2.2 Compare the different needs of the target markets for an organisation
So who are their different target markets and what do they want?
Example exam :Retrospec case study
Information supplied in the case study:
- RetroSpec Ltd, set up by directors Jay and Ali in 2005 as a market stall near a university
- Two business strands: clothing and accessories shop, online gadget shop
- Turnover last year: £250,000, net profits: £50,000
- Initially RetroSpec specialised in clothing and accessories from the 1990s
- Most items priced under £25
- Market research last year showed that most customers were females aged16-25, including many students
- Currently occupying a rented high-street shop close to the market and university.
Since moving to the shop, Jay and Ali have seen an increase in visitors, mainly men, coming to the shop to request gadgets from the 1990s - Gameboys, old mobile phones and portable CD players etc. They decided to branch out into this niche market to sell gadgets from the 90s online. This new online strand has now been trading for 6 months but sales have been slow so far.
Jay and Ali know their existing customer base well. However, they are aware that online they have to reach a much wider range of potential customers.
Jay and Ali carried out market research among people visiting the shop to enquire about gadgets. They identified that these people:
- are willing to pay up to £200 online for items in excellent working condition.
- would like the option of paying by credit/debit card or PayPal
- don’t want to wait too long for delivery
- like to make offers and haggle over prices. From the market stall, Jay and Ali are used to customers bartering and are in support of this idea.
Some of the most sought-after items are listed below, together with the amount customers have said they are willing to pay.
Some of the most sought-after items are listed below, together with the amount customers have
said they are willing to pay.
- Gameboy original & games £30 - £50
- Retro mobile phones £25 - £40
- Space Invaders/Pacman £50 - £60
- Nintendo GameCube £100 - £120
- Calculator Watches £15 - £20
- Portable CD players £30 - £50
- Arcade machines £200+
- Large football table £150 - £200
Jay and Ali have also started to gather information about potential customers using Facebook.
Here are the results of their Facebook survey:
Here is the question which related to that information
b) Compare the different needsof the target markets for RetroSpecs’s two strands, giving as much detail as you can.
Needs of clothing and accessories target market
Target: females aged 16-25 many students.
We can see from the case study that their target market like to buy clothing from the 1990’s Evidence “Initially RetroSpec specialised in clothing and accessories from the 1990s” and the shop was a success from the profit made. These customers are looking for something different. Each item will be a one off and will be pre-owned by someone long ago. This means nobody else will have the same items. This is unlike buying clothes from a chain store like New Look or Top Shop where other people may be wearing the same.
The customers are young and lots of students who don’t have lots of money to spend so like a bargain. Evidence “Most items priced under £25” This means they probably are not wanting to spend a lot on an item just like to get something different without it being a big investment. If accessories are reasonably priced you are morelikely to buy something you like.
Needs of online gadget target market
Target: mostly males aged 26-40 buying products for themselves. Looking for retro gadgets online and willing to pay £31- £100
We know this is a specialist “niche market” so not for everyone.
I know that Jay and Ali carried out market research among people visiting the shop to enquire about gadgets. They identified the following evidence about their potential customers needs:
•willing to pay up to £200 online for items in excellent working condition.
•would like the option of paying by credit/debit card or PayPal
•don’t want to wait too long for delivery
•like to make offers and haggle over prices.
•Their needs include original game boys, retro mobile phones, Space invaders, Arcade machines for which they are willing to pay good money.
Remember you are asked to COMPARE the needs so say what is different or similar.
Summary and comparison
From the evidence in the case study I can see the needs of the clothing and accessories (C&A) target market is very different to the online gadget (OG) customers. C&A customers are younger, female and looking for a lower priced item. OG target market are mostly males who buy for themselves online. They are in an older age group so probably have jobs and more money to spend. This is reflected in the prices they are prepared to pay which go up to £200.