Introduction
As companies struggle to maintain a competitive edge in the market, they are often faced with challenges in making major decisions that can help them remain profitable and sustainable in the industry. One major decision that companies have to make is concerned with the appropriate target market. Choosing a target market can be instrumental in enhancing the performance of the company ( Peppers & Rogers, 2016) . Big D is faced with a challenge of choosing the niche market to serve. Mr. Robbins and his partner are considering whether to cater for small customers, large customers or both in order for the business to become profitable and competitive in the market. The report provides an insight of the challenge faced by the business regarding the choice of the appropriate market segment to serve. It analyzes the case of Big D company in order to come with an appropriate solution regarding the niche market they should target to become profitable. Specifically, it informs the investors on the decision of whether they should chase small customers and focus on customers with large orders.
Background
Big D printing company was started by Mr. Robins and his partner after investing $ 225,000 in the business. The two partners entered into a partnership agreement where Mr. Robbins as responsible for customer service while the partner was a salesman. As the business started to grow, Mr. Robin was only interested in large customers with big orders and this made him turn away small customers. Within the first year of trade, the company realized some revenues but made a small loss. The two entrepreneurs differ in their business strategies as Mr. Robbin wanted the business to primarily focus on customers with large orders while the partner wanted the business to focus on both the large and small customers. The conflict in the appropriate business strategies can be seen as the root cause of the loss that they started to experience at the beginning of their business. Eventually, the business decided to integrate both small and large customers as well as develop appropriate pricing strategies that cater to both their customers' niche. As demonstrated in the case, Big D decided to make its prices open by placing and indicated on their website. This strategy was aimed at making them differentiated from the competitors. However, many of its rival firms were against the idea of making their prices open and public.
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Solutions
The business can take various strategies to help it overcome the problem that it faces. There are three main options that the business can take to solve the issue and include focusing on the large market segment, focusing on the small market segments and focusing on both large and small market segments. The three options are associated with different benefits and limitations that can either make them ideal for the profitability of the company or not.
The first option is where the company can consider pursuing the customers who purchase a large number of goods and service. It is noted that the customers who purchase large volumes of products can make the company profitable since they ensure that there is a high amount of revenues due the large sales quantities. As a result, the company is likely to generate high revenue when it deals with large volume customers and this is likely to improve its profitability. The limitation of the option to pursue large customers is based on the fact that the company can experience losses if the demand for the goods by the large customers declines. In essence, the large customers normally purchase goods at a specific period and thus cannot be guaranteed as daily customers. As a result, the company can run into cash shortages problems when there is a decline in the amount of cash flow.
The second option is where the company decides to deal with small size customers. The strategy can ensure that the company focuses on the customers who purchase small orders while ignoring the large customers with bulk orders. The strategy can be appropriate since it can increase the cash flow in the organization. Small customers often purchase goods on a daily basis and this can help the company to have adequate cash to run the daily operations thus strengthen its financial flows ( Roh et al., 2014) . The major limitation is that the small customers are associated with low revenues and often aid the short-term investment objectives. Due to this, it can hinder the future and long-term growth of the company in the market.
The third option that seems appropriate for the company is to target both large and small customers with its marketing strategies. Accordingly, the intense level of competition in the business environment makes it appropriate for companies to not only diversify their product portfolio but also their market segments. The Big D is in the printing industry and deals with a single product. In order for it to increase its performance, it should consider assessing the various markets such as small and large customers. The important decision regarding the choice of customers to the target requires careful analysis of the specific needs of the company ( Roh et al., 2014) . As in this case, Big D requires both the small and large customers to improve its profitability. Both the targeted customers are important to the growth of customer base and revenues.
One of the experts questioned the Big D niche focus by indicating that it can result in inefficiency. However, it is evident that the focus on the two niche market has proved profitable for the company. In fact, the two niche market enables the company to generate constant and regular revenues throughout the trading period. The niche market complements each other and this means that when the demand of the large customers is low, small customers will often provide the company with the required revenue and cash. On the other hand, when the niche market for small customer is low, large customers will support the operation of the business. Essentially, the focus on the two market niche protects the company from certain risks and ensures that the waste associated with underproduction is reduced as the level of demand will remain stable at different times of the year ( Peppers & Rogers, 2016) .
The other comment is about the idea of the company to post prices on the Big D websites. Although posting prices on the websites can be a source of prices, it is seen as a differentiation strategy of the company. Compared to pricing strategy, differentiation is known to play a more critical role towards enhancing the competitiveness of the company. As a result, its contribution towards creating customer loyalty overweighs the price wars that can be initiated by the competitors.
The other comment was about the role of small customers towards giving repeat business and increasing the size of the orders. It was established that small customers appear profitable since they often purchase the products and ensures that the company keeps receiving orders. It was also noted that the small customers increase their orders with time as well as refer other customers to purchase the products of the company.
Results
The best option selected by the company is to target both the market niche for the large and small customers. The target of the two niche market can help the company spread its risks in the market ( Peppers & Rogers, 2016) . Furthermore, the two market niche can help Big D to increase its customer and market base and thus improves its revenue and profitability. As a result, the strategy can make it become profitable in the market. However, it is appropriate for the company to consider different price strategies for the two market niches so as to avoid incurring high production and operation cost and maximizes their profitability. Through the focus on both the market segments, Big D can ensure that it meets the needs of all its customers and thus gain the trust and loyalty of the customers. This can ensure that it improves its sales and revenues on the market and thus gain competitive advantage.
Conclusion
The decision that the business made is to focus on the two market niches. The company decided to take orders from both the large and small customers to increase its market base and amount of revenues. Upon the implementaion of this strategy, the revenue of the company increased from $675,000 in 2009 to $ $ 900,000 in 2010. The strategy has enabled to increase the demand for its products. The increase in demand is an opportunity for the company as it has enabled it expands its operation in different regions and market across the country. The number of the employees of the company has significantly increased due to its new business strategy. The report, therefore, indicates that the company should focus on both the large niche market as well as the small niche market. The large niche market can help it generates huge revenues that it can use to improve its long-term performance. The small niche market is also important towards supporting its daily operation.
References
Peppers, D., & Rogers, M. (2016). Managing Customer Experience and Relationships: A Strategic Framework . John Wiley & Sons.
Roh, J., Hong, P., & Min, H. (2014). Implementation of a responsive supply chain strategy in global complexity: The case of manufacturing firms. International Journal of Production Economics , 147 , 198-210.
