Read the overview below and complete the activities that follow. The Hutch store
ID: 390760 • Letter: R
Question
Read the overview below and complete the activities that follow.
The Hutch store chain was founded in 1952 by John Henry Hutchison, a musician and extremely successful insurance salesman. Hutchison established the headquarters in Richmond, Virginia. Hutch currently operates 350 popularly priced women's clothing stores throughout the Southeast and Midwest. All Hutch stores are located within 400 miles of a distribution center. Within this geographic area, Hutch stores are located in communities with a population range of 10,000 to 50,000 and a trade area of 50,000 to 150,000. Hutch stores are primarily located in strip malls or strip centers-generally ones anchored by either a regional or a national discount store. Currently, Hutch is using Claritas data to decide which location to choose for the next Hutch store.
CONCEPT REVIEW:
Selecting a site location is one of the most important decisions that a retailer can make. Because of the long-term implications of site selection, retailers invest a lot of resources in location decisions. Retailers consider numerous factors in site selection, including economic conditions, competition, strategic fit and operating costs. Retailers are also concerned with the number of stores in an area and the surrounding competition. Retailers also evaluate specific sites and estimate expected sales for a particular site location.
To further analyze the attractiveness of a potential store site, a retailer needs information about both the consumers and the competitors in the site's trade area. Two widely used sources of information about the nature of consumers in a trade area are (1) data published by the U.S. Census Bureau and (2) data from geographic information systems, provided by several commercial firms. GIS suppliers have developed systems for classifying geographic areas in the United States by combining census and survey data about people's lifestyles and purchasing behavior with the mapping capabilities of GIS.
Read the case below and answer the questions that follow.
The Hutch store chain was founded in 1952 by John Henry Hutchison, a musician and extremely successful insurance salesman. Hutchison established the headquarters in Richmond, Virginia. Hutch Fashions is considered one of the leading popularly priced women’s fashion apparel chains in the Southeast. The stores carry trendy apparel selections in juniors’, misses’, and women’s sizes, all at popular prices. The chain offers a complementary array of accessories in addition to its main features of dresses, coats, and sportswear.
Hutch’s target market is women between the ages of 18-40 years old who are in the lower-middle to middle-income range. Hutch positions its merchandise and price levels between the mass merchandisers and the department stores. Hutch currently operates 350 popularly priced women’s clothing stores throughout the Southeast and Midwest. All Hutch stores are located within 400 miles of a distribution center. Stores are located close to a distribution center so that trucks can deliver to every location in two days. Within this geographic area, Hutch stores are located in communities with a population range of 10,000 to 50,000 and a trade area of 50,000 to 150,000. Hutch stores are primarily located in strip malls or strip centers-generally ones anchored by either a regional or a national discount store.
Dale Abell, the vice president of new business development for the Hutch Corporation, is searching for a good location to open a new store. After a preliminary search, Abell narrowed the choices to two locations, both in Georgia. Abell is using several reports generated by Claritas to help him decide which of the two locations to choose for the next Hutch store. He has developed reports that describe the 10-mile ring around each of the proposed locations.
The potential locations:
Dalton, Georgia- Dalton produces most of the carpeting in the United States; carpet mills are the major employers in Dalton. One of the leading manufacturers in the area is Stainmaster, who has to use seven times the amount of water as a regular carpet manufacturer. Abell worries that a drought might cause production to decline and employees to lose their jobs.
The proposed site for the new location in Dalton is a store in the Whitfield Square shopping center located off the main highway, approximately two miles from the center of town. The strip center has high visibility, is anchored by both Walmart and Kroger (a large grocery chain), and ample parking. The Sales Potential Index information for Women’s Apparel in Dalton indicates that area sales are $18.01 million, Areas Sales Per Capita is $206.26 ($1.39 less than the national average). The index is 99.
Using, Claritas, PRIZM data, Abell finds that the top three PRIZM groups in Dalton are Red, White, and Blues, Shotguns and Pickups, and Rural Industrials.
Red, White and Blues- Small-town blue-collar families; middle income; age groups 35-54, 55-64; predominantly white, with skilled workers primarily in mining, milling, manufacturing, and construction. Geocentered in the Appalachians, Great Lakes industrial region, and Western Highlands, these folks love the outdoors.
Shotguns and Pickups- Rural blue-collar workers and families; middle income; age groups 35-44, 45-54; predominantly white. This cluster is found in the Northeast, the Southeast, and the Great Lakes and Piedmont Industrial regions. They are in blue-collar jobs; most are married with school-age kids. They are churchgoers who also enjoy bowling, hunting, sewing, and attending car races.
Rural Industrialists-Low-income, blue-collar families; lower-middle incomes; age groups <24, 25-34; predominantly white, high Hispanic; Nonunion labor found in this cluster, which is comprised of hundreds of blue-collar mill towns on America’s rural backroads.
Hinesville, Georgia- Hinesville has one major employer, the Fort Stuart army base. Fort Stuart is a rapid-deployment force base. Because the United States currently is involved in a number of international activities, Abell is concerned that if the military force deploys, the town will become a ghost town. The location under consideration is the Target Plaza at the two junction of a state route and a U.S. Highway. The center is anchored by Target and a grocery store that is party of a popular Eastern U.S. chain. Other tenants in the center include a bookstore, a waterbed store, a shoe store, a yogurt store, and a movie theatre. The Sales Potential Index information for Women’s Apparel in Hinesville indicates that area sales are $8.97 million, Areas Sales Per Capita is $154.74 ($52.91 less than the national average). The index is 75.
Using, Claritas, PRIZM data, Abell finds that the top two PRIZM groups in Hinesville are Military Quarters and Scrub Pine Flats.
Military Quarters- GIs and surrounding off-base families; lower-middle income; age groups under 24, 25-34; ethnically diverse. Since this cluster depicts military life with personnel living in group quarters, its demographics are wholly atypical because they are located on our military bases. Racially integrated and with the highest index for adults under 35, “Military Quarters” like fast cars, bars, and action sports.
Scrub Pine Flats- Older African-American farm families; poor; age groups 55-64, 65+, predominantly black. This cluster is found mainly in the coastal flatlands of the Atlantic and Gulf states from the James to the Mississippi rivers. These humid, sleepy rural communities, with a mix of blacks and whites, live in a seemingly timeless, agrarian rhythm.
1.
An important component of Hutch's site selection strategy is that a store must be located within 400 miles of one of Hutch's ___________________.
select
2.
Abell is worried that in both locations, there is a high potential for _____________________.
select
3.
Abell used data from Claritas to determine the annual per-person spending potential for each trade area. Which location had the highest annual per-person spending potential?
select
4.
Abell used the PRIZM data from Claritas to determine ___________________ characteristics of the populations of Dalton and Hinesville.
select
QUESTION PROGRESS Case Analysis Case Analysis 1. An important component of Hutch's site selection Read the case below and answer the questions that follow strategy is that a store must be located within 400 miles of one of Hutch's 4 The Hutch store chain was founded in 1952 by John Henry Hutchison, a musician and extrermely successful insurance salesman. Hutchison established the headquarters in Richmond, Virginia. Hutch Fashions is considered one of the leading popularly priced women's fashion apparel chains in the Southeast. The stores carry trendy apparel selections in juniors misses', and women's sizes, all at popular prices. The chain offers a complementary array of accessories in addition to its main features of dresses, coats, and sportswear select distribution centers executive offices manufacturing office sales center retail center 8 -a high Hutch's target market is women between the ages of 18-40 years old who are in the lower-middle to middle-income range. Hutch positions its merchandise and price levels between the mass merchandisers and the department stores. Hutch currently operates 350 popularly priced women's clothing stores throughout the Southeast and Midwest. All Hutch stores are located within 400 miles of a distribution center. Stores are located close to a distribution center so that trucks can deliver to every location in two days. Within this geographic area, Hutch stores are located in communities with a population range of 10,000 to 50,000 and a trade area of 50,000 to 150,000. Hutch stores are primarily located in strip malls or strip centers-generally ones anchored by either a regional or a national discount store Abell used data from Claritas to determine the annual per-person spending potential for each trade area Which location had the highest annual per-person spending potential? select 4. Abell used the PRIZM data from Claritas to determine characteristics of the populations of Dalton and Hinesville Dale Abell, the vice president of new business development for 4 prev glossaryExplanation / Answer
1. An important component of Hutch's site selection strategy is that a store must be located within 400 miles of one of Hutch's distribution center
Answer: Option A: distribution centers
2. Abell is worried that in both locations, there is a high potential for unemployment.
Answer: Option E: Unemployment
3. Abell used data from Claritas to determine the annual per-person spending potential for each trade area. Which location had the highest annual per-person spending potential?
Answer: Option A: Not enough information
4.Abell used the PRIZM data from Claritas to determine lifestyle characteristics of the populations of Dalton and Hinesville.
Answer: Option A: lifestyle
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