Case History: Market Study for Sporting Goods Retailer

The Organization
Regional retailer of golf equipment and other selected sporting goods.

The Situation
The young company had experienced significant success in opening three stores in one state. The company wished to remain a regional retailer but was concerned about where to open new outlets that would offer sufficient potential and not draw significant numbers of customers from their existing stores, which were widely separated geographically. Top management was not aware of their current market share, the potential within the region and the competitive environment outside their present locations.

The Approach
It was quickly determined that the company already enjoyed significant market share within the state where its existing stores were located. Opening other outlets within a thirty to forty mile radius of those stores would likely result in drawing existing customers to the new locations thus adding little in incremental sales overall. In order to determine what areas offered the best potential, the market study included the following components:

  • Three thousand existing customers were sent a survey questionnaire designed to get their preferences for new store locations, and as a side benefit, their impressions of the company. Responses from 770 (26%) identified five locations in adjacent states as good locations for new outlets.
  • Using a forty mile radius from the hub of each potential location, complete demographic data was collected from readily available census data.
  • Within each market area, golf courses and country clubs were identified and estimated numbers of golfers were obtained from a golf industry trade association.
  • For each area, competitors were identified with estimated number of employees and sales volumes.
  • Using the headquarter store as a benchmark, the data collected was compared and weighted which enabled ranking each area's potential.

The company is in the process of securing a prime site in the highest ranked location.

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