Question

Explain the criteria used in selecting a target market

BUS220 Retail Management, thank you!

Answer 1

Targeting refers to choosing the correct market as accordance to the needs and the operations of the company where your organisation could effectively and efficiently work and satisfy the consumers of the market selected. Thus, the 5 criteria used by every organisation to select the most accurate target market are:

1. Market Size: In this criteria, the size of the market is being considered. Is the size too big, or too small that it won't even generate feasible revenues or profits. The size of the market should be accurate and worth the organisation for.

2. Expected Growth: Even the market is small, the organisation should be able to have the effective forecast revealing the expected future growth in the market so as they could invest and make the operation worth the company's time and cost.

3. Competitive Position: The market we have selected, how much competition is already exisiting in the market? Is the competition high or is rare and is not explored yet. This is to be understand that the less competition a market would have, more attractive it would be for the organisation to pursue.

4. Cost: Cost refers to all the expenses that the organisation has to go through to capture the market segment the have selected. Thus, all the analysis that whether the market is feasible and under the budget of our organisation is analysed.

5. Compatibility: At last, the market and the consumers: their needs, wants and demands would be as according to the objectives and the goals of our organisation. If the goal of our company is maximum sales but the consumer in the market demands luxury goods, it is not compatible.