Trade Area Analysis

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customer loyalty, location, vendor relations Management information and distribution systems, and low cost operations.

.  Deciding on the general area to locate. and Selecting the specific site within that trading area. the city or trading area. that is.

” i.e.The customers’ major criterion in selecting a store is “convenience. convenient location. convenience in cost and convenience in shopping. .

     Population Factor Literacy Factor Trading Performance Factor Accessibility Factor Facility Factors .

    Using checklist Using census data Survey of Buying Power Using Market Research Datas .

e. That of the city or metropolitan area i. secondary trading area.   That of the store itself i.e. fringe trading area.e. . That of the shopping centre or area where the store is located i. primary trading area.

proposed. Geographic Information Systems ◦ digitized mapping with key locational data to graphically depict trading-area characteristics such as  population demographics  data on customer purchases  listings of current. and competitor locations .

Claritas ESRI GDT GeoVue Mapinfo SRC .

Determining the Trading Area Using Huff’s Model Define trade area and forecast sales .

a traditional means of trading-area delineation. so the trading area of each can be determined .Reilly’s law of retail gravitation. establishes a point of indifference between two cities or communities.

some people will travel shorter distances along cross streets  Travel time does not reflect distance traveled. Many people are more concerned with time traveled than with distance  Actual distance may not correspond with perceptions of distance . Distance is only measured by major thoroughfares.

Store Location .


   Proximity of the target market Type of merchandise Proximity of generator stores .

.The most important factor on which the locations decisions mostly based is. the type of merchandise a store intends to sell.

   Convenience goods Shopping goods Specialty goods .

  Unplanned market area Planned market area .

    Main Market Area Secondary Business Area or Neighbourhood Area Strip Clusters Isolated Shopping Areas .


It depends upon the following factors.        Customer traffic Specialty Goods Generators Stores Sides of the Street Corner location Transportation Facilities The Adequacy of Parking .

    The Intercepting Qualities of a Site The Growth of Business and Facilities in the Area The Customer Interchange Potential & Compatibility of existing business Possible Negative Features in a Site .


    Is site near the target market? Is the type of site appropriate for the store? What are the age and condition of the site? What is the trade area? .

       What are the roads patterns and conditions surrounding the site? Do any natural or artificial barriers impede access to the site? Does the site have good visibility from the street? Is there a good balance between to much and too little traffic flow? Is there a good balance between too much and too little parking? Is there a good balance between too much and too little congestion of traffic and people? Is it easy to enter /exit the parking lot? .

  Is the site adjacent to important tenants? Will adjacent tenants complement /compete with the store? .

   Are the terms of the lease slated in favour of the landlord or retailer? Is the type of lease favourable to the retailer? What are the various options of occupancy of the location? .

      Does the site meet requirements of the Local Statutory Requirement? Does the site meet environmental standards? Is the site zoning compatible with the store? Does the store’s architectural design meet building codes? Are the store’s external signs compatible with zoning ordinances. building codes. and shopping centre management? .

      Does the sources and type of power available required for the purpose? Is there an independent sources of water available? Is drinking and usable water available during peak consumption? Does the mechanism of mechanical and electrical maintenance exist? What is the condition of sewage and drainage system in that locality? What is the life of the drainage system? .