FOREIGN SEGMENT IN USA MARKET

Q1. From a market segmentation perspective, comment on Nash Finch’s

development of WFO as a prototype store.

Nash Finch is seeking to appeal to the recent Mexican arrivals in the Upper
Midwest through its whole sale food outlet (WFO) located in Omaha. In
recent years, the Hispanic population has always been an important market
segment in the Southwest, Florida, and the Northeast and now has expanded
into the Midwest. Hispanics have not been served as well as they should have
in the Upper Midwest. This is a heck of an opportunity for Nash Finch.These
are very loyal shoppers who are big on cooking from scratch, and not as
restaurant-driven as the general population. Nash Finch views the Omaha store
as a laboratory for developing a competitive strategy with the greatest appeal
to the growing target market.

Q2. What are the pros and cons of Nash Finch’s choice of the Hispanic market as
a target market?

Hispanic are very loyal shoppers who are big on cooking from scratch, and not as
restaurant-driven as the general population so if any outlet offers grocery on whole
sale price so they would definintely prefer. Hispanic is a continously growing market,
has always been an important market segment in the Southwest, Florida, and the
Northeast and now has expanded into the Midwest so a large revenue can be expected
to generate from this target market. The Hispanic-American business is also much
more cash-driven than a traditional store, where much of sales are completed by credit
card. Beside all of these advantages, Nash Finch’s work on this store has been far
from easy. Nash Finch has to be very selective in product offerings, a much larger
percentage of its goods consists of Hispanic specialties with lowest possible prices
and they also have to provide customer service in English, Spanish, and bilingual
versions.

Q3. What other target marketing opportunities should Nash Finch investigate?

At the Omaha store, more than 60% of its shoppers are Hispanic and 90% of them
live within a mile and a half of the store. Nash Finch should expand their whole sale
food outlet chain with complete research of location and the purchasing power of
people living there. Nash Finch could also use their wall of values more effectively by
offering a wide product range on daily basis with seasonal specialities to increase the
sales.
Q4. How could Nash Finch prepare a five years sales forecast for its WFO
stores?

As evidence of the success of the store in attracting its clientele, the WFO store was
formerly part of the Hinky Dinky chain. As a Hinky Dinky unit, the store had a
weekly sales volume of $70,000. Now, in the slowest week of the month, WFO does
double that volume which means, its total sales per month near or equal to be
$2,800,000 approximately. The Hispanic population in Omaha has doubled in the past
10 years so in umcoming 5 years, its population would also increase which would
directly infulence the sales of WFO stores. Apart of this, if Nash Finch expands its
WFO chain then more market could be target. If we talk about the Omaha store,
following sale can be forecasted.

Year Sales/Month

1 $680,000/month

2 $850,000/month

3 $1,100,000/montth

4 $1,350,000/month

5 $1,500,000/month

All the above sales have been forcasted on the basis of continously growing target
market, all the socioeconomic factors such a inflation, shortage of supply, higher
demand of a particular product due to unpredicted event, etc. have been neglected.