Unexpectedly Intriguing!
January 11, 2005

One of my favorite things to do is to read the Sunday paper. After I pick it up in the driveway on Sunday morning, I'm compelled to go through and read the whole thing, and I do mean the *whole* thing: articles, comics, classifieds (well, okay, maybe I just scan the classifieds) and even the advertising inserts. I really do go through all the SmartSource coupons, the Best Buy/Circuit City/etc. electronics ads, the JCPenney/Sears/department store sales circulars, and even the inserts from discounters like Wal-Mart, K-mart and Target.

So, I was surprised to find that Target had placed a special advertising insert in my Sunday Arizona Republic this past week, above and beyond their usual weekly advertising insert, this one promoting the company's Community Giving efforts.

What makes this insert unusual is the context. As an MBA student, I can appreciate that this kind of advertising is directed toward developing a positive image of the company. It's the kind of thing you see incorporated in a publicly traded company's annual report (see page 14), where the objective is to "sell" the company to its current and potential stockholders. It's the kind of thing you see when a company wants to convince a community that it's a good neighbor, usually when it plans on expanding into an established neighborhood (reference: Wal-Mart). And it's also the kind of thing you can expect to see when a company has damaged its reputation, and as a consequence, has also damaged its business as well. And so, I believe this last possibility is the reason why Target's special promotion has appeared among the advertising inserts of my Sunday paper.

There's no arguing that Target is generous to its chosen charities. Ultimately though, the company's problem is not about whether or not Target is a charitable company itself, it is about the company's decision to sever a long-term relationship with the Salvation Army. By declining to allow the charity to continue conducting fund-raising outside its stores during the holiday season, Target has, in effect, declined to allow its own customers to have the easy opportunity to contribute to the charity, and that has led to the self-inflicted damage to the company's reputation, and by extension, its business.

Will Target's effort at damage control by public relations and marketing work? I'm sure that over a long period of time that customers offended by Target's policy change will return to its stores, but only after that long time has passed. I believe that Target is missing a real opportunity to repair it's image and brand identity in the short term by not acknowledging its errors in this matter, especially its fundamental error in understanding the expectations of its customers. Until it does so, I believe Target will continue to underperform its full potential, as both a corporation and as a corporate citizen. Something to think about if you're a shareholder.

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