And now a word about pricing

A victim of its own success when it came to the “expect more” half of its brand promise, Target said it is encouraged by the progress made so far to alter consumers’ perceptions of its pricing. Company executives offered the familiar assertion during the recent analysts’ meeting that Target has always delivered value by offering prices competitive to those at Walmart even if it wasn’t always given credit for doing so by shoppers.

“We’ve been intently focused on using all of our marketing and merchandise tools to ensure that our guests’ price perception matches reality, without compromising on the high quality design and differentiated experience that our guest know and love,” said merchandising EVP Kathee Tesija. “The fact is that Target’s prices are at parity with Walmart’s prices on like items in local markets just as they have been for well over a decade.”

Last summer, Target introduced its “low-price promise” which is essentially a mirror image of Walmart’s “unbeatable” promise with both companies pledging to honor competitors’ prices for like items in local print ads. The strategy has helped blunt the impact of Walmart’s pricing perception among key customer segments inclined to defect due to the allure of lower prices elsewhere.

Target chief marketing officer Michael Francis also offered a few thoughts about pricing, noting that Target conducted extensive research prior to implementing its low-price promise.

“What we learn from our research is that if all mom cares about is price, she’ll do most of her shopping at our largest competitor. Fortunately, million of moms aren’t that single minded in their decision making,” Francis said.