IMPORTANCE OF LOCATION DECISION

Location is a major cost factor because it

Involves large capital investment

Affects transportation costs

Affects human resources cost e.g. Salaries

IMPORTANCE OF LOCATION DECISION

Location is a major revenue factor because it

Affects the amount of customer traffic

Affects the volume of business

IMPORTANCE OF LOCATION DECISION

1st LOCATION

2nd LOCATION

3rd LOCATION

LEVELS OF LOCATION DECISION & ITS DETERMINING FACTORS

SELECTION OF A CITY

SELECTION OF AN AREA WITHIN CITY

IDENTIFICATION OF A SPECIFIC SITE

LEVELS OF LOCATION

DECISION & ITS

DETERMINING

FACTORS

SELECTION OF A CITY

SELECTION OF A CITY

POPULATION & GROWTH TRENDS

CURRENT POPULATION

THEIR INCOME LEVEL

SEASONAL CHANGES / PERIODICAL INCOMES

AGE GROUPS & SEXUAL COMPOSITION

POPULATION DYNAMICS –Apartments V/S Homes,

Population Density

Likelihood of Growth, Decline, Constant

SELECTION OF A CITY

SIZE OF THE CITY’S TRADING AREAPRIMARY , SECONDARY, TERTIARY

PURCHASING POWER & ITS DISTRIBUTION

DISPOSIBLE INCOME

TRADE POTENTIAL

NUMBER,SIZE,QUALITY OF COMPETITION

LEVELS OF LOCATION

DECISION & ITS

DETERMINING

FACTORS

SELECTION OF AN

AREA WITHIN CITY

AREA WITHIN CITY

CUSTOMER ATTRACTION OF SHOPPING DISTRICT

QUANTITATIVE & QUALITATIVE COMPETITION

TRAFFIC AND TRAFFIC PATTERNS

NATURE OF ZONING REGULATION

DIRECTION OF THE AREA EXPANSION

VISIBILITY OF THE STORE

LEVELS OF LOCATION

DECISION & ITS

DETERMINING

FACTORS

IDENTIFICATION OF

A SPECIFIC SITE

SITE DECISION

ADEQUACY AND POTENTIAL TRAFFIC

COMPLEMENTARY NATURE OF ADJACENT STORE

ADEQUACY OF PARKING

TENANCY MIX – IF MALL / SHOPPING CENTRE

OWNERSHIP OR LEASE

OWNERSHIP V/S LEASE

ADVANTAGES

OWNERSHIP

# No Interference of Landlord

# Physical Changes in the property

can be done

# Liberty to rent a store

# Increase in real estate value can

be solely enjoyed by the Owner

DISADVANTAGES

# Huge Initial Investment

# Heavy Interest

# Maintenance costs

# Decrease in real estate value has

to be borne by the Owner

OWNERSHIP V/S LEASE

ADVANTAGES

LEASE

# Ability to concentrate on

merchandising instead of on real

estate

# No Initial Interest

# Opportunity to move elsewhere at

the expiration of the lease

# No Initial Investment except Deposit

(if any)

LOCATION OF A WAREHOUSE (HUB)

WAREHOUSE

HUB

RETAIL STORE

RETAIL STORE

RETAIL STORE

RETAIL STORE

RETAIL STORE

RETAIL STORE

RETAIL STORE

TYPES OF LOCATION

FREE STANDING LOCATIONS

UNPLANNED CBD’s

PLANNED SHOPPING CENTRES

TYPES OF LOCATION

FREE STANDING LOCATIONSNEIGHBOURHOOD STORES HIGHWAY STORES

NEIGHBOURHOOD- BUSINESS - DISTRICT

DOWNTOWN OR CENTRAL BUSINESS DISTRICT

SUBURBAN BUSINESS DISTRICT

SECONDARY BUSINESS DISTRICT

TYPES OF LOCATION

UNPLANNED CBD’s

REGIONAL SHOPPING CENTRES OF MALLS

NEIGHBOURHOOD / COMMUNITY

SPECIALITY MARKET

PERIODIC MARKETS / WEEKLY

PLANNED SHOPPING CENTRES

TYPES OF LOCATION

DESIGNED (MAIN)

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

DESIGNED (MAIN)

EMERGED (MAIN)

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

NOT MAIN – EITHER EMERGED OR DESIGNED

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

DESIGNED BY

BIULDER/ DEVELOPER

As Townships

But not Malls

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

SHOPPING MALLS

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

EMERGED FROM PICULAR NEED

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

AREA WHICH CAN

BE CONVERTED

LOW RENT DISTRICT

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

DESIGNED (MAIN)

EMERGED (MAIN)

NOT MAIN – EITHER EMERGED OR DESIGNED

DESIGNED BY BIULDER/ DEVELOPER

SHOPPING MALLS

EMERGED FROM PICULAR NEED

AREA WHICH CAN BE CONVERTED

LOW RENT DISTRICT

TYPES OF LOCATIONBROADER CLASSIFICATION RELEVANT IN

INDIA

THE SPREAD OF ORGANISED

RETAIL IN INDIA

BANGALORE CHENNAI

MUMBAI DELHI KOLKATTA

PUNE GURGOAN NOIDA INDORE CHANDIGARH

NAGPUR BHOPAL JAIPUR UDAIPUR

NASIK AHEMDABAD COCHIN MADURAI

HOW FAR IS THE CUSTOMER WILLING TO TRAVEL

Grocery 4.0 km

Jewellery 1.5 km

Cosmetics 4.5 km

Apparel 2.32 km

Books 2.74 km

Music 2.54 km1

2

3

5

4

KSA Technopak Consumer Outlook 2002

• Reilly’s retail gravitational theory

(Ba / Bb) = (Pa / Pb) ((Db / Da)

Ba = the business which City A draws from the intermediate place

Bb = the business which City B draws from the intermediate place

Pa = Population of City A

Pb = Population of City B

Da = Distance of city A to the intermediate place

Db = Distance of city B to the intermediate place

2