Capital Insurance’s marketing research team identified mid-west and south-west as having the most potential to gain market share without serious competitive position. Should the company focus on these markets of define its target market differently?

Question

What will be an ideal response?

Answer 1

Since the company is rather new and lacks experience, penetrating a market to gain market share without serious opposition would be a good decision for Capital Insurance. Although Capital’s primary and prospective customers are located in the major metropolitan cities, such as New York and Los Angeles, barriers to entry and competition
would be much more difficult and complex to overcome in these cities. The mid-west and south-west markets, although less thriving than major metropolitan cities, did show promise in the growing affluence of cities such as Chicago, Dallas, Minneapolis, and Phoenix. Capital should definitely target those markets to gain some experience and confirm that it is a leader in financial services, and then make a move toward New York and Los Angeles.