The case study titled "Expect More, Pay Less: Target's Revolutionary Pricing Strategy" discusses the pricing strategy implemented by Target, a popular American retail chain, in the early 2000s. At the time, the company was facing increased competition from both traditional brick-and-mortar retailers and emerging online retailers, and it needed to find a way to differentiate itself in the market.
In response, Target decided to adopt a "high-low" pricing strategy, in which it offered a mix of high-quality, fashionable products at low prices. This strategy was based on the idea that customers would be willing to pay more for high-quality products, but would also appreciate the opportunity to save money on those products.
To implement this strategy, Target focused on three key areas: sourcing, design, and marketing. First, the company worked to build strong relationships with its suppliers and negotiate favorable prices for the products it sold. This helped it to keep costs low and pass those savings on to its customers.
Next, Target invested heavily in design, hiring top talent to create unique and fashionable products that would appeal to its target market. This helped the company to differentiate itself from other retailers and attract customers who were willing to pay a premium for high-quality products.
Finally, Target used targeted marketing to communicate its value proposition to consumers. The company's advertisements emphasized the high-quality and fashionability of its products, while also highlighting the low prices that were available. This helped to create a strong brand image and attracted price-sensitive customers who were looking for a good deal.
Overall, Target's "Expect More, Pay Less" strategy was successful in differentiating the company from its competitors and attracting a loyal customer base. By offering high-quality, fashionable products at low prices, Target was able to appeal to a wide range of consumers and establish itself as a go-to destination for affordable fashion.
