Target costing firstly looks at a market for the product. For instance, the company will look at where their product fits in the market place and how much competitors charge for similar products or services. With this information the price of the product is set first, and a required gross profit margin subtracted. This leaves the target cost for the product which the company will aim to match. If the target cost is not possible the product is seen as un-feasible unless changes can be made. This method has the added benefit that the company knows its market before production as well as knowing the price will be competitive. This pricing strategy should reduce risks in the investment and is popular with technology companies such as Apple.