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Corporate success depends on breaking through the clutter of messages and products facing consumers in the marketplace. But the more innovative the idea--whether it is a new product, package, price, or promotion--the greater the risk. Traditional marketing research methods, such as test markets, focus groups, controlled field experiments, and even STMs, have limitations. Some are vulnerable to observation and manipulation by competitors; others are contrived and unrealistic, too expensive, or simply incapable of providing the information that managers need. But a new alternative--the virtual store--not only addresses those limitations, it also broadens the horizons of marketing research.

The Marsh chain of supermarkets is challenged by the entry of Meijer Supercenters into the Indianapolis market. Marsh management must decide how to select, price, promote, and merchandise its products in order to retain the loyalty of its customers and maintain profitability.

In response to recent trends in grocery retailing, Marsh Supermarkets has completed an intensive 65-week study of the activity at 5 superstores in the midwest United States. The study tracked the sales, profits, space, and promotion dynamics of the entire store: dry grocery, general merchandise, health and beauty care, and perishables. (These data are provided in the case exhibits.) Management hoped the study would provide insights on how and why products sell, identify product categories of greatest strategic importance, and spot inefficiencies in store operations.