Why Are Consumer

Services Distributed in a
Regular Pattern?
Chapter 12: Services Key
Issue 3
 Central Place Theory
Central Place Theory competition of central places
leads to regular patterns of settlements
Central place central market for exchange of goods &
services
Ex. Wausau, Madison, Milwaukee, Appleton/Green Bay
Market Area (hinterland) area around a central place that
attracts certain people (nodal region)
Daily urban systems 171 functional regions based on commuting
hub (Berry)
Size of Market Area
Range of Service maximum distance most people (3/4) will travel
Brewers vs. Twins vs. Cubs fans
Threshold of Service
Minimum number of people to support a service
Healthcare vs. malls
 Market-Area Analysis
Profitability of a Location
Compute the range
Surveying local residents/consumers
Compute the threshold
How much does the average customer spend in a week on
the service in question
How many customers are needed to break even
Draw the market area
Account for competitors and determine how many
customers fall within the range and identify if it is enough to
reach/exceed threshold
Is it a good idea to invest heavily in a business that
JUST barely meets threshold? Support your answer!
 Market-Area Analysis
Optimal Location Within a Market
Where should business go?
Linear settlement
Use a median point think balancing point
Gravity model buildings with more people
(apartments) count more than single
families & distance is also important
Nonlinear settlement
Use potential users and distance to compute
the best possible location
Hierarchy of Services & Settlements

Size of settlement
Small = smaller ranges, smaller market areas
Large = often larger ranges, larger market areas
Exceptions: fast food, gas stations, neighborhood
services
Nesting
Distances between settlements form distinctive
patterns based on available services (Walter
Christaller)
Seven different sizes of townships (small to large)
Four different market sizes
Hierarchy of Services & Settlements
Rank-Size Distribution of Settlements
Rank-Size Rule: linear distribution of settlements
Ex. 2nd largest city is the size of largest, 3rd largest is 1/3, etc.
Primate city rule
Largest city is more than 2x the size of the second largest city
Many found in Europe
LDCs dont follow Rank-Size distributions
People may have to travel many hours for basic services (food, medical,
etc.)
Periodic Markets
Offer services on regular intervals
Areas that dont have enough population or financial wealth to have full-
time services
Providers that cant produce at a high level
Ex. Locally flea markets or farmers markets