Thursday, July 10, 2008

Should Nature's Way open a store in Plainesville?

In this memo , the vice president of Nature's Way(NW), a chain of stores selling health food and other health-related products, recommends that the company should build the next new store in Plainsville.To support the recommendation , NW cites the following facts about Plainesville:
  • sales of exercise shoes and clothing are all-time highs;
  • the local heath club is more popular than ever
  • the city's schoolchildren are required to participate in a fitness program.

Close scrutiny of each of these facts,however, reveals that none of them lend credible support to the recommendation.

First,strong sales of exercise apparel do not necessarily indicate that Plainesville residents would be interested in NW's products, or that exercising is popular with these residents.Perhaps exercise apparel happens to be fashionable at the moment, or inexpensive compared to the other types of clothing. For that matter,perhaps the stronger-than-usual sales are due to increasing sales to tourists.In short, without ruling out other possible reasons for the strong sales,the vice president can not convince me on the basis of them that Plainesville residents are exercising regularly,let alone that they would be interested in buying the sorts of food and other products that NW sells.

Secondly, even if exercise is more popular among P residents than ever before,the vice president assumes further that people who exercise regularly are also interested in buying health food and health-related products.It is entirely possible that as a result of the regular exercise they believe that they are sufficiently fit and healthy and do not need a healthy product(As a reaction to the healthful habits imposed upon them).

Finally , even assuming that P residents are strongly interested in eating health foods and health-related products , the recommmendation rests on the additional assumptions :

  • that this interest will continue in the forseeable future
  • that P residents will prefer NW over other merchants that sell similar products.

In sum , the recommendation relies on certain doubtful assumptions that render it unconvincing as it stands. To bolster the recommendation the vice president must provide clear evidence-perhaps by way of a local survey or study-that P residents who buy and wear exercise apprarel, and especially the health club's memebers, do in fact exercise regularly, and that these exercisers are likely to bug health foods and health-related products at a NW store. To better assess the recommendation , i would need to know why P's health club is popular, and whyP does not contain more health clubs.I would also need to know what competition NW might face in P

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