Target Corporation Advertising - PowerPoint by oxd99547


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									        GROUP #15
   Presented by: Connie
Jones, Darren Coslov, Brian
 Watson and Luis Rosales
  Overview of Context
Connie: History of Target, Law Of Demand,
Darren: Advertising, Scarce Resources, Target
Brian: Budget Constraint, Opportunity Cost,
 Target’s Opportunity Cost
Luis: Income Effect,Substitution Effect, Market
 Structure, Price Taker
               History of Target
Unlike most other mass merchandisers, Target has department store
roots. In 1961, Dayton’s department store identified a demand for a
store that sold less expensive goods in a quick, convenient format.
Target was born.

In 1952, the first Target store was opened in Roseville, Minnesota.
They were the first retail store to offer well-known national brands at
discounted prices.

Today the are presently expanding their corporation even further, by
opening their first Super Target store, which combined groceries and
special services with a Target Great land store.
                  Law of Demand
 The law of demand states that as the price of a good
  increases, the quantity demanded decreases. Also as
  the prices of a good decreases, then the quantity
  demanded increases.
 Target has many popular competitors such as Wal-Mart,
  and K-Mart. So Target must be careful when it is setting
  prices, due to the tough competition.
 If Target charges a higher price for a good, then the
  quantity that the consumer is willing and able to buy
  decreases. Therefore Target may be losing some of
  their business to other leading competitors.
 Target has also expanded its access to the Internet. It is an even more
  convenient way to grant access to their customers. The website has brought even more customers into their corporation,
  especially by meeting peoples needs and lowering their opportunity cost.
           What is Economics??
 Economics- social science that deals with the way society
  chooses to allocate its resources in order to satisfy it wants and
  needs. Keeping in mind that resources are limited, as well as wants
  and needs. (Scarcity of choice).
    Target uses the basic assumptions of economics to evaluate
     their franchise. It takes into account the scarce resources by
     choosing where to build its facilities. The time and amount
     managers clerks and stockers are willing and able to work.
    When determining how big and how accessible to make a store
     they would use the scarcity of choice method to provide the
    • Target uses advertising as non-
      price competition to let people
      know that they are a store that
      offers low prices.
    • Target will also advertise their
      low prices to attract attention to
      people. Advertising makes a
      point to the customers, that they
      can receive the same quality
      products, that are found
      elsewhere, and possibly have
      lower prices.
    • Other firms competing, will be
      well aware of this fact as well.
   TARGET uses the basic assumptions of
   economics to evaluate their franchise. It takes
   into fact the scarce resources by choosing where
   to build it’s facilities. The time and amount
   managers, clerks and stockers are willing and
   able to work.

   Along with the equipment needed to make the
   store work, security systems, cash registers etc,
   It was must also take into account the skill
   needed to be in a managerial position, a sales
   rep, marketing executive. It splits people into
   sections that their knowledge of a particular
   category is specialized.
TARGET is a corporation because people own
stock in it, and have only to lose what they put into
Because TARGET is a corporation with employees,
it has advantages because it can lower its
transaction cost by having material produced with
in the company rather than spending time to find a
reliable source.
TARGET faces budget constraints like anyone else.
The managers in charge must face the constraint of how
much of a good or service they can afford to order or get
while taking into account they have to pay their workers.
They have to pay to get things refilled such as (gumball
machines). They have to sacrifice a large amount of
money for bills they have to pay.
They must face this constraint and use all combinations
before deciding what and when to make a transaction.
       Opportunity Cost
What is given up when taking an action or making a
 choice. The next best alternative. All production
carries an opportunity cost: to produce more of one
 good, society must shift its resources away from
                  something else.
               Target’s Opportunity Cost

o Target faces opportunity costs everyday. They must decide what
  they are willing to sell and advertise the most of.
o By placing emphasis on selling one good more predominantly, it
  may take away sales from other goods.
o When Target decides that one good will sell more than they will
  produce more of that good. By producing more of one particular
  good they are limited their resources to that specific good, and
  giving up producing something else.
o By doing that Target will increase the opportunity of producing more
  of that particular good.
                 Income Effect

• Relative prices
• Prices before compared to lowered prices
• Total expenditure decrease so total income
     • Example: nails
• Increase demand
        Substitution Effect

• Buy one item because it is extremely
  cheap and use it for other things
    • Example: sweat pants
           Market Structure

• Actions taken = influence how much and
  what their buyers will choose to buy and
  influence how other companies will react
  and sell their products
               Price Taker
• In an oligopoly:
  – Kmart, Wal-mart
• Has perfect knowledge
  – Knows consumer needs and wants
  – Thus, maneuver and adjust sales and items to
    maximize profit

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