Professional Documents
Culture Documents
Site Location
Site Location
Introduction
Define Store:
“A store is place , real or virtual , where the shoppers comes to
buy goods & services. The sales transaction occurs at this
junction.”
A bad location may cause a retailer to fail even if its strategic mix
is excellent.. On the other hand , a good location may help a
retailer succeed even if its strategic mix is mediocre.
Music – Books –
2.54 km 2.74km
1km 2km 3km 4km 5km
Jwellery –
1.5 km
Source : KSA – Technopack
consumer outlook, 2004 Grocery – 4
km
Business Associated Location: These are location where a
group of retail outlets offering a variety of merchandise work
together to attract customers to their retail area, but also
compete against each other for the same customers.two types
includes in ;
• Neighborhood/community/shopping centers:
Neighborhood /community centers usually have a balanced mix
of stores including a few grocery stores , a chemist, a verity store
and a few other stores selling convenience goods to the
residents of the neighborhood.
India to have mother of all malls
• Gurgaon is set to get the mother of all malls — a humungous 40-lakh sq ft sprawling property
that is being touted by its developer DLF Universal as the biggest mall of the world.
The average size of malls here is 2.5 lakh sq ft; this will be 16 times bigger.
The mall —- christened Mall of India -— will be spread over 32 acres and will have parking
space for 10,000 cars.
These ambitious plans have been drawn up at a time when footfalls are down at Gurgaon malls
and rental rates have virtually halved.
But DLF is unfazed. It says Gurgaon with so many malls will soon develop as a mega
shopping district in the NCR region.
What's the basis of the claim that this will be the biggest in the world?
DLF spokerperson Kajal Aijaz said the biggest now is Mall of America in Minneapolis which
has a covered area of 38 lakh sq ft, followed by a mall in Shanghai which is 30 lakh sq ft.
Mall of India would be bigger than these, she said.
The DLF mall — located on the Delhi-Jaipur highway — has been designed by Jerde Partnership
which also designed the mega malls in Minneapolis and Shanghai.
The costs are not known but property consultants said it could be in the region of Rs 1,500
crore.
Selection of Shopping centre / market
• Shopping centers are distinctly different from the other two
major locations -- that is, downtown and local business strips.
• The shopping center building is pre-planned as a
merchandising unit for interplay among tenants. Its site is
deliberately selected by the developer for easy access to pull
customers from a trade area.
• It has on-site parking as a common feature of the layout. The
amount of parking space is directly related to the retail area.
Where
IRS- is the index of retail saturation
H -is the number of households in the area
RE- is the annual retail expenditures for a particular line of
trade per household in the area
RF- is the square footage of retail facilities of a particular line
of trade in the area (including square footage of the
proposed store)
Implications
• It is calculated based on existing retail facilities
and their use
• Low level saturation is indicated by higher IRS –
which means the likelihood of success is
higher
• If the market is having too few stores and unable
to satisfy the demands of the customers, the
market is under stored
• If there is too many stores the market is over
stored, unable to give fair return on investments to
the retailer
Herfindahl – Herschman Index
• It is a measure of market concentration
• The Herfindahl index (HI) is a measure of industry
concentration equal to the sum of the squared market
shares of the firms in the industry
• N
• HHI = Σ
•
S2
i
i =1
Example
• For instance, two cases in which the six largest firms sells
90 % of the sales:
• Case 1: All six firms sell 15% each, and
• Case 2: One firm sell 80 % while the five others sell 2 %
each.
• We will assume that the remaining 10% of sales is
divided among 10 equally sized firms.
• The six-firm concentration ratio would equal 90 % for both
case 1 and case 2. But the first case would promote significant
competition, where the second case approaches monopoly.
The Herfindahl index for these two situations makes the lack
of competition in the second case strikingly clear:
• Case 1: Herfindahl index = 6 * 0.152 + 10 * 0.012 = 0.136
(13.6%)
• Case 2: Herfindahl index = 0.802 + 5 * 0.022 + 10 * 0.012 =
• The maximum in this case is 100% = 10,000.
• A HHI index below 0.1 (or 1,000) indicates an
unconcentrated index.
A HHI index between 0.1 to 0.18 (or 1,000 to 1,800)
indicates moderate concentration.
A HHI index above 0.18 (above 1,800) indicates
high concentration.
Merchandising,
Basis of retail merchandising,
Merchandise to be carried
Organisation Structure
Merchandising function
Types of store
• The merchandiser to be carried by a retailer largely determines
the responsibilities of the merchandiser.
• Store design and layout tells a customer what the store is all about
and it is very strong tool in the hands of the retailer for
communicating and creating the image of the store in the mind of
the customers.
• For the retailer, developing a powerful image provides the opportunity to embody a
single message, stand out from the competition and be remembered.
Elements of store design
Ext.
Frontage &
Entrance Display Parking
space
Building
architecture Location
Health &
Safety Store Access
design
Store
‘theme’
Target Merchand
Customers ise Mix
Exterior Store Design & Interior Design
• Exterior
• Locatio
• n
• Parking
• Ease of
• access
• The
Storebuilding
windows,architecture
lighting
• Interior
Health and safety standards
• Fixtures
• Flooring & Ceilings
• Lighting
• Graphics & Signages
• Atmospherics
Visual merchandising
• VM is the art of presentation, which puts the merchandise in focus. It educates the
customers, creates desire and finally augments the selling process.