Project

Target Market Project MG-103

Target Market Project MG-103

Montgomery College

6/9/2012

Montgomery College

6/9/2012

Wade, Moulaye

Prof. Frasier

Wade, Moulaye

Prof. Frasier

Moulaye Wade

MG-103

Prof. Frasier

Target Market Project

Determining your target market takes research to identify who is likely to want your products or services enough to pay money for them. Your target market, however, is also a target for your competitors. This fact gives both suppliers and customers an advantage, and a competitive analysis of your target market needs to take account of this. Michael Porter of Harvard Business School came up with five factors, called the "five forces model," which helps business owners to understand their target market's characteristics.

If the selection of your target market is accurate, you will be able to see returns in a short time because your products or services will sell well. As soon as the market starts to buy your offering, however, you risk a competitor entering the same marketplace to try to obtain some of the action. This is the risk of entry by competitors. You create or succeed in a particular market because of your hard work, only to have someone else come along and take some of the business away from you.

The intensity of the rivalry between competitors can determine the future viability of your target market. If competitors are few and their products are neither identical nor substitutes for one another, rivalry is likely to be less intense and the industry will be more disciplined. All the companies supplying the same target market will be able to conduct business and make a profit. If rivalry is more intense, however, it can lower profitability for all competitors to the point that the companies could fail.

The existence of competition in a target market creates buyer-bargaining power. Buyers have the most power when the market consists of mostly small competitors, the buyers purchase in large quantities, and...