Throughout the major Canadian cities we find many of the large category killer stores. These stores expanded across Canada in the 1980’s and 90’s. These category killing stores specialize in one particular category, but offer a moderately deep assortment of brands, styles, and prices in all of the merchandise classes that make up the category. One of these stores in present in Lethbridge. This store is Toys R Us. This store can satisfy most of the needs of the target market. Most of the jobs that a small toy business would have to look after are performed through a head or regional office.
This gives Toys R Us a distinct competitive advantage over the competition from the small toy retails in Lethbridge. Ordering, pricing, payroll, storage, advertising, and many other day to day activities are performed by few for very many. Toys R Us is a large category killing store that is located at 225 1st Avenue South, right next door to the Park Place Mall in Lethbridge, Alberta. It offers a wide range of toys, bikes, computer games, baby needs, and games to children and adults throughout Southern Alberta.
Toys R Us has been open in Lethbridge for almost six years. Market Selection Strategy The market selection strategy for a category killer such as Toys R Us is fairly simple. A strategy often determines the target market, and the different market segments that the store is looking toward for the majority of its business. Toys R Us is a store which is in a mature market. The majority of the growth that has happened in this market occurred in the 1960’s, when the majority of consumers enjoyed a higher disposable income and therefore large chain stores began to appear.
The market is still strong and stable and Toys R Us can expect increases to their sales every year as there are no plans for another major toy competitor in the area. The toy market is a very competitive business. Stores such as Wal-Mart and Zellers boast large toy departments and these are the biggest competition for Toys R Us. The store has some loyal customers. However, most of the customers in the toy market are very price sensitive and will shop at the store with the lowest prices. In order to increase their sales and market share, Toys R Us must look for ways to keep their customers loyal to the store.
The geographic location of the store helps to attract more customers off the highway and those potential shoppers from out of town. As Toys R Us sits next to Highway 3, it makes it easier for out of town customers to get to the store. Toys R Us is able to target consumers anywhere from the Alberta/Saskatchewan border to the east to Fernie, Cranbrook and Creston to the west. They also have the ability and size to attract all customers to the south of Lethbridge, including those who live in northern Montana. Customers to the north have the option of shopping at the larger Calgary store or Lethbridge.
This gives Toys R Us a very large customer base. The target market refers to the primary market that the store is trying to attract. In the case of Toys R Us, their target market is individuals with children, which range from 25-45 years of age. The target audience is also the adults but the advertising can often hit the children, ultimately who will enjoy the products the most. Toys R Us finds the majority of their customers are the parents, but for some of their video games, the older teenager often has a disposable income high enough to spend on the featured games in stock.
By understanding that the majority of buyers are the parents, Toys R Us has also stocked itself in the off-seasons with product parents may be interested in buying. These products include, learning games, adult games such as Trivial Pursuit and adult bicycles. As the population of Lethbridge expands, the sales of Toys R Us will increase. Market Research Most market research for Toys R Us is conducted at the regional offices or head office. The information gathered from here is passed on to the 65 individual stores across Canada.
Some primary research is done on the store level such as checking competitors prices and wages. Other primary research done at the store level is the customer satisfaction surveys that are conducted over the year. Secondary research is used at head office and regional offices to conduct more through market research for the stores. Very little money is budgeted for the stores to conduct market research. Often at the smaller stores such as Lethbridge, it is just another responsibility of the store director.