Question

The new CEO of a struggling cell phone service provider is trying to revitalize the company by revamping its business strategy. The CEO surveys the current service provider market and sees that there are a few large companies with similar business models: customers are required to chose from a limited number of plans, and are then locked into those plans for at least two years by contract. In order to even enter into a contract with the service provider, the customer must have proof of a steady income and be able to pass a credit check. The CEO sees that many individuals in the 15 to 24-year-old age bracket cannot meet these standards and are not being served by the larger companies. She decides to make her company unique by offering no-contract, pay-as-you-go cell phone service. Customers do not need to pass a credit check or provide proof of income in order to sign up for service, and can discontinue service at any time.​According to this scenario and your knowledge of marketing strategies, which statement best explains the new CEO's actions?​A. ​The CEO felt sorry for people with bad credit because other cell phone companies were not meeting their needs, so she decided to create a company that did.B. ​The CEO wanted to make an alternative cell phone service available for indecisive people who disliked the contracts and plan choices required by other companies.C. ​The CEO created a business plan that would target the low-income market, knowing she could take advantage of the fact that other companies require proof of income.D. ​The CEO decided to create a unique business plan even though it would not meet the needs of the majority of the population, just so that her company would stand out.E. ​The CEO realized that the youth segment of the market was not being served and decided to fill that niche in the business by creating a business plan that targeted it.

Answer 1

Answer:

The CEO concluded that the youth market segment was not being served and for that reason he decided to fill that niche in the business by creating a business plan that took it into account.

Explanation:

A market niche is a marketing term used to refer to a portion of a market segment in which individuals possess homogeneous characteristics and needs, and the latter are not entirely covered by the general market offer.

The market niche is based on recognizing in the segmentation a new business opportunity arising from unsatisfied needs and then being economically exploited by a company, but it may also be because there are not enough companies to supply that need. As for a niche market we must understand certain basic things to be able to have a fruitful activity, one of those is that this must be broad enough to derive a business from it and another aspect to consider is that we must know if there is something competition, the latter is not necessarily something negative since we will know that there is already a public and therefore a demand.