Chapter 9 To Demonstrate Importance of Store Location

• To Demonstrate Importance of Store Location • To Discuss the Concept of

• Good Location CAN Overcome Mediocre Strategy Mix • Poor Location Difficult to

• Loyal Customers and Employees May Be Lost • New Location May Not

Evaluate Alternate Geographic (Trading) Areas Determine Type of Location Select General Location Analyze Alternate

• • • Consumer Characteristics Detailed Promotional Activity Focus Determined Ascertain Overall Net

Total Revised Sales of Existing Store + Total Sales of New Store - Total

• Trading Area by Specific Demographics • Derive Sales Potential • Effect of

• Primary • Secondary • Fringe (Tertiary)

• Not Concentric • Two Stores in Same Area Can Have Different Trading

• • • Store Size Competitors’ Locations New Stores Residential Housing Patterns Travel

By Geographic Location • Shopping Frequency • Average Dollar Purchases • Concentration of Store’s

• • Trend Analysis Analog Model Regression Model Gravity Model – Reilly’s Law

• Population – Census – Survey of Buying Power • Effective Buying Index

• Number of People Per Establishment • Average Sales – Store – Category

• The Importance of Store Location and the Process of Choosing a Location

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Chapter 9

• To Demonstrate Importance of Store Location • To Discuss the Concept of Trading Area • To Show How Trading Areas Can Be Delineated • To Examine Factors in Trading Area Analysis

• Good Location CAN Overcome Mediocre Strategy Mix • Poor Location Difficult to Overcome • Requires Extensive Decision Making • Least Flexible Element of Strategy Mix

• Loyal Customers and Employees May Be Lost • New Location May Not Have Same Characteristics • Store Fixtures and Renovations May Not Transfer

Evaluate Alternate Geographic (Trading) Areas Determine Type of Location Select General Location Analyze Alternate Sites

• • • Consumer Characteristics Detailed Promotional Activity Focus Determined Ascertain Overall Net Increase Proper Number of Stores Calculated Geographic Weaknesses Highlighted

Total Revised Sales of Existing Store + Total Sales of New Store - Total Previous Sales of Existing Store

• Trading Area by Specific Demographics • Derive Sales Potential • Effect of New Location on Existing

• Primary • Secondary • Fringe (Tertiary)

• Not Concentric • Two Stores in Same Area Can Have Different Trading Areas (TA)

• Destination • Parasite

• • • Store Size Competitors’ Locations New Stores Residential Housing Patterns Travel or Driving Time Promotion

By Geographic Location • Shopping Frequency • Average Dollar Purchases • Concentration of Store’s Credit Card

• • Trend Analysis Analog Model Regression Model Gravity Model – Reilly’s Law of Retail Gravitation – Huffs Law of Shopper Attraction

By Geographic Location • Shopping Frequency • Average Dollar Purchases • Concentration of Store’s Credit Card

• Population – Census – Survey of Buying Power • Effective Buying Index (EBI) • Buying Power Index (BPI) • Economic Base

• Understored • Saturated • Overstored

• Number of People Per Establishment • Average Sales – Store – Category – Store Per Capita or Household – Per Square Foot – Per Sales Person

• The Importance of Store Location and the Process of Choosing a Location • The Concept of Trading Area and Its Components • How Trading Areas May Be Delineated for Existing and New Stores • Three Major Factors in Trading Area Analysis: – Population Characteristics – Economic Base Characteristics – Competition and Level of Saturation

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