Retailing Management Study Set 4

Business

Quiz 8 :

Retail Site Location

Quiz 8 :

Retail Site Location

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If you were considering the ownership of a Taco Bell franchise, what would you want to know about the location in terms of traffic, population, income, employment, and competition What else would need to be researched about a potential location
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Franchise refers to the legal authorization to a company or an individual to run a particular commercial activity which allows the franchise buyer to use franchisor's (seller's) name, trademark, business processes, etc. to conduct business.
If an individual is considering the ownership of a restaurant chain called as TBB, then the individual is required to get aware about the location where the franchise will be open and operated. In terms of location's traffic, the individual should understand that customers would come in their vehicles and cars which needs to be parked and needs ample area in front of the restaurant. When it comes to population residing there, the individual should ensure that people residing in nearby areas are attracted towards such restaurants and carry a habit of eating at such places.
In terms of income, the individual needs to ensure that people carry good disposable income and are willing to spend at dining out. In terms of employment, the individual has to ensure that there is availability of eligible candidates who are ready to work in the restaurant at various positions at competitive salaries offered by the restaurant. In terms of competition, there is a need to ensure that the other restaurants operating in the nearby areas are not serving the cuisine that TBB offers and if there are such restaurants, then TBB has to put their products differently.
The other things that needs to be researched about the location is to ensure that there are no commercial restrictions in operating a restaurant business. One also needs to ensure that there are no restrictions on late operations of restaurants because if it is a residential area, then there could no honking or late night parties conducted at that location.

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Retailers have a choice of locating on a mall's main floor or second or third level. Typically, the main floor offers the best, but most expensive, locations. Why would specialty stores such as Radio Shack and Foot Locker choose the second or third floor
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Store location depends upon various factors like infrastructure, demographic and economic factors, cultures and subcultures, market and sales potential, demand for the store and its products, etc. and it guides the retailer to select a particular location to open a store.
The retailers who operate their stores in a shopping mall has a choice to open their store at the first, second, or the third floor of the mall. Mostly, the first-floor space is highly expensive and offers the best location.
The reason the speciality stores like Company BB (cosmetics) and Company FLL (shoe brand) will choose second or third floor to open a store because these brands are popular and need no introduction to the customers. There is a permanent and loyal customer market for these products and people look for these brands on their own and consider them highly to buy its products. This is the reason it would not affect the store's popularity and customer footfalls even if these brands of speciality stores open their stores at second or third level of a shopping mall. The customers on their own would look for these stores and would find them at any location it exists in order to purchase their desired merchandises. Thus, it is better for these speciality stores to not to pay huge rent or price for the space at the first floor and operate business at second or third levels.

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Under what circumstances might a retailer use the analog approach for estimating demand for a new store What about regression analysis
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Trade area is the geographical area from where the store placed is likely to get customers. Once the trade area is identified, the next step is to determine the sale possibility for the store. There are two methods by which it can be done; regression method and analog method.
The analog method is a sales forecasting method that is done using historical data analysis. When a new site location has to be selected, it is necessary to evaluate all the factors affecting the store and the sales. But considering all the small chains may not help much. Thus, the analog method is used. Here, the most successful store is being selected to understand the key factors for sales and performance. And then selects the new site which has the same characteristics. This is also treated as real-time forecasting method as the comparison is done with a really successful store.
The regression analysis approach is being used to understand the overall story. If the retailer needs to analyses the factors affecting all the store's sales, a regression can be used. The retailer uses multiple regressions to predict sales. All the factors including visibility, success, trade area characteristics, demographics, culture, values, and lifestyles are being analyzed here. This comes up with an assumption predicting the factors that constitute greater sales and selects the site as per the assumptions.

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What retail locations are best for department stores, consumer electronics category killers, specialty apparel stores, and warehouse stores Discuss your rationale.
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Which factors do retailers consider when evaluating an area of the country to locate stores How do retailers determine the trade area for a store
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Trade areas are often described as concentric circles emanating from the store or shopping center. Why is this practice used Suggest an alternative method. Which would you use if you owned a store in need of a trade area analysis
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A drugstore is considering opening a new location at shopping center A, with hopes of capturing sales from a new neighborhood under construction. Two nearby shopping centers located nearby, B and C, will provide competition. Using the following information and the Huff gravity model, determine the probability that residents of the new neighborhood will shop at shopping center A: Reference Table: img
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True Value Hardware plans to open a new store. Two sites are available, both in middle-income neighborhood centers. One neighborhood is 20 years old and has been well maintained. The other was recently built in a newly planned community. Which site is preferable for True Value Why
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