Question

Red Carpet Inc. is a small apparel store started by an aspiring designer. The store needs to compete against larger, well-established multinational brands. Which of the following strategies will most help Red Carpet Inc. avoid competition from larger firms?

Answer 1

Answer:

The answer is: Red Carpet should try to focus on niche market segments.

Explanation:

A niche market is part of a greater market, but its focus is set on very specific products. The niche market has very specific market needs that need to be targeted by very specific products.

Usually niche markets are targeted by high priced products since normal broad range products or services will not satisfy their specific needs. For example, vegan restaurants are more expensive than McDonald's or Pizza Hut.

Since niche markets are small, usually big multinational corporations don't pay attention to them.