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[SUSTAINABLE GIFT CARD ] March 6, 2012 1 Target Communication Case Study Layne Robinson, John Runyan, Kathleen Saunders, Kylie Schuchard, Kiah Simmons, Mary Smith The University of Tennessee

Target Communication Case Study - SWOT Analysis

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[SUSTAINABLE GIFT CARD ] March 6, 2012

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Target Communication Case Study

Layne Robinson, John Runyan, Kathleen Saunders, Kylie Schuchard, Kiah Simmons, Mary Smith

The University of Tennessee

[SUSTAINABLE GIFT CARD ] March 6, 2012

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Summary Overview:

In an effort to bring Target to the forefront of sustainable development, we designed a fully

recyclable gift card made from the plastic polypropylene that not only promotes the environmental

awareness of the corporation, but gives back to its community. By donating 5% of the proceeds of

this gift card’s sales to the Humane Society, Target will garner a growing market of pet owners and

further establish their corporation as one that cares about the earth, the community, and the

consumer. The marketing motto: “Good for the Earth, Good for the Community, Good for

Yourself” highlights the great benefits shopping at Target and buying this gift card can bring.

TABLE OF CONTENTS:

I. Marketing Plan……………………………………………………………………… 3

II. Why Target?............................................................................ 5

III. Partnering Up/Humane Society…………………………………………….. 7

IV. New Material………………………………………………………………………… 8

V. Card Design…………………………………………………………………………… 9

VI. Cost and Regulation…………………………………………………………….. 11

VII. SWOT Analysis…………………………………………………………………….. 12

VIII. Reinforcement…………………………………………………………………….. 18

IX. References…………………………………………………………………………… 19

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Why this Marketing Plan?

The “Good for the Earth, Good for the Community, Good for Yourself” marketing campaign will not only ensure successful consumer recognition for the new gift card, it will promote the sale of all Target’s green products and initiatives. This will bring in new customers, new revenue and new awareness to one of the most successful retailers in the country.

● GOOD FOR THE EARTH

○ In the past decade, “buying green” has invaded the mainstream market and consumers

who make purchases based on the environment, sustainability, personal health and

social issues make up a more than $209 billion dollar market (McIntosh, 2009)

○ For this reason, the “Good for the Earth” portion of the plan will be the focal point; it is

the central reason that the plan is being implemented in the stores and will be at the

forefront of all literature and packaging

○ The recyclable gift card will promote Target’s dedication to environmental

responsibility, and in doing so, bring revenue to its other products that are “Good for

the Earth” such as:

● Archer Farms food products

● Non-toxic cleaning products (by Seventh Generation, Method, JR

Watkins, Mrs. Meyers, Green Works)

● Furniture from Room Essentials from sustainable forests

● Organic foods

● LED lights

● Organic sheets and towels

● Natural and organic beauty products

○ By doing this, the marketing plan is more than a gift card promotion, it is part of a bigger

goal to promote Target’s environmental awareness as a corporation and bring in

revenue from the $200 billion-dollar environmentally conscious market

● GOOD FOR THE COMMUNITY

○ In a recent study, Lii, Wu & Ding (2011) found that marketing of Corporate Social

Responsibility initiatives such as philanthropy, sponsorship, and cause-related

marketing enhances sales and public relations in the short term, but also raises

corporate reputation, image and brand in the long term

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○ Our decision to include a donation to the Humane Society not only continues Target’s

long history of community-giving, but draws in the consumer

■ This will boost sales of gift cards in the short run, and overall brand recognition

and customer commitment in the long run

● GOOD FOR YOURSELF

○ In the end, the consumer is focused more on the self than the the Earth and the

community

○ The most significant aspect about the new gift card and its marketing campaign is that

Target is making it easy for the consumer to be conscious of the environment and make

purchases that reflect this

○ Target can become a place where a customer can come in for cleaning products and

last-minute gifts and leave feeling they have contributed to something larger than

themselves

■ THE GREAT POSITIVE EFFECT THIS HAS ON CONSUMER SENTIMENT IS THE

BASIS OF THE SUCCESS OF OUR PLAN.

● IMPLEMENTATION

○ The motto “Good for the Earth, Good for the Community, Good for Yourself” will be

printed on all promotional materials and included in all promotional activities

■ The specific materials and activities are up to the discretion of Target

Corporation, however we offer a few suggestions:

● Promotional banners hung from the ceiling in Target stores displaying

the card and its motto

● Prominent display of the card at checkout lines

● Commercials promoting the Humane Society and making use of the

motto

● Creating shelving signs with the motto to place next to all sustainable

products

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Why for Target?

Target has a long history of community outreach, corporate responsibility and

environmental awareness. The campaign surrounding the new, recyclable gift card will promote

this history in a time where corporate skepticism runs high. Target wishes to give consumers

tools and incentives to make sustainable living easy. Our card can do just that. The following is

a list of reasons why this campaign will be consistent with Target’s history and will launch it

towards its future.

● On the company website, Target states, “When we talk about our dedication to good

design, we don’t just mean how something looks, but how it satisfies a need, how it

simplifies your life, and how it makes you feel.”

○ Our card can do all of these things.

■It satisfies the need to produce less waste and create a more sustainable

Target.

■It simplifies your life by giving a thoughtful, environmentally conscious gift

to another

■It makes you feel good about yourself for not only reducing waste, but

promoting animal protection and corporate responsibility.

● Target’s history of Giving begins in 1918 and was given specific parameters in 1946 when it was

declared that 5% of the company earnings would go to the community

○ Our card builds on the 5% giving history in declaring that 5% of all proceeds from the sale of the gift card will go to The Humane Society

● When Target changed its original name to the one it is known for today, it set out to be “a store

you can be proud to shop in, a store you can have confidence in, a store that is fun to shop and exciting to visit”

○ Our card gives the consumer pride by giving back to the community, confidence by reducing operating waste, and exciting by adding to the long lists of Target’s environmental innovations

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How is Target already Green?

The campaign for the polypropylene gift card will not only promote the sale of the card itself, it will

promote all of Target’s green products, as previously stated. Target’s dedication to selling products that are

committed to both contributing to the community and helping promote a greener future for all is a central

to its competitive advantage.

● SEVENTH GENERATION (www.seventhgeneration.com/about/donations)

○ Leading brand of household and personal products established to help protect its customers

and the environment

○ The Seventh Generation Foundation established to help operate two grant programs to

further their quest to support the community through corporate giving

● METHOD (www.methodhome.com)

○ Prides itself on creating safe cleaning products that are not only effective but

environmentally friendly as well

○ Contributes to global communities and donated 23,000 packages of hand wash to those

recovering from the earthquake in Haiti

● J.R. WATKINS (www.jrwatkins.com)

○ Creates its products using the finest natural, environmentally friendly ingredients from

renewable resources

○ Products for personal/home care, remedies and organic flavorings offer customers upscale

everyday items that are both beneficial to them and to the environment in which they live

○ Proudly supports 32 community organizations, including Habitat for Humanity

● MRS. MEYERS CLEAN DAY (www.mrsmeyers.com/Garden_Parties)

○ Provides customers with alternative products for those who are concerned with the

environmental effects of cleaning products

○ Partners with local organizations around the country to create Garden Parties that promote

a clean and healthy environment

● GREEN WORKS (www.greenworkscleaners.com/get-involved)

○ Dedicated to creating a more natural lifestyle through their cleaning products made with

plant and mineral-based ingredients naturally derived

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Why The Humane Society?

Donating 5% of the revenue from the new gift card to The Humane Society will not only contribute to the development of Target’s community goals, it will also boost revenue for Target as a whole. By promoting a non-profit that support pets and other animals, Target will capture a large part of the their Target market for reasons outlined below:

● 62% of US households own pets (APPA’s National Pet Owners Survey)

● The emerging trend of pet parents and the humanization of pets has brought about a high demand for pet products and services (IBISWorld)

○ This has caused an increase in consumption of these products across retailers that has

been sustained sustained despite the economic recession (IBISWorld)

● 52% of household pets are owned by people ages 35-54 (IBISWorld)

● 38% of households with children 18 and under own pets (APPA)

○ The median age of the Target consumer is 40

○ 33% of Target consumers have children at home

● The Humane Society is that nation’s largest and most effective animal protection agency.

○ It is one of the 10 most fiscally responsible charities in the United States

● Therefore, promoting the Humane Society will draw in more people within the corporation’s target market leading to greater revenue for the company

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Why Polypropylene?

In an effort to create a gift with sustainable elements, we propose that Target Corporation use the plastic polypropylene for the following reasons:

● Polypropylene is a number 5 recyclable material

● Its properties make ideal for use in a gift card form (derived from lenntech.com)

○ Light in weight

○ Excellent resistance to stress and cracking

○ Non-toxic

○ Easy to produce and assemble

○ Highly economic material

● It can be recycled into use as medicine bottles, straws, and even new gift cards (ecovillagegreen.com and The Knoxville Recycling Commission)

● Products made from polypropylene can be produced at a low cost and a high volume

● If on average, Target stores sell 40 gift cards per day, the corporation would reduce the amount of plastic waste sent to landfills by nearly 130 tons per month nationwide by using polypropylene.

○ This would assist Target in reaching its goal of reducing operating waste by 15% by the year 2015 (sites.target.com).

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DESIGN

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Why this Design?

The design of our launch card combines many intentional elements that will not only set the card apart, but draw attention to the newly implemented card production and maintain the card’s recyclable qualities.

● The Bar Code

○ The use of the bar code on the back rather than the traditional magnetic strip maintains the recyclability of the card

○ Magnetic strips cannot be separated from the card in the recycling process and would prohibit the card from being fully recyclable.

● The Background

○ The choice of the light brown background was intended to invoke an immediate association with sustainability.

○ Many products associated with the environmental and sustainable movement have adopted to colors of brown and green to connote “earthiness” and environmental friendliness.

● The Humane Society

○ Since an essential element of the card is its donation to the Humane Society, we wanted this to be central to its design

○ The logo will not only attract consumers, but remind them that buying this card benefits the community

● The Motto

○ The “Good for the Earth, Good for the Community, Good for Yourself” is the motto for the marketing campaign of the card

○ ts location on the card design is to associate this card with the campaign and remind consumers of all the many benefits of purchasing this gift card

● The Target Symbol

○ The Bullseye symbol is recognized by 97% of American consumers

○ The Bulleye will associate this card with all the things that consumers love about Target: its commitment to its customers and its community in making a sustainable lifestyle easy

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Cost & Regulation?

● Materials Cost:

○ Polypropylene cost ranges from $0.70/lb to $1.10/lb

○ As an average, if bought at $0.85/lb, to buy the polypropylene needed to manufacture 50,000 (~625 lbs) gift cards it would cost ~$530

○ Cardboard displays: $0.35/display, so 1700 card displays: ~$600

(displays2go.com)

● Production Cost: ○ At ~$0.19 per card, it will cost ~$9500 to produce 50,000 cards

(ecardsystems.com)

○ At ~$0.03 per envelope, it will cost ~$1500 to produce 50,000 envelopes (ecardsystems.com)

○ The total production cost is: ~$11,000

○ It will take approximately 15 business days for production, shipping and receiving

the cards in Target stores (ecardsystems.com)

● Total Cost ○ Materials (~$1130) + Production (~$11,000) = ~$17,530 per 50,000 cards

Gift Card Protections:

“Protects recipients of gift cards by requiring all gift cards to have at least a five‐year life span,

and eliminates the practice of declining values and hidden fees for those cards not used within a

reasonable period of time. “ (Senate/Gov.)

“Credit cards, gift cards and debit cards have all had to adopt the Credit Card Accountability

Responsibility and Disclosure Act regulations.” (Huff Post)

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SWOT Analysis: “is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in business venture.”

SWOT Analysis: Currently Strengths

Differentiation

Embracing current trends

Branding

Weaknesses

Not able to be recycled

Geographically limited

Limited awareness

Opportunities

Fully recyclable card material

Emphasizing environmental responsibility

Creating awareness for animal protection

Threats

Competitors’ gift card innovations

Preference for mobile cards

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Current SWOT Analysis ● STRENGTHS

○ Differentiation

■One of the greatest strengths of Target Corporation over the years has been its ability to differentiate from its competitors (DATAMONITOR). Target’s position in the gift card market is not exception to this. The corporation is the first among its competitors to use resin made from renewable resources. Its use of PLA and PHA decomposable resins leads the industry in sustainable gift card innovation.

○ Embracing trends

■In the recent years the push to go digital has affected nearly every market, gift cards included. Target has not only recognized this trend, but embraced innovation to stay current. Along with their decomposable and re-loadable gift cards, they have introduced an e-card that can be purchased and used online or through an application.

○ Branding

■Target has created a brand recognition that is unlike many others. The Bullseye logo is recognized by 97% of the market, beating both Apple and Nike in scope of recognition. Realizing this, Target has ensured that this logo has been used on all of their gift cards. This is an enormous strength of the current gift card design.

● WEAKNESSES

○ Not able to be recycled

■Although the PHA and PLA resins are able to decompose and this is their great strength, they are not accepted by recycling companies. Their materials cannot be re-made into useful items such as bottles, pens or even new gift cards as other materials can. This poses a difficulty and increased cost to Target in their manufacturing and distributing of the cards.

○ Geographic Limitations

■The decomposable cards are very helpful for those groups of people and locations where compost piles and gardens are common, but that is not true of every place. CityTarget is a new initiative that Target Corporation has embraced to enter urban centers with smaller versions of the store (DATAMONITOR). This new phase of growth for Target is very important, but it could limit the use of the decomposable card due to lack of yards and gardens in many urban environments.

○ Limited awareness

■Although gift cards are high sellers for Target, there are few people who have a significant awareness of the cards. People may pick them up at the end of shopping outings or as a last-minute, last-resort gift for a friend or coworker. There have been few efforts to actively promote these gift cards, missing a great opportunity to garner new attention and new consumers of gift cards at Target.

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● OPPORTUNITIES

○ Fully recyclable card

■Recycling companies are expanding and embracing more and more recyclable materials, especially plastics. Target has the opportunity to tap into these new innovations by creating a fully recyclable card out of materials accepted by these companies. This would help Target reach its goal of reducing operating waste sent to a landfill by 15% (Target’s environmental responsibility packet). With this Target could not only recycle its cards into new items such as bottles or pens but also use the recycled material to create new cards, reducing its carbon footprint. Also, introducing a patent on the design of a recyclable gift card could create a new source of revenue for the company.

○ Environmental Responsibility

■Target has taken many steps to promote its image as an environmentally responsible corporation and enact the ideas of “Sustainable Living, Sustainable Products, and Smart Development” (Environmental responsibility packet). By making embracing a more sustainable card and a marketing campaign surrounding it, Target has the opportunity to enhance this image.

○ Animal Protection

■Target has a commitment to the community like few other large corporations do. It has been part of their history; remains part of their present, and will guide its future. The corporation has gained much recognition for this, receiving the Medal of Honor for Community Giving by President Reagan in 1983 (target.com/history?). In its efforts to embrace the community, it has not yet supported groups that benefit the well-being of animals? Expanding its influence into the realm of animal protection is an opportunity for many things. Target would gain new customers who are attached to this cause and would support the corporation because of this. Also, being a leader in the market, Target could influence other corporations and people to become more aware of the issues with animal cruelty and protect more animals nationwide.

● THREATS

○ Competitors’ gift card innovations

■Seeing the emphasis Target has placed on sustainable innovation and its new gift card designs, competitors could introduce a fully recyclable gift card before Target does. If that company gains a patent for the material and the design, it will increase the cost of creating the card. It would also take Target’s place as a leader in gift card innovation, a switch whose influence could not be quantified.

○ Preference for mobile-based cards

■As the market moves to a more mobile-based emphasis, the preference for e-cards over plastic ones will increase. This could pose a threat to the differentiation and leadership that Target has managed to gain in the gift card market. These e-cards could easily place all competitors who use them on the same playing field.

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SWOT Analysis: Implementation Strengths

Further Differentiation

Recognition for Environmental Consciousness

Helps Reach Environmental Goals

Innovation Leadership

Weaknesses

Learning Curve

Lack of Proven Success

Opportunities

Patenting a Design

Acceptance in Urban Centers

Threats

Awareness of Weaknesses in the Recycling System

Global Competition

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SWOT Analysis after Implementation

● STRENGTHS

○ Further differentiation

■As mentioned in the current SWOT analysis, Target’s main strength is in its ability to differentiate from the market (DATAMONITOR). Implementing the polypropylene gift card will be yet another way that the corporation sets itself apart from its competitors. This material is yet to be used in competitors’ gift card design and will draw consumers to Target for its ability to think and act sustainably in all areas.

○ Recognition for being environmentally conscious

■Corporate environmental performance has become an emphasis in the current business environment and its usefulness for both reputation and financial performance has been noted in literature as well as practice (Guenster, Bauer, Derwall & Koedijk, 2011). If Target gains more recognition for its emphasis on the community and the environment, this will increase consumer confidence and draw in more customers, leading to greater revenue.

○ Moving towards environmental goals

■Environmental responsibility is already a very important part of the way Target presents itself to the market. The corporation has done a commendable job of setting forth goals and making changes that make a difference. Their environmental goals for the year 2015 are challenging but achievable, and this new gift card design helps them reach those. If the company sold and average of 40 recyclable gift cards per day in each their stores, it could decrease their operating waste sent to a landfill by nearly 130 tons per week. This helps reach the goal of only wasting 24% of operating materials by 2015 (packet).

○ Innovation Leadership

■The polypropylene card would be the first of its kind. In a competitive market driven by innovation and differentiation, this would be extremely beneficial. Setting itself as an innovation leader, Target will increase its share of the market and begin to edge out its competitors.

● WEAKNESSES

○ Dealing with the learning curve

■As with all new products, there is a span of time in which consumers are not fully aware of the benefits of a new product. As research has noted for decades, there are a few who catch on early (innovators and early adopters) but many take their cues from those who have tried and like the innovation (early majority, late majority and laggards) (Rogers, 1962). Target will most likely notice the delay in the full profit of the card until these later groups have seen its potential.

○ Risking a product that lacks proven success

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■As polypropylene has not been used in other gift cards, its successful implementation cannot be proven. There are nuances and complications to all new innovations that cannot be foreseen and must be dealt with as the production and implementation is in process. This should not deter a company from innovating, but it should ensure that companies are prepared for the surprises and challenges that leading the market brings.

● OPPORTUNITIES

○ Patenting a design and reducing carbon footprints globally

■Being a leader in the market poses great opportunities for influence in the market. If Target is the first to adopt the polypropylene card and gains patented rights to this design, it has an enormous potential for new revenue. Other competitors will find it essential to obtain this sustainable card in order to keep up, and Target will have the option to sell their design. This is not only a revenue-gaining mechanism, but also a step towards “thinking locally and acting globally” as the environmental movement encourages. If competitors adopt these cards, Target will not only have helped its customers reduce their carbon footprint, but the entire generation as well.

○ Gaining acceptance in skeptical urban markets

■The new venture of CityTarget has been largely successful one for the Target Corporation. Its success has been and will be entirely due to its ability to reach the urban community with different products and services. The implementation of a recyclable gift card will help achieve this connection. Persons living in urban environments tend to be highly educated and have high levels of income which have been found as differentiating factors in environmental concern, knowledge and actions (Arcury & Christianson, 1993). In order to gain acceptance in these communities, Target must continue to be on the cutting edge of sustainable development.

● THREATS

○ Growing awareness of the weaknesses in the recycling system

■The newness of the expansion and implementation of recycling in large corporations and other organizations and institution has brought about many questions about whether these objects actually get recycled. Also, there has been recent skepticism about the energy that it takes to recycle products and the relative benefit it provides. Although recycling still holds positive connotations in the public mind, those who question it are speaking loudly for its reform which could cause doubt about the new card.

○ Facing the global competition

■The threat of becoming over-powered by its competitors who have global market shares affects Target in all areas. The success of the gift card is inherently tied to the success of Target as a whole and is dependent on the corporation’s expansion into the global marketplace or continued viability at home.

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Reinforcement: Incorporate Our GiftCard

“Good for the Earth, Good for the Community,

Good for Yourself.”

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REFERENCES American Pet Products Association, 2010. 2009-2010 APPA National Pet Owners Survey APPA, Greenwich, CT) IBISWorld. (2011 October). Pet Stores in the U.S. Retrieved from IBISWorld Industry Market Research database.

Guenster, N., Bauer, R., Derwall, J. & Koedijk, K. (2011) The economic value of corporate eco-efficiency. European Financial Management, 17(4), pp. 679-704. doi: 10.1111/j.1468-036X.2009.00532.x Rogers, E. M. (1962). Diffusion of innovations. The Free Press: NY Arcury, T. A. & Christianson, E. H. (1993) Rural-urban differences in environmental knowledge and actions. The Journal of Environmental Education, 25(1), pp. 19-25. doi: 10.1080/00958964.1993.9941940 McIntosh, M. J. (2009). Determinants of environmentally conscious consumer behaviors: Measuring the

value consumer environmentalism and predicting behavioral intention to purchase environmentally

friendly products. Electronic Doctoral Dissertations for UMass Amherst. Paper AAI3379991.

http://scholarworks.umass.edu/dissertations/AAI3379991

Lii, Y.S., Wu, K.W. & Ding, M. C. (2011) Doing good does good? Sustainable marketing of CSR and

consumer evaluations. Corporate Social Responsibility. doi: 10.1002/csr. 294