Communication Plan Team Report

BCOM 314R, Section 010

October 11, 2018

Brain Cornell
Chairman & Chief Executive Officer, Target

Mikel Chertudi
Director of Corporate Communications, Target

Group #4
Omar A. Aparicio
Peyton Hitchcock
Abby Krulisky
Patrick McKenna
Jeb Tompkins
Eddie Zuhric
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Table of Contents

Executive Summary……………………………………………………………………………….2

Introduction………………………………………………………………………………………..3

Situation…………………………………………………………………………………………...3

Background and Analysis…………………………………………………………………………3

Stakeholder Recommendations…………………………………………………………………...5

In-Store Activities for Guests……………………………………………………………...5

Increased Advertisements for Potential Customers……………………………………….6

Emailing Press Releases to Shareholders…………………………………………………6

Communication Plan………………………………………………………………………………7

Conclusion………………………………………………………………………………………...9
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Executive Summary
Throughout the last seven weeks my team has been interns of the communications team for
Target. We have been working on analyzing our communications to our key stakeholders and
how there may be disconnects and holes in what we are saying and what is happening. We
happened to find an issue but also an opportunity where Target can capitalize on an opening of
the toy market due to Toys “R” Us’ recent closing. We need to communicate to our guests that
we are a full and legitimate toy store same; and what we offer in comparison to other retailers
that could make us the preferred toy stop for our guest.

We identified three key stakeholders’ groups that we have prepared personalized communication
recommendations that we believe will likely bridge the gap in our communications. The three
key stakeholders that we are focusing on are our guest, shareholders, and our competitors. For
our most important stakeholder group, the guests, we would like to reintroduce days where we
would open up parts of our toy sections for children to come and demo our toys for themselves.
We would advertise this through emails, in-store flyers, and newspaper ads.

For our future guests we would like to advertise all the innovations and conveniences we offer
when shopping with us that they cannot provide. Such as curve side pickup and free two-day
shipping; and we can advertise this through in-store fliers and email blasts. Finally, for our
shareholders, we recommend using press releases that show how much we have invested in our
stores, specifically the toy department and why possible future guests should shop with us.
Overall, we would recommend increasing our in-store signage to engage our guests in buying
more from us.

We have detailed in the next steps portion of this report what we would like to see as our
following steps. In short, we would like to begin as soon as possible to capitalize on the
upcoming quarter four sales which are when the most toy sales occur for all retail outlets. We
have broken down in detail what the cost of running newspaper ads, commercials, and in-store
signage; as well as detailing what order we believe it should proceed with each step. As you will
tell from that portion, our proposition is incredibly aggressive and outgoing, but we think it is
well worth it for the return on investment we will receive not only during the holiday season but
every financial quarter after that. With our current calculations, we perceive that our return on
investment will be a significant 23%.

In conclusion, if we proceed with this aggressive ad campaign our profits will likely increase
drastically for toy sales, secure a large portion of market share, attract thousands of new guests to
us for all their toy needs. We hopefully can steal some potential customers away from our
competitors when they see what we can offer them when they shop with us.
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Introduction

Target over the last few months has presented with an enormous opportunity to gain an
unprecedented amount of market share for the toy market; due to the recent closing of Toys ’R’
Us. However, there is an issue we are facing, and it is that our competition; specifically Amazon
and Walmart are also trying to capitalize on this market share.

The main problem we face with this is that we are not seen enough by both our current guests
and future guests as a toy store which might make them choose our competition over us. We
have prepared several communication recommendations that will impact our three primary
stakeholder groups and get them to see us as a viable toy store that’s more than good enough to
replace Toy ‘R’ Us. We are confident that if our recommendations are implemented, we will
have great success in capturing the market space.

Situation

Our mission is to make Target the preferred shopping destination in all channels by delivering
outstanding value, continuous innovation and exceptional guest experiences by consistently
fulfilling our ‘Expect More Pay Less’ brand promise. However, many of our current and
potential guests do not see us as a major toy retailer. This enlarges due to our communication gap
between what we are trying to say and advertise and how the public perceives it.

Background & Analysis

Through our research into Target’s communications with our three key stakeholders we have
found evidence that suggests that we are not seen enough as a toy store. Overall it seems that we
can be doing more to compete in the toy market against our primary competitors; Amazon and
Walmart. This is a significant revelation to us as 182 of the first set of Toys ‘R’ Us locations are
closing; 93% of those are within a 15-minute drive of at least one Target. This is a massive
opportunity for Target to capitalize on the now free 18.7% market share of toys.

A shocking article we found during our research was by CNN Money; in this article, they stated
that Walmart is “killing Target” by increasing digital sales by offering free fast shipping.
Another service they offer is a revamped return policy that makes returns significantly easier.
The bizarre thing is that Walmart is “killing us” yet we offer the same fast, free shipping and a
return policy that is simple too.

Guests
Toys R Us Event’s Effects
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Before going out of business Toys R Us was known for its inclusiveness for customers and
children. Toys R Us put a priority on creating an environment for customer and children to test
out new purchases or potential purchases. In 2016, Toys R Us held 150 events where over 95%
of their stores participated. Over 335,000 customers reserved a place for these events. Overall
these events increased to over $15 million in sales within a week after the event was held.

Targets Lack of Events

Compared to the recently closed Toys R Us target held significantly less in-store events relating
to toys and games. In 2017, Target held only four annual events relating to toys and games, their
biggest event being a Minecraft specific event. Out of the 1,822 stores, only 37 participated in
these events.

Target is the New Toys R Us

To create an environment in which family and children relate the idea of “toys” and “fun” with
our stores we need to facilitate there want for our store. Claiming the market share that was once
Toys R Us’, would require us to communicate with guests that have all the same narratives as
Toys R Us. Over 40% of our guests leave our store with items they did not intend to purchase
before entering. But only 4% of those additions’ purchases are games or toys. We need to create
an environment in which draws guests to our toys and gives them a need to purchase them.

Potential Customers
Toys R Us held a large percentage of the toy market, 18.7% in total to be exact. Since their doors
closed on June 29th of this year, that market share is up for grabs. Target wants to capitalize on
the amount of that market share that we can take away from our competitors. Amazon and
Walmart are our main competition in filling the toy gap.

Target’s New Shipping Service Decreases Wait-Time for Packages

Target has recently acquired a shipping service, Shipt, to aid in making shipping to guests
happen faster (Garcia). Target is hoping to have Shipt’s services rolled out to all stores by the
holiday season this year. With Shipt, we can ship to our guests in a comparable amount of time
to Amazon’s shipping time.

Target has an Internal Approach to Compete with Walmart

Walmart has been busy flaunting that they bought out bigger companies and a good amount of
smaller companies as well. During that time, Target has taken a more internal approach to the
competition. We have added a curbside pick-up service and new sales each week. Target’s CEO,
Brian Cornell, stated that Walmart is “cutting costs just to keep their heads above water. This
contraction will create opportunities for Target to pick up market share over the long term"
(Thomas, 2017).
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Target has been known for having its name pronounced with a faux French accent. “Tar-jay” is
what made Target different from the Amazons and Walmart's of the world. This is another
internal approach that Target has been taking to bring customers inside its doors. Target has to
“give the consumer a reason to come into [our] store or click on a website, and exclusive brands
are No. 1 in that process... Target's brands so far are doing better than the company thought they
would” (Thomas, 2018).

Shareholders
Ways to increase the number of Shareholders who believe in Target going forward?
As the holiday season quickly approaches, it is imperative that Target starts to roll out the next
versions of their advertisement campaign. Chief Merchandising Officer, Mark Tritton has been
emphasizing this holiday season in particular and states, “We're going bigger, offering guests
thousands of toys, including more than 2,500 new and exclusive items – nearly double compared
to last year” (Henderson, 2018). The fact of the matter is that Target needs to couple their efforts
by promoting their toy selection this season with better communication towards their
shareholders. To ensure our shareholders that Target remains profitable for the foreseeable
future, we recommend that we send out press releases more frequently and also utilize more in-
store signage.

Our recommendations will consist of our three stakeholders: Guests, Potential Guests, and
Shareholders. There will be a variety of communication-based recommendations that will further
enhance the perspective that people have on Target. The sole purpose of this section is to discuss
potential recommendations that we believe will bridge our communication gap that Target can
implement which will take the overall market share away from their competitors and the Toys R
Us shoppers who now need a new place to shop.

Stakeholder Recommendations

In-Store Activities for Guests

Developing several days out of the year where we can open up the toy and game aisles of our
store and allow children and teens to play with the games and test them out before purchasing
them. This enables guests and children to see our store as their “go to” for toys and games.
Communicating these events with guests is the most crucial part. One way to talk to guests
would be through our email blasts, and flyers in store. To communicate this to future guests, we
would be posting these events in local newspapers and through email alerts as stated.
Realistically we want to be able to hold these events in almost every store in the United States,
including advertisements, labor, products, and communicate. Allowing customers to bring their
children and teens into our stores would create awareness for the new games and toys. This not
only increases the sales of our toys and games but also gives customers the perception that we
are a toy store destination giving us the ability to claim more of this market share.
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Increased Advertisements for Potential Customers

Target needs to advertise to its potential guests that we have added the curbside pick-up service,
upgraded our shipping to be faster, and how we differentiate ourselves. With these
advertisements, Target will be seen as more competitive with Amazon and Walmart. This can
help in increasing the number of people who shop in our stores and online because once
consumers see us as being similar to the competition, more people could come to Target for their
shopping needs. These announcements would be advertised through television commercials and
newspaper advertisements.

Emailing Press Releases to Shareholders

With an opportunity to gain some of the toy market shares within the next couple months, we
suggest that Target emails all shareholders a copy of the press releases as soon as they go public.
Shareholders commonly use company press releases to understand a company’s current outlook;
therefore, Target can use this to communicate any upcoming plans as seen in Figure 1. This
would likely increase the number of our overall shareholders and give them a view of how strong
our stock will be in the coming months once the holiday season gets underway.

Figure 1

Catchy In-store Signage for our Shareholders to see

In addition to sending out press releases, we need to be implementing more in-store signage
which will promote Target’s vision that we are the place you should be shopping for toys. Target
is being talked about throughout the news and online; therefore, we must continue the trend and
relate to the overall conversation. Target needs to become more aggressive and get their
communication across so that we can attract current shareholders and non-shareholders to our
store. The in-store signs should include pictures, dates and attractive deals which would entice
people to include Target in their shopping experience if they already do not.
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Figure 1

Next Steps To Be Competent With Our Opportunity

Targeted Ad Commercials
Having our highest cost, translate into being a capable platform to communicate to our target. Ad
commercials will broadcast nationally twice per day during prime time, at 8 am and 8 pm. Our
focus is to target as many viewers that have children, before heading to work/school and when
viewers are enjoying their favorite family show. (Kumar and Sharma)

Leveraging from Digital Entertainment Exposure

Using online sources, we will distinguish the popularity and demand trends of toys. Most
children and teenagers use the virtual world for streaming platforms of their favorite shows,
mobile-gaming, and research for future purchases. We will know what to communicate in the ads
due to the fundamentals of data that can be built based on the child or teenager interests,
location, and demographic characteristics.

Commitment and Network Communication via In-Store Signage

The designs for fliers will allow our guests to learn about our price-check guarantee. In the past,
guests are not communicated of this and decide to walk out of our stores without committing to
purchasing anything because they find a lower cost somewhere else. When this is successful, it
will create momentum growth of word-to-mouth to their social group including social media
content, allowing our company to be distinguished superior among our closest competitors.

Consistent Newspaper Circulation

Two main approaches six days a week, National and local. This strategy will allow our guests
and potential guests to be aware of the deliverables of our quality toy infrastructure to give us a
high standard review to the public. Our target market for this circulation are consumers that
enjoy subscriptions that provide insights into discounts on specific products and events.

Figure 2
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This first month will be one of the most aggressive to reach our target market because of our
direct competition.

Budget: $16.9 Million

Budget: $16.9 Million
Our suggestion for creating a monthly budget plan will be the most effective way to approach
adequate spending. As we go through the fiscal year, this budget will have changes. Due to this,
we have priority of notifying our Shareholders of any changes. (Figure 3)
Figure 3
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Figure 4

Return On Investment (ROI)

We have analyzed our quantitative
data and have forecasted a 2.244%
Industry Market Share gain within
four quarters. Our investment
strategy will have a 23% ROI.
(Figure 4)

Conclusion

We need to be aggressive in the upcoming months with the ways we can communicate with our
customers current and future. Right now there is a large part of the market share available with
the closing of the primary competitor which we may be able to obtain many of their customers. It
will be a fight to gain the customers from the other large competitors for the holiday season
arriving fast. However, many people still do not see us as a toy store but with advertising in local
newspapers, television ads, and in-store signage to let the customers know we provide the same
toys and services as our competitors. To help inform the consumers how we are are a toys store
we need to advertise the in-store activities showcasing our toys more openly to bring more guest
to shop with us. This holiday season we will be doubling the number of toys we can offer and by
doing so will increase the profits for the shareholders. We currently offer many of the same
features as our competitors with online shopping and delivery times, but we also provide the
service curb stop, unlike our competitors. We will need to communicate towards our guests that
we can offer these service opportunities to show we are going the extra mile for our guest to
become the next great toy store.
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