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Hudson's Bay Company

A test market, in the field of business and marketing, is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a test market region or group include:

  1. a population that is demographically similar to the proposed target market and
  2. relative isolation from densely populated media markets so that advertising to the test audience can be efficient and economical.
 
Kingston is another favourite city to be used as a test market since it is close to Toronto, but isolated enough to market exclusively to the community.

One huge thing about test markets is that they provide room for failure. You don't need to worry about your business idea tanking, since no one outside of the test market will know about it to begin with.
 
As noted above:
1: demographics similar to the larger market
2: isolated, both for promotional cost reasons as well as determining effectiveness of promotion

but also:
3: relatively low real estate costs compared to larger cities like Toronto or Vancouver. A company testing out a new retail concept or chain might want to keep it going for several months or even years to determine viability. If it turns out to be a dud, the real estate/leasing costs are much less of a write-off.
4: this one I'm not sure about. I saw it mentioned in an article I read about test markets, but it was very old so it may not apply today (if it ever did). Anyway, supposedly people in Winnipeg are more conservative in their shopping/dining/spending habits, and tend not to jump on the latest thing. This is important because business owners need to have a solid grasp of the long-term prospects of a concept before expanding it nationally. It would be a disaster if the test seemed initially successful, but later revealed to have only been an initial rush as people flocked to try it out of curiosity, never to return. Krispy Kreme's entry into the GTA is a good example of this: at first it was an unprecedented success and they started a rapid major expansion, only to discover that business quickly dropped off as the novelty faded, and most of the stores were shuttered within a few months. So, the idea is that if it works in Winnipeg, it will work anywhere.
 
Kingston is another favourite city to be used as a test market since it is close to Toronto, but isolated enough to market exclusively to the community.

London, ON is another. Medium-sized city, relatively low-cost, and demographics diverse enough to reflect the larger market. Interesting to note that both London and Kingston each have a major university which bring in people from other areas.
 
40 stores? That's a lot of focus for just one country
They own a lot of stores there after last year's acquistion.....so I think it is essentially a re-branding of 40 of those stores to Saks off 5th...so there will be one So5th for every 2 million germans.
 

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