Retail Mix

Customer Location
Service

Store Design Merchandise

And Display Retail Strategy Assortment

Communication Pricing
Mix

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Retail Mix

Location Strategy

Customer
Service

Store Display Merchandise

And Design Assortment

Communication
Mix Pricing

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LOCATION ANALYSIS
SMITU MALHOTRA

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 Why is Store Location Important for a Retailer?

 Location is typically prime consideration in

customer’s store choice.
 Location decisions have strategic importance
because they can help to develop sustainable
competitive advantage.
 Location decisions are risky: invest or lease?

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location research – why ?
 SALES POTENTIAL OF A STORE

 CHOOSE LOCATION THAT

 OPTIMIZES THE SHARE OF MARKET POTENTIAL
 MINIMUM HAZARD FOR FUTURE SALES EROSION
 MAXIMIZES ROI OVER THE LEASE PERIOD

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ERGO ------ USEFUL WHEN ??
• FIRM SEEKS TO EXPAND /IMPROVE MARKET
• PROPOSES TO OPEN STORES IN NEW AREAS
• CONSIDERS AN ACQUISITION

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Issues in Location Planning
• Rollout / extension (increase in floor space)
• Relocation (combining two nearby stores or moving to a better
location)

• Rationalization (the closure of individual stores or selling of

divisions

• Refascia (altering the image of outlets by changing the name and

appearance)

• Refurbishment (changing or updating the fittings)

• Remerchandising (altering the product range and
merchandising of a retail location)

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 WHAT INFLUENCES LOCATION
DECISIONS?
 CONSUMER BEHAVIOR
 DENSITY OF TG
 UNIQUENESS OF RETAIL OFFERING
 COMPETITION
 COSTS OF OPERATION

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Effect of Competition
 Why do retailers cluster around together?

 Hotelling’s rule

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 Geographic Planning -----Central
Place Theory

Threshold – yellow area

tC
A
th range

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 Shopping Behavior of Consumers
in Retailer’s Target Market
 Consumer Shopping Situations
 Convenience shopping
 Comparison shopping
 Specialty shopping

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Convenience Shopping
 Minimize the
customer’s effort to
get the product or
service by locating
store close to where

The McGraw-Hill Companies, Inc./Andrew Resek, photographer

customers are located

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Comparison Shopping

 Customers have a good idea of

what type of product they
want, but don’t have a strong
preference for brand, model or
retailer.
 Competing retailers locate near
one another

Typical for furniture, appliances,

apparel, consumer electronics,
hand tools and cameras.
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Specialty Shopping

 Customers know what

they want
 Designer labels
 Convenient location
matters less

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 What kinds of locations are
available to the retailer ?
 FREE STANDING
 CITY
 BUSINESS DISTRICT – CP IN DELHI
 MAIN STREET / HIGH STREET - JANPATH
 MALLS AND SHOPPING CENTERS
 OUTLET MALLS
 SPECIALIZED
 AIRPORTS

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 FOUR LEVELS OF LOCATION
DECISIONS
➢ What region of the country?
➢ What city or community?
➢ What area of the city?
➢ What specific site?

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