Household-based Market Analysis Total catchment area contains 1,000 household (H
ID: 398188 • Letter: H
Question
Household-based Market Analysis Total catchment area contains 1,000 household (HH). There are 3,000 bank branches in a state with 2,40,000 HHs (0.00125 per HH). The median income at the state and county level is $40,000 and $27,500 year, respectively. Use the following equation to estimate unit of establishment. . How many grocery stores can be by 1,000 HHs in that catchment area can support? . What is the assumption in this estimation process? . Is it economically viable? 2. COU IN where, EST- units of establishments of type i EST,HH-Units of establishment of Type i per HH at the state level CoU INC Average household income at county level STINC = Average household income at state level TOTHH Total households in catchment areaExplanation / Answer
1. No. of branches/stores = 1000*0.00125*(27500/40000)
= 0.86 bank branch
2. The assumption is that the number of establishments per households that is estimated for the state level can be easily factored to account for the income differences.
3. The result is 0.86 bank branch and this means that the number of bank branches supported by a density of 1,000 HH is 0.86 branches. This means that the neighborhood cannot support an economically viable branch. A branch can be situated in the neighborhood but majority of its revenue will have to come from businesses that does not come through the neighborhood.
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