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Robin and Pat are planning to establish a sporting goods business - HSC - SSCE Business Studies - Question 25 - 2013 - Paper 1
Question 25
Robin and Pat are planning to establish a sporting goods business. They have decided to adopt a niche market approach to maximise profits. (a) Outline ONE method th... show full transcript
Worked Solution & Example Answer:Robin and Pat are planning to establish a sporting goods business - HSC - SSCE Business Studies - Question 25 - 2013 - Paper 1
Step 1
Outline ONE method that could be used by this business to collect relevant data about its target market.
Answer
One effective method that Robin and Pat could use to collect relevant data about their target market is through a survey. This method allows them to gather primary data directly from potential customers.
By designing a survey that includes questions about consumer preferences, buying behaviors, and attitudes towards sporting goods, they can obtain valuable insights tailored to their specific needs. Surveys can be conducted both online and in-person, making them a versatile option for reaching their target audience.
Step 2
Evaluate their decision to adopt a niche market approach.
Answer
Adopting a niche market approach can offer several advantages and disadvantages for Robin and Pat.
Advantages:
- Targeted Marketing: Focusing on a specific segment allows them to tailor their marketing efforts, which can lead to better engagement and higher conversion rates.
- Reduced Competition: By concentrating on a niche, they can avoid direct competition with larger sporting goods retailers, giving them a better chance to establish their brand.
- Customer Loyalty: Specializing in a particular market can help in building strong customer relationships and loyalty, as they cater to specific needs.
Disadvantages:
- Limited Customer Base: Targeting a niche may restrict their market size, which could lead to lower overall sales volume compared to broader market strategies.
- Market Risks: Niche markets can be vulnerable to economic fluctuations or shifts in consumer preferences. A small change in demand can significantly impact their stability.
- Resource Dependency: Relying heavily on a niche market may make it difficult to diversify, which can be a risk if the niche diminishes in popularity.
In conclusion, while adopting a niche market approach can allow Robin and Pat to maximize profits through targeted strategies, they should remain aware of the inherent risks and challenges associated with limited market segments.