Target

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Title: Target

1

2
Overview of Context

3
History of Target

Unlike most other mass merchandisers, Target
has department store roots. In 1961, Daytons
department store identified a demand for a store
that sold less expensive goods in a quick,
convenient format. Target was born.
In 1952, the first Target store was opened in
Roseville, Minnesota. They were the first retail
store to offer well-known national brands at
discounted prices.
Today the are presently expanding their
corporation even further, by opening their first
Super Target store, which combined groceries and
special services with a Target Great land store.

4
Law of Demand

The law of demand states that as the price of a
good increases, the quantity demanded decreases.
Also as the prices of a good decreases, then the
quantity demanded increases.
Target has many popular competitors such as
Wal-Mart, and K-Mart. So Target must be careful
when it is setting prices, due to the tough
competition.
If Target charges a higher price for a good, then
the quantity that the consumer is willing and
able to buy decreases. Therefore Target may be
losing some of their business to other leading
competitors.
Target has also expanded its access to the
Internet. It is an even more convenient way to
grant access to their customers. The website
www.target.com has brought even more customers
into their corporation, especially by meeting
peoples needs and lowering their opportunity
cost.
As well as making their products accessible
to most people, Target also contributes over 2
million each week to the communities it serves.
Target stores are proud sponsors of the PBS Kids
Share a Story literacy campaign.

5
What is Economics??

Economics- social science that deals with the way
society chooses to allocate its resources
in order to satisfy it wants and needs. Keeping
in mind that resources are limited, as well as
wants and needs. (Scarcity of choice).
Target uses the basic assumptions of economics to
evaluate their franchise. It takes into account
the scarce resources by choosing where to build
its facilities. The time and amount managers
clerks and stockers are willing and able to work.
When determining how big and how accessible to
make a store they would use the scarcity of
choice method to provide the answer.

6
ADVERTISING

Target uses advertising as non-price competition
to let people know that they are a store that
offers low prices.
Target will also advertise their low prices to
attract attention to people. Advertising makes a
point to the customers, that they can receive the
same quality products, that are found elsewhere,
and possibly have lower prices.
Other firms competing, will be well aware of this
fact as well.

7
SCARCE RESOURCES

TARGET uses the basic assumptions of economics to
evaluate their franchise. It takes into fact the
scarce resources by choosing where to build its
facilities. The time and amount managers, clerks
and stockers are willing and able to work.
Along with the equipment needed to make the store
work, security systems, cash registers etc, It
was must also take into account the skill needed
to be in a managerial position, a sales rep,
marketing executive. It splits people into
sections that their knowledge of a particular
category is specialized.
Buy one item because it is extremely cheap and
use it for other things
Example sweat pants

8
CORPORATION

TARGET is a corporation because people own stock
in it, and have only to lose what they put into
it.
Because TARGET is a corporation with employees,
it has advantages because it can lower its
transaction cost by having material produced with
in the company rather than spending time to find
a reliable source.

9
BUDGET CONSTRAINT

TARGET faces budget constraints like anyone else.
The managers in charge must face the constraint
of how much of a good or service they can afford
to order or get while taking into account they
have to pay their workers. They have to pay to
get things refilled such as (gumball machines).
They have to sacrifice a large amount of money
for bills they have to pay.
They must face this constraint and use all
combinations before deciding what and when to
make a transaction.

10
Opportunity Cost

What is given up when taking an action or making
a choice. The next best alternative. All
production carries an opportunity cost to
produce more of one good, society must shift its
resources away from something else.

11
Targets Opportunity Cost

Target faces opportunity costs everyday. They
must decide what they are willing to sell and
advertise the most of.
By placing emphasis on selling one good more
predominantly, it may take away sales from other
goods.
When Target decides that one good will sell more
than they will produce more of that good. By
producing more of one particular good they are
limited their resources to that specific good,
and giving up producing something else.
By doing that Target will increase the
opportunity of producing more of that particular
good.

12
Income Effect