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Some General Factors Affecting
Location Choice
1. Access to a capable, well-trained, stable work
force.
2. Availability of adequate and affordable supplies
and services.
3. Availability, type, use, and cost of
transportation.
4. Taxes and government regulations.
5. Availability and cost of electricity, gas, water,
sewerage, and other utilities.
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Specific Factors to Consider for
Various Businesses
Retailers
Sell goods to the ultimate consumer.
Producers
Convert materials into products in considerable
volume for others to sell to ultimate consumers.
Service companies
Which provide a service for customers, have
some characteristics of both retailers and
producers.
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Types of Stores
Convenience goods
Products that
customers buy often,
routinely, quickly, and
in any store that
carries them.
Shopping goods
Goods that customers
buy infrequently,
after shopping at only
a few stores.
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Types of Stores
Specialty goods
Bought infrequently, often at exclusive outlets,
after special effort by the customer to drive to
the store.
Downtown locations
Attract business-oriented activities, as
government, financial businesses, and head
offices of large firms are usually located in the
downtown area.
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Types of Stores
Seasonal stores
Those that target customers for specific seasons
or events.
Some are open year-round and some are only
open seasonally.
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Types of Locations
Freestanding stores,
Found in various
locations are usually
best for customers who
have brand or company
loyalty.
The market niche –
product and clientele –
must conform to the
needs of the people in
the area.
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Types of Locations
Shopping centers
Vary in size and are designed to draw traffic
according to the planned nature of the stores to
be included in them.
Anchor stores
Those that generate heavy traffic in a shopping
center.
Often large department stores placed at ends of
the mall arms.
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Why are shopping centers so
popular?
Shopping centers are designed to draw traffic
according to the planned nature of the stores
to be included in them
Shopping centers offer many services, such as
specialized activities to bring in traffic,
merchant association activities, parking,
utilities, and combined advertising. A current
trend is for large "power centers" to compete
with one another to be the largest
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Another reason for the popularity of
shopping centers is the growing interest in
shopping.
Enclosed malls have eliminated weather
problems for customers. Indeed, older people
are encouraged to use the mall for exercise in
a controlled climate.
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Drawbacks of Shopping Centers
1. Cost: there is now a "total rent" concept for
costs that must be considered in a shopping
center. These costs may include dues to the
merchants' association, maintenance fees for
the common areas, and the cost of special
events or combined advertising. The most
common rental is a basic rent, usually based
on square footage, plus a percentage of gross
sales (usually 5 to 7 percent). In total, these
costs tend to be high and often discourage
tenants
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2. Restrictions imposed by the center’s theme.
3. Operating regulations.
4. Possible changes in the center’s owners and
managers.
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Plants and Physical Facilities
Manufacturing, or production
Usually involves making or processing materials into
finished goods.
Success of a given location can hinge on the availability and
cost of the proper mode of transportation.
Facilities
The buildings, machines and other equipment, and
furniture and fixtures needed to produce and distribute a
product.
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Telecommuting and Remote Locations
Needs
Access to phone systems, services, and hig-speed
internet.
The best computer and technology you can buy.
Access to pick up Fed Ex, UPS, and USPS.
Access to purchase of supplies.
Knowledge of year-round weather and
transportation.
Four-wheel drive and gas efficient vehicle.
Contingency plan for ding business.
