In order to evaluate the market potential for additional Home Store outlets, three research issues are identified:
– What is the existing target market for the Home Store in Mississauga, Ont. just outside Toronto?
– What other geographic areas are likely to be potential markets for additional Home Store outlets?
– Where specifically should the next Home Store be located?
A preferred research program to address these research issues consists of three phases.
The first phase is a survey of existing Home Store shoppers in the Mississauga area. The second phase is an analysis of potential markets based on geographic databases which contain demographic and buying power data for every city block in the country.
The final phase consists of a survey in a selected market to test reactions to the opening of another Home Store.
Current Shopper Survey
As a first stop, a telephone survey should be conducted among 300 current Home Store shoppers. Telephone numbers would be collected at the store from shoppers and then follow-up surveys would be conducted.
The survey would be used to verify the socio-economic, demographic and psychographic characteristics of shoppers. This is necessary because the Home Store is relying on u.s. sources for this data.
In addition, the survey would collect information concerning how far away Home Store shoppers live from the Mississauga store.
This information will allow Home Store to define the geographic extent of the trading area for its current store.
The effectiveness of its advertising campaign can be assessed in addition to collecting comparative information concerning competitive outlets. The cost for this survey would be about $7,000.
Geographic Analysis
The demographic and socio-economic profile of every city block in the country is available in several commercially available databases.
One example is Vancouver-based Tetrad’s P-Census.
Tetrad can match the profile of existing Home Store shoppers to the profile of similar areas in other parts of the country.
For example, if the shopper survey indicated the typical Home Store shopper has a household income of $40,000 to $50,000 and lives in a single-family dwelling, Tetrad can identify several areas in the country with the same profile.
In addition, Tetrad can match profiles based on psychographic characteristics. Typical cost for this analysis would be about $3,000.
Test Market Survey
Once a potential market area has been identified based on the Tetrad database, a survey of 300 residents in the new market should be conducted in order to verify that a new Home Store would be successful.
The survey would identify the strengths and weaknesses of existing competitors and assess reactions to the opening of a new Home Store. An estimate of market share would be calculated. The cost for this survey would be about $8,000.
The time required to undertake all three phases of the research program is about five weeks.
For more information, contact Lorne Bozinoff, Gallup Canada, 180 Bloor St. W., Toronto, Ont., M5S 2V6. Tel: (416) 961-2811, fax (416) 961-3662.
