copyright 2008 prentice hall publishing company 1 chapter 14: location & layout choosing the...

1Chapter 14: Location & Layout Copyright 2008 Prentice Hall Publishing Company

Choosing the Right Location

and Layout

Choosing the Right Location

and Layout


Choosing a LocationChoosing a Location

The right region of the countryThe right region of the country The right state in the regionThe right state in the region The right city in the stateThe right city in the state The right site in the cityThe right site in the city


Choosing the Choosing the Region:Region:

Sources of Sources of InformationInformation Census dataCensus data

World Wide WebWorld Wide Web http://www.census.gov/http://www.census.gov/ http://factfinder.census.govhttp://factfinder.census.gov

STAT-USA STAT-USA http://www.statusa.govhttp://www.statusa.gov

http://www.census.gov/

http://factfinder.census.gov/

http://www.statusa.gov/



Sources of Sources of InformationInformation Demographics USADemographics USA

Lifestyle Market Analyst Lifestyle Market Analyst Survey of Buying PowerSurvey of Buying Power Editor and Publisher Market Editor and Publisher Market

GuideGuide Rand McNally's Commercial Atlas Rand McNally's Commercial Atlas

and Marketing Guideand Marketing Guide Zip Code Atlas and Market Zip Code Atlas and Market

PlannerPlanner



Sources of Sources of InformationInformation The American Marketplace: The American Marketplace:

Demographics and Spending Demographics and Spending PatternsPatterns

Commercial Atlas and Marketing Commercial Atlas and Marketing GuideGuide

Zip Code AtlasZip Code Atlas Geographic Information Systems Geographic Information Systems

(GIS)(GIS) U.S. Census Department’s TIGER U.S. Census Department’s TIGER


Geographic Information Geographic Information SystemsSystems

(GIS)(GIS) Computerized programs combining map-Computerized programs combining map-

drawing with database management drawing with database management capability.capability.

Search through virtually Search through virtually anyany database database and then plot the results on a map.and then plot the results on a map.

Visual display reveals otherwise hidden Visual display reveals otherwise hidden trends.trends.


Choosing the Choosing the StateState

Proximity to marketsProximity to markets Proximity to needed raw Proximity to needed raw

materialsmaterials Wage ratesWage rates Labor supply needsLabor supply needs Business climateBusiness climate Tax ratesTax rates Internet accessInternet access

State Evaluation MatrixState Evaluation Matrix

State Weighted Score (Weight x Score)

Location Criterion WeightScore (Low = 1, High = 5) State 1 State 2 State 3

Quality of labor force

Wage rates

Union activity

Property/building costs

Utility costs

Transportation costs

Tax burden

Educational/training assistance

Start-up incentives

Raw material availability

Quality of life

Other:

Other

Total Score


Choosing the CityChoosing the City

Population trendsPopulation trends CompetitionCompetition ClusteringClustering Compatibility with Compatibility with

communitycommunity Local laws and Local laws and

regulationsregulations


Transportation networksTransportation networks Police and fire Police and fire

protectionprotection Cost of utilities and Cost of utilities and

public servicespublic services Quality of lifeQuality of life

(Continued)(Continued)

Choosing the CityChoosing the City


Retail and Service Retail and Service Location Location

ConsiderationsConsiderations Trade area – the Trade area – the

region from which a region from which a business can expect business can expect to draw customers. to draw customers. Retail compatibilityRetail compatibility Degree of Degree of

competitioncompetition Index of retail Index of retail

saturation (IRS) saturation (IRS)


Index of Retail Index of Retail SaturationSaturation

C x REC x RE RFRF

wherewhere C = Number of customers in the C = Number of customers in the

trading areatrading areaRE = Retail expenditures = the average RE = Retail expenditures = the average

expenditure per person for the expenditure per person for the product in product in the trading areathe trading area

RF = Retail facilities = the total square RF = Retail facilities = the total square feet of feet of selling space allocated to the selling space allocated to the product in the product in the trading areatrading area

IRS = IRS =


Reilly’s Law of Retail Reilly’s Law of Retail GravitationGravitation

where:where:BP = Distance in miles from location A to BP = Distance in miles from location A to

the break pointthe break pointd = Distance in miles between locations A d = Distance in miles between locations A

and Band B

PPaa = Population surrounding location A = Population surrounding location A

PPbb = Population surrounding location B = Population surrounding location B

a

bP

P1

dBP



ConsiderationsConsiderations Trade area sizeTrade area size

Retail compatibilityRetail compatibility Degree of competitionDegree of competition Index of retail Index of retail

saturation (IRS) saturation (IRS) Transportation Transportation

networknetwork Physical, racial, or Physical, racial, or

emotional barriersemotional barriers Political barriersPolitical barriers



ConsiderationsConsiderations Trade area sizeTrade area size

Customer trafficCustomer traffic Adequate parkingAdequate parking ReputationReputation Room for expansionRoom for expansion VisibilityVisibility



Retail and Service Retail and Service Location OptionsLocation Options

Central Business Districts Central Business Districts (CBDs)(CBDs)

Neighborhood locationsNeighborhood locations Shopping centers and mallsShopping centers and malls

Neighborhood shopping centersNeighborhood shopping centers Community shopping centersCommunity shopping centers Regional shopping centersRegional shopping centers Power centersPower centers


Shopping Centers Shopping Centers and Mallsand Malls

Neighborhood shopping centersNeighborhood shopping centers 3 to 12 Stores; anchor is supermarket or 3 to 12 Stores; anchor is supermarket or

drugstore; serves up to 40,000 peopledrugstore; serves up to 40,000 people Community shopping centersCommunity shopping centers

12 to 50 stores; anchor is department or 12 to 50 stores; anchor is department or variety store; serves 40,000 to 150,000 variety store; serves 40,000 to 150,000 peoplepeople

Power centersPower centers Combine drawing power of a mall with Combine drawing power of a mall with

convenience of neighborhood shopping convenience of neighborhood shopping center; anchor stores typically occupy center; anchor stores typically occupy 80 percent of space.80 percent of space.



Theme or festival centersTheme or festival centers Employ a unifying theme, often involving Employ a unifying theme, often involving

entertainment, to attract tourists entertainment, to attract tourists Outlet centersOutlet centers

Feature manufacturers’ and retailers’ Feature manufacturers’ and retailers’ outlet stores selling name-brand goods at outlet stores selling name-brand goods at discount prices; usually follows “open air” discount prices; usually follows “open air” designdesign

Lifestyle centersLifestyle centers Located near affluent residential Located near affluent residential

neighborhoods; designed to look more like neighborhoods; designed to look more like a central business district than a shopping a central business district than a shopping center or mallcenter or mall



Regional shopping mallsRegional shopping malls 50 to 100 stores; anchor is one or more 50 to 100 stores; anchor is one or more

major department stores; draws customers major department stores; draws customers from a large trading area, often 5 to 15 from a large trading area, often 5 to 15 miles or more in all directionsmiles or more in all directions

Super-regional shopping mallsSuper-regional shopping malls Similar to a regional mall but bigger; Similar to a regional mall but bigger;

trading area is 25 miles or more in all trading area is 25 miles or more in all directions.directions.

ExamplesExamples Mall of America (Bloomington, MN), largest mall Mall of America (Bloomington, MN), largest mall

in the U.S.in the U.S. West Edmonton Mall (West Edmonton, Canada), West Edmonton Mall (West Edmonton, Canada),

largest mall in the worldlargest mall in the world

Shopping Mall Patterns

9.5

12.410.8

8.87.7

8.5

10.5 10.7

82.2

88.8

73.878.2

85.5 86.7 87.592.8

0

2

4

6

8

10

12

14

AllAges

14 - 17 18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+

Age

Nu

mb

er o

f M

all

Vis

its

in P

rece

din

g

Th

ree

Mo

nth

s

0

10

20

30

40

50

60

70

80

90

100

Ave

rag

e D

ura

tio

n o

f V

isit

(in

Min

ute

s)

Number of Mall Visits in Past ThreeMonths

Duration of Visit (in minutes)


Retail and Service Retail and Service Location OptionsLocation Options

Near competitorsNear competitors Outlying areasOutlying areas Home-based businessesHome-based businesses

(continued)(continued)


Manufacturing LocationsManufacturing Locations

Foreign trade zonesForeign trade zones


How a Foreign Trade Zone (FTZ) How a Foreign Trade Zone (FTZ) Works Works

Without FTZ

Imported Parts and Materials

Store

Assemble

Package

Manufacture

Process

Mix

With FTZ

DutyPaid

NoDutyPaid

U.S.Sales

Exports

U.S.Sales

Exports

Small Company

No Duty Paid

Duty Paid

Duty Paid

No Duty Paid


Manufacturing LocationsManufacturing Locations

Foreign trade zonesForeign trade zones Empowerment zonesEmpowerment zones Business incubatorsBusiness incubators


Business IncubatorsBusiness Incubators Organizations that combine low-cost, Organizations that combine low-cost,

flexible rental space with a multitude flexible rental space with a multitude of support services for their small of support services for their small business residents.business residents.

More than 1,000 in operation across More than 1,000 in operation across the U.S., and a new one opening, on the U.S., and a new one opening, on average, every week.average, every week.

They work!! Firms that “graduate” They work!! Firms that “graduate” from incubators have a success rate of from incubators have a success rate of 87 percent.87 percent.

Average incubator houses 20 Average incubator houses 20 businesses employing 55 people.businesses employing 55 people.


LayoutLayout

Layout – the logical Layout – the logical arrangement of the physical arrangement of the physical facilities of a business that facilities of a business that contributes to efficient contributes to efficient operations, increased operations, increased productivity, and higher sales. productivity, and higher sales.

Study: Look and feel of Study: Look and feel of employees’ work spaces is employees’ work spaces is third most important third most important consideration (after salary consideration (after salary and benefits) when deciding and benefits) when deciding whether or not to accept or to whether or not to accept or to quit a job. quit a job.


Layout:Layout:External External FactorsFactors

Size must be adequate to Size must be adequate to accommodate business needs.accommodate business needs.

Appearance must create the Appearance must create the proper image or “personality” proper image or “personality” for the business in the for the business in the customer’s eyes.customer’s eyes.

Entrances must Entrances must inviteinvite customers to come in.customers to come in.


Layout:Layout:External External FactorsFactors

Create effective window Create effective window displays and change them displays and change them often; they can be powerful often; they can be powerful sales tools.sales tools.

Must comply with Americans Must comply with Americans with Disabilities Act (ADA).with Disabilities Act (ADA).

Pay attention to the business Pay attention to the business sign, the most direct method of sign, the most direct method of reaching potential customers.reaching potential customers.



A Business A Business SignSign

Tells potential customers who you Tells potential customers who you are and what you’re selling.are and what you’re selling.

Must comply with local sign Must comply with local sign ordinances.ordinances.

Should be visible, simple, and clear.Should be visible, simple, and clear. Should be changed periodically to Should be changed periodically to

avoid becoming part of the avoid becoming part of the background.background.

Should be legible both day and night.Should be legible both day and night. Must be maintained properly.Must be maintained properly.


Building Building InteriorsInteriors

ErgonomicsErgonomics is an integral part of any is an integral part of any design.design.

Proper layout and design pays off in Proper layout and design pays off in higher productivity, efficiency, or sales.higher productivity, efficiency, or sales.

Proper lighting is measured by what is Proper lighting is measured by what is ideal for the job being done.ideal for the job being done. Use of natural light can increase retail Use of natural light can increase retail

sales. sales. Careful selection of colors can create Careful selection of colors can create

the desired impressions among the desired impressions among customers and employees.customers and employees.

Appealing to Appealing to allall of the customer’s of the customer’s senses can boost sales.senses can boost sales.


Three Retail Layout Three Retail Layout PatternsPatterns

GridGrid Rectangular with parallel aisles; Rectangular with parallel aisles;

formal; controls traffic flow; formal; controls traffic flow; uses selling space efficiently.uses selling space efficiently.

Supermarkets and self-service Supermarkets and self-service discount stores.discount stores.


Free-FormFree-Form Free-flowing; informal; creates Free-flowing; informal; creates

“friendly” environment; “friendly” environment; flexible.flexible.

Small specialty shops.Small specialty shops.



BoutiqueBoutique Divides store into a series of Divides store into a series of

individual shopping areas, each individual shopping areas, each with its own theme; unique with its own theme; unique shopping environment.shopping environment.

Small department stores.Small department stores.



Layout Layout GuidelinesGuidelines

Know your customers buying habits Know your customers buying habits and plan your layout accordingly.and plan your layout accordingly.

Display merchandise as attractively Display merchandise as attractively as your budget will allow.as your budget will allow.

Display complementary items Display complementary items together.together.

Recognize the value of floor space; Recognize the value of floor space; never waste valuable selling space never waste valuable selling space with nonselling functions.with nonselling functions.


Factors to Consider in Factors to Consider in Manufacturing LayoutsManufacturing Layouts

Type of productType of product Type of production processType of production process Ergonomic considerationsErgonomic considerations Economic considerationsEconomic considerations Space availability within the Space availability within the

facilityfacility


Manufacturing Manufacturing LayoutsLayouts

Product layoutProduct layout Process layoutProcess layout Fixed position layoutFixed position layout Functional layoutFunctional layout

copyright 2008 prentice hall publishing company 1 chapter 14: location & layout choosing the...

Documents

right location

right state

layout slide

right region

state proximity

city slide

right city

market planner slide