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Questions and Answers
What is an exclusivity clause in a retail lease?
What is an exclusivity clause in a retail lease?
Which area would likely have the highest rental costs for mall space?
Which area would likely have the highest rental costs for mall space?
What typically characterizes fixed payment leases?
What typically characterizes fixed payment leases?
What is a guaranteed traffic rate in the context of mall rentals?
What is a guaranteed traffic rate in the context of mall rentals?
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Which of the following could be classified as an 'other expense' in a mall lease agreement?
Which of the following could be classified as an 'other expense' in a mall lease agreement?
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What does a Gantt chart primarily illustrate?
What does a Gantt chart primarily illustrate?
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Which of the following is a strength identified in the SWOT analysis?
Which of the following is a strength identified in the SWOT analysis?
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In the Business Model Canvas, which of the following is NOT one of the sections?
In the Business Model Canvas, which of the following is NOT one of the sections?
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Which color in the weaknesses section of the SWOT analysis symbolizes something positive?
Which color in the weaknesses section of the SWOT analysis symbolizes something positive?
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Which of the following best describes the 'Opportunities' component in a SWOT analysis?
Which of the following best describes the 'Opportunities' component in a SWOT analysis?
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What is the relationship between store size and trading area?
What is the relationship between store size and trading area?
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What role does distance between competing stores play in trading areas?
What role does distance between competing stores play in trading areas?
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Which of the following factors does NOT influence a trading area's characteristics?
Which of the following factors does NOT influence a trading area's characteristics?
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What is considered a '100-percent location' for a retail store?
What is considered a '100-percent location' for a retail store?
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Which characteristic is important in evaluating site conditions?
Which characteristic is important in evaluating site conditions?
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What does demand density indicate for retailers?
What does demand density indicate for retailers?
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Which of the following is NOT a typical criterion for site evaluation?
Which of the following is NOT a typical criterion for site evaluation?
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What is the Impact of eminent domain law on site availability?
What is the Impact of eminent domain law on site availability?
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What is the primary focus of market identification in retail location analysis?
What is the primary focus of market identification in retail location analysis?
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Which of the following is NOT a criterion for market identification?
Which of the following is NOT a criterion for market identification?
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What does accessibility in market identification refer to?
What does accessibility in market identification refer to?
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Which type of retailer reaches customers outside of a physical store?
Which type of retailer reaches customers outside of a physical store?
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Which of these retail environments is also known as Temples of Consumption?
Which of these retail environments is also known as Temples of Consumption?
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What is meant by substantiality in the context of market identification?
What is meant by substantiality in the context of market identification?
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Which of the following is an example of a store-based retailer?
Which of the following is an example of a store-based retailer?
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In site selection for retail, what does the term 'fixed store location' signify?
In site selection for retail, what does the term 'fixed store location' signify?
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What characterizes freestanding retail locations?
What characterizes freestanding retail locations?
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What is the purpose of a Geographic Information System (GIS)?
What is the purpose of a Geographic Information System (GIS)?
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What does the Index of Retail Saturation measure?
What does the Index of Retail Saturation measure?
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What does the Buying Power Index combine to evaluate a market's potential?
What does the Buying Power Index combine to evaluate a market's potential?
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What happens to the trading area size as consumer mobility increases?
What happens to the trading area size as consumer mobility increases?
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Which factor primarily affects the size of a store's trading area?
Which factor primarily affects the size of a store's trading area?
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What distinguishes nontraditional retail locations from traditional ones?
What distinguishes nontraditional retail locations from traditional ones?
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Which statement about retail gravity theory is accurate?
Which statement about retail gravity theory is accurate?
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Study Notes
Market Selection and Retail Location Analysis
- Market selection involves identifying the most attractive markets.
- Site analysis evaluates demand and supply for each market.
- Site selection involves choosing the best available site(s).
Market Identification
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Criteria:
- Measurability: Objective data on target market attributes (e.g., age, gender, education, religion) exists.
- Accessibility: Marketing efforts can target specific market segments uniquely (e.g., TV, radio, websites).
- Substantiality: The target market is large enough to pursue economically.
- Target Market: The market segment a retailer chooses to target through their marketing efforts.
Reaching the Target Market
- Store-Based Retailers: Operate from fixed locations requiring customer travel. Types include: business districts (CBDs), shopping centers/malls, freestanding, and non-traditional.
- Nonstore-Based Retailers: Reach customers outside store locations. Types include: street peddling, mail order, direct selling, internet (e-commerce), and automated merchandising systems.
Store-Based Retailers
- Business District (CBD): Unplanned shopping area around public transportation hubs.
- Shopping Centers/Malls: Centrally managed, planned districts with complementary merchandise offerings and anchored stores.
- Freestanding Location: Along major traffic arteries, without adjacent competing stores.
- Non-Traditional Location: Stores in airports, terminals, schools, or hospitals.
Geographic Information System (GIS)
- A geographic information system (GIS) is an integrated computer hardware and software system for storing, managing, analyzing, editing, outputting, and visualizing geographic data.
Retail Location Theories
- Retail Gravity Theory: As community population increases, it will offer more merchandise and serve as a drawing power to nearby customers.
- Index of Retail Saturation: This reflects total demand for a product, determines if an area is over- or under-supplied, and assesses the availability of current retailers to meet demand.
- Buying Power Index: Combines effective buying income, retail sales, and population size to assess a market's potential.
Site Analysis
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Size of the Trading Area: Area where customers live and are likely to travel for a business or district.
- Customer spotting analysis maps demographic information and attitudes, shopping habits to predict store catchment area.
- Factors impacting trading area size include store size, consumer mobility, distance from competing stores, and geographical barriers like natural and man-made obstacles.
- Description of the Trading Area: Factors include income levels, age, family status, race, culture, religion, population density, urbanization, and housing types; alongside lifestyles, retail opportunities, and financial/media habits are crucial.
- Demand and Supply Density: This measures potential demand for a retailer's goods and how much services concentrate in an area (e.g., census tracts, ZIP codes). It also highlights existing retail establishments and their locations helping assess sites for potential new businesses
Site Selection
- All retailers aim for 100% location (no better use), considering site nature, traffic characteristics, neighborhood types, and lease terms. Factors for site selection include:
- Site Availability: Determine availability after demand-supply density analysis and consider Eminent Domain Law (government seizing property).
- Nature of the Site: Is it a vacant space, a vacant lot, or a planned center?
- Traffic Characteristics: Vehicles & pedestrian flow, street congestion, accessibility, and physical barriers.
- Type of Neighbors: Number and type of existing stores, direct competitors, other merchants.
- Terms of Purchase or Lease: Lease length, exclusivity clauses, guaranteed traffic, anchor clauses, payment terms.
Additional Summary
- Best locations are expensive.
- Specific data examples: mall rentals in the Philippines cost more in Metro Manila than in provinces and certain areas might command higher prices based on location.
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Description
This quiz covers the essential aspects of market selection and retail location analysis, focusing on the identification of attractive markets. It discusses criteria for market identification and how store-based and nonstore-based retailers reach their target markets. Test your knowledge on these crucial retail concepts.
