Part 5 Place Dynamics
320
What makes a good site for a retail store?
The site should be (1) easy to get to,
(2) visible to passing traffic, and (3) safe.
Major shopping malls are often located where
two main roads intersect. Cars should be
able to easily get into, park, and exit from the
site. If the site is in a city, it should be close to
public transportation. The site should also be
safe from crime and other dangers.
Name your favorite retail store and the types of
products it sells. Who is the target market for
this store? Is this store located at a good site?
Explain your answer.
3
Reality Check
Market Coverage
Another site decision is how many
stores to have. Market coverage refers to the
number of stores a retailer chooses to have in
a specific geographic area. The three levels of
retail market coverage are the following:
n Intensive Market Coverage. A retailer
has as many stores as possible in one
market area. For example, Starbucks has
intensive market coverage in Seattle.
Starbucks stores are often located fairly
close to each other. Starbucks might be
located in each major shopping mall, in
all the smaller strip malls, and on many
street corners.
n Selective Market Coverage. A retailer
has just enough locations to adequately
serve the target market. Selective market
coverage usually means several stores in
a market area. A selective retailer might
locate one store in each major shopping
mall. For example, Old Navy has a
selective market approach.
n Exclusive Market Coverage. A retailer
has only one store to serve the entire
market area. Upscale specialty retailers
use this approach. For example, there is
only one Rolls Royce-Bentley automobile
dealer in the Chicago area. These types of
retailers can use the exclusive approach
because their customers are willing to
travel quite a distance for these special
products.
What type of market coverage does your
favorite retail store have? Name a store in one
of the other two coverage types.
3
Reality Check
Hours
Another decision considered to be part
of the place P is store hours. Which days of
the week and which hours will the store be
open? The answer depends on the type of
retail business and demands of the market,
as well as state and federal laws regarding
operating hours. Some grocery stores stay
open around the clock. Clothing stores often
open at 10:00 a.m. and close mid-evening.
Upscale dinner restaurants may be open
from 5:00 p.m. until midnight, Tuesday
through Sunday.
A mail-order retailer does not have a
store. This business does not need to be close
to customers because this type of retailer
reaches customers in their own homes,
through mail, by telephone, or by Internet.
The mail-order retailer provides convenience
by providing toll-free numbers and customer
service representatives, 26-5. Many have
customer service representatives 24 hours a
day. In addition, the mail-order retailer may
provide a Web site, which is also available
24 hours a day. The office of the mail-order
retailer should be near excellent shipping
facilities to get products to customers quickly
and cheaply.