Boots and Bryant

Helena Miech

Michael O’Halloran

Aaron Small

Daniel Cappiello

Nicholas Calabro

Owen O’Brien

Abstract

Target was founded in 1962, as a high-quality discount retailer. They specialize in

selling trendy merchandise in clean guest-friendly environments. They have more than 1,700

stores and emphasize giving guests innovative products and great design. One may think that

there is no area in which Target is behind the competition, but there is. Specifically, Target is

not incurring as much revenue in the pet food and supplies segment as preferred. For this part of

department, Target relies on mothers with children who are shopping for the family. It is known

that 70% of Target households indeed own pets. However, the sales in the pet department do not

indicate that these households are purchasing pet supplies and pet food at Target. Rather, it is

inferred that current Target guests are purchasing pet supplies elsewhere, thus resulting in

unfavorable revenues in the pet department at Target. This is a threat which Target hopes to

mitigate.

Strategy

The method for generating an increase in revenue in the pet department from current

Target guests will be through Target’s private label brand of dog food, Boots and Barkley. Our

mission is to help Target build awareness and desire for these products, and therefore an increase

in revenue. The following is a thorough analysis of how the use of Boots and Barkley will

achieve the desired results.

Direct Advertising

Currently Target does not have a loyalty program but instead mobile application called

Cartwheel that is attached to one’s social media and email. This application allows each owner

access to purchase Target products with a discount on certain advertisements. If an identification

number is utilized with this application it would open up vast opportunities for target to reach

consumers that otherwise would not have been aware of its product. This idea’s foundation is as

follows; if a Target Cartwheel member purchases dog food and/or pet supplies on a regular basis,

Target can track their purchasing habits to focus advertisements, such as Boots and Barkley, to

pop up when they use the application. With this new form of direct advertising for members it

will be highly likely that the overall customer base will increase its purchases on Boots and

Barkley vicariously generate brand awareness. This ability to track consumer purchase behavior

will allow for direct advertising as well through e-mail, should the Cartwheel user be willing to

having advertisements sent to them (choice is included in application process).

Point-of-Sale Advertising

This strategy will also focus on a point-of sale technique in each Target that will include

redesigning all floor design options in the dry and canned pet food aisle. The point of rearranging

Target’s pet food shelf space will be to place all dry and canned Boots and Barkley product in

one aisle and help draw the customers eyes towards the product. All product that were in Boots

and Barkley's new location will be placed in the old shelf space that Targets dry and canned food

used to occupy. There will also be a small in-store advertisement placed in the newly designed

aisle to further catch the customers’ attention as they desire.

The true beauty of this strategy is in the combination of all the resulting outcomes of

point-of-sale merchandising and applying these identification numbers. Once consumer can be

moderately identified they are able to receive incentive based promotions and these same

customers will be able to easily find the product in the newly designed aisle. These forms of

direct advertising will also encourage customers who try the product to spread brand awareness

through word-of-mouth marketing. This increase in the customer base will give Target new

customers attract and advertise too as well as the old. Through the survey conducted for this

project, it is has been able to determine that the majority of guests, 77% (Appendix A), are

willing to switch dog food brands. With this knowledge Target would be able to strongly

promote its private brand and expect to see the sales increase for their privately owned brand.

In- Store Presentation/Merchandising

Wal-Mart currently has the number one selling brand of dog food in the United States in

their owned brand of Ol’ Roy and their premium brand Pure Balance. Wal-Mart is able to

accomplish this with no marketing budget, not television ads, and no circulars for the owned

brand. Instead, all of the marketing needed takes place right at the shelf with various point-of-

sale and point-of-purchase materials. (Roberts 18). The strategy for Boots and Barkley will

follow a similar path as the owned brand for Wal-Mart. With thousands of locations across the

United States, the scale of a marketing strategy through the shelves will save Target from the

costly burden of advertising through television ads and other costly marketing outlets. Instead,

Target will focus on point-of sale and point-of-purchase materials in strategic locations of each

pet department in Target stores.

This strategy for the Boots and Barkley brand will merchandise and promote in such a

way to receive greater brand awareness. The strategic placement of the Boots and Barkley brand

towards the end of the aisle, at eye level, will raise awareness with guests coming through the

door. Several plan-o-grams attached exemplify how to merchandise the pet food aisle in order to

gain greater awareness for the Boots and Barkley brand. The Boots and Barkley brand will be

located in one shelf space rather than scattered throughout the remainder of dog food aisles. This

section will comprise of a four foot portion of an eight foot shelf space (Appendix B).

Along with the new plan-o-gram, the strategy will introduce new point-of-sale materials

to help the promotion of the Boots and Barkley brand as well as gain greater awareness for the

brand. The point-of-sale materials will command attention to the Boots and Barkley brand

specifically, as opposed to pet food in general, or other brands likes Pedigree or Purina. Such

materials include shippers, channel strips, shelf wobblers, and vertical signs (Appendix C).

Examples of these designs can be seen in the attached appendix. The price of the point-of-sale

materials will be roughly $1,000 per store depending on customization, materials, and coloring.

Finally, the small pet accessories and food is currently located at the end of the cat food

and litter aisle. The current layout of the small pet accessories and food will fit on an end cap for

one of the pet department aisles. The placement of this segment on an end cap in order to raise

awareness to consumers that Target does in fact supply for small pet owners is recommended.

Consumers may not be aware that Target has supplies for small pets since it is currently located

at the end of the cat food and litter aisle. By placing these items on an end cap for a testing

period, we can benchmark whether the placement raises awareness for current customers and

increases sales for this segment.

Promotion

Target will now focus on the added features of Cartwheel to be able to use consumer

purchase behavior to form direct advertising both in the application and to consumers email.

These advertisements create an incentive to purchase the Target store brand Boots and Barkley..

On top of advocating for the product through Cartwheel, Target is to also focus on the pet

supplies through its social media page in order to help increase brand awareness for the product.

According to the previously conducted survey, only seven percent of customers do their pet food

shopping at Target when compared against seven other options. To address this issue Target

should emphasize one of its’ core competencies, differentiation. When Target shows its

customers that it has not just an average but a large and diverse selection of pet supplies, they

will respond by recognizing the store as more of a ‘one-stop-shop’ rather than just a superstore.

The survey results also provided information showing that 77 percent of the respondents were

willing to switch pet foods (Appendix A). Due to the low switching costs to customers portrayed

in these results, Target will advertise its pet section it will be able to focus on its’ personal brand,

Boots and Barkley, next to highly recognized brand names without having to worry about a large

drop in product sales. The shift in product sales to the Target owned brand of Boots and Barkley

can be seen in the cost/benefit analysis (Appendix D).

Competitor Analysis

Current industry trends show that Target’s biggest competitors in the sale of pet supplies

come from big-box specialty retailers such as PetCo and PetSmart, other big-box retailers, and e-

commerce. For the big-box specialty stores, differentiation is achieved primarily through the

“benefits from strong buyer power and shared operational resources through economies of scale”

(Carter, Brittany). These advantages help stores like Petco and Petsmart differentiate from

competitors through the sale of premium and often exclusive products, a broad selection of

products and product lines, and an array of pet services (Carter, Brittany). The ability for these

stores to successfully differentiate based on high-end product offerings and wide product

selections is due primarily to the high buyer power from these big-box niche retailers. Ibisworld

reports that “manufacturers typically place restrictions on ultra-premium pet products, selling

them only to specialty pet stores” (Carter, Brittany). The result of this exclusivity is “a degree of

guaranteed sales for [niche] operators” because other stores simply cannot offer these brands and

are therefore unable to compete directly. The other differentiated source of revenue for specialty

retailers is the increased availability of pet services. These operators have been “actively adding

pet services to capture more of the consumer dollar” (Carter, Brittany).

As niche operators whose retail is focused solely on the pet market, the ability to add pet-

related services such as pet grooming and/or boarding is intended to improve sales and thus

profit margins. This is because other retail outlets who do offer a selection of pet supplies do not

also offer pet services, differentiating the big-box specialty retailers from other general big-box

retailers. The combination of the advantages of exclusive and broad product offerings and

emphasis on pet services has ultimately allowed these specialty operators to attract pet owners

with higher discretionary income who wish to pamper their pets (Carter, Brittany).

For e-commerce outlets like Amazon, profit margins are maintained because they do not

have the expenditures (such as costly rent for high-traffic retail space) associated with operating

a store-front (Carter, Brittany). E-commerce sites pass these savings onto consumers with lower

prices. Big-box retailers such as Walmart and Costco also compete on price. These mass

merchandisers have extremely high buyer power and economies of scale, resulting in an ability

to buy in bulk, thus reducing costs and passing savings to customers (Carter, Brittany).

Ibisworld reports that “such cost savings have lured in price-conscious consumers, allowing

[these] larger stores to capture a higher share of the market” (Carter, Brittany). Also, consumers

who are time-poor “have turned to these types of stores to streamline and simplify errands”

(Carter, Brittany). Both e-commerce and mass merchandisers are low-cost strategists.

As industry data illustrates, the prevalent competitors in the sale of pet supplies have

distinct strategies for incurring revenues in its pet department. Target’s general merchandising

strategy relies on fulfilling its “Expect More. Pay Less” brand promise. For Boots and Barkley,

fulfilling this brand promise will also be achieved. Therefore, Boots and Barkley can be expected

to fulfill Target’s core sources of competitive advantage: differentiation, value, reliability, and

frequency.

Differentiation

Consumer reports indicate that Target’s private label brand is scored at a level

comparable to brand names such as Pedigree. However, most consumers are unaware that Boots

& Barkley is indeed the Target brand. If this lack of knowledge was mitigated through the

promotional and merchandising strategies recommended, it is believed that current loyal Target

guests will be more likely to consider switching to Boots & Barkley. Boots and Barkley will

thus appeal to Target’s “Expect More. Pay Less” brand promise. Because Boots and Barkley is a

Target brand, it achieves exclusivity and will not be available any place but Target, challenging

and imitating the advantage of big-box specialty retailers in the sale of exclusive items. Boots &

Barkley will also challenge the low pricing strategies of e-commerce sites and mass

merchandisers because as a private label brand, it will be less expensive than high-end brands,

but will offer more value than other private label brands because of the value of Target’s brand.

The perception of Target as a superior mass merchandiser (relative to Walmart or K-Mart) will

transcend onto the products that Target promotes. Therefore, this benefit is believed to be

applicable to a private label of dog food once awareness that it is indeed the. Target brand is

achieved. Thus, successful investment into the Target brand of pet supplies will differentiate its

pet section from that of other pet stores, supermarkets, and mass merchandisers. Achieving

awareness of this value among current Target guests will be achievable because as loyal Target

guests, they already understand the value that Target provides.

Value

Since the strategy primarily focuses on the Target owned brand of Boots and Barkley, the

effects will be seen directly to the bottom line. Target has an opportunity to capture more of the

pet food and accessories market through their owned brand. The study conducted shows that

over 77% of guests are willing to purchase a store brand pet food such as Boots and Barkley

(Appendix A). The study looked at four specific factors that guests use to purchase pet food

including Price, Brand, Nutritional Value, and Professional (i.e. Veterinarian) Recommendation.

The consumers ranked Nutritional Value as most important, followed by Price, Brand, and

finally Professional Recommendation. The current re-branding strategy Target has with Boots

and Barkley, in unison with a strategy to promote more consumers to purchase the Boots and

Barkley brand, will cause the retention of more current consumers in the pet department as well

as bring new consumers to Target who are loyal to the Boots and Barkley brand. As stated

before, the potential increase in Boots and Barkley sales will be seen directly at the bottom line

for Target. The current goal for this strategy is to switch 5% of current consumers over the

course of the next year from purchasing other brands of dog food to purchasing the Boots and

Barkley brand. By having 5% of current consumers switch to the Boots and Barkley brand, the

revenues of from the Target owned brand will increase by $14 million (Appendix D).

The study also concluded that Purina is the most popular brand of pet food purchased at 16%,

followed by Meow Mix (8.8%), Blue Buffalo (7%), Alpo, Iams, and Fancy Feast (6% each),

Pedigree (4.5%), and Kibbles N’ Bits (1.5%) (Appendix A). Since Nutritional Value is ranked

the most important quality by consumers when purchasing pet food, it is important to rank the

several brands of dog food based on nutritional value. The Dog Food Advisor is an independent

website that ranks dog foods nutritional value based on ingredients, articles, reports, and public

records on dog food. The current leader is Blue Buffalo with their dog foods ranking between

2.5-5 stars, followed by Iams with a 2-3 star ranking. Iams is followed by Purina with 1-2 stars.

Finally, Alpo, Pedigree, Kibbles N’ Bits, and Boots and Barkley are ranked at 1 star. With price

being the second most important factor for consumers when purchasing pet food, we see an

opportunity for Target. Boots and Barkley is the low cost provider of dog food, and is on par

with the nutritional value of the other major competitors in the market. The strategy will bring

value to Target by retaining the consumers they already have and converting them to the Boots

and Barkley brand of dog food which can only be purchased at Target locations or online

through Target.com

Reliability

What is being addressed here is can Target provide what the guests looking for pet food

want, where it is consistently available and easy to find? Target’s merchandising strategy of

“Expect More, Pay Less” at first glance just measures the cost of purchasing items at reduced

rate. To further enhance this strategy, Target can have their items, dog food in this case, visibly

on display with signs that clearly advertise what is being sold, so guests can have an easier time

finding the items they are looking for. Orders must be consistently in place to have an updated

section so guests can constantly find what they need. For special deals, the items should be

placed on the end caps so those items can be the first that guests can see. In the survey price,

brand, nutritional value and professional recommendation were asked of importance. Despite

their rank if they are not easy to locate, the value of these attributes drop significantly. By

having increased reliability, the other three areas of differentiation, value and frequency will all

increase, as well. A company may have a strong differentiation strategy but if the strategy is

difficult to see, it goes to waste. If the items are easier to find and take less time being searched

for its value will increase due to having strong exposure and being a well-sought product. With a

solid differentiation strategy that is clear to view and understand as well as having the value of

products rising more guests will likely come back to Target and shop there, rather than a

competitors’ store. Ultimately, this will heavily increase the frequency and make Target’s pet

isle high above its competitors.

Frequency

With a high level of interest in private label pet foods, Target will have the ability to

appeal to the guest’s lifestyle. However, Target can not be all things to all people. Therefore, the

strategy will emphasize the quality standard that is most often at number one. In the case of

Target, this was the “nutritional value.” To make the shopping experience more convenient, the

strategy includes new plan-o-grams for Boots and Barkley (Appendix D). Ultimately, the Target

guests will remember the convenience of the Boots and Barkley brand, and come back more

often. Not only that, but there will also be a promotion, wherein Target will advertise

specifically to customers through their Cartwheel App. This gives Target the means to track

guests’ purchases, and then understand the products for which the customer is looking. Simply

put, for every ten purchases that somebody makes of Boots and Barkley, the customer will get a

dollar off their next purchase. That in turn will give customers a reason to come back.

Cost-Benefit Analysis

Based on the survey results where 77% of people are willing to switch to a store brand of

pet food if it met their quality standards (Appendix A), there is a $280 million potential market

for the Target owned brand of dog food, Boots and Barkley. This strategy will use 5% as a

reasonable estimate for the number of Target guests that will switch to the store brand of Boots

and Barkley. The 5% switch to Boots and Barkley will cause an increase of $14 million in

revenue under Target owned brand name.

The costs for the in-store merchandising plan will be $1,000 per store for point-of-sale

and point-of-purchase materials. This $1,000 includes two vertical blade signs, shipper displays

for canned dog food and small bags of dog food. The goal of the strategy is to implement the

merchandising plan into all United States Target locations. At a cost of $1,000 per store, this will

yield a total cost of $1,793,000 to implement in all of the locations. In order to cover this cost,

revenue of $1,992,222.22 must be generated. This strategy will increase revenues of Boots and

Barkley by $14 million, and the incremental sales from the brand recognition will cover this

initial investment in the first year (Appendix D).

Works Cited

Carter, Brittany. (2015 March). Pet Stores in the US. IBISWorld US. Retrieved from

http://0-clients1.ibisworld.com.helin.uri.edu/reports/us/industry/default.aspx?entid=1103

Roberts, Bryan, and Natalie Berg. Walmart: Key Insights and Practical Lessons from the

World’s Largest Retailer. London: Kogan Page. 2012. Print.

Appendix A:

Appendix B:

Current pet

food plan-o-

grams

Revised Plan-o-gram for eight foot section

Appendix C:

Appendix D: