- Is where the company sells its products. Choosing the right one is important as it - affects sales and profits, and the resources consumed. Also, each location has inherent advantages and risks
Market Location
- Where there are no other outlets in the vicinity of the store and therefore store depends on its own pulling power and promotion to attracts customers
Freestanding/Isolated Store
TWO CATEGORY OF SHOPPING CENTRE
● Regional Shopping Centers or Mall
● Neighborhood/Community/Shopping Centers
Are the largest planned shopping centers
● Regional Shopping Centers or Mall
Usually have a balanced mix of stores including a few grocery stores, a chemist, a variety store and a few other stores selling convenience goods to the residents of the neighborhood
● Neighborhood/Community/Shopping Centers
FACTORS TO BE CONSIDERED IN
SELECTING A SHOPPING CENTER
● Traffic Count
● Pedestrian Traffic Count
● Estimate of Store Sales
● Automobile Traffic Count
EVALUATING SPECIFIC AREAS FOR
LOCATIONS
Competition
Strategic Fit
Economic Condition
Operating Costs
● Refer to the state of macroeconomic variables and trends in a country at point in time. Such conditions may include GDP growth potential, the unemployment rate, inflation, and fiscal and monetary policy orientations
Economic Condition
● Is a rivalry where two or more parties strive for a common goal which cannot be shared: where one’s gain is the other’s loss
Competition
● Expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment
Strategic Fit
● Are the expenses incurred by a business that it uses to conduct its operations. These expenses may include payroll, rent, insurance premiums, utilities, and equipment maintenance. Operating costs do not include capital expenditures or depreciation
Operating Costs
Evaluating a Site for Locating a Retail Store
When evaluating and selecting a specific site, retailers consider:
● The characteristics of the site
● The characteristics of the trading area
● The estimated potential sales that can be generated
SITE CHARACTERISTICS
Traffic Flow and Accessibility
Convenience of Going to Site
Accessibility
Traffic Flow and Accessibility
- When traffic is greater, more customer shop
- Good for convenience retailers
- Not necessary for destination retailers
- Too much can impede access to store
- Accessibility to store is as important as traffic flow
Convenience of Going to Site
Accessibility
- Road pattern and condition
- Natural and artificial barriers
- Visibility
- Traffic flow
- Parking
- Congestion
- Ingress/egress
WHAT SHOULD RETAILERS CONSIDER REGARDING PARKING?
- Observe shopping center at various times
- Employee parking availability
- Shoppers that use cars
- Parking by non-shoppers
- Typical length of a shopping trip
PSYCHOLOGICAL TRIPS
Decoy Effect
Illusion Scarcity
Loss Aversion
- Is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated
Decoy Effect
- Is the perception that a product is more valuable when its availability is limited
Illusion scarcity
- A psychological and economic concept, which refers to how outcomes are interpreted as gains and losses where losses are subject to more sensitivity in people’s responses compared to equivalent gains acquired
Loss Aversion
