Question

Why is it important to "know your customer"? Describe a national company that has only one or two target markets and why that is not a good strategy.

Answer 1

A company needs to know their customers and understand what the customers expect from this company and it's products in order to come up with products that matches their requirements. This makes it easy for the company to create a mark for itself among the consumers and hence makes it successful . Hence it is very important to know our customers to serve them better.

Let us consider a car manufacturer that only targets high class people and industries for their cars. They sell cars only to those people who have high income levels and the cars would also be sophisticated and high in costs. It is not a good strategy because only few people would be present who are extremely rich . More customers comes from middle class segment and hence the manufacturer will not be successful until they come up with cars for middle class in an affordable way .