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Target is #OnPoint Target is #OnPoint Target & The Hispanic Consumer Femi Brinson Chris Lewitzke Krystal Lo Marissa Pulido

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Target is #OnPointTarget is #OnPoint

Target & The Hispanic Consumer

Femi BrinsonChris Lewitzke

Krystal LoMarissa Pulido

Target is #OnPoint

IntroductionFemi Brinson

Target is #OnPoint

Agenda

Target is #OnPoint

Things To Consider As We Forge A Relationship Between The Hispanic Guest and Target

What competencies and infrastructure does Target possess to properly address this diverse customer segment?

What are key facts that Target should leverage involving the Hispanic market?

What challenges do retailers face in addressing the Hispanic market?

Target is #OnPoint

Brief Target & Cartwheel Overview

2nd largest retailer with nearly 50% of stores in states of high Hispanic buying power 6

2nd largest social media presence10

6th most visited retailer online 12

A digital platform that allows Target guests to handpick sales

Application can be linked to Facebook profile or email address, sales can be redeemed online or in-store

Guests have saved $32 million dollars using Cartwheel1

Target is #OnPoint

Demographic Analysis

• The top 10 states of Hispanic buying power represent $770B 6

• Target has 880 stores in these 10 states 8

• With nearly 50% of Target’s stores located in this area, our solution will target these markets6

Target is #OnPoint

Competitor insightsKrystal Lo

Target is #OnPoint

KMART•Mock telenovela “Madres y Comadres” 5

•Latina Smart Scholarsip 2

Competitive Landscape

Target is #OnPoint

WALMART

•Advertising•Average income: $42,000 3

•“Always Low Prices”•Partnership with Univision 13

Competitive Landscape

Target is #OnPoint

Hispanic Celebrities

Ineffective Solutions

Spanish Language

Latino Music

Target is #OnPoint

A Solution that is #OnPointMarissa Pulido

Target is #OnPoint

Our Solution: The #OnPoint Campaign

• Honors and supports Hispanic Heroes who are #OnPoint in their communities

• Target Corp. will sponsor 3 #OnPoint projects per month and provide coupons & cash to those that donate time or money at the event

• #OnPoint honorees will have project and daily lives filmed and shared via Facebook and various social media

• Those that share Facebook photos will receive introductory Cartwheel coupons and Cartwheel Cash

Target is #OnPoint

Target is #OnPoint

Target is #OnPoint

Why Target Should Embrace Our Solution

• Our solution focuses on community values and will add value as opposed to extracting value 7

• Engages and re-engages guests through social media 4

• Drives people to Cartwheel application and increases internet and in-store traffic

• Utilizes existing infrastructure through Target Foundation and social media teams

• Provides tax breaks and a direct platform for corporate social responsibility in the Hispanic community

Target is #OnPoint

Marketing & Financials that are #OnPoint

CHRIS LEWITZKE

Target is #OnPoint

#OnPoint Marketing Strategy

Target is #OnPoint

Annual Recruitment & Project Expenses

Project & Grant Cost ($60,000 per market) $720,000

Cartwheel Dollars ($10,000 per project) $360,000

Facebook & Twitter Advertising $200,000

Brand Ambassadors $250,000

Total $1,530,000

Retention Strategy

Engagement Survey $250,000

Mailing $200,000

Total $450,000

#OnPoint Expenses

Total Expense: $1,980,000

Target is #OnPoint

Financial Impact—Current Guests

• Target currently has 22,711,212 likes on Facebook 10

• 783,536 Hispanics share post on Facebook‒15% of Hispanics exposed to post

• 274,237 will redeem coupon in Cartwheel‒35% of those given the coupon

• Total Revenue increase of $131,633,760‒Additional spending of $40/month

• Total Income increase of 36,067,650‒Net profit margin of 27.4% 9

Target is #OnPoint

Financial Impact—New Guests

• 180,000 new potential guests engaged‒5,000/charity

• 54,000 new Cartwheel downloads‒30% of engaged Hispanics

• $32.4 million additional revenue‒Spending $50/month

• Net income increase: $8,877,600‒27.4% net profit margin 9

• Total ROI: 22.7‒Average Target ROI: 9.8

Target is #OnPoint

Financial Forecasts

Year 1 Year 2 Year 3

Costs $ 1,980,000 $ 2,970,000 $ 3,861,000

Income $ 44,945,250 $ 71,912,400 $ 100,677,360

Target is #OnPoint

Things To Consider As We Forge A Relationship Between The Hispanic Guest and Target

What competencies and infrastructure does Target possess to properly address this diverse customer segment?

•Diverse workforce (Ranked 20th, highest retailer) 11

•Strong social media footprint

What are key facts that Target should leverage involving the Hispanic market?

•Core values•Above average social media consumption•Increase in coupon usage

What challenges do retailers face in addressing the Hispanic market?

•Heterogeneous population•Effectively marketing to multiple generations and cultures

Target is #OnPointTarget is #OnPoint

QUESTIONS

Target is #OnPoint

"1 Million Cartwheel Users and Counting." A Bullseye View. Target Corp, 8 Aug 2013. Web. 10 Jan 2014. <http://www.abullseyeview.com/2013/08/target-celebrates-one-million-cartwheel-users/>. 1

"Answer this: "I am LatinaSmart because..."." tiki tiki. WordPress, 18 Aug 2011. Web. 15 Jan 2014. <http://www.tikitikiblog.com/answer-this-i-am-latinasmart-because/ 2

D'Innocenzio, Anne. "Retail:The great consumer divide; Rich spend, others scrimp, retail reports show."Detroit Legal News. Detroit Legal News Publishing LLC, 20 May 2011. Web. 15 Jan 2014. <http://www.legalnews.com/detroit/950203>. 3

Gonzalez-Barrera, Ana. "Social Networking." Pew Research. Pew Research Center, 7 Mar 2013. Web. 15 Jan 2014. <http://www.pewhispanic.org/2013/03/07/vi-social-networking/>. 4

Kmart, dir. Trailer de Madres y Comadres. Youtube, Film. 10 Jan 2014. <http://www.youtube.com/watch?v=crSeODh6-F0&feature=c4-overview-vl&list=PLD8F252C5DCE9B2D3>. 5

"Multicultural Economy 2013." Selig Center for Economic Growth. University of Georgia, n.d. Web. 9 Jan 2014. 6

Target is #OnPoint

Mueller, MP. "Marketing Tips for Reaching Hispanic Americans." Business Day: Small Business. The New York Times, 1 Feb 2013. Web. 10 Jan 2014. <http://boss.blogs.nytimes.com/2013/02/01/marketing-tips-for-reaching-hispanic-americans/?_r=1>. 7

N.p.. Web. 15 Jan 2014. <http://investors.target.com/phoenix.zhtml?c=65828&p=irol-homeProfile>. 8

N.p.. Web. 15 Jan 2014. <http://www.marketwatch.com/investing/stock/tgt/profile>. 9

"Target Profile." Facebook. Facebook, 15 Jan 2014. Web. 15 Jan 2014. <https://www.facebook.com/target>.

10

"The DiversityInc Top 50 Companies for Diversity."DiversityInc. N.p., n.d. Web. 15 Jan 2014. <http://www.diversityinc.com/the-diversityinc-top-50-companies-for-diversity-2013/>. 11

"Top 50 Most Popular Online Shopping Websites." My App Magazine. MyAppMag, 8 Jan 2013. Web. 15 Jan 2014. <http://myappmag.com/online-shopping-websites/>. 12

"Walmart and Univision: Winning with Hispanics."Univision Communications INC. Univision Communications INC, n.d. Web. 15 Jan 2014. <http://corporate.univision.com/walmart2013/ 13