In its ongoing effort to distinguish itself from its main competitor Walmart, Target is reinventing its product segmentation, targeting plan, and promotional schedule. The result for some well-known partners of the retail chain is the threat of a lot less support. By pursuing “demanding enthusiasts” as a primary market, Target seeks to appeal to these young, multicultural, city dwellers with more organic and healthy options, as well as smaller package sizes. As a result, some big consumer goods companies, such as Kellogg, Campbell Soup, and General Mills, can look forward to fewer promotional displays featuring multipacks of their cereal or condensed soup products. The moves come in tandem with Target’s new three-tier, in-store segmentation of products as signature (the categories and products for which it is known), outperform (midrange items), and perform (basic goods, including most consumer packaged items). In addition, Target plans to expand its private-label options, suggesting that soon, there will be little room left on the shelves for some of its longest running supply chain partners.
Source: Paul Ziobro, The Wall Street Journal, May 18, 2015