Another factor that has a major impact on
company profi ts is the cost of building, buying,
or leasing facilities. Small retailers may have
to settle for whatever locations they can fi nd
and afford, while large retailers can employ
site location specialists. From all potential
site alternatives, they evaluate what sites are
available for rent or purchase, which are most
suitable in structure and size, and which are
the most affordable based on the retailer’s
operating budget.
Market Coverage in Site
Selection
Site selection strategy for some retail
companies also includes market coverage, or
how concentrated a presence the retailer wants
to have in a specifi c geographic area. The main
market coverage strategies include the following:
Intensive market coverage, which involves
selecting and utilizing as many retail outlets
as are justifi ed to obtain blanket coverage.
This approach tries to serve all customers of
an entire market area. A typical example is
convenience stores.
Selective market coverage, which
involves choosing enough locations to
ensure adequate coverage of selected
target markets. Chain apparel retailers and
department stores often do this by locating a
store in each of the major shopping malls of
a metropolitan area, 13-25.
Exclusive market coverage, which involves
using one location to serve either an entire
market area or some major segment of that
market. Prestigious specialty retailers can
use this approach since customers will travel
farther for their goods.
Facilities Design
After the site location has been determined,
the store should be designed to create a strong
visual identity with the right ambiance for
the target market, 13-26. Stores can visually
distinguish themselves from competitors using
a unique physical environment. A store’s image
is infl uenced by both its exterior and interior
appearance.
•
•
•
13-25 Gap stores have selective coverage
of most market areas with stores scattered
among major shopping centers.
Talbots/AEON Group
13-26 A distinctive red door with shiny brass
hardware visually identifi es every Talbots
store to consumers and indicates the level
of merchandise and services inside.
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