Target Corporation Rewards Program June 2010 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

That was in May 2010, and the results were in. For Doug Scovanner, Financial Officer Target, was good news, and there was bad news. Recent testing of the new REDcard Rewards Program in Kansas City, Missouri, and San Antonio, Texas, has given mixed results. In San Antonio, a new rewards program offered customers a discount of 3% on targeted purchase using REDcard, but she did not give a significant increase in sales in this market. On the other hand, the court in Kansas City, with a 5% discount on the purchase of Target REDcard, led to a significant increase in sales. In fact, if the results are applicable to the rest of the chain, the program will add 1% in comparable store sales in the fourth quarter of 2010 and provide a further boost in 2011. There were risks associated with the decision, without additional sales, 5% discount will hurt the bottom line of the company. The choice in favor of testing raises its own set of questions: Will the company find out more? What about the opportunity cost of waiting to deploy a national program? Scovanner then had to decide if the program should be in place during the fall and holiday seasons. "Hide
by Robert M. Conroy Source: Darden School of Business 14 pages. Publication Date: November 15, 2011. Prod. #: UV5629-PDF-ENG