Professional Documents
Culture Documents
The questions are from two dimensions Where is the best location to put a new store? Is the location of my present store(s) most effective?
Local store marketing plan versus local geography What is the trade area? What are my distribution networks? Where are my competitors? Are there any new competitors? Is my store local service or traffic oriented or both What are my forecasting models? Demographic data changing population Traffic count data Drive times to the store
Processes
Simple maps of trade areas 1 mile radius Locate all competitors Evaluate locations of growth in the local markets What more could they do?
Travel distances to all stores including competitors Location of potential special incentive programs - schools etc.
Objective: Create a site evaluation & performance prediction system . Secondary was a direct mailing system Database per store unit
Unit sales Location of competitors 1 mile socioeconomic/demographic data set 2 mile socioeconomic/demographic data set Traffic counts mapped and weighted on the street Distribution of 80 % of total sales Customer locations (latitude/longitude)
Predicting one variable using two or more other variables Sales per store
Predictors
Change in households 1985-1990 Population under 15 years old Weighted traffic counts Average household income Visibility of the store Weighted competition The importance of each indicator How correlated the indicators are to each other What factors are the most important in predicting store sales.
Geocoding of all customers first Computed the distance to each customer Calculated the contribution of the customer to the store Drew a boundary that represented 80% of store sales Thus the primary market area (PMA) was defined Overlay of zip codes to the PMA to define the mailing per store
Objective to provide dynamic equilibrium for demand and supply of products & services over space There is a geographically uneven demand for products & services .. High demand in one place low in another Can you given an example? Processes
Select new sites and close others Defining merchandise mix Targeted customer groups Analysis of the competition Advertising & distribution
Processes (cont)
Catchment or market area definition - primary, secondary & tertiary Travel time analysis
Varying demands for products Low to high order continuum Low order low price frequent purchases High order high prices infrequent purchases Pharmacy: Bubble gum to prescription medicine Automobile dealer: Sales to service
Low order good trade areas? High order good trade areas? Pharmacy
Low order goods local unplanned purchases? High order goods regional demand planned purchases
General Processes
Defined by distance customers travel to stores Calculate market penetration Locate untapped markets Assumes you know the location of your customers Create profiles of existing customers Then look for areas with similar profiles
Customer Prospecting
Assumes you do not know where the customers live Store-based trade areas
Simple rings Data driven rings Equal competition areas (Thiessen polygons) Drive time areas along street networks
Store Prospecting
Searching for new sites for your business Define store-based trade areas for a new store
Locational questions
Do my customers live, work or play near my site? Which customer segments are driving my business? How far are my customers willing to travel to shop? Is my site well placed to defend or dominate a market? How can we increase trade area traffic? What is the best venue/store mix for a site? Where should we locate a site relative to existing locations?
Early tools gravity models and venue attractiveness. Recent techniques add traffic counts, demographics and statistical techniques to the process
Simple rings
Defines primary, secondary and tertiary rings Used as an initial screening device Primary ring nearest source of customers Secondary ring .. Residential neighborhoods where customers live Tertiary ring far flung customers A subjective definition of distance based on past experience.
Address geocoding of the customer locations Drawing design lines not completely necessary Define a polygon based on a percentage of the customers 80-90% An irregular shaped trade area is defined. Penetration polygons defined by overlapping polygon arcs Illustrates store coverage relative to street networks, physical features, access barriers Assumes what?
How far will the customer travel? What is used? A connected street network Each line segment from intersection to intersection has a length It may not have a speed limit or traffic volume measure Problem defining the time through an arc Problem of defining temporal travel through the net How is the resulting polygon shaped?
What has to be added to the standard trade area models? Measures of price, quality, image subjective measures Location, location, location Location in addition to location quality
Summary
Analysis of existing markets Analysis of potential markets Strategies for increased market share