DC Lecture Two : Market Selection and Location Analysis


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DC Lecture Two : Market Selection and Location Analysis

  1. 1. Distribution Channels MKTG 1058 LECTURE TWO MARKET SELECTION & LOCATION ANALYSIS (Chapter 7)1
  2. 2. Learning Objectives for Chapter 7:1. Explain the criteria used in selecting a target market.2. Identify the different options, both store- based and non-store-based, for effectively reaching a target market and identify the advantages and disadvantages of business districts, shopping centers, and freestanding units as sites for retail location.3. Define geographic information systems (GIS) and discuss their potential uses in a retail enterprise. 2-2
  3. 3. Learning Objectives 4. Describe the various factors to consider in identifying the most attractive geographic market for a new store. 5. Discuss the various attributes to consider in evaluating retail sites within a retail market. 6. Explain how to select the best geographic site for a store. 2-3
  4. 4. Importance of Topic Vital to doing well in your group project You need to apply the concepts of LA and discuss critically the issues required in the project brief Read the project brief in detail and note each requirement!! Do not stray out of point.
  5. 5. Location!! Location!! Location!! These words resonate in retailing A key decision is where to locate the retail shop/s and mall Location will determine where you draw your target customers from We call this “Trading Area” This topic forms the basis of your project- learn it very well!! 2-5
  6. 6. Why is Store Location Important for a Retailer? Location is typically prime consideration in customer’s store choice. Location decisions have strategic importance because they can help to develop sustainable competitive advantage. Location decisions are risky: invest or lease? 2-6
  7. 7. Geographic space and cyberspace must be considered  Traditionally, reaching the target market has been associated with selecting the best physical location for a store.  The Internet is becoming a viable alternative for reaching one’s customers. 2-7
  8. 8. Virtual Stores  The equivalence of a store on the Internet is a retailers World Wide Web (www) site.  The retailers home page is the introductory or first material viewers see when they access a retailers Internet site. It is equivalent to a retailers storefront in the physical world.  Virtual store is the total collection of all the pages of information on the retailers Internet site.  The counterpart to location on the Internet is the "ease of access." This refers to the consumer’s ability to find a Web site in cyberspace easily and quickly. 2-8
  9. 9. Market Segmentation  a method retailers use to segment, or break down, heterogeneous consumer populations into smaller, more homogeneous groups based on their characteristics. 2-9
  10. 10. Segmentation  No single retailer can serve all potential customers; it is important that it segment the market and select a target market(s).  A target market is the segment of the market that the retailer decides to pursue through its marketing efforts.  The topics of target market selection and location analysis are combined because a retailer must identify its target market(s) before it decides how best to reach that market(s). 2-10
  11. 11. Marketing : An Introduction 2-11 An Asian Perspective © Armstrong, Kotler & da Silva
  12. 12. Identifying a Target Market Market segment should be measurableTo reach atarget market Market should be accessiblesuccessfully Market should be sustainable enough to be profitable 2-12
  13. 13. Market Segmentation  Target market Is the group of customers that the retailer is seeking to serve.  How do you know which particular segment is the most attractive for your firm? What factors would you consider when selecting and penetrating a given target market? 2-13
  14. 14. Target Market UNIQLO has a well- defined target market: customers who desire good quality but reasonably priced casual fashion apparel Think of some local retailers that focus on specific customer segments. What examples come to mind? Is narrow or broad targeting a preferred strategy and why? 2-14
  15. 15. Target marketing in retailing Using this framework, think of examples of retailers who apply each of these 3 types of targeting strategies. 2-15
  16. 16. Targeting the Fashion Conscious 2-16
  17. 17. Targeting Kids 2-17
  18. 18. Targeting the Budget Conscious Segment 2-18
  19. 19. Different ways of achieving competitive advantages in marketing andretailing (differentiation strategies) 2-19
  20. 20. POSITIONING IN MARKETING Marketing : An Introduction 2-20© Armstrong, Kotler & da Silva An Asian Perspective
  21. 21. Positioning Map for Retailer Categories21
  22. 22. Positioning based on Margins and Natureof Merchandise:
  23. 23. Positioning of Malls- possible criteria Landmark City Location i-ON Orchard Orchard CentralLocal Tenants Upscale International Branded Tenants Lot 1 Chelsea Premium Outlets coming to Johore in 2011 Loyang Point Neighborhood/ Suburban Location
  24. 24. Reaching Your Target Market Location of Store- based Retailers Non-store-based Retailers 2-24
  25. 25. Location of Store-Based Retailers  Store-Based Retailers operate from a fixed store location that requires customers to travel to the store to view and select merchandise or service.  Non-store-Based Retailers intercept customers at home, at work, or at a place other than a store where they might be susceptible to purchasing. 2-25
  26. 26. Retail Formats for Accessing A Target Market 2-26 Exhibit 7.2
  27. 27. Location of Store-Based Retailers  Central Business Districts (CBD) usually consists of an unplanned shopping area around the geographic point at which all public transportation systems converge; it is usually in the center of the city and often where the city originated historically.  Secondary Business District (SBD) is a shopping area that is smaller than the CBD and that revolves around at least one department or variety store at a major street intersection. 2-27
  28. 28. Central Business DistrictADVANTAGES Draws people into areas during business hours Hub for public transportation Pedestrian traffic ResidentsDISADVANTAGES High security required Shoplifting Parking is poor Evenings and weekends are slow
  29. 29. Location of Store-Based Retailers  Neighborhood Business District (NBD) is a chopping area that evolves to satisfy the convenience- oriented shopping needs of a neighborhood, generally contains several small stores (with the major retailer being a supermarket or a variety store), and its located on a major artery of a residential area. (Example our HDB heartland stores)  Shopping Center (or mall) is a centrally owned or managed shopping district that is planned, has balanced tenancy (the stores complement each other in merchandise offerings), and is surrounded by parking facilities. (note: quite often in Singapore our Shopping Centre is located within the city or main street) 2-29
  30. 30. ISCS Shopping Center Definitions Exhibit 7.3 2-30
  31. 31. ISCS Shopping Center Definitions Exhibit 7.3 2-31
  32. 32. ISCS Shopping Center Definitions Exhibit 7.3 2-32
  33. 33. Shopping Center Advantages  Heavy traffic resulting from the wide range of product offerings.  Cooperative planning and sharing of common resources.  Access to highways and availability of parking.  Lower crime rate.  Clean, neat environment. 2-33
  34. 34. Shopping Center Disadvantages  Inflexible store hours (open during mall hours only).  High rents.  Restrictions as to what merchandise the retailer may sell.  Inflexible operations and required membership in the center’s merchant organization.  Possibility of too much competition and the fact that much of the traffic is not interested in a particular product offering.  Dominance of the smaller stores by the anchor tenants. 2-34
  35. 35. The Largest Shopping Malls 2-35
  36. 36. Advantages and Disadvantages of Shopping Malls Advantages: Many different types of stores Many different assortments available Attracts many shoppers Main Street for today’s shoppers Never worry about the weather Comfortable surrounding to shop Uniform hours of operation Disadvantages: Occupancy costs are high Tenants may not like mall management control of operations Competition can be intense 2-36
  37. 37. Challenges to Malls Time pressured society makes it impractical to wander malls Fashion apparel sold in malls experiencing limited growth Malls are getting old and rundown – unappealing to shop Anchor tenants are decreasing due to retail consolidation 2-37
  38. 38. Lifestyle Centers • Usually located in affluent residential neighborhoods • Includes 50K sq. ft. of upscale chain specialty stores • Open-air configuration • Design ambience and amenities • Upscale stores • Restaurants and often a cinema or other entertainment • Small department store format may be there 2-38
  39. 39. Lifestyle Centers: examples in Singapore Clarke Quay Holland Village/ Rochester Park 2-39
  40. 40. Fashion / Luxury Specialty Centers Branded goods Located in upscale malls Target at up-market clients 2-40
  41. 41. Outlet Centers These shopping centers contain mostly manufacturers and retail outlet stores 2-41
  42. 42. There is one coming soon to Johore soon!!The new Johor project is expected to attract 4 million visitors a year, according to Malaysian Prime Minister Najib Razak. Its a jointventure between Chelsea Premium Outlets and Genting Group thats being developed in Johor as part of the Iskandar Malaysiaproject, and understandably, Malaysia has bragging rights to it. "It is the first (Chelsea) center in the (Asean) region and Im veryhappy that they have chosen Malaysia," said PM Najib. He said he understood other countries in the region had been trying to woo theChelsea Group to set up the center http://www.cnngo.com/singapore/shop/chelsea-premium-outlets-open-johor-709556
  43. 43. Location of Store-Based Retailers  Anchor Stores are the stores in a shopping center that are the most the most dominant and are expected to draw customers to the shopping center.  Free-Standing Retailer generally locates along major traffic arteries and does not have any adjacent retailers to share traffic with. 2-43
  44. 44. Unplanned Retail Locations Merchandise Kiosks – small temporaryselling stations located in walkways ofenclosed malls, airports, train stations oroffice building lobbies. 2-44
  45. 45. Unplanned Retail Locations Freestanding Sites – location for individual store unconnected to other retailer
  46. 46. Advantages of Freestanding Retailing Lack of direct competition. Generally lower rents. Freedom in operations and hours. Facilities that can be adapted to individual needs. Inexpensive parking. 2-46
  47. 47. Limitations of Freestanding Retailing Lack of drawing power from complementary stores. Difficulties in attracting customers for the initial visit. Higher advertising and promotional costs. Operating costs that cannot be shared with others. Stores that may have to be built rather than rented. Zoning laws that may restrict some activities. 2-47
  48. 48. Other Retail Location Opportunities • Mixed Use Developments • Airports • Resorts • Hospitals • Store within a Store2-48
  49. 49. Alternative Locations Mixed Use Developments (MXDs) Office Hotels Buildings Civic Centers49
  50. 50. Airports as retail locationsAirports:  Why wait with nothing to do?Rents are 20% higher than mallsSales/sq ft are 3‐4 times higher than mallsBest airports are ones with many connecting flights 2-50
  51. 51. Alternative Locations- Hotels and Resorts Hilton Singapore Banyan Tree Captive audience Well-to-do customer Customers have time to shop 2-51
  52. 52. Alternative Locations - Hospitals Captive Location Patients cannot leave Gifts are available 2-52
  53. 53. Non-store-based Retail Formats Direct Selling Street Peddling Interactive TV Mail-Order Internet Automated Merchandising Systems 2-53
  54. 54. Location must also to be considered from the“customer’s perspective” While we discuss location, we don’t just consider the retailer’s perspective of store choice location What about customers’ shopping patterns? How, where, when and why do customers buy? There are different patterns… 2-54
  55. 55. Shopping SituationsConvenience Shopping Minimize thecustomer’s effort to getthe product or serviceby locating store closeto where customers arelocated 2-55
  56. 56. Shopping SituationsComparison Shopping Customers have a good idea of what type of product they want, but don’t have a strong preference for brand, model or retailer. Typical for furniture, appliances, apparel, consumer electronics, hand tools and cameras. 2-56
  57. 57. Category Specialists Consumers can see almost all brands and models in one storeIKEA is a “destination store” 2-57
  58. 58. Shopping SituationsSpecialty Shopping•Customers know what they want•Designer labels•Convenient location matters less 2-58
  59. 59. Destinations Versus “Parasites” Destination stores have a Parasite stores do not better assortment, create their own traffic better promotion, and have no real and/or better image trading area of their  They generate trading own areas much larger than  These stores depend on competitors people who are drawn  Going to IKEA- this is a to the area for other destination store reasons59
  60. 60. Question to Ponder  Given the wide variety of locations available to target specific consumer groups, what new locations will provide the greatest opportunities for the retailers of tomorrow? Trends will vary across Asia. More malls will  spring up in city centers. Others will still rely  on traditional retail locations. Within Asia  location is important for tourism retailing.  Other comments? 2-60
  61. 61. LOCATION ANALYSIS METHODS These topics will be important for your completion of your DC project61
  62. 62. Geographic Information Systems These comprise:  digitized mapping with key locational data to graphically depict trading-area characteristics such as  population demographics  data on customer purchases  listings of current, proposed, and competitor locations 2-62
  63. 63. Geographic Information Systems  The GIS combines physical geography with cultural geography.  Cultural geography: is the buffer that people have created between themselves and the raw physical environment and includes the characteristics of the population, humanly created objects, and mobile physical structures.  Thematic Maps use visual techniques such as colors, shading, and lines to display cultural characteristics of the physical space. 2-63
  64. 64. GIS Components Exhibit 7.4 2-64
  65. 65. Uses of GIS Market selection. Site analysis. Trade area definition. New store cannibalization. Advertising management. Merchandise management. Evaluation of store managers. 2-65
  66. 66. Market Identification  Market Identification - involves three sequential steps: 1. First, the retailer must identify the most attractive markets in which to operate. 2. Second, one must evaluate the density of demand and supply within each market and identify the most attractive sites that are available within each market. 3. Third, select the best site or sites available. 2-66
  67. 67. Selecting a Retail Location Exhibit 7.5 2-67
  68. 68. Location analysis is like a filtering process… 1 Target Overall market segment market 2 The locality or Trading catchment area area The 3 actual Site location of the store/mall2-68
  69. 69. Market Identification  Trading Area Is the geographic area from which a retailer, or group of retailers, or community draws its customers. 2-69
  70. 70. Elements in Trading-Area Selection Population Economic Base Characteristics Characteristics Nature and Saturation of Competition 2-70
  71. 71. Benefits of Trading Area Analysis Discovery of  Assessment of effects of consumer trading area overlap demographics and  Ascertain whether chain’s socioeconomic competitors will open characteristics nearby Opportunity to  Discovery of ideal determine focus of number of outlets, promotional activities geographic weaknesses Opportunity to view  Review of other issues, media coverage such as transportation patterns 2-71
  72. 72. Selected Population Statistics for Trading Areas A and B Characteristics Area A Area B Total population, 2000 13,732 15,499 Population change, 1990-2000 +8.2 +2.5 College graduates, 25 +, 2000 (%) 41.4 39.2 Median household income, 2000 $61,236 $61,242 Managerial and professional 45.3 45.0 occupations (%), 2000 Which trading area would you consider as being the most attractive and why? 2-72
  73. 73. The Segments of a Trading Area 2-73
  74. 74. Trading Areas and Store TypesLargest Department stores SupermarketsTRADING AREAS Apparel stores Gift storesSmallest Convenience stores 2-74
  75. 75. Market IdentificationRetail Location TheoriesMarket Demand PotentialMarket Supply Factors 2-75
  76. 76. Retail Location Theories Retail Gravity Theory Saturation Theory Buying Power Index 2-76
  77. 77. Retail Location Theories  Retail Gravity Theory Suggests that there are underlying consistencies in shopping behavior that yield to mathematical analysis and prediction based on the notion or concept of gravity. It is based on Newtonian gravitational principles, explains how large urbanized areas attract customers from smaller rural communities. 2-77
  78. 78. Retail Location Theories The Formula used: d Dab = Pb 1+ Pawhere Dab is the breaking point from city A, measured in miles along the road to city B; d is the distance between city A and city B along the major highway; Pa is the population of city A; and Pb is the population of city B. 2-78
  79. 79. Retail Location Theories Point of Indifference Is the extremity of a city’s trading area where households would be indifferent between shopping in that city or an alternative city in a different geographical direction. 2-79
  80. 80. Trading Area for City A Exhibit 7.6 2-80
  81. 81. The break points are computed based on the formula: Exhibit 7.6 2-81
  82. 82. Computation of the values usingReilly’s Law of Retail GravitationFrom City_ to Computed value using the Point of equationCentral City (A) Indifference: 18 From B to A = 14.5 X = 18 –14.5 = 3.5 1+√ 14000 240000 14 From C to A = 10.8 Y = 14 –10.8 = 3.2 1+√ 21000 240000 5 From D to A = 3.7 Z = 5 – 3.7 = 1.3 1+√ 30000 240000 2-82
  83. 83. Limitations of Reilly’s Law Distance is only measured by major thoroughfares; some people will travel shorter distances along cross streets Travel time does not reflect distance traveled. Many people are more concerned with time traveled than with distance Actual distance may not correspond with perceptions of distance 2-83
  84. 84. Illustration of Location Analysis How to apply Reilly’s Law for the Project 2-84
  85. 85. The challenge of doing LA analysis inSingapore context  Urban state  Small geographical area  Efficient transportation system (no issue about mobility unlike US where customers commute if there larger malls)  In this project we will substitute population size (as shown in text) with mall size (square feet)  Reason: mall size becomes the “surrogate measure” of a centre’ attractiveness 2-85
  86. 86. Mall BFloor Area 450K Sq Ft Mall C Floor Area 150K Sq Ft 25 km 10km Mall A Your Site Floor Area 250K Sq Ft 2-86
  87. 87. Work out using the Reilly model d Dab = Pb 1+ Pawhere Dab is the breaking point from city A, measured in milesalong the road to city B;d is the distance between city A and city B along the majorhighway;Pa is the population of city A; and Substitute with floor area (square feet) of your own mall sitePb is the population of city B. Substitute with floor area (square feet) of another nearby mall that may attract similar customers 2-87
  88. 88. Mall A and Mall B 25Dab = 450 1+ 250 = 10.6km 2-88
  89. 89. Mall A and Mall C 10Dab = 150 1+ 250 = 5.6 km 2-89
  90. 90. Mark off the break points Mall BFloor Area 450K Sq Ft Mall C Floor Area 150K Sq Ft 25 km 5.6 10km 10.6 Mall A Your Site Floor Area 250K Sq Ft 2-90
  91. 91. Zone off the Trading Area Mall BFloor Area 450K Sq Ft Mall C Floor Area 150K Sq Ft 25 km 5.6 10km 10.6 Mall A Your Site Floor Area 250K Sq Ft 2-91
  92. 92. Show the maps…your trading area could be triangular or even polygon92
  93. 93. Trading area mapped out against three malls93
  94. 94. Retail Location Theories Saturation Theory Examines how the demand for goods and services of a potential trading area is being served by current retail establishments in comparison with other potential markets. 2-94
  95. 95. Retail Location Theories  Retail Store Saturation: is a condition where there is just enough store facilities for a given type of store to efficiently and satisfactorily serve the population and yield a fair profit to the owners. 2-95
  96. 96. Retail Location Theories  Understored: is a condition in a community where the number of stores in relation to households is relatively low so that engaging in retailing is an attractive economic endeavor. 2-96
  97. 97. Retail Location Theories  Overstored: is a condition in a community where the number of stores in relation to households is so large that engaging in retailing is usually unprofitable or marginally profitable. 2-97
  98. 98. Retail Location Theories  Index of Retail Saturation (IRS) is the ratio of demand for a product (households in the geographic area multiplied by annual retail expenditures for a particular line of trade per household) divided by available supply (the square footage of retail facilities of a particular line of trade in a geographic area). 2-98
  99. 99. Index of Retail Saturation (IRS) IRS = (H X RE)/RFWhere IRS is the index of retail saturation foran area; H is the number of households in thearea; RE is the annual retail expenditures fora particular line of trade per household in thearea; RF is the square footage of retailfacilities of a particular line of trade in thearea (including square footage of the proposedstore). 2-99
  100. 100. Sample Question 11 from the text:11. Compute the index of retail saturation for the following three markets. The data fordepartment stores are as follows: MARKET A B CRetail expenditures per household $789 $875 $943Square feet of retail space 600,000 488,000 808,000Number of households 121,000 102,000 157,000Based on these data, which market is most attractive? What additional data would you findhelpful in determining the attractiveness of the three markets? 2-100
  101. 101. Solution to Question 11IRS (Market A) = (121,000 x $789) / 600,000 = 159.12IRS (Market B) = (102,000 x $875) / 488,000 = 182.89IRS (Market C) = (157,000 x $943) / 808,000 = 183.23The most attractive market is Market-C with an IRS of 183.23 or $183.23 in expected sales persquare foot. It would be helpful if additional information on various factors that influencemarket demand potential such as population characteristics, buyer behavior characteristics,household income, household age profile, household composition, community life cycle,population density and mobility. In addition supply factors such as square feet per store, squarefeet of space per employee, store growth, and the quality of competition should be analyzed. 2-101
  102. 102. See also the ‘Planning Your Own Retail Business’ exampleThe retail store that you are planning has an estimated circular trade radius of four miles. Withinthis four-mile radius, there is an average of 1,145 households per square mile. In a normal year,you expect that 47 percent of these households would visit your store (referred to as penetration)an average of 4.3 times (referred to as frequency). Based on these figures, what would youexpect to be the traffic (i.e., number of visitors to your store per year)? (Hint: Traffic can beviewed as the square miles of the trade area multiplied by the household density multiplied bypenetration, which is in turn multiplied by frequency.) Once you answer this question, do some sensitivity analysis, which is an assessment ofhow sensitive store traffic is to changes in your assumptions about penetration and frequency.What happens if penetration drops to 45 percent or rises to 50 percent? What happens iffrequency drops to 4.0 times annually or rises to 4.5 times annually? In this analysis, only changeone thing at a time and hold all other assumptions constant. 2-102
  103. 103. Solution:Suggested Answer:One needs to first compute the following.1. square miles of trade area = r2 = (22/7)(4)2 = 50.2862. traffic = (square miles in trade area) x (household density) x (penetration) x (frequency) traffic = (50.286) x (1,145) X (47%) X (4.3) traffic = 116,364Next do some sensitivity analysis. 2-103
  104. 104. Solution (sensitivity analysis) Consider the following possible parameter values SQUARE HOUSEHOLD MILES IN (x) DENSITY (x) PENETRATION (x) FREQUENCY = TRAFFIC TRADE AREA 1 50.286 x 1145 x 47% x 4.3 = 116,364 2 50.286 x 1145 x 45% x 4.3 = 111,412 3 50.286 x 1145 x 50% x 4.3 = 123,792 4 50.286 x 1145 x 47% x 4.0 = 108,246 5 50.286 x 1145 x 47% x 4.5 = 121,776 2-104
  105. 105. Retail Location Theories  Buying Power Index (BPI): is an indicator of a market’s overall retail potential and is composed of the weighted measures of effective buying income (personal income, including all nontax payments such as social security, minus all taxes), retail sales, and population size. 2-105
  106. 106. Buying Power Index (BPI)BPI = 0.5(the area’s percentage of U.S. effective buying income) + 0.3(the area’s percentage of U.S. retail sales) + 0.2(the area’s percentage of U.S. population) 2-106
  107. 107. Other Demand and SupplyFactors- Market Demand Potential- Market Supply Factors 2-107
  108. 108. Market Demand Potential  Population Characteristics  Buyer Behavior Characteristics  Household Income  Household Age Profile  Household Composition  Community Life Cycle  Population Density  Mobility 2-108
  109. 109. Identifying Communities with High DemandPotential for Fast-Food Drive-In Restaurant Exhibit 7.7 2-109
  110. 110. Market Supply Factors Square Feet Per Store Square Feet Per Employee Growth in Stores Quality of Competition 2-110
  111. 111. Site Analysis Site Analysis Is the evaluation of the density of demand and supply within each market with the goal of identifying the best retail site(s). 2-111
  112. 112. Site Analysis Size of Trading Areas Description of Trading Area Demand Density Supply Density Site Availability 2-112
  113. 113. Site Analysis Size of Trading Areas  Applebaum developed a technique for estimating the trade area of a current store.  It involved interviewing a customer for each $100 in weekly sales. The customers were randomly selected and their home addresses obtained.  After the home addresses of the shoppers were plotted on a map one could make inferences about the trading area size and the competition.  This is sometimes referred to as ‘customer spotting’ 2-113
  114. 114. But for new stores… the task is more difficult; however, there are some general rules that apply.1. Stores that sell products that the customer wants to buy in the most convenient manner will have a smaller trading area2. As customer mobility increases, the size of the trading area increases3. As the size of the store increases, its trading area increases, because it can stock a broader and deeper assortment of merchandise, which will attract customers from greater distances. 2-114
  115. 115. Some conclusions… 4. As the distance between competing stores increases, their trading areas will increase. 5. Natural and synthetic obstacles such as rivers, mountains, railroads, and freeways can abruptly stop the boundaries of a trading area 2-115
  116. 116. Description of Trading Areas  Retailers can access at relatively low cost information concerning the trading area for various retail locations and the buyer behavior of the trading area.  Use descriptors to profile trading areas  Start with geo-demographic variables  Can be supplemented with lifestyle and behavioral factors  Neighborhood analysis  MapInfo  www.mapinfo.com 2-116
  117. 117. Demand Density  Demand Density Is the extent to which the potential demand for the retailer’s goods and services is concentrated in certain census tracts, ZIP (postal) code areas, or parts of the community. 2-117
  118. 118. Demand Density Map Exhibit 7.11
  119. 119. Supply Density Supply Density The extent to which retailers are concentrated in different areas of the market under question. 2-119
  120. 120. Store Density and Site Availability Map 2-120Exhibit 7.12
  121. 121. Checklist for Site Evaluations Exhibit 7.13 2-121
  122. 122. Checklist for Site Evaluations Exhibit 7.13 2-122
  123. 123. Checklist for Site Evaluations Exhibit 7.13 2-123
  124. 124. Checklist for Site Evaluations Exhibit 7.13 2-124
  125. 125. Checklist for Site Evaluations 2-125 Exhibit 7.13
  126. 126. Site Selection Nature of Site Terms of Purchase or Lease Expected Profitability 2-126
  127. 127. Site Selection  100 Percent Location Is when there is no better use for a site than the retail store that is being planned for that site. After all, all retailers should attempt to find a 100 percent location for their stores. A 100 percent location is a location where there is no better use for the site then the retail store that is being planned. Retailers should remember that what may be a 100 percent site for one store may not be for another. The best location for a supermarket may not be the best location for a discount department store 2-127
  128. 128. Nature of Site Store Compatibility Exists when two similar retail businesses locate next to or nearby each other and they realize a sales volume greater than what they would have achieved if they were located apart from each other. 2-128
  129. 129. Past Year Exam Questions MARKET SELECTION & LOCATION ANALYSIS (Chapter 7)1-129
  130. 130. October 20062-130