World University of Bangladesh

Case Study
On
Pharmaceutical Marketing

Course Code: PHR-505

Course Title: Pharmaceutical Marketing
Program: Bachelor of Pharmacy (Hons.)
Department of Pharmacy
World University of Bangladesh

Submitted By
Name: Md. Nure Alamin Siddik
Id: Wub14/19/25/729
Batch: 25th
Department of Pharmacy
World University of Bangladesh

Submitted To
Md. Moniruzzaman
Assistant Professor
World School of Business
World University of Bangladesh

Date of Submission: 07 April 2021

Question No: 01 What microenvironmental factors have affected Target’s performance
over the past few years?

Answer to the Question No- 01

Microenvironmental factors that have affected Target’s performance over the past few years
would be marketing intermediaries, customer markets, and competitors.

The biggest affect would be its competitors. Walmart has affected targets performance in the
past few years. The fact that they could keep low prices when that was at a high demand
made target think that they had to lower their prices which would made their customers
think that they didn’t have that high quality that they once had before.

✓ Microenvironmental factors that affected them would include Company, competitors,

media, and intermediaries. Target itself, is a discount retail store, but is known to carry
designer wears. Since Target is known for style, fashionable and slightly higher priced
clothing and appliances, and in the end, they hurt themselves. Target should have done
a lot better of a job in providing customer value and satisfaction then.

1. Competitors: Walmart’s distinct strategy of providing products at a very low price,

resonated with consumers in the economic crisis of 2008. This led to Target’s decline in
market share as Wal-Mart had a huge microenvironment affect as a competitor as the low-
cost store.

2. Customers: As the recession hit, unemployment rose and people started becoming more
responsible with money, the consumer priority changed from fashionable to budgeted
purchase. Since Target was known for style, fashionable in slightly higher price, in the end,
they hurt themselves. Target should have done a lot better of a job in providing customer
value and satisfaction than Walmart. Customers would have stayed loyal if valued and
satisfied.

3. Publics: Target had a falling out among its various stakeholders, with the activist
shareholder William Ackman, whose company lost 85% of the $2 billion invested in
Target. Ackman not only chided target for being ineffectual in dealing with the abrupt
economic downturn but also accused the Target’s board of directors to be inexperienced
and so, went on to ask to control 5 of the board’s seats.
 4. Operations: Target made two significant operational changes. Firstly, it brought up
“mini grocery stories” which carried a narrow selection of 90% of the food categories found
in full-size grocery stores, including fresh produce. This led to customer convenience,
saving their time and effort. Second, they surprised everyone by discarding the bulls-eye,
replacing it with big, colorful, upward pointing arrows on a white background, with the
new brand name, “up and up”. The intention was to attract new customer and therefore get
more of market price, with their priced at 30% lower than the comparable.

Question No: 02 What macroenvironmental factors have affected Target’s performance

during that period?

Answer to the Question No- 02

Target and Walmart were always thought of by the consumer as the discount retail brands, and
the comparison between the two has been going on for as long as they have been in the market.

Even though Walmart was associated with the cheaper stuff, Target was known for its sense in
style and fashion. Target has always been the one with the higher revenues until recently. That
change of revenues is affected by a couple of macroenvironmental factors.

The macroenvironmental factors that affected target’s performance during that same period are
categorized as demographic, economic, natural, technological, political, and cultural.

❑ Economic factor

Economic was the macro economical factor that affected target’s performance during that
period. The economical condition over the last few years since 2008 was rough as the economy
was in recession and inflation was on rise. With rise in Unemployment, people started to have
a newfound sense of frugality and monetary responsibility. This led Target to formulate its
“Pay Less” strategy and stress aggressively on it.

❑ Technological Environment

Technology is updating every second and to keep the business going in the long run, the firm
has to put efforts to go side by side with the changing technology. How much firm is focusing
on innovation and research and development plays a great role in its success, because it can
make the firm first and fast mover, in that technology. The factors included are a type of
technology presently in use, technological development level, technology policy, suitable
technologies, the rate at which new technologies are adopted and diffused.

❑ Demographic Environment

Demographic Environment covers the type, size and growth rate of population in the area in
which the business operates. It discusses the education level, household patterns, age
distribution, regional characteristics, level of income, level of consumption of the population.
Here, it must be noted that the marketing mix and the product type the organization
introduces, largely depends on the demographic environment. The pricing, distribution and
promotional strategies are also based on the demography itself.

❑ Political-Legal Environment

Political Environment covers the actions of the government, that have a bearing on the
company’s operations. Further, the span of implementation of these actions i.e., local level,
state-level or national level, is significant in this regard. The top management of the company
has to keep a close watch on the actions of the government to take decisions accordingly. It
can be influenced by bureaucracy, tariffs, trade control, corruption level, tax policy,
competition regulation and changes in different laws. Moreover, legal environment covers the
laws of the country, the changes in which might affect the functioning of the business, as
every organization works within the framework of law and adhere to these laws strictly.
These laws may include minimum wage laws, worker safety laws, company law, union law,
etc.

Question No: 3 By focusing on the pay less part of its slogan, has target pursued the best
strategy? Why or why not?

Answer to the Question No- 03

There “pay less” strategy is the best strategy. They told the old customers that they still have
high quality product just at lower prices than before. They showed new customers that they
could have high quality products without having to pay a high price.

Honestly, I think target would have been better off by focusing on their whole slogan instead
of just a portion of it. Why they think customers expects them to only live up to half of their
slogan baffles me. If Target is going to portray “Expect More, Pay Less”, then I would expect
more for my money at a lower price, not just seeing lower prices everywhere.
Sometimes just lowering the price can make it seem like Target is groveling to compete with
Wal-Mart

Target has been doing things right since the beginning. They were the first to build themselves
on a very diversified and unique strategy and way of business. They set themselves apart and
succeeded as their slogan “Expect More. Pay Less.” took off and had customers in love with
their chic in products. As they reached a peak, they made one small mistake and that was
stressing too much on “Expect More” only. When the Recession hit, customers were low on
funds and thought that shopping at Target would be too much of a treat or fancy, and/or “More”
expensive than what

Walmart is all about low prices; target is about style and fashion. The “cheap chic” label applied
by consumers and the media over the years perfectly captures the long-standing company
positioning: “Expect More. Pay Less.” With its numerous designer product lines, Target has
been so successful with its brand positioning that for a number of years it has slowly chipped
away at Walmart’s massive market share.

Granted, the difference in the scale for the two companies has always been huge. Walmart’s
most recent annual revenues of $408 billion are more than six times those of Target. But for
many years, Target’s business grew at a much faster pace than Walmart’s.

✓ In fact, as Walmart’s same-store sales began to lag in the mid- 2000s, the world’s largest
retailer unabashedly attempted to become more like Target. It spruced up its store
environment, added more fashionable clothing and housewares, and stocked organic and
gourmet products in its grocery aisles. Walmart even experimented with luxury brands.
After 19 years of promoting the slogan, “Always Low Prices. Always.” Walmart replaced
it with the very Target-esque tagline, “Save Money. Live Better.” None of those efforts
seemed to speed up Walmart’s revenue growth or slow down Target’s.

As the global recession began to tighten its grip on the world’s retailers in 2008, the dynamics
between the two retail giants reversed almost overnight. As unemployment rose and consumers
began pinching their pennies, Walmart’s familiar price “rollbacks” resonated with consumers,
while Target’s image of slightly better stuff for slightly higher prices did not. Target’s well-
cultivated “upscale discount” image was turning away customers who believed that its
fashionable products and trendy advertising meant steeper prices. By mid-2008, Target had
experienced three straight quarters of flat same-store sales growth and a slight dip in store
traffic. At the same time, Walmart was defying the economic slowdown, posting quarterly
increases in same-store sales of close to 5 percent along with substantial jumps in profits.

Question No: 4 What alternative strategy might target have followed in responding to
the first signs of declining revenues and profits?

Answer to the Question No- 04

They should have followed was instead of focusing so strongly on the words “Pay Less” in
their slogan. They should have gone out and asked for feedback from their consumers,
fixing any external issues that buyers have had and why they choose to do business
elsewhere.

Target should have promoted itself more and created better quality items at lower prices.
They should have fulfilled their slogan and focused on their customers instead of being so
worried about their competitors. In the end they are still overpriced on a lot of their items.
Customer service should have been amped up. Forget remarketing themselves. Quality items
at expected prices and customer service are things they should have focused on. Making sure
there are no crazy lines, stores are clean and maintained, and making sure their slogan meets
expectations should have been what Target focused on.

As Target’s CEO Steinhafel conceded that the retail giant’s Value Proposition was not as
strong as that of its rival– Target could have made much effort in changing the customer
perception. Their motto “Expect More” “Pay Less” could be used with the current strategy
to let customers know that they deserve better and/or higher quality clothes, appliances, and
other products, which other stores do not provide. Like adding, “You Deserve it” at the end
of the current motto will have people thinking and saying “Do I?” (Most people with a decent
salary will always believe they do and spend the money) This might make it possible to tap
into a completely new market segment.

Question No: 05 Given target’s current situation, what recommendations would you
make to CEO Steinhafel for the company’s future?

Answer to the Question No- 05

In my opinion, they need make their business reform outside of the company, and do more
connections between the company and the customers.
Most of the customers in a retail store’s target market love to save money no matter what
economic stage, I recommend that Target would give more coupons out in newspapers and/or
offer more discounts in store like a store membership card. With the card, the customers apply
for and are able to save money and receive offers that non-cardholders are not able to receive.
With these benefits, the customers will feel more self-valued, greater worth, and satisfied.
This in the end will create loyal customers and will go on to bring in new customers. Moreover,
keeping in mind the fashionable concept with which the customers make Target distinct than
others, Steinhafel should keep up the designer products perhaps with more sustainable pricing.

❑ Avoid marketing myopia.

The strategies of successful green products shows that their marketers have avoided "green
marketing myopia" by following three important principles that can be called "The Three
Cs":

1. Consumer value positioning

✓ Design environmental products to perform as well as (or better than) alternatives.

✓ Promote and deliver the consumer-desired value of environmental products and target
relevant consumer market segments (e.g., target money savings benefits to cost-
conscious consumers).
✓ Broaden mainstream appeal by bundling (or adding) consumer-desired value into
environmental products (such as fixed pricing for subscribers of renewable energy).

2. Calibration of consumer knowledge

✓ Educate consumers with marketing messages that connect environmental product

attributes with desired consumer value (for example, "pesticide-free produce is
healthier," "energy-efficiency saves money," or "solar power is convenient")
✓ Frame environmental product attributes as "solutions" for consumer needs, for
example, "rechargeable batteries offer longer performance." With indoor air quality a
growing concern and fumes from paints, carpets, and furniture now linked to
headaches, eye, nose, and throat irritation, dizziness, and fatigue, Sherwin Williams
offers "Harmony," a line of interior paints that is low-odor, zero-VOC, and silica-free.
✓ Create engaging and educational Web sites about environmental products' desired
value: e.g., Tide Coldwater's interactive Web site allows visitors to calculate their
 likely annual money savings based on their laundry habits, utility source (gas or
electricity), and ZIP code location.

3. Credibility of product claims

✓ Make sure that environmental product and consumer claims are specific, meaningful,
and qualified. Compare with comparable alternatives or likely usage scenarios.
Recognizing the ambiguity of the term green, "Drive Green, breathe Blue" in favor of
"Less gas in. Less gasses out."
✓ Underscore credibility with product endorsements or ecocertifications from
trustworthy third parties, and educate consumers about the meaning behind those
endorsements and eco-certifications. Over 40 product categories can now bear the
Energy Star seal.
✓ Encourage positive word of mouth via consumers' social and internet communication
networks with compelling, interesting, or entertaining information about
environmental products. Increasingly, consumers have grown skeptical of commercial
messages, and they're turning to friends and peers for advice.

❑ Hire for the Future, Not the Past:

▪ Recreating the existing labor force prior to the recession isn't going to be enough.
▪ Cultivate the new skills—business management, financial management, strategic
planning, IT, marketing, consultative selling, etc.—our new industry requires
▪ Cross-train to develop the flexible, adaptable work force that can be assign at the right
time, at the right place and to make labor more of a variable cost than a fixed cost.
▪ Replace the workers with no results in help to advance the company.
▪ Alert with the significant change in the company where situation of workers to
thinkers is changing dramatically.