Example of Market Definition
In general, the requirements for an appropriate market definition include:
Example:
American Entertainment, Inc. competes in the market for retail, installation and service of high-end, custom-installed, home entertainment systems sold directly to consumers in Miami-Dade, Broward and Palm Beach Counties, Florida.
Support:
Product and service: As stated in the case, the company sells, installs and services high-end, custom-installed, home entertainment systems. As there are a number of other companies competing in the same field and customers generally go to a company specializing in this specific type of merchandise, this is a real industry.
Customer: Sales are made directly to consumers (including businesses for their own use).
Level in chain: The company is a retailer and direct service provider.
Geographic area: The company competes only in Miami-Dade County presently, however, the three southeast Florida counties are generally considered to be one market area for this type of business. Because of custom installation and service requirements, the customer deals with a company having a physical presence in the local area, so this smaller geographic area constitutes a real market.
- R. S. Kulzick – 8/03/2007 -