Universidad de la Sabana
Escuela Ciencias Económicas y Administrativas
Mercadeo 2013 – 2
Case 4: From “Expect More” To “pay Less”
Agosto 23 - 2013
* Camila Andrea Pinzón Gómez 201213506
WHAT IS ALL THIS CASE ABOUT?
The principal idea of the case is examine Target, a discount retailer who was always known for their ‘cheap chic’, “Expect More, Pay Less” value proposition. The evaluation between
Target Corporation originally the Dayton Dry Goods Company and later the Dayton Hudson Corporation,
1902: Dayton Dry Goods Company was founded in 1902 by George Draper Dayton, a banker who built his wealth by buying farm mortgages in southwest Minnesota and an ...view middle of the document...
Right before the Wall Street Crash of 1929, the company made its first expansion by acquiring the Minneapolis-based jeweler, J.B. Hudson & Son. Throughout the Great Depression, its jewelry store operated in a net loss but its department store managed to weather the economic crisis. In 1938, George Dayton died and Nelson Dayton assumed the role of president of the Dayton Company, a $14 million business. Throughout his tenure, the strict Presbyterian guidelines and conservative management style of his father were maintained.
1962–65: Founding of Target[edit source | editbeta]
Target's original bullseye logo, used from 1962 until 1968.
While working for the Dayton company, John F. Geisse developed the concept of upscale discount retailing. On May 1, 1962 the Dayton Company, using Geisse's concepts, opened its first Target discount store located at 1515 West County Road B in the Saint Paul suburb of Roseville, Minnesota. The name "Target" originated from Dayton's publicity director, Stewart K. Widdess, and was intended to prevent consumers from associating the new discount store chain with the department store. Douglas Dayton served as the first president of Target. The new subsidiary ended its first year with four units, all in Minnesota. Target Stores lost money in its initial years but reported its first gain in 1965, with sales reaching $39 million, allowing a fifth store to open in Minneapolis.
1966–74: Expansion[edit source | editbeta]
In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain as a Dayton Company subsidiary. Target Stores expanded outside of Minneapolis by opening two stores in Denver, Colorado and sales exceeded $60 million. The next year, the Dayton Corporation was established and it went public with its first offering of common stock. It opened two more Target stores in Minnesota, resulting in a total of nine units. It also acquired the San Francisco-based jeweler Shreve & Co., which it merged with previously acquired J.B. Hudson & Son to become Dayton Jewelers.
In 1968, Target changed its bullseye logo to a more modern look, and expanded into St. Louis, Missouri, with two new stores. Target's president, Douglas J. Dayton, went back to the parent Dayton Corporation and was succeeded by William A. Hodder, and senior vice president and founder John Geisse left the company. Geisse was later hired by St. Louis-based May Department Stores, where he founded the Venture Stores chain. Target Stores ended the year with 11 units and $130 million in sales. It also acquired the Los Angeles-based Pickwick Book Shops and merged it into B. Dalton Bookseller.
In 1969, it acquired the Boston-based Lechmere electronics and appliances chain that operated in New England and the Philadelphia-based jewelry chain J.E. Caldwell. It expanded Target Stores into Texas and Oklahoma with six new units and its first distribution center in Fridley, Minnesota. The Dayton Company also...