Market Selection and Retail Location Analysis PDF

Market Selection and Retail Location Analysis  Retail Location Decisions 1 MARKET IDENTIFICATION Identifying the most attractive markets. 2 SITE ANALYSIS Evaluating the demand and...

Market Selection and Retail Location Analysis  Retail Location Decisions 1 MARKET IDENTIFICATION Identifying the most attractive markets. 2 SITE ANALYSIS Evaluating the demand and supply with each market 3 SITE SELECTION Selecting the best site (or sites) available MARKET IDENTIFICATION CRITERIA CRITERIA: 1. Measurability – concerns whether or not objective data exists on the attributes of the target market. (Age, Gender, Education, Ethnic Group, and Religion) 2. Accessibility – deals with the extent to which marketing efforts can be uniquely targeted at a particular segment of the market. (Do they watch television, listen to radio, visit the same websites) 3. Substantiality – relates to whether the target market is large enough to be economically worth pursuing. Target Market – the segment of the market that the retailer decides to pursue through its marketing efforts.  Reaching the Target Market STORE-BASED RETAILERS NONSTORE-BASED RETAILERS Operate from a fixed store Reach customers at home, at location that requires work, or at places other than a customers to travel to the store where they might be open store to view and purchase to purchasing. the merchandise and or services. Types: Street Peddling, Mail Order, Direct Selling, Internet (E-commerce), Automated Merchandising Systems Types: Business District, Shopping centers/Malls, Freestanding, and nontraditional  STORE-BASED RETAILERS Business District Shopping Centers and Malls Also known as Central Business Also known Temples of Consumption District (CBD). A centrally owned or managed An unplanned shopping area shopping district that is planned, had around the geographic point balanced tenancy (the stores where all public transportation complement each other in converge. merchandise offerings), is sorrounded by parking facilities. It has one or more anchor stores and a variety of smaller stores.  STORE-BASED RETAILERS Freestanding Location Nontraditional Location Generally locates along major Examples: Stores in airport, traffic arteries without any terminal, pop-up store inside the adjacent retailers selling school, stores inside hospital competing products to share buildings. traffic.  GIS A geographic information system (GIS) consists of integrated computer hardware and software that store, manage, analyze, edit, output, and visualize geographic data. 8  RETAIL LOCATION THEORIES Retail Gravity Theory Index of Retail Assumes that as the population Saturation of a community rises relative to Reflects the total demand for nearby communities, it will have the product under question relatively more merchandise and whether the area is assortments and availability, overstored or understored, which serves as a drawing which is the availability of power for community to draw current retailers to service or customers into its retail supply current demand. shopping district. RETAIL LOCATION THEORIES Buying Power Index Combines effective buying income, retail sales, and population size into an overall indicator of a market’s potential.  SITE ANALYSIS DESCRIPTION SIZE OF THE DEMAND OF THE TRADING AND SUPPLY TRADING AREA AREA DENSITY Trade Area defines where customers live and how far they are likely to travel to a particular business or business district.  SIZE OF THE TRADING AREA William Applebaum introduced a technique based on Customer spotting. Focus on getting customer information such as demographic information, shopping habits, attitude towards the stores and its competitors to create a map. 1. Stores that sell products to consumer wants to purchase in the most convenient manner will have a smaller trading area. 2. As consumer mobility increases, the size of the store’s trading area increases.  SIZE OF THE TRADING AREA 3. 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. 4. As the distance between competing stores increases, their trading areas will increase. 5. Natural and human-made obstacles such as river, mountains, railroads, and freeways can abruptly limit the boundaries of a trading area. DESCRIPTION OF THE TRADING AREA Consider factors such as income level, age, occupation, family status, race, culture, religion, population density, urbanization, and housing types. Aside from demographics, lifestyles, retail opportunities, and financial and media habits must be considered.  DEMAND SUPPLY DENSITY DENSITY It is the extent to which potential demand for the retailer’s goods and It shows the number of services is concentrated in certain census tracts, ZIP-code areas, or existing retail establishments parts of community. including their location. To determine the demand density, Helps identify the remaining retailers need to identify what they site available. believe to be the major variables influencing their potential demand. (standard demographic variables such as age, income, gender, education) SITE SELECTION  SITE AVAILABITY Determine after conducting demand-supply density analysis. Eminent Domain Law – the inherent power of the government to seize private property without owner’s consent in order to benefit the community.  SITE SELECTION In principle, all retailers should attempt to find a 100- percent location for their stores. 100-percent location – one where there is no better use for the site than the retail store that is being planned. Criteria in evaluating sites: Nature of the site, Traffic characteristics, types of neighbors, and the term of purchase or lease.  Is the site currently a vacant store? Is the site vacant parcel of land? Is the site of a planned shopping center? Nature of the Site  Number and type of vehicles passing Number and type of pedestrian passing Level of street congestion Access of vehicle to location Presence of physical barriers Accessibility of major highway artery Traffic Characteristics  Number and types of stores in the area. Number and location of direct competitors in the area. Competitiveness of other merchants. Analysis of key players in the area. Type of Neighbors  Length of Lease (it could be too long or too short) Exclusivity Clause (whether or not the retailer will be the only one allowed to sell a certain line of merchandise) Guaranteed traffic rate ( a reduction in rent should be offered if the shopping center fails to achieve a target traffic level) Anchor Clause ( a reduction in rent if the anchor store does not open on time) Terms of Lease (Lease arrangement): Fixed payment or variable payment Terms of Purchase or Lease “The best locations come expensive.”  Mall Rentals in the Philippines A mall space in Metro Manila will cost more (per sqm) than a rental space in the provinces. The following spaces will probably cost more: Food court, Areas beside cinemas and groceries, and Mall entrances Types of store: Food, Non-food, Non-stores (vending machines or exhibits) In-line store or kiosk  Mall Rentals in the Philippines Fixed or Percentage Rent Other expense and Cash outlays Common Usage Service Area (CUSA): lobby, hallways, restrooms, and others Electricity and Water Utilities Bio-augmented and Pest Control Marketing Ads Fund Ingress (moving in) and Egress (moving out) Deposit and Bonds - 2 to 6 months’ worth of gross rent THANK YOU!  Gantt chart Week 1 Week 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Task 1 Task 2 ◆ Task 3 Task 4 ◆ Task 5 ◆ Task 6 Task 7 Task 8 28  SWOT Analysis STRENGTHS WEAKNESSES Blue is the colour of the Yellow is the color of gold, clear sky and the deep sea butter and ripe lemons S W O T Black is the color of ebony White is the color of milk and of outer space and fresh snow OPPORTUNITIES THREATS 29  Business Model Canvas Key Partners Key Activities Value Propositions Customer Relationships Customer Segments Insert your content Insert your content Insert your content Insert your content Insert your content Key Resources Channels Insert your content Insert your content Cost Structure Revenue Streams Insert your content Insert your content 30