1.

Using the information provided, prepare an estimate of the market potential for the target
market at with Alice Wood is aiming.
Per family expenditures on women’s clothing = $1000 per year (given in the case)
Therefore, women's clothing expenditures in Prince George number of households X $1,000
29,200 X 1,000= 29,200,000
Share for Sizes 3 to 9 which she wants to sell, and 20% of women fit those sizes.
29,200,000 X 20%=$ 5,840,000
Therefore, market potential for this target market is approximately $5,840,000.
2. What portion of this market potential could Alice expect for Petite Shop's market share?
Market share formula = Proposed selling space/ (market selling space + proposed selling space)
Given data from the case.
Total Square Footage Devoted to Target Market Clothing stores:
Clothing stores: 6,500 (sq. ft.)
Existing market selling space: 24,500 (sq. ft.)
Proposed store space for Alice’s store = 1000 sq. ft. (given in the case)
Market share percentage (based on market share formula above):
(1000 sq. ft.) / (24,500 +1,000) = 3.9%
Market share in dollars: 3.9% X 5,840,000= $ 227,760
NOTE: 5,840,000 is the market potential calculated from question (1)
3.What non-quantitative considerations should be brought into this analysis?
There are several negative and positive factors which could conceivably cause Alice to alter her
proposed sales figure.
Negative:

 Since Petite Shop is new, it will take some time for it to gain the needed market share.
The store may need to wait many months to establish itself and start drawing in a
consistent flow of consumers.
 Since established clothes stores can already have a devoted clientele and a better location,
it is advisable to investigate how close rival businesses are to her prospective venture.
  Price wars and promotions are two strategies used by well-established retailers,
particularly department stores, to hold onto market share. Alice needs to be ready for
issues arising from pricing competition.
 Well-established department and apparel stores may be able to negotiate cheaper rates
and access a wider selection of merchandise because of their positive connections with
suppliers. To effectively compete, Petite Shop needs to find extraordinary suppliers or
negotiate favorable pricing.
Positive:

 Alice plans to concentrate on apparel for this market, which will provide her store a
"competitive advantage" in terms of knowledge, service, etc.
 Alice can set her store apart by concentrating primarily on sizes 3 to 9 thanks to her prior
retail experience. Specialized products can draw in customers who are searching for
better options in this size range.
 Prince George is a major hub for a broader commercial area than the cities, Petite Shop
can draw in clients from the outlying areas as well. The market potential can be changed
to account for this greater customer base to produce a more accurate revenue projection.