TARGET JOINS THE LOW-PRICE WAR

Takes on Rival Kmart in New Spots

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SAN FRANCISCO (AdAge.com) -- Enough with cheap chic. Target Corp. this week entered the low-price war Kmart Corp. started last year with its Bluelights Always campaign.

Target, the nation's No. 3 discount chain, started the new year with a series of commercials pointing out its new low-price message. The new spots contrast with its previous branding spots, from those featuring pop art executions of the retailer's mascot dog in 1950's settings to its recent Gap-like holiday spots.

In one new spot, for example, a young musician prepares his living room for a blast of guitar music by lining the walls with toilet paper. In another, a ballet troop uses its toes to clean the floor with wipes.

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Kmart, No. 2 in the nation, last year cast the opening salvo in a price war among discounters. The strategy was quickly met, and beat, by its biggest competitor, Wal-Mart Stores.

Kmart also launched a campaign using animated "blue lights" dancing around its stores lowering "everyday prices."

Those spots, from agencies Interpublic Group of Cos.-backed Don Coleman Advertising, Southfield, Mich., and Omnicom Group's TBWA/Chiat/Day, New York, mimicked Wal-Mart's long-running smiley face campaign.

Wal-Mart's agency for that campaign is Bernstein-Rein Advertising, Kansas City, Mo.

Target, which producesg its circulars in-house, works with a number of agencies for its broadcast and print campaigns.

Wall Street analysts, meanwhile, concerned about Kmart's long-term viability, have begun to note the price war strategy may not be working.

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