Pellegrene on Target marketing

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Advertising Age West Coast Editor Alice Z. Cuneo interviewed Target Exec VP John Pellegrene for his take on key issues in retailing.

On retail marketing:

"The retail business has marketing nuances; it's not like Kellogg's Corn Flakes. Originally, the marketing piece of a retail company was held together by the families who founded them. The second generation became the `professional marketers.' There was just one hitch. Many of them were not marketers. They promoted item and price, or they would project their brand differently [in different media]. They would run a wonderful fashion ad, and then the most ugly advertising you ever saw. Open the paper and look at a two-page spread in The New York Times. Good grief."

On Target Stores' secret:

"Target maintains a level of advertising that ranges from couture in some of the finest books in the country like Vogue and Elle and some of the real avant-garde things like Wallpaper, and some things I don't even read because I'm too old. At the same time, Target never allows the circular to conflict with that too much. Everything hits a certain level; it isn't allowed to drop below that level because that erodes your brand."

On dimensional marketing:

"Dimensional marketing is marketing in 3-D, not just doing an ad on a piece of paper, but doing an ad that may have behind it a $200 million business based on the idea people put together."

On the WOW factor:

"If you see Bloomingdale's in Vogue, you expect them to be there. If you see Target in Vogue, you don't. But we're there. We make you sit up and take notice."

On Target's brand:

"It's very sophisticated. To me, The Gap is a little easier thing to manage because they're so narrow. But we have to manage everything from Swiffers to Michael Graves-designed toasters."

On Wal-Mart:

"Wal-Mart does not have marketing nuances. They have one issue. Price. It's $9.99 and that's it."

On e-commerce:

"At the first blush of e-commerce, it was techies trying to get into the commercial world. The brick-and-mortar retailers will, in five years, totally dominate the e-commerce field."

On Target's underestimated marketing weapon:

"When the people founded this corporation, they gave 5% of their pretax profit to charity. That's coming in at a $1.5 million a week in cause marketing. [Target's Take Charge of Education program] went from nothing to $30 million in two years."

On the Big Apple:

"A ton [of advertising] has to do with Broadway, New York and Manhattan, because the center of the publishing industry is in that area. We have a campaign that just deals with the sophistication of that island, even though we don't have a store on that island."

On what's next:

"Every single holiday you can find on the calendar will be supported by TV, radio, magazines, and it will have some big wow factor to it. In addition, there will be a cause-marketing campaign plugged to virtually every single one of those programs. Everything will be very intense and very integrated. In addition, we will be enhancing e-commerce and extending the credit program big time, and doubling the [customer membership in] Take Care of Education program, now at 6 million. We're going to be going for 12 million. The [advertising] budget will increase significantly."

On why Target has so many agencies:

"We have a house agency, which has got a lot of things in it, people doing point-of-sale, presentation, events, public relations, internal marketing. In addition to that, we probably have 8 or 9 major agencies around the country that feed into the house agency. In the retail business, if you don't have that-when you consider the number of commercials produced a year, the number of marketing programs produced a year, the number of print ads produced a year-you would burn people out in 30 seconds. You have to have a constant feed of original marketing, advertising . . . Wow-factor ideas to keep the company as current, as up to date and as in front of the public as you can. You've got to continually use it with an O. Henry ending. You've always got to have the shock value. You've always got to be up above everybody else.

"The administration is simply the ability to mix that talent properly and to make sure all that talent always enhances the brand. We are not Kmart. We are not Wal-Mart. We are not Sears. We are Target. We are Tar-zhay."

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