CASE 5-3 Eddie Bauer s answer (file attached)

CASE 5-3

Eddie Bauer: Strategize with

Secondary Marketing Data

Eddie Bauer, Inc., is a leading international retail

brand, offering casual lifestyle products for adults

through its retailing concepts: Eddie Bauer and Eddie

Bauer Home. Eddie Bauer products are for men and

women who seek versatile, classically styled, highquality

merchandise designed to meet a wide range

of their apparel and home-furnishing needs. Since

1920, the company has evolved from a single store in

Seattle to a multichannel, international company with

more than 590 stores worldwide. In addition, Eddie

Bauer has 110 million catalogs in circulation and an

online website (www.eddiebauer.com). The company

operates stores in the United States and Canada, and

has joint venture partnerships in Germany and Japan.

Eddie Bauer has long considered the location of

stores as the key element for maximizing sales. However,

the problem has been how to choose these prime

locations. Until recently, the company relied on basic

census information, such as income and number of

households, when choosing locations for new stores.

But recent demographic changes in the United States

and Canada have made this task more complex.

So Eddie Bauer purchased Clarita’s online geocoding

and GIS mapping software, along with databases

to provide precise knowledge for identifying ideal location.

The first step was to identify potential areas of high

retail expenditures. Information (household growth rate, number of housing units) about these locations along

with consumer information (age, income level, household

size, and education level) were collected using

Clarita’s demographics. Thus, for each proposed store

location, Eddie Bauer’s marketing team gathered detailed

consumer information on the market and potential new

locations relative to existing stores and competitors.

Moreover, Eddie Bauer’s marketing team started

to use Clarita’s Potential Rating Index Zip Markets

(PRIZM) geocoding system to evaluate existing sites

and current customers. For example, they not only profiled the shoppers at its five best-performing retail

outlets but also studied the branches that were not doing

very well. The profile of the shoppers would help the

marketing team identify the shared characteristics of

customers who frequent Eddie Bauer Stores. This knowledge

would be very helpful not only in deciding on new

site locations, interior designs, and merchandising mix

but also in developing the store concept. This detailed

consumer information prepares Eddie Bauer to compete

more efficiently in the ever-changing retail industry.

Write a 3-5 page paper for the following questions:

1. What demographic and geographic information

should Eddie Bauer collect to select store locations?

2. What kind of information regarding the competitive

environment of the market in which Eddie

Bauer operates is needed when choosing store

locations?

3. Suggest methods by which Eddie Bauer can conduct

marketing research to identify the shared

characteristics of those customers who frequent

Eddie Bauer stores versus the characteristics of

customers who frequent the stores of competitors

 

at various locations.