Question

What are the reasons a company should target low margin customers?

Answer 1

Targeting low margin customers can lead to increased sales volume, market share expansion, and customer loyalty.

Step-by-step explanation:

Targeting low margin customers can provide several benefits for a company:

1. Increased sales volume: By pricing products or services competitively for low margin customers, a company can attract a larger customer base and increase sales volume.
2. Market share expansion: Targeting low margin customers can help a company gain market share by offering products or services that are more affordable compared to competitors.
3. Build customer loyalty: By serving low margin customers, a company has the opportunity to build trust and loyalty, which can lead to repeat business and positive word-of-mouth.

However, it is important for a company to carefully analyze the potential impact on profitability and overall business strategy before targeting low margin customers.