STEP INVOLVE IN RETAIL LOCATION

Neeru Banchhor AFB-2011.13018 14-07-2012

TRADE AREA ANALYSIS & STORE LOCATION

INTRODATION
SELECTION

OF LOCATION TRADE AREA ANALYSIS STORE LOCATION TYPES OF RETAIL LOCAION CONCLUSION

Importance Of Location To Retailer

Location is a major factor leading to a firms success or failure . It is a sizeable investment . It is a long term commitment . It is fixed nature . A firm cant easily move to another location or convert to another format . Location is typically prime consideration in customers store choice. Location decisions have strategic importance because they can help to develop sustainable competitive advantage.

Trade Area Analysis/Store Location

Location of the store is capital intensive, taken once in a life time Selecting a location involves two major considerations:

Deciding on the general area to locate. Selecting the specific site within the general area. Compatibility with surrounding areas

Retailer follow 4 steps in choosing retailer location

Evaluate Alternate Geographical areas

Determine type of Location

Select General Location

Analyze Alternate sites.

1.

Evaluate Alternate geographical trading areas:

Based on Per capita purchasing power. Number of competitors. Catchment area analysis.

2.

Determining the type of Location;

Population factor.
Population of the area. Number of households. Density of the population, Sex ratio. Characteristics of Population distribution. Social and cultural mixes and biases. Occupation distribution Level. Literacy level of average population. Level of education. Distribution of Population based on Religion. Distribution of POPULATION based on Language.

Literacy Factor:

 Trading Factor Analysis: SWOT.

Types of Major stores existing. Size of trading area. Type and kind of merchandising offered. Market reputation of major retailers. Type and availability of stock/stock areas. Type of trading undertaken.

Accessibility Factor:
Lines and level of transportation availability. Availability of parking space. Pedestrian passage and comfort. Travel distance.

Amenities factor:
Banking Services, ATM, etc. Delivery, credit. Social and amusement facility.

Classification of consumer goods

The merchandise or consumer goods can be classified broadly as:

Convenience goods:
Consumption goods which are purchased on a regular basis. E.g. Milk, eggs, curds. etc.

Shopping Goods:
These are items which are not purchased on a regular basis. E.g. Furniture's, Garments etc.

Specialty stores: These are usually luxury or special items purchased on special occasions.
These have a limited target market. Needs a dense cluster of population to create a sale. Even out of town spaces are used

TYPES OF RETAIL LOCATIONS

Indian markets are broadly categorised as

Unplanned market area Planned market area

UNPLANNED MARKET AREA: Main Market Area:

a. Characteristic Features:
a. Large shopping stores with selected assortment of Merchandise. b. Variety of store types in Centralized Location. c. High competition, Price ranges, High quality of Products and services. d. Convenience of transport and mobility. e. Parking spaces. f. Wide target Market. g. Higher security requirements. h. High rental. i. Problems of traffic control and pollution. j. High maintenance cost and high cases of shrinkage.

2 . Secondary business Area or Neighborhood Area:

Characteristics:
Variety of shops from consumer to shopping goods. Higher competition and comparison of goods and services. Un-organized parking and traffic congestion. Variety of shopping opportunities for the retailers. Prices are comparable to central market area. Lower assortment of breadth and depth of merchandise. Rental are usually lower than the central market area.

3 . Strip Clusters: ( Ribbon centers)

Usually isolated stores and do not form a big market place. Small convenience shops located near residential areas. Specialty of the town stores.

4 . Isolated shopping stores or Free standing stores.

Freestanding Sites location for individual store unconnected to other retailer Advantages:
No competition

Low Rental Costs Flexibility Parking Lower price

Disadvantages:
Difficult attracting customer Customers not willing to travel Customers like veriety in shopping High advertising cost Operating cost Building ownership

Example.

Merchandise Kiosks small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies.

Example.

Merchandise Kiosks small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies.

Market Analysis Model

Market Feasibility
Location/Site Feasibility

Decision : Go, no-GO, Go with modifications

Financial Feasibility

Planned controlled shopping stores

A planned shopping store has one or more Anchor or Generator Stores That draws the population towards the marketing area. Planned shopping centers resulted due to;
Retailers started following the population shift. R & D in retail

Characteristics :
Essentially planned as a unit with a objective of having a balanced assortment of products and services in different stores. Complement overall merchandising effort. Provide ample and free parking.

I) Planned Shopping Centers

Industry nomenclature originally offered basic terms : 1) neighbor hood, 2) community, 3) regional, and 4) super regional. 5. Fashion/specialist center 6. Power center 7. Theme / Festival center 8. Factory outlet center

Factors for choosing a location

Region/Market area selection.

Geographical reasons.
Areas have excellent visibility. Known well throughout the region. Managers have a greater control over a regional market. Managers can easily visit and assess competition. Operate more efficiently. Can easily target the customers with their pricing and merchandise

Trade area analysis:

A trade area is the geographic area that generates the majority of the customers for the store. Primary trade area: primary trading covers between 50-80% of the stores customers.

Secondary Trading Area: this area contains the additional 15- to 25% of the stores customers.
Tertiary trading area covers the balance customers These trading areas are dependent on distance and do not always have to be concentric in nature

Types of Trades areas

Trade Area selection. The 100 percent location.

100 percent location depends on:

Customer traffic. Specialty Goods. Generator stores. Sides of the streets. Corner location. Transportation facilities. Adequacy of parking. Growth of business and facilities in the area. Intercepting qualities of a site. Customer interchange potential and compatibility of existing business. Possible negative features .

The choice of location is required extensive decision making criteria o Population

o Size

& traits o Competition o Transportation access o Parking availability o Nature of the near by store o Property cost o The length of the agreement o Legal restrictions

ISSUES TO BE THOUGHT OF CHOOSING A RETAIL SIDE

Type

of side

Is side near the target market? What are the age & condition of the side ? What is the target area ? Accessibility Does the side have good visibility from the street ? Is their good balance between to much & to little traffic flow ? Is their good balance between to much & to little parking? Is their good balance between to much & to little congestion of traffic & people ? Is it easy to enter / exit the parking lot ?

Location advantage with in a center Terms of occupancy Legal Considerations Power , water & maintenance feasibility

BIBLIOGRAPHY
RETAIL MANAGEMENT http://www.InfoFanz.com Info@InfoFanz.com Web sites for additional information

http://www.selig.uga.edu/forecast/totalbuy/total/tbp1.html http://demographicsusa.com/p_demographics.html

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