They place a lot of focus on their brand promise, “Expect More, Pay Less,” in order to ensure customer satisfaction. “Expect more of everything. More great design, more choices and more designer-created items that you won’t find anywhere else. And pay less. Its as simple as that” (1). Target Corporation is guided by their commitment to great value, the community, diversity and the environment and this is held very close to their heart. In keeping with their “Expect More, Pay Less” promise, Target distinguishes itself from competitors by offering affordable yet upscale products. History: Target Corporations, formally known as the Dayton Corporation, was founded in 1902 by George Dayton. At the time of formation, the store was known for “Dependable merchandise, fair business practices and a generous spirit of giving” (1). Dayton had recognized opportunities for growth in this market and took...

Words: 7553 - Pages: 31

Carmakers

...Assignment #3: Case 7-2 “Carmakers Target Gen Y” Monique S. Kearson Dr. Bao MKT 505 February 12, 2012 Introduction Generation Y is a group of US citizens that were born in the early 1980’s and 2002. They are referred to as Gen Y and Eco Boomers, as they have been said to have a tremendous impact on the generation. With totals nearing 81 million the Gen Y era has been the largest of that since the Baby Boomer age. They hold great credit and spending standings with over 200 or more billion reported annually. The ages for the Gen Y range currently from 10 to 30 years of age. I myself can highly relate to many of these findings due to the fact that I am a part of this generation Y era and I do find it to be true and very accurate.(Generation Y) 1. Explain the strategy behind Asian automakers targeting Gen Y Asian automakers have sought out to target the Generation Y consumer for many reasons. They have found that high priced gas guzzlers are not so popular anymore. Gas has not been at an affordable standstill for years. What does this mean to Asian automakers? They have the opportunity to target young US consumers that are looking for small reliable and fuel efficient vehicles. Asian automakers understand that America is in a crunch so people are looking for more but for less. Their aim is to introduce lines of vehicles that are not only fuel friendly but are pocket friendly as well. As stated by consumer affairs “There are 64 million Gen Y buyers coming into the......

Words: 1583 - Pages: 7

Target

...minimal difference in the series’ 2010 and 2011 asset allocations. Target allocations in further detail by target year, illustrating trends Morningstar has observed for the past several years. Longer-dated funds from target-date 2040 onward (several firms now offer 2060 funds) show little substantive difference in their average equity allocation, which ranges from 87% to 92%. The range of allocations in long-dated funds look wider for many of the subsequent target years due to the Invesco series’ unusual structure, which involves levering up its bond holdings. Invesco doesn’t offer a 2055 fund, so the range of equity allocations extends from 85% to 100%. Certainly, there is a meaningful difference in equity risk between these allocation points, but it’s not extreme. Even at 85% in stocks, investors have heavy exposure to equities, with many years left to ride out periodic short-term losses. Such a vast gap reflects the divergent philosophies regarding how long investors are expected to remain invested in target-date funds (that is, should they remain invested after they enter retirement or reallocate into other vehicles when they retire) and thus the appropriate weighting in stocks when they retire. These data once again confirm that philosophical and risk-management differences among target-date series are most pointed in the years leading up to the retirement date. The problem is that many investors in target-date funds buy in during their twenties or......

Words: 345 - Pages: 2

Target

...Target: “From More” to “Pay Less” Gregory Tatum Saint Leo University Target: “From More” to “Pay Less” The central problem for Target is maintaining their goal of affordable prices against a weakening economy and competitors who have an advantage over them when it comes to price. Target got a shock during the 2008 economic slump. Consumers are supposed to "expect more, pay less" at Target. But during the slump, shoppers clearly opted for "always low prices" at Wal-Mart, the retail giant's old marketing tagline. Although there are several facts of relevance to the case, the glaring one was the urgency in solving the problem. Some people have always said, “Imitation is the greatest form of flattery.” To put it simply, Target is looking to the Wal-Mart model, lots of consumables at discount prices, to help it hold off any serious decreases in profit. Chasing other retailers to low prices is a mistake as it is a battle that Target cannot win in. Target has spent years building its image as a cleaner, trendier, and generally more pleasant shopping experience than its competitors. This image has had immeasurable advantages in the marketplace. The inherent danger of beginning to focus on price is that consumers may perceive less of a difference between Target and its competitors. This would tarnish Target’s brand image and eat away at the tremendous brand equity that it has spent decades establishing. By moving to a focus on......

Words: 668 - Pages: 3