MRB 4+Location

7/28/2019 MRB 4+Location

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CHOOSING A STORE

LOCATION


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Retailer can use a three step process based

on geogrphics when assessing where tolocate their business .these steps aregiven below

Regional analysis

Trading area analysis

Actual site analysis


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SHOPPING CENTRES

Shopping Centre is a group of retail & other

commercial establishment that is planned ,

developed, owned & managed as a single property .

2 main configurations

Strip Shopping Centers

Shopping centers that usually have a

parking directly in front of the stores.

Shopping malls

Shopping centers in whichCustomers park in outlying

Areas and walk to the stores.


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Strip Shopping Centers

- Traditional Strip Centre :- shopping centre thatis designed to provide convenient shopping for

the day-to-day needs of consumers in their

immediate neighborhood.

- Power Centers :- shopping center that is

dominated by several large freestanding

anchors.


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Shopping Malls

- Regional :- General Merchandise , fashion mainly, main attractions are its anchors , department &discount stores or fashion specialty stores .

- Superregional Centers :- similar to regional centrebut larger size.Has more variety & assortment

- Lifestyle :- Higher end,fashion oriented .

- Fashion /speciality centers

- Outlet:- manufacturers outlet stores

- Theme/Festival Centers :- unifying theme in

individual shops & also to an extend inmerchandise .

- Merchandise Kiosks :- small selling spacesoffering a limited merchandise assortment . Found

in shopping malls .


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CITY OR TOWN LOCATIONS

Central Business Districts :-business area in a city or

town . CBDs for retail trade are those with a largenumber of residents living the area .

Inner City Locations :- typically high density urban

areas .

Main Street Locations :- CBD located in traditional

shopping area of small town or suburb within a

larger city . Occupancy costs are genrally lower than

primary CBD .

FREESTANDING SITESRetail location thats not connected to other retailers ,

although many are located adjacent to malls


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OTHER RETAIL LOCATION

OPPORTUNITIES

Mixed-Use Developments (MXDs) :- combine severaldifferent uses in one complex , including shoppingcentres, office towers, hotels, residential complexes,

civic centers , and convention centers . Popular withretailers because they bring additional shoppers totheir stores.

- Airports

- Resort

- Hospitals

- Store within a store


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Site Selection

Region :- refers to the country , part of the

country , a particular city or

Metropolitan Statistical Area (MSA) :- city with

75,000 (in england) inhabitants , urbanized

area .

Trade Area :- contiguous geographical area. That

accounts for majority of stores sales &

customers . Maybe a part of city or mayextend beyond the citys boundaries .

Regional Analysis Trade Area Analysis Site Analysis


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Factors Affecting The Demand for a Region or

Trade Area- Economies of scale

- Demographic & Lifestyle Characteristics- Business Climate :- employment level , cyclical trends etc.

- Competition

- Saturated Trade areaEx:- some restaurants such as Burger king seek locations where their

major competition-McDonalds has a strong presence . They believethat it is important to go head-to-head with their strongest competitorsso that they can develop methods & systems that will allow them tosuccessfully compete with them .

- Understored Trade area

An area that has too few stores selling a specific good or service tosatisfy good or service to satisfy the needs of the population

- Overstored Trade areaHaving so many stores selling a specific good or service that some stores

will fail .


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- Span of Managerial Control

focus on certain geographic regions or trade areas.

- Global Location IssuesFACTORS AFFECTING THE ATTRACTIVENESS OF A SITE

-Accessibility

-Macro Analysis

- Road Patterns

- Natural Barriers

- Artificial Barriers

-Micro Analysis

- visibility

- Amount & quality of parking facilities

- Congestion

-Location Advantages within a Center

- Principle of Cumulative Attraction :- applies to both

stores that sell complementary merchandise & thosethat compete directly with one another .


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Estimating Demand for a New Location

Retailers estimate the demand for a new location by

defining its trade area & then estimating how muchpeople within the trade area will spend.

Trade Area :- divided into 2 to 3 zones

- Primary Zone :- geographic area from which store

derives 60 to 65% of its customers .

- Secondary Zone :- geographic area from which store

derives 20% of its customers/sales .

- Tertiary Zone :- outermost ring :- customers who

occasionally shop from the store .


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Factors defining Trade Areas- Store Accessibility

- Natural & Physical Barriers

- Type of Shopping area

- Competition

- Type of Store

(a) Destination store :- is one in which themerchandise , selection , presentation , pricingor other unique features act as a magnet for

customers .(b) Parasite Store :- one that does not create its own

traffic & whose trade area is determined by thedestination or dominant retailer in the retail area.

S f I f i d fi T d


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Sources of Information to define a Trade

Area

1. Determine no. of people /potential customers) &where they live

Technique :-

-Customer Spotting

-Census-Demographic data & GIS (Geographical Information

Systems)

-ACORN ( A Classification of Residential Neighborhoods)

-MPI (Market Potential Index)-SPI (Spending Potential Index)

2. Sources to assess competition .

Documents

MRB 4+Location