Target Corporation is performing spectacularly well. Recent reports have indicated spectacular figures and satisfying gross profits. It reported sales of $39.9 billion for the most recent fiscal year, mainly from its 1,100 Target stores, pushing it ahead of Kmart to make Target the nation's second biggest discounter ("Target"). Analysts are impressed with its earnings, which went up 36 percent, and up to $345 million, in the most recent quarter as revenue increased 15 percent, to $9.59 billion. Target's share price rose 27 percent last year, although it is off around 6 percent this year. By comparison, Wal-Mart's sales in the first quarter rose 14.4 percent, to $55 billion. Its net income in that period jumped 19.7 percent, to $1.7 billion ("Walmart's Financial Center").
Target has earned itself an image with arty distinctive and crafty ads. It is considered that the Target chain is by far the best-performing unit of the parent corporation.
In the first quarter, Target stores provided 89 percent of the company's pretax profit, up from 82 percent last year. In 2004, 92 percent of the corporation's capital spending, or $2.9 billion, went to the Target chain. Target executives like to point out that the chain promotes contemporary fashion while it keeps prices low, while Wal-Mart is known for low prices, and low prices only ("Target Stores").
Target's advertising budget is rising rapidly. In 2003, it spent $824 million on advertising, up just 4 percent, or $33 million, from the previous year. But last year, that budget was $924 million which was a 12 percent jump. Marketing is considered essential to help build Target's persona. The believe in what is called the ''the wow'' for its customers ("Target Stores").
Such marketing, though, is not something that Wal-Mart makes a priority. One way that Target is trying to offset...