Target Revives Dropped Price-Matching Program – 5/12/09
Target dropped its price-matching program in 2002. That, as they say, was then because now it looks as though the retailer may be on the verge of bringing it back. Target has tested the program in two markets since March 15 and began a third in its own Minneapolis backyard on May 1.
The retailer has been matching lower prices in its competitors’ ads at 22 stores in the Orlando area and 28 others in Denver for the past two months. The chain rolled out its “Unbeatable Prices. Guaranteed.” program in Minneapolis and Medina earlier this month with the expectation that it will result in a national expansion of the price-matching initiative.
Target believes it has figured out a way to get around the problems it found in 2002. Then, competitor prices were verified at the checkout, causing delays at the front-end. Now, all pricing will be verified away from the checkout at the store’s service desk.
Delia McLinden, a spokesperson for Target, told the Minneapolis Star Tribune that the program was being retested because they “want to speak boldly about value and low prices and give customers peace of mind.”
The Minneapolis/St. Paul Business Journal pointed out in an article that “Target has been ratcheting up its emphasis on prices for the past year, as consumers cut back on discretionary purchases during the recession.”
Discussion questions: How much will Target’s “Unbeatable Prices. Guaranteed.” program help it achieve a stronger price image with consumers? Does a program like this risk diluting the equity Target has built for its brand over the years?
I have always been a big fan of Target. I am “one of those” who avoid Wal-mart if at all possible due to the feel of the place. Target provides good prices (even if not as low as Wal-mart) with nice ambience and some really cool product via their focus on design. Unfortunately, they have drifted in the last few years and lost some of their message. It didn’t change my enjoyment of the shopping experience there but clearly Wal-mart gained share as they stayed true to their low price message and dealt with much of their bad publicity.
I haven’t seen the new price-matching program in action, but I will assume the two test markets have shown strong results or they wouldn’t be expanding the program. Target is known for execution, so I will assume they have the bugs worked out of dealing with the customer requests. I think the marketing message is right for the times and as long as they keep to their design ethos, it will prove to be a good move.
Mike Osorio, your Dare to be Contagious! ™ strategist
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