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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 appropriate method that Robin and Pat could use to collect relevant data about their target market is through a survey. By conducting surveys, they can gather primary data that is tailored to their specific needs. The survey could include questions about customer preferences, attitudes toward different sporting goods, and purchasing behaviors. This data will help them understand the wants and needs of their target market.
Step 2
Evaluate their decision to adopt a niche market approach.
Answer
Adopting a niche market approach can be advantageous for Robin and Pat as it allows them to focus on a specific segment of the market, thereby reducing competition with larger retailers. This strategy enables them to establish a loyal customer base that values specialized products tailored to their interests.
However, there are also potential downsides. By focusing on a niche market, they may limit their overall customer base and could be more vulnerable to market fluctuations. If customer interests shift, their specialized offerings might become less relevant, thereby impacting sales.
In conclusion, while targeting a niche market can help Robin and Pat maximize their profits due to reduced competition and increased customer loyalty, they must continually assess market trends and customer preferences to remain relevant and successful.