2. Benefits of Trading Area
Consumers’ demographic and socioeconomic
characteristics are uncovered.
Reveals opportunities and the strategy necessary
to succeed
The focus of promotional activities is ascertained.
Helps to identify media coverage patterns of
proposed or existing locations.
A retailer learns whether the location will serve
new customers or take business from existing
ones.
3. Benefits of Trading Area
Whether competitors want to open nearby stores if
the firm does not do so itself.
The best number of stores for a chain to operate in
a given area is calculated.
Geographic weaknesses are highlighted.
The impact of the Internet is taken into account.
Other factors like competition, financial
institutions, transportation, labor availability,
supplier location, lega.l restrictions are reviewed
4. Trading Area Analysis
A trading area is a geographic area containing the
customers of a particular firm or group of firms
for specific goods or services.
It is the first step in the choice of retail store
location
which describe and evaluate alternative trading
areas and
then decide on the most desirable one.
5. Characteristics of Trading Area
Population size and characteristics
Availability of labor
Closeness to sources of supplies
Promotion facilities
Economic base
Competition
Availability of location
Rules and regulations
6. Characteristics of Trading Area
▪ Population size and characteristics
▪ Total size and density
▪ Age distribution
▪ Average education level
▪ Percentage of residents owning homes
▪ Availability of Labor
▪ Management
▪ Management trainee
▪ Clerical
7. Characteristics of Trading Area
Closeness of Sources of Supply
❖ Delivery cost
❖ Timeliness
Promotion Facilities
❖ Availability and frequency of media
❖ Costs
❖ Waste
Regulation
❖ Taxes
❖ Licensing
❖ Operations
8. Characteristics of Trading Area
Economic Base
❖ Dominant industry
❖ Extent of diversification
❖ Growth projections
Competitive Situation
❖ Number and size of existing competitors
❖ Evaluation of competitors
❖ Strengths and weaknesses
Availability of Store Location
❖ Number and type of location
❖ Access to transportation
❖ Owning versus leasing opportunities
