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Target Project
Business 400-CE
By: Abraham Freedberg
JiaJia Jin
Joshua Kong
Melvin Korpue
Alejandro Votteler














Table of Contents
Proposal
Summary
Target Industry Analysis
Industry Overview
Five Forces Model
Threat of Entrants
Bargaining Power of Buyers
Threat of Substitutes
Bargaining Power of Suppliers
Intensity of Rivalry
Competitor Information
Walmart
Sears Holdings Corporation
Macys Inc.
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Consumer Market Data
Demographics
SWOT Analysis
Strengths:
Weaknesses:
Opportunities:
Threats:
Social Media Landscape
Target
Walmart
TJX
Expanded Proposal
Our Focus
Implementation
Examples
Return on Investment





Our strategy for Target will align with its core mission of expecting more, and paying less by
increasing the perception of Target fashion utilizing social media.
Proposal
Summary

Due to a business model favoring low profit margins on goods sold, Target has remained
profitable for more than a century by relying on a low cost structure as to keep its small volume
from affecting bottom line income.
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At 30%, the fiscal year of 2013 saw Greg Steinhafels
enterprise holding the second lowest gross profit margin in the industry. However, in 2011
Target was able to beat profit estimates by selling higher margined items such as apparel
and home goods.
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During a site visit to Targets Lincoln retail chain, Store Team Leader

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Bryant Celan, The Motley Fool, http://www.fool.com/investing/general/2014/01/21/wal-mart-and-target-have-the-
worst-gross-profit-ma.aspx
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Townsend Matt, Bloomberg News, http://www.bloomberg.com/news/2011-11-16/target-third-quarter-profit-
exceeds-estimates-as-credit-card-unit-gains.html
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(Stephanie R. Fontaine) informed the group that many the company's newest designer labeled
clothes were not reaching sales estimates. Therefore, in order to maximize efficiency and
revenue, our Target proposal will focus on this sector of the companys highest earning
merchandise as well as most profitable departments, designer labeled clothing for women ages
18 to 45. Therefore, we look to improve womens clothing revenue numbers by cultivating a
company run apparel blog that will be managed by an internal team of fashion interns.
These individuals will propose social media marketing strategies, research upcoming
fashion trends, as well as look for profitable clothing brands that the company can partner
with in the future.
Our proposal is aimed at bringing in as well as garnering attention from the companies
core consumer base, women between the ages of 18-45. This will be accomplished through the
creation of an upscale blog featuring the latest female designers, trends, and articles of clothing
that one can locate and buy in all Target retail chains. Through various postings of photos,
stories, as well as unique design selections, female consumers across the United States will
become better educated in Target brands as well as the latest styles within the fashion industry.
To run this site Target will employ fashion oriented, social media savvy interns for a
semester long assignment. The position will be part time, and paid at an hourly wage of $17.50.
The strategy behind this proposal is to increase the quality of apparel in Target by employing
knowledgeable interns, and collecting valuable information on how to better improve the apparel
department in all Target locations. By adding more focus to the apparel department Target will
be able to attract more mothers, and young women who make up a significant portion of Targets
customer demographic. This in turn leads to higher sales in other departments like pharmacy,
grocery, and household essentials.
Target Industry Analysis
Industry Overview

The department store industry includes a broad selection of merchandise ranging from
apparel, jewelry, cosmetics, home furnishings, general household products, toys, appliances,
sporting goods, and sometimes fresh groceries. The industry is very dependant upon per capita
disposable income, and consumer confidence. The IBIS report predicts that consumer spending
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will boost revenue in the industry, but online competition will curb growth. Online retailers like
Amazon.com are gaining market share in this space and it is important for companies in the
industry to develope a strong online presence with social media in order to compete with external
competition.
The industry is comprised of $199.8 billion and a bottom line of $9.6 billion. Since 2009,
the industry has grown only 0.3% because of the damaged consumer confidence and less
spending. As the economy continues to recover the annual growth in the industry will reach
1.5%. This means Target and other competitors will need to actively search for growth
opportunities in their existing departments. Womens wear is the largest product segment in the
industry at 21.1%, followed by household items at 16.5%, and drugs/cosmetics at 15.5%.
Currently, the industry is in its mature stage of growth, but with heavy online competition, and
the partial exit of Wal-Mart from the industry revenues are expected to grow slowly to a total of
$215.5 billion in the next five years.
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Five Forces Model
Threat of Entrants
Currently, there are multiple barriers to entry in this market and because of this barrier of
entrance is high. One can also account for the fact that the retail industry is in its mature stage,
where by there is already a lot of big retailers that hold the majority of market share. Target and
other major competitors are protected from new competitors due to their large sizes and working
capital which is in the billions. Target has developed economies of scale, and new entrants would
require time, effort and capital in order to obtain such a scale. Reputation and brand loyalty of
major competitors in this market will make it difficult for new entrants to brand themselves.
Target and other well established competitors in this industry already have a strong distribution
system that is both domestic and increasingly global. New entrants will have difficulties in
finding access to and creating regional or global distribution channels.

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IBISWorld Industry Report 45211, Department Stores in the US, http://0-
clients1.ibisworld.com.helin.uri.edu/reports/us/industry/default.aspx?entid=1090
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Bargaining Power of Buyers
The bargaining power of buyers is extremely high in this business because buyers have
an extensive amount of options to choose from. Target, Walmart, Kmart, Costco and many other
online retailers must compete with each other to sustain market share. This competition leads to
more discounting, better deals, price cuts and better customer service. Target does not employ a
low price strategy like Walmart, instead they sell better quality products targeting college
graduates and family households. Target tries to sell products at a premium price offering a great
degree of discounts to its customers and loyal credit-debit card holders, which overall makes it
seems reasonable to shop at Target.
Threat of Substitutes
Threat of substitution is very high. The retail business is very large and some might say
it is overpopulated, because of this we find that businesses are selling similar products. Walmart
is big competitor in this industry and with it very low prices customers can easily substitute them
for Target. There seems to lack an essence of differentiation although Target is recognize to a
degree for having its own line of products like its clothing and apparels but in general within the
industry competitors sells the same products and provides the same customer services like
rewards cards, stores credit cards, discounts etc. Big discount retailers face a huge threat with
the emergence of online retailers like Amazon who continue to expand their product offerings.
Amazon has even added online grocery delivery in order to capitalize on the growth seen in the
last year with the upturn in the economy.
Bargaining Power of Suppliers
Target relationships with its large diverse group of suppliers to meet its requirement give
Target a unique opportunity to access more products and services for less. Having over 1700
stores both in and out the United States allows Target to utilize its size in order to make deals
with suppliers. Target has leverage over suppliers like small unknown designers because they are
able to offer such large amounts of volume. Target buys products for less and then adds a
markup on those products to sell them at a premium. When Target sells its product at a premium
it is able to discount, or cut prices when consumers are not purchasing as many products. What
Target also gains from its supplier network is the ability to choose and demand the qualifications
of its products but not to the extreme of Wal-Mart. A large pool of suppliers who competes for
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Targets business allows Target to substitute within its suppliers circle, giving the company great
flexibility in supplier agreements.
Intensity of Rivalry
The retail industry is very competitive and because of this companies are doing what they
can to earn a good share of the revenues generated from consumer sales. With the introduction of
technology like social media platforms, online selling and digital discounts retailers like Target
are trying to use these instruments to direct more customers to utilize these services. Competitors
in the retail industries try to differentiate on cost, customer services, logistics and time
management.Targets strength lies in being able to uniquely use these factors. Target has been
able to fill a niche market differentiating itself from Walmart by providing quality products at a
generally low price.
Social media has become a blessing to retailers who now are able to monitored their
target customers on all social media platforms from the biggest aka Facebook, Pinterest, Twitter,
Instagram, YouTube and LinkedIn. Target is competitive when it comes to using social media
with its presence on (3) Facebook pages, (6) Twitter accounts, (4) Instagram accounts, (1)
Tumbler pages, (2) Pinterest pages, (1) LinkedIn account and (3) YouTube Channels.
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On its
major accounts Target has over 22.7 million likes, and 1.1 million followers. Competitors like
Wal-Mart, Sears, and Costco have created an advantage over Target with their vast expansion
into the South American, European, and Asian markets. Target has entered the Canadian market,
but has struggled to maintain the level of operational efficiency demonstrated in the U.S.



Competitor Information
Walmart
Walmart has 25% market share in the industry making it the worlds largest retailer and
employer. In the past five years Walmart has decided to partially exit the department store
industry to become a Supercenter that purchases and sell products in massive volume with fairly
low profit margins. By this, it is evident that the company has taken great advantage of

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Social Media at Target, Target Corporation, http://pressroom.target.com/social
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economies of scale. This industry is expected to grow faster than the department store industry
because of the recession. Walmarts low price strategy has allowed them to remain profitable
during periods of high unemployment, and low disposable income. Wal-Mart was able to
increase same store sales which indicates their new locations were attracting new customers.
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Sears Holdings Corporation
Sears has 16.6% market share in the industry, but the company is facing pressure from a
decline in revenues. Sears operates its normal domestic division of Sears stores and 1,221 Kmart
stores nationwide. Sears revenue in 2014 is expected to drop 7.8% mostly because low end
competitors like Wal-Mart and Target have gained more market share through steep discounts.
The decline in sales at Sears was mostly attributed to the recession, and fewer big ticket
purchases in electronics.
Macys Inc.
Macys retails a smaller selection of products than large discount retailers like Target and
Walmart. Macys focuses on apparel, cosmetics, and home furnishings. Revenues in 2014 are
expected to increase 2.1% as disposable income continues to rise along with the demand for
womens apparel, mens apparel, luggage and furniture. Macys operating income had been a
problem in the past because it accrued more than $5.4 billion in goodwill impairment charges
from closing stores, and restructuring costs.




Consumer Market Data
Demographics
Targets main customer demographic is comprised of individuals with a median age of 46
which is the youngest among major retailers.
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Median household income for customers is
$55,000 and 43% are college educated or employed professionals. The key demographic is

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,Major Companies,IBISWorld Industry Report 45211, http://0-
clients1.ibisworld.com.helin.uri.edu/reports/us/industry/majorcompanies.aspx?entid=1090
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Targets Unique Guests, Target Corporation, http://pressroom.target.com/backgrounders/target-guests
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women which makes up 80-90% of Target guests. Guests with children make up 38% of the
stores customer profile.
Target guests are knowledgeable about pricing and are often looking for quality products
and a wide selection of choices. Guests are also very environmentally conscious, and enjoy the
fact that Target has committed more than $2 million each week to communities across the
country.

SWOT Analysis
Strengths:

Target has proven to be a top competitor in the U.S. market ranking 36
th
in total business
performance overall and ranking second in the general merchandise industry.
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Target has
partnered with a lot of businesses and well known individuals to expand and provide different
services and product. Like its competitor Wal-Mart, ranked first in the Fortune 500 2014, Target
seeks to provide affordable product and services through a unique approach. Target differentiates
itself from others in that it has its own exclusive brand names and product lines; Target works
with suppliers who produce stylish fashion clothing and accessories lines. Working with its
partners and businesses large and small Target has been able to negotiate a great deal on the
production of its products/services. There is sense a of exclusivity that works well with Target,
what customers find at Target, for example certain outfits made by big name designers like
Neiman Marcus and Jason Wu, cannot be found anywhere else but at Target. In 2013 Target
Partnered with a designer by the name of Prabal Gurung and introduced a limited edition items
of womens apparel and accessories such as handbags, shoes, and jewelry. Target sell
differentiated high quality products at a premium compared to competitors and with all the
discounts, most of the premium price goes unnoticed by customers. This is something Target
does well and it is like a niche.
Target is one of the fewest companies that has stayed true to its image and that is to offer
products that are affordable yet stylish. As stated earlier, Target partnerships with designers and
suppliers have allowed it to create value for customers which are provided in discounts. There

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CNN Money, Fortune 500 Rankings, http://money.cnn.com/magazines/fortune/fortune500/2013/full_list/

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are lots of promotions and saving offers provided to customers on a daily bases. Target has its
Red Card, Check Card, deals listed on its social media pages, even more deals of its companys
websites. Target also differentiates from competitors in the way it treats its employees;
employees receives leadership trainings, promotions, and their work environment is very
welcoming energetic and proactive. Targets customer service is ranked amongst the best.
Employees place customers at the top of their list and each employees makes sure that a
customer is happy and satisfied with their shopping experience.
Target is strongly regarded as a socially aware business; it is seen as a company that
loves its communities it does business in. An article taken of Targets corporate web page
reveals that Our giving now equals more than $2 million every week to the communities we
serve. Those dollars go toward fighting hunger, aiding disaster preparedness and relief efforts,
supporting the arts and putting more kids on the path to high school graduation. In fact, were
committed to giving $1 billion for education by the end of 2015.
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. Employees at Target are
involved in many social services and outreach, like food pantries, after school programs,
donating to social causes or sponsoring education and community events. One cannot
underestimate Targets level of innovations because every so often it has something new to offer
to customers and business partners, either a new and better way to shop, save or to enjoy
everything that Target has to offer. Target has grown and expanded widely throughout North
America, with over 1,790 stores in 49 states, and over 360k employees domestic and
international, 37 distribution centers in 22 states with businesses in the U.S. Canada and recently
India.



Weaknesses:
Targets approach its 52
nd
anniversary and within this time frame it has been slow to
globalize. It recently made plans to enter India 2014 and just shortly before India it entered the
Canadian market in 2013; with 125-135 stores due to open across Canada in 2013 and 2014.
Although different in some way but Canada and the U.S. are quite similar when it comes to
consumers buying habit, being so close they share some of the same factors. During our research

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Goals and Reporting, Target corporation, https://corporate.target.com/corporate-responsibility/goals-reporting
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we considered the South and Central American markets which seems to be thriving, such
location can become big business for Target.

Target has been in the Press recently about the Cyber hacking that lost over 40 million
customer card holders information. Announced on December 19 2013 Target Corporate had this
to say, Approximately 40 million credit and debit card accounts may have been impacted
between Nov. 27 and Dec. 15, 2013. Target alerted authorities and financial institutions
immediately after it was made aware of the unauthorized access, and is putting all appropriate
resources behind these efforts. Among other actions, Target is partnering with a leading third-
party forensics firm to conduct a thorough investigation of the incident.
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With bad press and
social media frenzy Target took a hit to its reputation and financial pocket.
Opportunities:
Canadian Market:
Target has suffered with its expansion into the Canadian Market because it has not been
able to effectively execute their marketing program and manage inventory. The supply chain has
proven difficult because Canadian third party suppliers have not met Targets performance
standards and Target faces high switching costs, and a different legal environment. Losses in
2013 hit $941 million for the 124 leased Canadian locations. Targets Canadian operations
consisted of 3 distribution centers totaling 3,963 square feet. As we look at the numbers Target is
allocating more square feet of distribution per store than in the United States which shows us that
the company is having trouble transitioning their operational effectiveness. The Canadian market
comes with difficulties and is already saturated by competitors such as Walmart and Costco
Wholesale.
Global Expansion:
The Central and South American markets also offer huge growth potential. Countries like
Brazil, Chile, Colombia, and Panama and, Uruguay have strong, growing middle classes,
controlled inflation, and strong economic/political stability. Retail spending is also expected to
rise 11% in Brazil according to the Global Retailing index. Chile has also seen strong growth in
the retail industry because disposable incomes have expanded 10% in the past year. At $8,241

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Resources for Data Breach, Target Corporation, https://corporate.target.com/about/payment-card-issue.aspx
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consumer spending Chile ranks 6th among the indexes 30 countries; Lastly, Colombia has
proven to be a steady market with an annual GDP rise of 4.2% since 2001. Major retailers like
Carrefour and Jeronimo Martins have begun investing heavily into large Colombian retailers.

Sustainability Initiatives:
Target was ranked as an up and coming company in the general retailers category of
the 2013 Sustainability Yearbook. Interestingly, Walmart and other Target competitors have not
made this list, but still make claims about the effectiveness of their sustainability initiatives. The
only company to receive a Gold Class certification was Japan based retailer, Lotte. Reviewing
Lottes 2013 sustainability report illustrates the companies superior commitment to sustainable
practices. One example of their sustainability initiatives is providing customers with a green
card system which gives customers eco-points for purchasing eco-friendly products with the
green card. These points can be used for discounts on other products and makes green
consumption a way of life for Lotte shoppers.
Pharmaceuticals: The United States is expected to hit $345 billion in 2014 which is at the top of
the global pharmaceutical market. With an increasingly aging Baby Boomer population the
United States is poised to have 1 in 5 citizens be considered elderly by 2030. This provides the
sector with huge opportunity for growth because the demand for medicine will skyrocket. High
barriers to entry including regulations, and licenses from the government prevent smaller firms
from entering the industry. Target has positioned itself well for the future, but must continue to
carve out market share from top competitors like CVS and Walgreens.
Threats:
Declining revenue and net income due to the decline of the industry and the increase of
competition. The increased overlap of products in discount retailers tighten the competition.
From the financial statement, we see that Targets grocery revenue is increasing. Also, other
competitors start to sell products that Target was selling. Because all the discount retailers are
more like each other, Targets competitive advantage may erode. As the industry enters the
stage of decline, the growth of the industry is limited. Annual growth from 2009 to 2014 was
0.3%.
Targets reputation has been adversely affect due to the credit card breach this year. Due
to credit card breach at end of 2013, 40 million credit and debit cards information were stolen by
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hacker. Customers who shopped at Target may worry about their personal credit card
information. It adversely affects Targets reputation.
Rising labor and health-care costs also threaten Targets financial stability. Since 2013,
Target has approximately 361,000 employees and most of them are at entry-level and part time
job. Labor cost increases every year due to the minimum wage and inflation. Passing ObamaCare
and other legislation raises the healthcare cost. According to the estimations, health care cost for
a US employee will increase 5.3% in 2013.
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Rising labor and healthcare cost will reduce
Targets the profit margin.
Revenue is highly depended on customers disposable income and Target is highly
depended on consumers financial position. When consumers financial position is not
optimistic, they are likely to cut off or delay purchasing things. Due to the recent economic
recession, American customers have less disposable income than year before. Many retailers are
merging their business like Kmart and Sears which allows these companies to become large in
size and dominate the market. This could be a potential threat to Target because these companies
can take away market share by expanding their product offerings.

Social Media Landscape
Target
Target is one of the largest discount retailers in the United States they engage in most of
the social media platforms available in the market, like Facebook, Twitter, Pinterest and
Instagram. A lot of people follow Target social media page. For instance, Target has 22,731,561
likes on its Facebook page. Target guests engage with the firm on social media by liking or
following Targets social media pages, sharing and liking pictures, posts and events on social
media, comment or post their thoughts and concerns and review new updates timely. Individuals
look for different information on social media. Some people want to seek out the new product
information and upcoming events; some people want to find some specific promotion or
discount; some people want to read Targets news; some people want to review the product
online without going to the store; and other people want to see what is trending in fashion.

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Ferro Shaunacy, Healthcare costs seen rising in 2013, http://www.treasuryandrisk.com/2012/08/27/healthcare-
costs-seen-rising-53-in-2013
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People visit social media pages with a reason. Guests engage with the firms social media
because they can find the information that they want and communicate with the firm
conveniently.

TJX
Focusing on T.J. Maxxs Facebook page we see that they currently have about 2.1
million likes and 25,000 people talking about them. The Facebook page displays T.J. Maxxs
logo and the cover photo hashtags maxxinista, land amazing for less. This allows the company
to use the newly added hashtags on Facebook to get young women to post themselves in a new
outfit and hashtag T.J Maxx in order to receive a $1,000 shopping spree. The content in their
posts highlight women ages 18-30 in some sort of outfit, or close-ups of handbags and shoes.
There is no discernable pattern in post frequency, but they do post 1-2 times every day. Their
posts also highlight changes in seasonality, and some posts are cross-promotional which
highlight an article of clothing and a matching accessory.
T.J. Maxxs twitter page displays its logo as the profile picture and has a cover photo focusing on
stylish womens footwear. Twitter is what makes T.J. Maxxs #maxxinista program so effective. The
company even states in its description that its twitter page is the maxxinista headquarters. The
background of the page then goes on to describe the maxxinista contest encouraging customers to tweet a
picture of themselves wearing a T.J. Maxx designer item and share why it makes them feel extraordinary.
They also tag other twitter accounts that focus on finding affordable fashion for women like @momfinds
and other fashion bloggers that have large followings.

Expanded Proposal
Implementation
Target can approach college students or graduates searching for a fashion oriented social
media marketing position. The new hires will assist the Fashion Buyers at the corporate
headquarters by researching new trends in fashion, and new brands. In addition to research all
new interns will be able to submit social media strategies to corporate that can be implemented in
the stores. Once corporate has reviewed the strategies it can select the best one and use the
interns to test the effectiveness of the new strategy.
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Recent publications have suggested that private label retailing is declining in popularity
among consumers.
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After implementing the program Target will have an extensive network of
fashion savvy professionals that it can utilize to create Targets own private labeled brands. This
way Target can increase the quality of clothing to that of brand name labels. This strategy will
reignite interest in Target because of their new commitment to creating fashionable clothing.
This will drive Targets main demographic to the store, and lead to greater traffic and higher
sales in other departments. Target will also realize greater returns with their own private label
clothing brands by cutting out the middle man and having the resources and flexibility to keep up
with seasonality and what consumers want in the store in regards to quality. Researchers have
found that, when both rapid production and enhanced design are done together allowing the
latest merchandise to get into the hands of consumers quickly and with little overstock a
firm's profits increase by up to twice the sum of the extra profits that would have been earned
from each activity alone.
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Target can also dedicate a small section of the apparel department to this program so that
new interns can choose brands to test in apparel, or accessories. This department will attract
other fashion oriented people to explore and see what the new fashion interns have implemented.
It also creates a feeling of value for the interns seeing some of their ideas tested and implemented
at the store level. This program can create huge social media buzz by getting young women
interested in the new program and focusing more social media channels like Twitter, and
Instagram into fashion and trends.

Examples
As stated previously, Target fashion interns will work on social media strategies and
submit them to corporate. Target will then choose the top ideas and have them implemented in
the store. Here are some examples of ideas Target can implement and have the interns dedicate
time during the day to monitor, and interact with customers in the apparel department in order to
get more social media engagement from customers in the store.

Fitting room hashtag stickers

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Woodard Richard, Just-Style, Cheaper private label apparel losing traction http://www.just-
style.com/analysis/cheaper-private-label-apparel-losing-traction_id119895.aspx?utm_source=insights-
feed&utm_medium=rss-feed&utm_campaign=rss-feed
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Stanford Business, Outsourcing may hurt fashion manufacturers bottom line
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Discounts or promotions will be given on certain clothing or accessories when
customers take a selfie showing off Targets clothes.

Dedicate a department for fashion intern experimental products
Interns can have a small area in the store dedicated to a couple of new brands that
interns believe can have success at Target. This will create a treasure hunt effect
for the customer and Target can advertise the space on its social media channels.

Social media promotions
Target can give discounts for matching fashion products alerting customers
through social media. If a customer buys a certain brand of jeans along with a
matching accessory and takes a picture of the combination they can be entered
into a contest engaging social media users to get creative with their purchases.
This upselling strategy can be very effective since many women often search for
clothing and accessories that will match well together.

Return on Investment
Gain from investment
Department store like Target is highly related to the economic condition, because Targets most
revenue is from customers disposable income. In 2008, the average spending per visit for Target
was $54.47.
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In 2004, the average spending per visit for Target was around $70
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. Due to the
economic recession in 2008, people have less disposable income. We believe in 2014 the average
spending per visit for Target will between 2004 and 2008, because the economic condition. We
estimate the average spending income for 2014 will be $65. Our plan is started from the fashion
area, like New York City and Los Angeles. We aims at those areas because residents are more
will to participate at high fashion and social media as well. From the 2012 financial statement,
we find that the gross margin was 29.7%
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which means Target can get $29.7 in $100 sales.
However, as we know that Apparel department is one of the departments with highest profit
margin. So we assume the profit margin for apparel department is 40%. Due to our plan, more
customers will be coming into Target store. In average, people will spend $300. The products
cost 60% of the sale, so the rest 40% will be the real profit.

Cost of investment

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Geezeo, Main St, Main St Spending Index, http://www.mainstreet.com/article/money/investing/mainstreet-
spending-index-wal-mart-vs-target
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MNteractive, How much do we spend at Target and Walmart?, http://mnteractive.com/archive/how-much-do-
we-spend-at-target-walmart/
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Target Corporation, 2012 Annual Report
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The only cost will occur by implementing our plan is new interns wage. We plan to use an
intern per store at $15/hour. 25 hours per week will be enough. Intern will be required to work 45
weeks with three weeks of break.

Employee expense:







Break-even
This break-even tells us that one Target store which implement our plan will only need
attack addition 649 customer visits per year to get even. The daily average customer visits for
one Target store is 6000. By comparing two numbers, we believe this break-even number will be
realistic and easy to achieve.


Revenue = Fixed cost + Variable cost * Unit

Unit = Profit / Fixed cost

$16,875= $300 * 40% * additional customers

ROI

From Targets social media website, we found that:

Twitter has 1,110,000 followers
Facebook has 22,721,561 like
Instagram(target style) has 267,768 followers
Pinterest(women style) has 102,205 followers

Based on numbers shows on their social media pages, if we can initially attack 0.03% (3 people
out of 10,000 people) of the total population on each social media of Targets stores, we can
generate addition 7,261customers for Targets stores. Our plan will start from the top 10 appeals
selling stores nationwide to test our plan.

11.87% return on investment is considered a very good investment. However, our ROI highly
depends on the number of the addition customers attacked by social media. It is hard for us to
forecast exactly how many customers will be attracted by now. Social media is unpredicted. That
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why we want to start with several stores to test our proposal. The benefit Target may gain from
our social media plan not only from the direct additional customer driving revenue, but also
increasing awareness of Target quality apparels department.