Choosing

Choosing the
the
Right
Right Location
Location
and
and Layout
Layout
 Choosing a Location

n The right region of the country

n The right state in the region
n The right city in the state
n The right site in the city
 Choosing the Region:
Sources of Information
n Census data
n World Wide Web
w http://www.census.gov/
w http://govinfo.kerr.orst.edu/
n Survey of Buying Power
n Editor and Publisher Market Guide
 Choosing the Region:
Sources of Information
n The American Marketplace:
Demographics and Spending Patterns
n Rand McNally’s Commercial Atlas and
Marketing Guide
n Zip Code Atlas and Market Planner
Geographic Information Systems
(GIS)
n Computerized programs combining map-
drawing with database management capability.
n Search through virtually any database and then
plot the results on a map.
n Visual display reveals otherwise hidden trends.
 Choosing the State

n Proximity to markets
n Proximity to raw materials
n Wage rates
n Labor supply needs
n Business climate
n Tax rates
n Internet access
 Choosing the City
n Population trends
n Competition
n Clustering
n Compatibility with community
n Local laws and regulations
n Transportation networks
n Police and fire protection
n Cost of utilities and public services
n Quality of life
 Retail and Service Location
Considerations
n Trade area size
w Retail compatibility
w Degree of competition
w Index of retail saturation
(IRS)
w Transportation network
w Physical, racial, or
emotional barriers
w Political barriers
 Retail and Service Location
Considerations
(continued)

n Customer traffic
n Adequate parking
n Reputation
n Room for expansion
n Visibility
 Retail and Service Location
Options
n Central Business Districts (CBDs)
n Neighborhood locations
n Shopping centers and malls
w Neighborhood shopping centers
w Community shopping centers
w Regional shopping centers
w Power centers
 Shopping Centers and Malls
n Neighborhood Shopping Centers
w 3 to 12 Stores; anchor is supermarket or drugstore
n Community Shopping Centers
w 12 to 50 stores; anchor is department or variety
store
n Regional Shopping Malls
w 50 to 100 stores; anchor is one or more major
department stores
n Power Centers
w Combines drawing power of a mall with convenience
of neighborhood shopping center
 Retail and Service Location
Options
(continued)

n Near competitors
n Outlying areas
n Home-based businesses
 Manufacturing Locations

n Foreign trade zones

n Empowerment zones
n Business incubators
 Business Incubators
n Organizations that combine low-cost, flexible
rental space with a multitude of support
services for their small business residents.
n More than 900 in operation across the U.S.,
and a new one opening, on average, every
week.
n They work!! Firms that “graduate” from
incubators have a success rate of 87%.
n Average incubator houses 20 businesses
employing 55 people.
 Layout:
External Factors
n Adequate size to accommodate
business needs.
n Create the proper image or
“personality” for the business in the
customer’s eyes.
n Entrances must invite customers to
come in.
 Layout:
External Factors
(continued)

n Create effective window displays and

change them often; they can be
powerful sales tools.
n Must comply with Americans with
Disabilities Act.
n Pay attention to the business sign, the
most direct method of reaching
potential customers.
 A Business Sign

n Tells potential customers who you are and

what you’re selling.
n Must comply with local sign ordinances.
n Should be visible, simple, and clear.
n Should be changed periodically to avoid
becoming part of the background.
n Should be legible both day and night.
n Must be maintained properly.
 Building Interiors
n Ergonomics is an integral part of any design.
n Proper layout and design pays off in higher
productivity, efficiency, or sales.
n Proper lighting is measured by what is ideal for
the job being done.
n Careful selection of colors can create the
desired impressions among customers and
employees.
n Appealing to all of the customer’s senses can
boost sales.
 Three Layout Patterns

n Grid
w Rectangular with parallel aisles;
formal; controls traffic flow; uses
selling space efficiently
w Supermarkets and self-service discount
stores
 Three Layout Patterns

n Free-Form
w Free-flowing; informal; creates
“friendly” environment; flexible
w Small specialty shops
 Three Layout Patterns

n Boutique
w Divides store into a series of individual
shopping areas, each with its own
theme; unique shopping environment
w Small department stores
 Layout Guidelines
n Know your customers’ buying habits and
plan your layout accordingly.
n Display merchandise as attractively as your
budget will allow.
n Display complementary items together.
n Recognize the value of floor space; never
waste valuable selling space with nonselling
functions.
 Factors to Consider in
Manufacturing Layouts
n Type of product
n Type of production process
n Ergonomic considerations
n Economic considerations
n Space availability within the facility
 Manufacturing Layouts
n Product layout
n Process layout
n Fixed position layout
n Functional layout