Target Corporation Case

Overview/Benefits
CVS Health’s buyout of Target’s pharmacies and health clinics, was smart and another example of their aggressive marketing strategy. This buyout has strengthened CVS’s position as the largest dispensary of prescription medications and healthcare clinics in the United States. With the buyout, CVS gains 1,600 established pharmacies and 80 clinics in 47 states, thus allowing them to expand in geographic areas where their presence is currently weak.
As part of the deal, the pharmacies and clinics will be re-branded under the CVS brand and brand mark, helping to further CVS’s already strong brand awareness and recognition. In addition, CVS will enter new Target stores, including Target’s new store format for urban areas. The …show more content…

First, they need to review their strategic plan. If they didn’t complete a situation analysis before deciding on the buyout, they should now. Special attention should be placed on environmental scanning as they will be entering new markets, so it is important to understand their target markets. Second, they need to evaluate their mission statement, vision, and value proposition to assess whether they are accurate and reflect who the company is. Third, they need to re-evaluate an existing business-unit strategy or develop a new one if the situation warrants. Fourth, goals and objectives should be established. An example of an objective would be to decrease costs by 15% at the recently acquired target pharmacy locations within 1 year. Fifth, a functional strategy needs to be developed that is in line with the vision, objectives, and mission of CVS. Second to last, is they need to implement the functional strategy. Lastly, they need to evaluate the process to make sure the strategy is successful.
With the strategic plan in place, marketers can then focus on creating a marketing plan. The marketing plan should consist of an Executive Summary, Situation Analysis, SWOT for each product line, Marketing Goals and Objectives, marketing Strategy, Marketing Implementation and Evaluation and Control. There are many parallels in how the strategic plan and the marketing plan are …show more content…

CVS has strong buying power and should be able to secure discounts from purchasing in bulk. The costs for CVS should be less than Target’s costs, which in theory, would allow them to drop prices significantly. However, CVS needs to be careful that they don’t lower the cost beyond perceived value to avoid a costly price war which will just eat away at their profits. With that said, some cost savings should be passed onto the consumer, to attempt to gain their loyalty and start the relationship building.
CVS presumably already has a well-developed distribution channel and supply chain. Expansion into new markets may require additional resources such as outsourcing or additional distribution centers, geographically located closer to the stores, specifically the Pacific Northwest. Whatever method is the best fit for CVS.
The last part of the marketing program, promotion, should be part of a bigger program, Integrated Marketing Communications (IMC). An IMC is necessary because of the scale of CVS and the importance of having an integrated, consistent message. The IMC should consist of advertising, public relations, and sales promotion. The unique situation of being physically located within Target, can allow for some co-branding opportunities that may be capitalized