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Retailing 8th Edition Dunne Solutions
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Chapter 7: Market Selection and Retail Location Analysis
Chapter 7
Market Selection and Retail Location Analysis
OVERVIEW:
In this chapter, we will review how retailers select and reach their target markets through the choice
of location. The two broad options for reaching a target market are store-based and nonstore-based
locations. The chapter primarily focuses on the decision process for selecting store-based locations.
We describe the various demand and supply factors that must be evaluated for each geographic
market area under consideration. We conclude with a discussion of alternative locations that
retailers consider as they select a specific site.
LEARNING OBJECTIVES:
1. Explain the criteria used in selecting a target market.

2. Identify the different options, both store-based and nonstore-based, for effectively reaching a
target market and identify the advantages and disadvantages of business districts, shopping
centers, and freestanding units as sites for retail location.
3. Define geographic information systems (GIS) and discuss their potential uses in a retail
enterprise.
4. Describe the various factors to consider when identifying the most attractive geographic market
for a new store.
5. Discuss the various attributes to consider when evaluating retail sites within a retail market.
6. Explain how to select the best geographic site for a store.
CHAPTER OUTLINE:
I. Selecting a Target Market
Many retail experts say selecting a target market and evaluating alternative ways to reach this
target market are the two most critical determinants of success in retailing. Traditionally, reaching
the target market has been associated with selecting the best physical location for a store.
The Internet is becoming a major force in retailing. The equivalent of a store on the Internet is a
retailer’s website on the World Wide Web (usually denoted by www). When stopping at an e-
tailer’s website, visitors first view the firm’s home page, which is essentially the e-tailer’s
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
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storefront. It is equivalent to a retailer’s storefront in the physical world. The total collection of all
the pages of information on the retailer’s website is known as its virtual store. Whereas a
traditional store is located in geographic space, a virtual store is located in cyberspace.
The cyberspace counterpart to a convenient location is the ease of access a consumer has to the site.
This refers to the consumer’s ability to find a website in cyberspace easily and quickly. Exhibit 7.1
illustrates that the importance of easy access increases as the number of websites increases. For this
reason, retailers use website optimization services to help move their stores up the list whenever a
potential customer searches for a particular merchandise category the retailer handles. This is
similar to a practice in the not-too-distant past in which many small local retailers would place
advertisements in the telephone yellow pages (which were organized alphabetically) and refer to
their business as ABC Automotive Repair, or ABC Landscaping, and so on to gain the advantage of
being listed first.
Regardless of whether a retailer is planning a traditional store in geographic space, a virtual store in
cyberspace, or both, the first step is to develop a cost-effective way to reach the household or
individual consumer that the retailer has identified as its target market. It is important to realize that
failure to clearly identify one’s target market will result in a significant waste of marketing
expenditures.
A. Market segmentation
Market segmentation is a method retailers use to segment, or break down, heterogeneous

consumer populations into smaller, more homogeneous groups based on certain characteristics
deemed attractive by the retailer. No single retailer can serve all potential customers; it is
important that it segments the market and select a target market. A target market is the
segment of the market that the retailer decides to pursue through its marketing efforts. Retailers
in the same line of retail trade often pursue different target markets.
The topics of target-market selection and location analysis are combined because a retailer must
identify its target market before it decides how best to reach that market. Reaching the target
market can be achieved through a store-based location in which the consumer travels to the
store, or through a nonstore retailing format in which products and services are offered to the
consumer at a more convenient or accessible location. These are related topics because
individuals of different characteristics are not randomly spread over geographic space.
B. Identifying a Target Market
To reach a target market successfully, the market segment should be measurable, substantial,
and accessible.
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• Measurability—the retailer seeks a measurable market segment. This requires the retailer
to rely on objective measures for which there is data available (e.g., age, gender, income,
education, ethnic group, and religion).
• Accessibility—the degree to which the retailer can target its promotional or distribution
efforts to a particular market segment.
• Substantialness—the segment must be substantial or large enough to be profitable for the
retailer.
II. Reaching Your Target Market
Once a retailer identifies its target market, it must determine the most effective way to reach this
market. Exhibit 7.2 illustrates the two basic retail formats that can be used to reach target markets:
Store-based—store-based retailers operate from a fixed store location that requires customers to
travel to the store in order to view and select merchandise and/or services. Essentially, the retailer
requires that the consumer perform part of the transportation function, which is one of the eight
marketing functions.
Nonstore-based retailing—nonstore-based retailers reach customers at home, at work, or at places
other than a store where they might be open to purchasing. Many retailers now reach customers on
the Internet. Or, more accurately, the customer chooses to access the retailer on the Internet.
A. Location of Store-Based Retailers
There are four basic types of store-based retail locations (Exhibit 7.2):
• Business districts
• Shopping centers and malls
• Freestanding units
• Nontraditional locations
Business Districts
The central business district (CBD) usually consists of an unplanned shopping area
around the geographic point at which all public transportation systems converge; it is
usually in the center of the city and often where the city originated historically.
The makeup or mix of retailers in a CBD, however, is generally not the result of any
advanced planning and instead largely depends on history, retail trends, and luck.
Strengths of the CBD include:

• Easy access to public transportation
• Wide product assortment
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• Variety in images, prices, and services

• Proximity to commercial activities
Weaknesses of the CBD include:

• Inadequate (and usually expensive) parking
• Older stores
• High rents and taxes
• Traffic and delivery congestion
• Potentially high crime rate
• The often-decaying conditions of many inner cities
Often, the weaknesses of CBDs have resulted in a retail situation known as inner-city
retailing. This occurs when only the poorest citizens are left in an urban area. Despite the
fact that such areas annually contribute 2 percent to 3 percent of all retail spending, product
and service offerings in these areas have decreased while prices have held steady or even
increased.
In larger cities, secondary and neighborhood business districts (NBD) have also developed.
A secondary business district (SBD) is a shopping area that is smaller than the CBD and
revolves around at least one department or general merchandise store at a major street
intersection. A neighborhood business district (NBD) is a shopping area that evolves to
satisfy the convenience-oriented shopping needs of a neighborhood and generally contains
several small stores (with the major retailer being either a supermarket, a bank, or a variety
store) and is located on a major artery of a residential area. An increasing number of
national retail chains are finding the neighborhood business district an attractive location
for new stores.
Shopping Centers and Malls
Shopping centers are centrally owned or managed shopping districts that are planned,
have balanced tenancy (the stores complement each other in merchandise offerings), and
are surrounded by parking facilities. A shopping center has one or more anchor stores
(dominant large-scale stores that are expected to draw customers to the center) and a
variety of smaller stores.
To ensure that these smaller stores complement each other, the shopping center often
specifies the proportion of total space that can be occupied by each type of retailer.
Similarly, the center’s management places limits on the merchandise lines that each retailer
may carry. In addition, a unified, cooperative advertising and promotional strategy is
followed by all the retailers in the center. Because of the many advantages shopping
centers and malls can offer the retailer, they are a fixture of American life and account for
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usually over 50 percent of the retail sales in a community (excluding new and used
automobile sales).
Some of the advantages a shopping center or mall provides over a CBD location are:
• Heavy traffic resulting from the wide range of product offerings
• Cooperative planning and sharing of common costs
• Access to highways and available parking
• Lower crime rates
• Clean and neat environment
Despite these favorable reasons for locating in a shopping center, the retailer operating in a
mall does face several disadvantages, such as:
• Inflexible store hours (the retailer must stay open during mall hours and cannot be
open at other times)
• High rents
• Restrictions on merchandise the retailer may sell
• Inflexible operations and required membership in the center’s merchant organization
• Possibility of too much competition and the fact that much of the traffic is not
interested in a particular product offering
• Dominance of the smaller stores by the anchor tenant
Shopping-center image, preferences, and personality all attract various subsets of

consumers, giving retailers located at the center a competitive advantage over other
retailers. Therefore, it is extremely important that a retailer considering a shopping-center
location be aware of the makeup, image, preferences, and personality of the center under
question.
As Exhibit 7.3 shows, according to the International Council of Shopping Centers, there
are eight different types of shopping centers and malls, each with a distinctive function:
• Neighborhood center
• Community center
• Regional center
• Superregional center
• Fashion/Specialty center
• Power center
• Theme/Festival center
• Outlet center
Freestanding Location
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A freestanding retailer generally locates along major traffic arteries, without any adjacent
retailers selling competing products to share traffic. Freestanding retailing offers several
advantages:
• Lack of direct competition
• Generally lower rents
• Freedom in operations and hours
• Facilities that can be adapted to individual needs
• Inexpensive parking
However, freestanding retailing does have some limitations including:

• Lack of drawing power of from complementary stores
• Difficulties in attracting customers for the initial visit
• Higher advertising and promotional costs
• Operating costs cannot be shared with others
• Stores may have to be built rather than rented
• Zoning laws that may restrict some activities
The difficulties of drawing and then holding customers to an isolated or freestanding store
are the reason that only large, well-known retailers should attempt it. Small retailers may
be unable to develop a loyal customer base since customers are often unwilling to travel to
a freestanding store that does not have a wide assortment of products and a local or
national reputation.
Nontraditional Locations
Increasingly, retailers are identifying nontraditional locations that offer greater

convenience. Recognizing, for example, that a significant number of travelers spend
several hours in airports and could use this time to purchase merchandise they might
otherwise purchase in their local communities, today many airport concourses now look
like real regional malls, complete with national brands, casual dining, service kiosks, and
entertainment and infotainment venues. After all, the increased security measures of the
TSA mean that people are arriving earlier for their flights, leaving them with more time to
shop. Also, cutbacks in the food services offered on many flights have caused more people
to seek sustenance in the airport.
Other examples include stores at college campuses, truck and travel stops along interstate
highways, hospitals, etc.
B. Nonstore-Based Retailers
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There is a great diversity and variety of nonstore-based retailers. Perhaps the oldest form is the
street peddler who sells merchandise from a pushcart or temporary stall set up on a street. Street
peddling is still common in some parts of the world such as Mexico, Turkey, Pakistan, India,
and many parts of Africa and South America. Peddlers also operate in many other U.S. cities,
oftentimes using family members to operate kiosks and carts in heavily traveled areas such as
malls and the parking lots at sporting events.
Exhibit depicts some of the popular forms of nonstore retailing (direct sellers, catalog sales, and
e-tailing). Because retailing in the United States will continue to be predominantly store-based
for the foreseeable future, the text focuses the readers’ attention on location analysis for these
retailers. However, it should be noted that an increasing number of retailers are using multiple
retail formats to reach their target markets.
III. Geographic Information Systems
Geographic Information System (GIS) is a computerized system that combines physical

geography with cultural geography. Physical geography is the latitude (north–south) and longitude
(east–west) of a specific point in physical space and its related physical characteristics (water, land,
temperature, annual rainfall, etc.). Cultural geography consists of the things that people have put in
place in that space. To understand this, one needs to appreciate that culture is the buffer that
humankind has created between itself and the raw physical environment. It includes characteristics
of the population such as age, gender, and income, as well as human-made objects placed in that
space like fixed physical structures and mobile physical structures.
Recent advancements in GIS have allowed the retail analyst to also describe the lifestyle (activities,
interests, opinions) of the residents of geographic areas. This can be quite helpful in selecting
locations for stores that are highly lifestyle sensitive.
Exhibit 7.4 shows the key components of geographic information systems.
A. Thematic Maps
Thematic maps use visual techniques such as colors, shading, and lines to display cultural
characteristics of the physical space. Thematic maps can be very useful management tools for
retailers. They can help the retailer visualize a tremendous amount of information in an easy-to-
understand format. Today, thematic maps are an important feature of geographic information
systems and are fully computerized, making them easy for retailers to develop. Google Earth
displays satellite images of varying resolution of Earth’s surface, allowing users to visually see
things like cities, houses, buildings, or vacant lots. The degree of resolution available is based
somewhat on the points of interest and popularity of the site being considered. Today, retailers,
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especially the smaller ones, are beginning to use Yahoo or Google maps as an inexpensive
means of selecting or reviewing possible retail expansion ideas. Finally with the use of other
search engines, the retailer can enter the address of neighbors and determine the type of
business being operated and various other information factors about them.
B. Uses of GIS
As a management technology, GIS has a variety of important uses in retailing. Some of the
more popular uses are identified as follows:
• Market selection
• Site analysis
• Trade area definition
• New store cannibalization
• Advertising management
• Merchandise management
• Evaluation of store managers
Although most large retailers are using a combination of mapping and demographics during the
site-selection process, many small to medium-sized retailers are not using GIS technology to its
full potential. This may be due to a lack of technical expertise in using complicated software; if
a program isn’t easy to use, many firms won’t use it. Visualization of these maps is improving,
but it isn’t possible to make a perfect model of the world.
IV. Market Identification
The location decision for store-based retailers involves three sequential steps (Exhibit 7.5):
• Identify the most attractive markets or trading area—the geographic area from which a
retailer, group of retailers, or community draws its customers—in which to operate.
• Evaluate the density of demand and supply within each market and identify the most
attractive sites available within each market.
• Select the best site (or sites) available by estimating the revenue and expenses of a new store
at various locations and then identifying the most profitable ones.
A. Retail Location Theories
The most attractive retail markets are not necessarily the largest. A variety of other factors need
to be considered in identifying attractive markets (e.g., the level of competition, zoning laws,
average wages, and real estate costs).
Retail Gravity Theory
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Retail gravity theory suggests that there are underlying consistencies in shopping
behavior that yield to mathematical analysis and prediction that are based on the notion or
concept of gravity. Reilly’s law of retail gravitation, named after its developer, William
Reilly, is based on Newtonian gravitational principles and explains how large urbanized
areas attract customers from smaller rural communities. In effect, Reilly’s law states that
two cities attract trade from an intermediate place approximately in direct proportion to the
population of the two cities and in inverse proportion to the square of the distance from
these two cities to the intermediate place.
Reilly’s original law was revised in order to determine the boundaries of a city’s trading
area or to establish a point of indifference between two cities. This point of indifference is
the breaking point at which customers would be indifferent to shopping at either city. The
new formulation of Reilly’s law can be expressed algebraically as:
d
D ab =
P
1+ b
Pa
Where, Dab is the breaking point from A, measured in miles along the road to B;
d is the distance between A and B along the major highway;
Pa is the population of A; and
Pb is the population of B.
Retail gravity theory rests on two assumptions:

• The two competing cities are equally accessible from the major road.
• Population is a good indicator of the differences in the goods and services available
in different cities.
Consumers are attracted to the larger population center not because of the city’s size, but
because of the larger number of stores and wider product assortment available, thereby
making the increased travel time worthwhile.
Retail gravity theory does have several limitations:

• City population does not always reflect the available shopping facilities.
• Distance is measured in miles, not the time involved for the consumer to travel that
distance or the consumer’s perception of that distance or time involved.
• It fails to consider the perceived differences between local and other trading centers,
variety-seeking behavior, and other services provided such as medical services or
entertainment facilities.
• Gravity theory is less useful in metropolitan areas where consumers typically have a
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number of shopping choices available within the maximum distance they are willing
to travel.
Research on outshopping by residents of rural areas—that is, leaving your community to

shop elsewhere—suggests that factors other than those considered by retail gravity theory
are also important.
Saturation Theory
Another method for identifying attractive potential markets is based on retail saturation,
which examines how the demand for goods and services in a potential trading area is being
served by current retail establishments in comparison with other potential markets. Such
analysis produces three possible outcomes:
• Retail store saturation is a condition where there are just enough store facilities for
a given type of store to efficiently and satisfactorily serve the population and yield a
fair profit to the owners.
• When a market has too few stores to satisfactorily meet the needs of the customer, it
is understored.
• When a market has too many stores to yield a fair return on investment, it is
overstored.
Saturation theory, therefore, implies a balance between the number of existing retail store
facilities (supply) and their use (demand).
A possible indicator of understored versus overstored markets is the index of retail

saturation (IRS). The IRS is the ratio of demand for a product or service divided by
available supply and can be measured as follows:
IRS = (H×RE) / RF
Where, IRS = the index of retail saturation for an area,

H = the number of households in the area,
RE = the annual retail expenditures for a particular line of trade per household in the
area,
RF = the square footage of retail facilities of a particular line of trade in the area
(including square footage of the proposed store).
When the IRS takes on a high value in comparison with the line of trade in other cities, it
indicates that the market is understored and thus a potentially attractive opportunity. When
the IRS takes on a low value, it indicates an overstored market, which precludes the
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potential for significant profits.
Other Demand and Supply Factors
In addition to using retail gravity theory and the index of retail saturation, which are useful
in evaluating various potential markets, the successful retailer will also look at some other
demand and supply factors for each market.
B. Market Demand Potential
In analyzing the market potential, retailers identify certain criteria that are specific to the
product line or services they are selling. The criteria chosen by one retailer might not be of use
to a retailer selling a different product line. The major components of market demand potential
are as follows:
• Population characteristics
• Buyer behavior characteristics
• Household income
• Household age profile
• Household composition
• Community life cycle
• Population density
• Mobility
The most attractive market areas are those in which the preceding criteria are configured in
such a way that they represent maximum market potential for a particular retailer. This will
vary by the type of retailer and the product lines it handles. In assessing different market areas,
a retailer should first establish the market demand potential criteria that characterize the target
market it would like to attract.
C. Market supply Factors
In deciding to enter a new market, the successful retailer will also spend time analyzing the
competition. The retailer should consider square feet per store and square feet per employee,
store growth, and the quality of competition:
• Square feet per store—it is helpful to obtain data on the (average) square feet per store in
the communities that are being analyzed. This data will indicate whether the community
tends to have large- or small-scale retailing. In addition, this is important in terms of
assessing the extent to which the retailer’s standard type of store would blend with the
existing structure of retail trade in the community.
• Square feet per employee—it is a measure that combines two major supply factors in
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retailing, store space and labor. A high number for this statistic in a community indicates
that each employee is able to handle more space; this could be due to either a high level
of retail technology in the community or more self-service retailing. Since retail
technology is fairly constant across communities, any difference in square feet per
employee is most often due to the level of service being provided.
• Growth in stores—when growth in stores is rapid, the community is likely to have better-
located stores with more contemporary atmospheres.
• Quality of competition—the three preceding supply factors reflect the quantity of
competition. Retailers also need to look at the strength or quality of competition. They
should attempt to identify the major retail chains and local retailers in each market and
evaluate the strength of each.
V. Site Analysis
Once a retailer has identified the best potential market, the next step is to perform a more detailed
analysis of the market. Site analysis is an evaluation of the density of demand and supply within
each market with the goal of identifying the best retail site(s).
Site analysis begins by evaluating the density of demand and supply in various areas within the
chosen market. To do so, retailers commonly use census tract data, ZIP-code areas, or some other
meaningful geographic factor to identify the most attractive sites, given the retailer’s requirements,
that are available for new stores. One of the advantages of using census tract data is that it’s readily
available from the Census Bureau.
A. Size of Trading Areas
This section attempts to estimate the geographic area from which a store located at a particular
site will be able to attract customers.
At the same time that Reilly was developing retail gravity theory to determine the trading area
for communities, William designed a technique specifically for determining and evaluating
trading areas for an individual store. Applebaum’s technique was based on customer spottings.
For each $100 in weekly store sales, a customer was randomly selected or spotted for an
interview. These spottings usually did not require much time since the interviewer requested
only demographic information, shopping habits, and some pertinent consumer attitudes toward
the store and its competitors. After the home addresses of the shoppers were plotted on a map,
the analyst could make some inferences about trading area size and the competition. Exhibit 7.9
is an example of a map generated using customer spottings.
Thus, it is relatively easy to define the trading area of an existing store. All that is necessary is
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to interview current customers of the store to determine where they reside. There is a fair
amount of conventional wisdom that has withstood the test of time about the factors that are
related to trading area size, which can be summarized as follows:
• Stores that sell products the consumer wants to purchase in the most convenient manner
will have a smaller trading area than so-called specialty stores.
• As consumer mobility increases, the size of the store’s trading area increases.
• As the size of the store increases, its trading area increases because it can stock a broader
and deeper assortment of merchandise, which will then attract customers from greater
distances.
• As the distance between competing stores increases, their trading areas will increase.
• Natural and human-made obstacles such as rivers, mountains, railroads, and freeways can
abruptly limit the boundaries of a trading area.
B. Description of Trading Area
Retailers can access, at relatively low cost, information concerning the trading area for various
retail locations and the buyer behavior of the trading area. Using the search engine can help to
locate the websites of any of the firms providing geographical information services, indicating
how readily available this information is to the typical retailer. For example, consider the work
of Pitney Bowes MapInfo (www.pbinsight.com).
Pitney Bowes MapInfo is a global software company that integrates software, data, and
services to help retailers make more insightful location decisions. As a market-research firm
specializing in developing psychographic, demographic, or lifestyle analyses of geographic
areas, it produces solutions that are available in 20 languages in 65 countries. MapInfo’s
PSYTE Advantage segmentation system, which breaks down all neighborhoods in the United
States into 72 different clusters, is based on the old adage that birds of a feather flock together.
In distinguishing between neighborhood types, PSYTE Advantage and similar products use
two basic criteria:
• Each type of neighborhood must be different enough from all the others to make it a
distinct marketing segment.
• There must be enough people living in each type of neighborhood to make it a
worthwhile segment to retailers.
Utilizing a variety of databases, including U.S. census data and proprietary computer software,
Pitney Bowes MapInfo found 72 neighborhood types in the United States. These types are
distinguished from each other in many ways:
• Some are based primarily on income
• Some are family-oriented
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• Some are race-oriented\

• Some are urban
• Some suburban
• Some rural
Most combine two or more distinguishing demographic characteristics. Exhibit 7.10 identifies
these 72 neighborhood types or clusters.
The neighborhood names attempt to capture the essence of the neighborhood and provide an
easy way of remembering distinctions. Also associated with the neighborhoods are
demographics, lifestyles, retail opportunities, and financial and media habits.
C. Demand Density
Demand density is the extent to which the potential demand for the retailer’s goods and
services is concentrated in certain census tracts, ZIP code areas, or parts of the community. To
determine the extent of demand density, retailers need to identify what they believe to be the
major variables influencing their potential demand. One such method of identifying these
variables is to examine the types of customers who already shop in the retailer’s present
stores. The variables identified should be standard demographic variables such as age,
income, and education since this data will be readily available. Exhibit 7.11 provides an
example.
D. Supply Density
While the demand-density map allows you to identify the area within a community that
represents the highest potential demand, the location of existing retail establishments should
also be mapped. Supply density is the extent to which retailers are concentrated in different
geographic areas of the market under question.
E. Site Availability
Just because demand outstrips supply in certain geographic locations does not immediately
imply that stores should be located in those locations. Sites must be available. Some developers
have made use of eminent domain law— the inherent power of the government to seize
private property without the owner’s consent in order to benefit the community—as a means of
securing land to build retail outlets.
A map should be constructed of available sites in each community being analyzed. Exhibit 7.13
shows a checklist for site evaluations.
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VI. Site Selection
After completing the analysis of each segment in the desired market and identifying the best
available sites within each market, retailers are now ready to make the final decision regarding
location: selecting the best site (or sites) available.
In principle, all retailers should attempt to find a 100-percent location for their stores. A 100-
percent location is one where there is no better use for the site than the retail store that is being
planned. Retailers should remember that what may be a 100-percent site for one store may not be
for another. The best location for a supermarket may not be the best location for a discount
department store.
Unfortunately, there is no best way to identify the 100-percent location. There is, however, general
agreement on the types of things that the retailer should consider in evaluating sites:
• The nature of the site
• Traffic characteristics
• Type of neighbors
• The terms of purchase or lease
A. Nature of Site
Is the site currently a vacant store, a vacant parcel of land, or the site of a planned shopping
center? Many of the available retail sites will be vacant stores. This is because 10 percent to 15
percent of stores go out of business each year. When the retail site that appears to be best suited
to the retailer’s needs is a vacant parcel of land, the retailer needs to investigate why it is
vacant. Why have others passed up the site? Was it previously not for sale or was it priced too
high? Or is there some other reason?
Finally, the site may be part of a planned shopping center. In this case, the retailer can usually
be assured that it will have the proper mix of neighbors, adequate parking facilities, and good
traffic.
Traffic Characteristics
The traffic that passes a site, whether it is vehicular or pedestrian, can be an important
determinant of the potential sales at that site. However, other factors than traffic flow must
be considered. The retailer must determine whether the population and traffic are of the
type desired.
The retailer should evaluate the following traffic-related aspects of the site:
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• The availability of sufficient parking, either at the site or nearby. Generally, the
space that will be needed is a function of four factors:
o Size of the store
o Frequency of customer visits
o Length of customer visits
o Availability of public transportation
• The direction of traffic relative to the shopping area
• The ease with which consumers can reach the store site
Types of Neighbors
The neighboring establishments surrounding the site can be good or bad depending on the
type of store being considered at the site.
Determining the good and bad neighbors may not always be that easy, especially for an
entrepreneur. A good neighboring business will be one that is compatible with the retailer’s
line of trade.
Research has found that retailers experience a benefit from store compatibility. Store
compatibility exists when two similar retail businesses locate next to or nearby each other
and they realize a sales volume greater than what they would have achieved if they were
located apart from each other.
Retail clusters are groups of stores closely located that share similar characteristics such
as product category, store format, or customer demographics. The major benefit of
clustering is two-fold for customers:
• Once potential customers identify a need for a line of merchandise or service, they
don’t need to decide on the specific store to visit but just need to decide to travel to
the retail cluster.
• Retail clustering allows customers to walk from store to store, comparing prices,
products, and service. However, grouping stores doesn’t always benefit competitors.
B. Terms of Purchase or Lease
The retailer should review terms of the lease, which would include:
• The length of the lease (it could be too long or too short)
• The exclusivity clause (whether or not the retailer will be the only one allowed to sell a
certain line of merchandise)
• The guaranteed traffic rate (a reduction in rent should be offered if the shopping center
fails to achieve a targeted traffic level)
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• An anchor clause (which would also allow for a rent reduction if the anchor store in a
developing center does not open on time or when the retailer opens)
Lease arrangements generally call for either a fixed payment in which the rental charge is
usually based on a fixed amount per month or a variable payment in which rent is a specified
percentage of sales with a guaranteed minimum rent. It is important for the retailer to choose
the one that is best under the circumstances—perhaps a combination of the two methods.
When the retailer decides to locate in a shopping center, it usually has no other choice than to
lease. However, in the case of a freestanding location, an outright purchase is often possible.
When purchasing a freestanding location, the retailer needs to carefully examine any zoning
regulations that might prevent the use of the property as the retailer intends. It should also make
sure that there are no liens on the property or hazardous wastes that the retailer may need to
clean up.
C. Expected Profitability
The final step in site selection analysis is the construction of a pro forma (expected) return-on-
asset model for each possible site. The return-on-asset model comprises three crucial variables:
• Net profit margin
• Asset turnover
• Return on assets
For purposes of evaluating sites, the potential return on equity is not relevant. This is because
the financial leverage ratio (total assets divided by equity) is a top-management decision; it
represents how much debt the retail enterprise is willing to assume. The retailer should already
have determined that it has or can obtain the capital to finance a new store. It is therefore
reasonable and appropriate to evaluate sites on their potential return on assets and not return on
equity.
If the retailer is to evaluate sites on their potential return on assets, then it will need at least
three estimates:
• Total sales
• Total assets
• Net profit
Each of these is likely to vary, depending on the site. Sales estimates will be different for
alternative sites because each will have unique trade area characteristics, such as the number
and nature of households and the level of competition. Estimated total assets could vary
because the alternative sites will likely have different prices; the cost of construction could also
vary. Finally, estimated profits could vary not only due to varying sales for the different sites
but also because of different operating costs.
18
REVIEW AND DISCUSSION QUESTIONS:
[LO01] What criteria are used in selecting a target market?
1. Why should retailers be concerned about selecting the right target market? How are target
market selection and location related?
A target market is that segment of the market that the retailer decides to pursue through its
marketing efforts. Since any single retailer cannot serve all potential customers, it is important
that it segment the market and select a target market.
The topics of target-market selection and location analysis are combined here because a retailer
must identify its target market before it decides how to best reach that market. Reaching the
target market can be achieved through a store-based location in which the consumer travels to
the store or through a nonstore retailing format in which products and services are offered to the
consumer at a more convenient or accessible location. These are related topics because
individuals of different characteristics are not randomly spread over geographic space. In fact, it
has been repeatedly demonstrated that people of similar backgrounds live near each other and
have similar media habits, consumption habits, activities, interests, and opinions.
2. What three criteria should be met to successfully target a market?
First, the selected market segment should be measurable or able to be described by using
objective measures on which data are available.
A second criterion is accessibility, or the degree to which the retailer can target its promotional
or distribution efforts to a particular market segment.
Finally, successful target marketing requires that the segment be substantial enough to be
profitable for the retailer.
[LO02] Identify the different options, both store-based and nonstore-based, for effectively
reaching the retailer’s target market, and identify the advantages and disadvantages of
business districts, shopping centers, and freestanding units as sites for retail location.
3. What types of retailers would be best suited for locating in a lifestyle center?
A shopping center may be considered one probable type of retailer that would be best suited for
locating in a lifestyle center.
A shopping center is a centrally owned or managed shopping district that is planned, has
balanced tenancy (the stores complement each other in merchandise offerings), and is
surrounded by parking facilities. A shopping center has one or more anchor stores (dominant
19
large-scale stores that are expected to draw customers to the center) and a variety of smaller
stores. Today, many centers are anchored by a single department store, along with a
Cheesecake Factory or Olive Garden; Bed, Bath and Beyond; Michael’s; Dick’s Sporting
Goods; PetSmart; Office Depot; Old Navy; Cost Cutters; or even the occasional Home Depot
or a multi-screened movie theater.
A unified, cooperative advertising and promotional strategy is followed by all the retailers in
the center.
4. Why are some shopping centers and malls now using big-box stores such as Home Depot, Bass
Pro Shops, and Kaplan’s as anchors? Aren’t anchor stores supposed to be department stores?
A shopping center has one or more anchor stores and a variety of smaller stores. In the past,
these anchors were department stores. However, the recent consolidation of department store
companies has reduced the number of stores, either chain or independent, that is available to
serve as magnets to draw consumers to the center. To ensure that these smaller stores
complement each other, the shopping center often specifies the proportion of total space that
can be occupied by each type of retailer. Similarly, the center’s management places limits on
the merchandise lines that each retailer may carry. In addition, a unified, cooperative
advertising and promotional strategy is followed by all the retailers in the center. The current
retailing move toward entertainment and lifestyle centers has seen a movement away from the
traditional mall or shopping center and toward the lifestyle center concept.
5. What lines of retail trade do you believe will be most affected by the growth of retailing on the
Internet?
The selling of nationally branded major durable goods such as automobiles, stereos, televisions,
computers, etc., will experience rapid growth on the Internet. This is because the savings can be
very high and with a national brand the customer knows what they are purchasing. One should
also expect lower price products such as books and groceries to also sell well as long as the
economies of home delivery can be justified. Finally purely electronic or digital products or
services such as banking, music, software, and travel reservations should experience explosive
growth via these new retail distribution formats, as the security issue is solved.
6. Why isn’t Walmart a good choice to be an anchor at a mall?
Anchors serve as magnets to draw consumers to the shopping center. To ensure that these
smaller stores complement each other, the shopping center often specifies the proportion of
total space that can be occupied by each type of retailer. Similarly, the center’s management
places limits on the merchandise lines that each retailer may carry. In addition, a unified,
cooperative advertising and promotional strategy is followed by all the retailers in the center.
20
Walmart is a traditional retailer which has monopoly of communities and very little
competition in some of the larger communities in the country. It has been operating
successfully over the years with price being competitive advantage. Thus, it is a mammoth that
cannot be squeezed as an anchor.
[LO03] Define geographic information systems (GIS) and discuss their potential uses in a
retail enterprise.
7. How have improvements in the user-friendliness of GIS mapping technology caused retailers to
become more research-driven in locating stores?
The recent advancements in geographic information system (GIS) mapping technology have
allowed the retail analyst to describe the lifestyle (activities, interests, opinions) of residents in
different geographic areas. This can be quite helpful in selecting locations for stores that are
highly lifestyle sensitive, such as sporting goods stores. The increased user-friendliness of GIS
mapping technology has allowed retailers to become more research-driven in locating stores.
They no longer have to rely on real estate brokers to supply information that may or may not be
relevant to their business, such as the fact that the supermarket across the street is doing $30
million in sales annually.
8. How is it possible for small retailers to use GIS? Isn’t it expensive to use GIS?
As a management technology, GIS has a variety of important uses in retailing. Some of the
popular uses are:
• Market selection
• Site analysis
• Trade area definition
• New store cannibalization
• Advertising management
• Merchandise management
• Evaluation of store managers
Although most large retailers are using a combination of mapping and demographics during the
site-selection process, many small to medium-sized retailers are not using GIS technology to its
full potential. This may be due to a lack of technical expertise in using complicated software; if
a program isn’t easy to use, many firms won’t use it.
9. Why do GISs include both physical and cultural geography? Provide some examples of
physical and cultural data that should be included in a GIS.
A geographic information system (GIS) is a computerized system that combines physical
21
geography with cultural geography. Physical geography is the latitude (north-south) and
longitude (east-west) of a specific point in physical space and its related physical characteristics
(water, land, temperature, annual rainfall, etc.). Cultural geography consists of the things that
people have put in place in that space. It includes characteristics of the population such as age,
gender, and income, as well as human-made objects placed in that space like fixed physical
structures (factories, stores, apartment building, schools, churches, houses, highways, railroads,
airports, etc.) and mobile physical structures (e.g., cars and trucks). In reality, culture includes
anything that humans can put onto a physical space, which then becomes an attribute of the
physical space.
[LO04] What factors should be considered in identifying the most attractive retail market?
10. Someone once said “build a better mousetrap and the world will beat a path to your door.” If
this is true, why is it important for a retailer to select the correct site within a trading area?
Explain your answer.
The location decision for store-based retailers involves three sequential and critical steps:
• The retailer must identify the most attractive market or trading area—the geographic area
from which a retailer, group of retailers, or community draws its customers—in which to
operate.
• The retailer must evaluate the density of demand and supply within each market and
identify the most attractive sites available within each market. Essentially, this means
identifying sites most consistent with the retailer’s target market while simultaneously
accounting for those markets that may be under- or overstored.
• The retailer must select the best site (or sites) available. This stage involves estimating
the revenue and expenses of a new store at various locations and then identifying the
most profitable ones.
11. What is the index of retail saturation? How is it used in making a location decision?
A possible indicator of understored versus overstored markets is the index of retail saturation
(IRS). The IRS is the ratio of demand for a product or service divided by available supply and
can be measured as follows:
IRS = (H × RE)/RF
where IRS is the index of retail saturation for an area, H is the number of households in the
area, RE is the annual retail expenditures for a particular line of trade per household in the area,
and RF is the square footage of retail facilities of a particular line of trade in the area (including
square footage of the proposed store). IRS is essentially the sales per square foot of retail space
22
in the marketplace for a particular line of retail trade.

When the IRS takes on a high value in comparison with the line of trade in other cities, it
indicates that the market is understored and thus a potentially attractive opportunity. When the
IRS takes on a low value, it indicates an overstored market, which precludes the potential for
significant profits.
12. With the growth of Internet retailing, will the IRS increase or decrease in importance? Why?
As nonstore-based retailing continues to grow, retailers need to recognize that the index of
retail saturation may become less useful. This is because it incorporates only store-based
retailing in the supply component of the index. Although this is not a problem in the rental
retailers, it may be a problem for apparel retailers and computer retailers because many
households may now make their purchases over the Internet.
13. According to Reilly’s law of retail gravitation, cities attract trade from an intermediate place
based on what two factors? How are these factors used in making a location decision?
Reilly’s law of retail gravitation deals with larger urbanized areas attracting customers from
smaller communities. Two factors that attract trade to an intermediate location are the direct
proportion to the population of the two cities and inverse proportion to the square of the
distance from these two cities to the intermediate place. Essentially, people will tend to shop in
the larger city if travel distance is equal, or even somewhat further, because they believe the
product selection in the larger city to be better and worth the travel.
These two points have factored into a revised Reilly’s law to determine boundaries of a trading
area. The new formula can be expressed algebraically as noted in the text (277). By using the
equation to calculate a trading area, a retailer has useful additional locale information for its
retail decision making.
14. Compute the index of retail saturation for the following three markets. The data for restaurants
is:
Market A B C
Annual retail expenditures $739 $845 $903
per household
Square feet of retail space 610,000 494,000 801,000
Number of households 126,000 109,000 109,000
Based on this data, which market is most attractive? What additional data would you find
helpful in determining the attractiveness of the three markets?
IRS (Market A) = (126,000 x $739) / 610,000
23
= 152.65646
IRS (Market B) = (109,000 x $845) / 494,000
= 186.447
IRS (Market C) = (163,000 x $903) / 801,000
= 183.76757
The most attractive market is Market B with an IRS of 186.447 or $186.447 in expected sales
per square foot. Additional information on various factors that influence market demand
potential such as population characteristics, buyer behavior characteristics, household income,
household age profile, household composition, community life cycle, population density, and
mobility would be helpful. In addition, supply factors such as square feet per store, square feet
of space per employee, store growth, and the quality of competition should be analyzed.
[LO05] What attributes should be considered in evaluating retail sites within a retail market?
15. Identify the factors you would consider most important in locating a fast-food restaurant.
Compare these factors with the factors you would use in selecting a site for a supermarket.
Once a retailer has identified the best potential market, the next step is to perform a more
detailed analysis of the market. Only after careful analysis of the market can the retailer choose
the best site (or sites) available. Site analysis consists of an evaluation of the density of demand
and supply within each market. It should be augmented by an identification of the most
attractive sites that are currently available within each market. The third and final step, site
selection, is the selection of the best possible site. However some of the possible factors for
these two different types of retail stores are listed below.
Fast-food Restaurant Supermarket

Number of vehicles passing Ease of access for truck deliveries
High levels of time pressed-consumers Proximity to larger families
Traffic flow for drive through Number of parking spaces
Number of restaurants in the area offering Close proximity to neighborhood offering
similar food similar food
Percentage of workforce traveling 0-14
minutes to work
16. Explain the concepts of demand density and supply density. Why are they important to retail
decision making?
Demand density is the amount of market potential (usually measured in dollars) that is
available in a geographic area. On the other hand supply density is the amount of retail space
24
(usually in square footage) that is available in a geographic area. Both demand and supply
density are important because they are key determinants of retail performance and/or
profitability. However, the retail decision-making should consider both demand and supply
density simultaneously. This is the case because a high demand density is less attractive if there
is also a high level of supply density.
[LO06] How is the best geographic site selected?
17. Why is it so hard to find that 100-percent retail location?
Finding that 100-percent retail location is so difficult because of the number of variables
involved. Investigating the nature of the site takes time and while even if the site found is part
of a planned shopping center where it can be assured of the proper mix of neighbors, adequate
parking facilities, and good traffic, proper planning must take place to avoid being part of a
center where a high percentage of space is not rented. Other variables, like traffic
characteristics, can change over time. What once was an easily accessible location may become
undesirable due to construction or growth patterns. Moreover, ascertaining various factors
ahead of time is not always that easy. Because of the number of factors involved and the
complexity of those variables, finding that 100-percent retail location can be very hard to do.
18. Why do some stores cluster around each other? Doesn’t being so close to their competition hurt
their profitability?
Research has found there is benefit from store compatibility. This is when compatible, or very
similar, businesses locate near each other, and show an increase in sales volume than had they
been located separately. There are many benefits to clustering which dates back to the 1950s
when gas stations competed at already populated intersections. Customers want to do
comparison of shop. Clustering allows more ease in this process. It has also been shown that by
clustering, sales can be increased by 20 percent.
WRITING AND SPEAKING EXERCISE:
You have a summer job with a small florist shop, Forget-Me-Knot, in Troy, Illinois, a growing
area a half-hour east of St. Louis, Missouri. Until recently, Forget-Me-Knot and a smaller flower
shop located a mile away in the center of town were able to easily satisfy the demand for flowers
and floral arrangements in the area. Kathy Kistenmacher, the owner, believes there is room for
another store because of the increasing number of people moving from St. Louis to the small
suburban town. In fact, between 2000 and 2010, the city’s population increased from 11,000 to
15,500. Kistenmacher sells more than just flowers, which gives her a competitive advantage over
other flower shops. She also sells novelty items such as figurines, candles, potpourri, and
25
houseplants. These other items make up 25 percent of Kathy’s gross sales.
The shop has been very busy, and sales are growing rapidly. The store is often very crowded
between 4:30 P.M. and 6:30 P.M. Therefore, Kistenmacher is contemplating either expanding
her current business or opening another store at a new location before someone else sees the
opportunity. She does not have the financial capability to do both. The expansion would be less
expensive, but another store might attract more customers. Current customer information is given
in Exhibit 1.
Exhibit 1
1. Current sales: $452,000

2. Sales growth rate (annually since 2000): 15 percent annually
3. Percentage of customers living within 3 miles: 43 percent
4. Percentage of customers living within 3 to 6 miles: 30 percent
5. Percentage of customers living more than 6 miles: 27 percent
6. Average income of those living within 3 miles: $32,000
7. Average income of those living within 3 to 6 miles: $61,000
Forget-Me-Knot is currently located at the edge of town 2 miles from the interstate to St. Louis
on the main traffic artery from the interstate. Kistenmacher is considering two possible locations:
One is in the middle of town, a half-mile from her current location and only two blocks from her
competitor; the other location is next to the Interstate.
The in-town possibility is centrally located, and Kathy feels that this location would attract many
people who shop at the renovated downtown shopping area. The highway location, on the other
hand, is conveniently located in a small shopping complex. This location would appeal to
commuters returning to the town proper from St. Louis. It would also be accessible to other
commuters who live in the new subdivisions across the interstate.
Kathy feels that she has to make a change, but she cannot decide which location to choose, or
whether she should renovate and expand the existing store. She can choose only one alternative.
Since you have taken a retailing class, Kathy asks for your advice. Therefore, based on the
available information, write a memo telling Kathy if she should open another store or just expand
her current location. Explain how you determined this strategy. If you recommend an additional
store, tell her why you chose that location.
Suggested Answer:
Students will have to consider following and do the required calculations before reaching any
26
consensus:
Point of indifference can be calculated using the Reilly’s law given in the text to close in on one
location.
It is obvious that effective buying income is the most important factor, followed by retail sales and
population. Sales & Marketing Management magazine annually publishes a survey of buying
power. This survey reports on current data for metropolitan areas, cities, and states. Using data that
can be easily obtained from Sales & Marketing Management, students can develop the buying
power index (BPI) for each location. Location with higher BPI can be considered.
After doing point of indifference and BPI calculations, students should pay attention to market
demand potential characteristics, especially the household income provided in the exhibit could be
of key consideration. As we know, a flower shop has more demand potential in a place with higher
income.
RETAIL PROJECT
Small as well as large retailers can benefit immensely from knowing the trade area of their store.
Identify a small local retailer such as a florist, pet store, apparel store, gift store, or restaurant.
Contact the store owner or manager and tell him or her that you are a student studying retailing and
would like to volunteer to construct a map of the retailer’s trade area. To do this, you need to obtain
the addresses of all the patrons over a one-week period and plot these on a map. Review the
customer-spotting map for a supermarket in Exhibit 7.9 on page 285. Develop a method to collect
the needed data and construct the map of the trade area. What percentage of customers are within 1
mile of the store? Within 3 miles? Within 5 miles?
Suggested Answer:
This is a good learning project. Be sure to guide your students regarding which local retailers to
contact. You may ask the students present their findings in class and then discuss with the students
why some retail stores have a smaller trade area—such as convenience stores.
PLANNING YOUR OWN ENTREPRENEURIAL BUSINESS:
The retail store you are planning has an estimated circular trade radius of 4 miles. Within this 4-mile
radius there is an average of 1,145 households per square mile. In a normal year, you expect that 47
percent of these households would visit your store (referred to as penetration) an average of 4.3
times (referred to as frequency). Based on those figures, what would you expect to be the traffic
(i.e., number of visitors to your store per year)? (Hint: Traffic can be viewed as the square miles of
the trade area multiplied by the household density multiplied by penetration, which is in turn
multiplied by frequency.)
Once you answer this question, do some sensitivity analysis, which is an assessment of how
27
sensitive store traffic is to changes in your assumptions about penetration and frequency. What
happens if penetration drops to 45 percent or rises to 50 percent? What happens if frequency drops
to 4.0 times annually or rises to 4.5 times annually? In this analysis, change only one thing at a time
and hold all other assumptions constant.
Suggested Answer:
One needs to first compute the following.
1. Square miles of trade area = r2
= (22/7)(4)2
= 50.286
2. Traffic = (square miles in trade area) × (household density) × (penetration) × (frequency)
= (50.286) × (1,145) × (47%) × (4.3)
= 116,364
Next do some sensitivity analysis.

Consider the following possible parameter values
Square Miles in Household Penetration Frequency Traffic

Trade Area Density
50.286 1145 47% 4.3 116,364
50.286 1145 45% 4.3 111,412
50.286 1145 50% 4.3 123,792
50.286 1145 47% 4.0 108,246
50.286 1145 47% 4.5 121,776
(Square Miles in Trade Area) × (Household Density) × (Penetration) × (Frequency) = Traffic
CASE:
Nordstrom Market Selection
Background
Founded in 1901 as a retail shoe business in Seattle, Nordstrom later incorporated in the state of
Washington in 1946. Today, Nordstrom is one of the nation’s leading fashion specialty retailers,
with stores located in 30 states as of March 16, 2012. The west and east coasts of the United
States are the areas in which Nordstrom has the largest presence.
As of March 16, 2012, Nordstrom included 116 ‘Nordstrom’ branded full-line stores, an online
store at www.nordstrom.com, and 105 off-price ‘Nordstrom Rack’ stores. Other retail channels
include their online private sale subsidiary ‘HauteLook’ acquired in February 2011, two ‘Jeffrey’
28
boutiques, one philanthropic ‘treasure&bond’ store and one clearance store that operates under
the name ‘Last Chance.’ HauteLook is a Los-Angeles-based e-tailer that offers flash sales on
designer fashion merchandise may be a key to Nordstrom’s future growth. HauteLook
(www.hautelook.com) offers merchandise at 50-75% off regular price.
Growth Through Market Expansion
In the U.S. market it has been difficult for retailers to grow since household income adjusted for
inflation is often flat if not negative. And even though Nordstrom appears to upper middle class
households they have also been hit hard by the economy. Thus Nordstrom has grown via
expansion into other states outside its home in Seattle, Washington. This actually is somewhat of
a continuation of its store growth strategy going back twenty-five years but store growth and
market expansion is more important than ever.
Between 2008 and 2011, Nordstrom continued its geographic expansion as shown in exhibits 1
and 2. Nordstrom generally opened between a dozen and 20 stores annually with the major focus
on opening of Nordstrom Rack Stores. Over the last five years Nordstrom Rack stores have
almost doubled. At the same time the firm experienced inconsistent financial and operating
performance as shown in exhibit 3. In fact 2011 operating profits were lower than in 2007; a
rather sobering experience for the senior management team. Some analysts are surprised why
with this inconsistent operating performance the firm continues to increase its dividend to
shareholders.
Questions
1. Why do you believe Nordstrom is opening more Nordstrom Rack Stores than its traditional
Nordstrom stores?
Suggested Answer:
Nordstrom traditional stores cater to higher income households and usually a large
community of one million people can only support one of these stores. On the other hand,
Nordstrom has a very strong overall reputation and often middle-income households will
occasionally visit a Nordstrom for a special occasion gift. By opening Nordstrom Rack
Stores with discounted merchandise, the firm is able to broaden its target market and reach
many more potential customers. Incidentally, since Nordstrom seldom has sales at its
traditional stores, it is able to attract the price and promotion oriented shopper with its
Nordstrom Rack Stores.
2. Analyze Nordstrom’s financial and operating performance and store growth and draw
29
conclusions on the effectiveness of the market expansion strategy.
Suggested Answer:
With the exception of 2008 and 2009, Nordstrom’s financial performance is strong. In 2008
same store sales declined 9% and in 2009 they declined 4.2%; however, this was mostly due
to the very weak national economy (recession). In 2007 the firm had a gross margin of
37.4%, followed by 34.5% in 2008, 35.5% in 2009, 36.7% in 2010, and 37.2% in 2011. If
Nordstrom did open Rack Stores, this gross margin would probably be higher by a few
percentage points, however, the Rack Stores are the avenue for sales growth. In 2007, the
firm had a net profit margin (after taxes) of 8.1%, followed by 4.8% in 2008, 5.3% in 2009,
6.6% in 2010 and 6.5% in 2011. Relative to other retailers, this is strong performance. One
area of concern is sales per square foot, which at $431 in 2011, was lower than $435 in
2007. This is a sign that although stores are being opened at a rapid pace, the market may be
saturated and thus, Nordstrom should proceed cautiously with new store openings,
especially in the U.S. market. Overall, the firm is doing quite well and shareholders have
benefitted. In 2007, earnings per share were $2.88 and dividends per share were $.54. By
2011, the earnings per share had risen to $3.14 and dividends per share were $.92.
3. Register for the HauteLook website and evaluate if you think Nordstrom should put more of
its emphasis on growth sales via e-tailing and less on its brick-and-mortar stores. Do the
same for Nordstrom’s online store (www.nordstrom.com).
Suggested Answer:
Students will enjoy viewing and studying these e-tailing businesses. Most will conclude that
e-tailing should be a prominent part of Nordstrom’s future growth strategy.
4. Should Nordstrom expand to markets outside the United States? If so, what markets do you
think would be most attractive?
Suggested Answer:
Many tourists from abroad visit and shop at Nordstrom. Since many tourists are from Asia,
and Nordstrom has had a U.S. West Coast presence for many decades, the Asian tourist has
had good exposure to the Nordstrom brand. Also, Asians are experiencing increases in
household income. Nordstrom should consider opening stores in Japan, South Korea, China,
Singapore, and Malaysia. In addition, it might consider Canada for market expansion,
especially Vancouver, Toronto, and Montreal.
TEACHING TIPS:
30
1. This is one of the more conceptually difficult chapters and therefore using some activity-based
learning exercises may prove helpful. Usually the topics addressed in this chapter require three
lectures: one on target market selection, another on the different types of locations that are
available, and a final lecture on the steps in selecting the best available retail location. In
advance of each of these three lectures you might give the following assignments or pose the
following questions that can then be used to commence class discussion.
a. Select your favorite restaurant. Identify what you believe to be its target market. How
important is the restaurant’s location to attracting its target market? How important is the
restaurant’s target market to the locations of future restaurants that it might open?
b. List and describe the non-store based retailers you have encountered in the last month.
Do they pose a threat to traditional store based retailers?
c. If you were to locate a Laundromat in your community where would it be located? This
question should get your students actively involved in considering demand and supply
factors and how they interact to influence the best site for a new retail enterprise.
2. Pose the question, “Given the wide variety of locations available to target specific consumer
groups, what new locations will provide the greatest opportunities for the retailers of
tomorrow?” to generate class discussion. This question, which poses the issue of future
locations, asks students to think beyond traditional brick-and-mortar retail locations and even
nonstore-based locations. For example, what type of retailing lies beyond the Internet? Much
like the new product development process, standard techniques can be applied here to answer
this question. For example, one could use attribute listing to stimulate this discussion. First, an
instructor would have students develop a list of all of the shortcomings/limitations of current
retail locations. Next, a list of “ideal” benefits retailers could provide via their location choice
would be developed. These lists can then form the basis of a new type of retail location. Focus
groups and forced relationships can also serve as methods to stimulate ideas.
3. It is conventional wisdom in shopping center management that anchor stores draw traffic to
shopping centers. The authors have found that this is not necessarily so for the under-25 age
segment. Students can be asked to identify their favorite regional shopping center. Next,
students can be asked what stores attract them to visit this shopping center. Almost invariably it
will be the smaller non-anchor specialty apparel and shoe stores and not the large department
stores.
4. If you have students who have lived outside the U.S., having them discuss the typical retail
store locations they have experienced helps broaden the class’s view of retailing. The
31
discussion can be especially interesting if you focus on groceries and restaurants.
6. To reinforce an international perspective to the course, the instructor may want to consider
having the students do some additional analysis regarding some developing nations. Then,
the students can be assigned the task of developing a plan to attract investors to a particular
region of the country. This project will emphasize the need to identify a target market and
the impact that the major components of market demand and the supply-side factors have on
attracting investors to a particular location.
7. The concept of Geographic Information Systems (GIS) is difficult. Have your students visit a
GIS website (MapInfo at www.mapinfo.com (http://www.pbinsight.com/welcome/mapinfo/) or
Environmental Systems Research Institute, Inc. at www.esri.com). Touring one of these
websites during class can help your students better understand the use and benefits of GIS
(please make sure to check each website prior to class as URLs change continually).
Environmental Systems Research Inc. (www.esri.com) is an excellent website with much
information that can serve as a basis for fruitful discussion.
8. For a more advanced class, using some extra time to better explain and work through some
problems using Reilly’s law or the index of retail saturation (IRS) can be informative. Exhibit
7.13, “Checklist for Site Evaluations,” is also a helpful teaching tool. Have your students
identify a failed and/or vacant retail store in your community. Using the checklist in Exhibit
7.13, have them identify potential causes of failure. Of course, remind your students that failure
may have not been due to location but other factors such as poor management or
merchandising. Nonetheless, the old adage that location, location, location are the three most
critical factors in determining retail success does have a lot of validity most of the time.
9. Similar to the activity above, the instructor can discuss the applicability of a checklist for
site evaluations, such as the one found in Exhibit 7.13. There are over 40 different criteria
listed in this exhibit. However, simply knowing the population and/or household base will
not ensure the success of a particular site. The retailer must look for criteria that will support
its endeavors as a profitable business. Therefore, the instructor can pre-select a type of store
that the members of the store have hypothetically decided to open (a flower shop, a bakery, a
music trading store, etc.). Then, the class can identify a target market that they desire to
serve through their offering. Given these two pieces of information (the type of store and the
desired target market); the instructor can have the students put parameters on the criteria for
site evaluation and discuss its usefulness.
10. The Internet is often one of the most popular topics for students to discuss. To help demonstrate
the importance of location online is to select a specific product category, such as coffee beans.
Ask students to independently find the “best” source of fresh coffee beans. Ask the students to
32
detail their exact steps on finding the best coffee beans online. Then, have students compare
their search process and relate it to the issue of what “location” means for an e-tailer.
11. One fun activity that an instructor may wish to use as a class exercise relates to determining the
best location for a new retailer. The instructor can indicate to the students that a new retailer is
considering opening a store in their area (the type of store selected should be something that
would be interesting to the students, but distinct from other retailers in the area—for example,
instead of another restaurant or night club, a unique retail idea should be used, such as a movie
theater where everyone is in a pool). The instructor may wish to direct student attention to
Exhibit 7.5 relating to selecting a retail location. Next, students are asked to put together a
presentation that will identify the relevant trading area and site selection criteria they will be
using. Finally, students are asked to present the chosen site and the rationale for its selection.
TEACHING IN ACTION:
No Men Allowed—Targeting Women Travelers in the Hotel Industry
For women business travelers, hotels are not always the most restful of retail institutions. Women
travelers are well aware of the dangers of going out alone in a strange city after putting in a hard day
at the office and as such often decide to spend an evening alone in the hotel instead. However, many
have found that while physically safe in the confines of their hotel, the experience is often less than
optimal. Dining alone is lonely, and a trip to the hotel bar often leads to advances from men
(ranging from typical pick-up lines to those mistaken encounters when the business traveler is
mistaken for a “professional” of another trade) most women would rather do without. As such, most
women take sanctuary in their hotel rooms, dining from room service, mini-bars, and the small
snacks left over from the day’s business lunches.
Enter Lady’s First, Zurich’s first hotel for women only. Recognizing the market opportunities
available due to the increasing number of women business travelers and their requisite needs,
Lady’s First opened in January of 2001. Clearly an example of segmenting and targeting a market,
Lady’s First understood that the travel needs of business women were unique from those of their
male counterparts. As such, the retail mix at Lady’s First not only includes the traditional amenities
offered by hotels targeting business travelers, but also included a women’s wellness center.
The wellness center operates more as a spa than as a traditional fitness center one would most likely
find in standard business hotels. Located on the top floor of the hotel, the wellness center offers a
variety of health and beauty treatments (e.g., massage, facials, etc.). Through matching retailer
product and services to the needs of this well-defined target market, Lady’s First has positioned
itself unlike any other.
33
INTEGRATIVE CASE:
Zumiez: Where to Expand Next?
Zumiez, a publicly traded retailer, is a specialty retailer focusing on the market comprising teens
to early 20s who are seeking the action sports or “rider” lifestyle. These sports include
snowboarding, skateboarding, surfing, BMX, and motocross. The merchandise mix reflects
brands which support and are symbols of this lifestyle. Zumiez has been successful in creating a
store format that gives the store an independent specialty shop feel, despite the fact that it is a
large chain. The company was founded in 1978, and by 2011 had grown to over 400 stores with
a presence in 37 states.
Zumiez has been growing rapidly over the past five years, opening 233 new stores from 2006 to
2011. In 2011, Zumiez expanded into the Canadian market with the opening of stores in Toronto
and Vancouver areas for a total of five Canadian locations. In addition to store expansion,
Zumiez has an opportunity to grow its e-commerce sales. Currently e-commerce represents a
small portion of Zumiez’s business, especially for a target age range that is more likely to shop
online than some others. E-commerce represented 1.7 percent, 2.5 percent, and 4.7 percent of
Zumiez’s sales in fiscal years 2008, 2009, and 2010.
Questions
1. Should Zumiez continue to expand in the United States and Canada or now try to enter other
foreign countries? What foreign countries might represent viable markets?
Suggested Answer:
Students should be encouraged to search the Internet and online library sources regarding
the market potential and growth of boarding sports, BMX, and Motocross. They are likely to
find many sources to support the global growth of these markets. One source is found at:
http://www.prweb.com/releases/summer_boardsports/snowboarding/prweb8286170.htm
(accessed on November 21, 2012) and provided good background and statistics on the
growth of board sports. Several countries that look attractive for expansion include
Australia, New Zealand, Norway, U.K., and France. The BMX and Motocross market is
also growing, and students should find information to specifically support growth prospects.
It should be noted that there are many small manufacturers of BMX, Motocross and
products in the board sports market, so, if Zumiez enters foreign markets, they also need to
be familiar with the supply chains for these products and any preferences for specific
brands.
2. Would Zumiez be better off focusing its growth strategy around enhancing its e-tailing
34
venture?
Suggested Answer:
Growth through e-tailing is a clear possibility. This is especially true due to the growth of
social media mostly among youth. Youth are the biggest market for the merchandise
offering of Zumiez. Another advantage of e-tailing is that when merchandise is shipped to
the customer, Zumiez gains information that would be valuable for locating future retail
outlets.
3. Identify an area in the state or country you live in where you would see the potential for
opening a Zumiez store. Explain your rationale.
Suggested Answer:
Students should always suggest geographic areas with a high proportion of children and
teenagers. They should also recognize that the market potential is a function of household
income. Ideal locations are those with above average household income with many children.
Another random document with
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courant très variable, mais souvent très fort, portant à l’ouest, aux
environs des caps Saint-Martin et Saint-Antoine.
A huit heures, on est venu nous prévenir que la messe serait dite
à neuf heures. Nous y sommes tous allés ; les uns par conviction,
les autres… peut-être par curiosité.
La dunette de la Junon était complètement dégagée et tout
entourée de pavillons de diverses couleurs étendus comme des
rideaux. Au fond, à l’arrière, ces pavillons formaient comme une
petite chapelle improvisée, aussi peu ornée que les plus simples
autels de village. Des chaises de chaque côté, un passage au milieu
comme dans nos églises ; au lieu des arceaux gothiques des
cathédrales, une tente en forme de toit très plat, bien raidie et se
rejoignant avec les pavillons qui nous entouraient.
A l’heure dite, le commandant, accompagné des officiers non de
service, prit place au premier rang, en invitant l’un de nous, M. R. de
L…, à se mettre à sa droite. Bientôt M. l’abbé Mac, aumônier de
l’expédition, parut et l’office commença. On n’entendit plus alors
d’autre bruit que celui des mots sacrés prononcés à demi-voix et le
battement régulier de l’hélice, dont chaque coup mettait plus de
distance entre nous et les nôtres.
Pour ma part, tout en m’abandonnant quelque peu à un
sentiment de rêverie qui me ramenait auprès des miens, j’éprouvais,
je l’avoue, un indéfinissable plaisir à suivre le sillage du navire et à
me sentir entraîné d’un mouvement doux, mais rapide, vers ces
pays nouveaux où j’avais tant hâte d’aborder.
6 août.
Le vent de bout a un peu retardé notre marche. Nous avons

maintenant en vue la terre d’Afrique ; à tribord, nous suivons d’assez
près la côte d’Espagne, où viennent s’affaisser brusquement les
sierras. Une forte houle de l’avant nous annonce la lutte entre la
Méditerranée refoulée et l’Atlantique qui verse ses marées chez sa
faible rivale. Voici encore Malaga. Puis les terres se resserrent, les
deux continents semblent se rejoindre. Le temps est devenu
magnifique, le ciel est toujours bleu et le soleil à son coucher jette
encore quelques rayons d’or à l’entrée du détroit. A gauche, sur la
côte d’Afrique, c’est Ceuta, place jadis forte et toujours occupée par
les Espagnols, qui en ont fait un pénitencier ; à droite, c’est la pointe
d’Europe, figurée par un énorme rocher au sommet duquel flotte le
drapeau dominateur de l’Angleterre.
La Junon arbore les couleurs nationales et signale en même
temps son nom par l’arrangement de quatre pavillons formant ce
qu’on appelle le numéro du navire ; les dernières lueurs du jour lui
permettent de se frayer rapidement un passage au milieu des
nombreux bâtiments et pontons qui encombrent la rade. Elle s’arrête
enfin, l’ancre tombe. Nous sommes devant Gibraltar.
GIBRALTAR
La citadelle. — Une consigne sévère. — L’aventure de la petite Johnston. —

La clef de la Méditerranée. — Physionomie de la ville. — Les cavernes. —
Point de vue.
8 août.
La grande baie de Gibraltar, ou d’Algésiras, a la forme d’un U

renversé. La colonie anglaise occupe toute la partie orientale du
golfe, et le colossal promontoire rocheux sur le flanc duquel elle est,
en quelque sorte, accrochée, ne tient à la terre ferme que par une
sorte de lande basse et inculte. La petite ville d’Algésiras est située
en face de Gibraltar, de l’autre côté de la rade.
Notre première visite fut pour la citadelle, œuvre étrange et
presque surhumaine. Dans l’intérieur de ces masses énormes de
lave et de granit, la mine a partout creusé des casemates. A la
pointe d’Europe, notre attention avait été attirée par des batteries
dont les feux rasants semblent avoir la prétention de barrer le
passage du détroit, et de notre mouillage nous avions aperçu de
nouvelles batteries étagées sur trois rangs, à ciel ouvert ou
couvertes, disséminées autant que dissimulées à tous les replis, à
toutes les anfractuosités de la roche.
Aimez-vous les canons ? De ce côté (pauvre Espagne !) on en a
mis partout, et leur présence n’est révélée que par des trous noirs
percés à des hauteurs invraisemblables dans les falaises à pic. Les
galeries intérieures ne sont éclairées que par les embrasures des
pièces. Le côté qui regarde l’Espagne, relié à la péninsule par
l’étroite langue de terre nommée terrain neutre, est surtout fortifié de
façon à repousser toute attaque et à déjouer toute surprise. Chaque
objet est entretenu avec le soin minutieux et la propreté scrupuleuse
qui caractérisent les établissements militaires anglais. Le gouverneur
avait eu la gracieuseté de nous envoyer une permission spéciale
avant que nous eussions pris la peine de la demander, en sorte que
nous pûmes tout visiter sans rencontrer le moindre obstacle. Je dois
ajouter que le garde d’artillerie chargé de nous guider dans les
labyrinthes de la forteresse, un grand et beau garçon, bien pris dans
son sévère uniforme, nous surprit un peu par le sans-façon avec
lequel il empocha quelques pièces d’argent que nous pensions
difficile de lui faire accepter. Notre premier « pourboire », au début de
ce voyage, où sans doute nous étions destinés à en prodiguer un
nombre respectable, tomba ainsi dans la main d’un soldat anglais.
All right !
Le fort et la ville sont placés sous le régime d’un état de siège
permanent. La discipline y est aussi stricte que celle d’une place
investie ; chaque jour, à neuf heures du soir, les portes sont fermées
et ne sont rouvertes que le matin, sous quelque prétexte que ce soit.
Cette consigne est exécutée avec une rigueur absolue.
Permettez-moi de vous conter une petite anecdote, qui vous
montrera jusqu’à quel point peut aller la sévérité en pareille matière.
Il y a quelques années, un Anglais, résidant à Gibraltar, homme

bien posé dans la ville, dont le nom m’échappe en ce moment et que
nous appellerons, si vous voulez, M. Johnston, sortit un après-midi
d’été, avec sa petite fille, dans un simple but de promenade. Ils
franchirent les portes de la ville et s’avancèrent sur le terrain neutre.
Le temps était très beau et très doux. L’enfant, enchantée de se
trouver en un lieu nouveau pour elle, courait toujours en avant
cherchant des coquilles, cueillant des herbes et jasant avec papa ; si
bien que les heures s’envolèrent, et le déclin du jour vint seul les
avertir qu’il fallait songer à rentrer au logis. L’heure était déjà
avancée. La petite avait, dans ses jeux, fait au moins le double de la
route et, dès qu’il fallut hâter le pas pour retourner, se plaignit de la
fatigue. M. Johnston prit sa fille par la main, puis se résigna à la
porter. Ce cher fardeau ralentissait sa marche. La nuit survint, mais
pas assez noire pour cacher la grande porte de la ville, qui se
rapprochait de plus en plus.
Ils arrivent à cent pas des murailles, au moment où neuf heures
commencent à sonner. Est-il trop tard ? M. Johnston, exténué,
désespéré, est saisi d’une idée subite. Il pose l’enfant à terre et lui
dit : « Allons, Mary, cours après papa, vite, bien vite ; » et lui-même,
rassemblant toutes ses forces, s’élance, atteint la poterne, la
franchit, en s’écriant : « Attendez ! ma fille !… » La lourde porte roule
sur ses gonds, se ferme avec un bruit sonore, les verrous sont
poussés.
Avait-on vu l’enfant ? Je l’ignore.
Le malheureux père s’adresse au sergent du poste :
— Monsieur, ayez la bonté d’ouvrir pour ma petite fille, qui est là,
qui courait après moi.
— Impossible, monsieur, on n’ouvrira que demain.
— Mais je vous dis que c’est ma petite fille. C’est absurde. Elle
est là, là, derrière la porte.
— Monsieur, je ne puis pas ouvrir. Demandez à l’officier.
M. Johnston entre comme un fou dans la chambre de l’officier.
— Capitaine, je vous en prie, donnez l’ordre qu’on ouvre cette
porte. C’est pour ma fille, qui est là, de l’autre côté. Nous avons
couru pour arriver à temps ; moi, je suis entré le premier pour
prévenir. Vous comprenez…
— Monsieur, je regrette beaucoup de ne pouvoir faire ce que
vous me demandez, mais la consigne est formelle. Je ne dois faire
ouvrir pour quoi que ce soit.
— Mais, capitaine, une petite fille…
— Je vous assure que je ne peux pas.
— Mais il y a du danger pour elle. La peur, le froid… et puis, vous
savez bien qu’il y a de mauvaises gens de ce côté. On peut
l’emmener, on peut…
— Je comprends, monsieur, votre situation et vos angoisses,
mais, je vous le répète, la consigne est absolue, formelle. Si j’y
manquais, je serais destitué dans les vingt-quatre heures. Apportez-
moi un ordre écrit du gouverneur, j’ouvrirai. Mais je doute qu’il le
donne.
Aller chez le gouverneur, qui résidait fort loin de là, avoir l’ordre,
revenir. Que de temps perdu ! Le pauvre père perdait la tête.
Après de nouvelles supplications inutiles, il fut convenu que Mme
Johnston, qui connaissait particulièrement la femme du gouverneur,
la prierait d’intercéder pour elle. C’était, au dire de l’officier, le
meilleur, sinon le seul moyen qui eût quelque chance de réussir.
On entendait les pleurs de l’enfant à travers la porte massive.
Mme Johnston, prévenue en toute hâte, courut chez son amie, qui lui
promit de faire tout au monde pour obtenir de son mari l’autorisation
de faire rentrer l’enfant.
Le premier mot du gouverneur fut le même que celui des
gardiens : impossible !
— Mais, mon ami, ce qui est impossible, c’est de laisser cette
pauvre petite dans une situation aussi affreuse. Elle peut en
mourir… Ces consignes-là sont faites pour la guerre, pour les
hommes, et non pour les enfants.
— Elles sont ce qu’elles sont. On ne m’a pas laissé le droit de les
apprécier, mon devoir est de leur obéir.
Mais la femme du gouverneur s’était juré de fléchir cette rigueur
inexorable. Pendant une demi-heure, elle discuta comme une
femme qui veut, elle aussi, et fit tant par ses prières et ses larmes
que le vieux soldat fut enfin ébranlé.
— Eh bien ! je ferai, dit-il, pour Mme Johnston et pour vous ce que
je ne croyais jamais devoir faire. La consigne sera violée, la porte
sera ouverte ; mais ce que je ne ferai pas, c’est de violer en même
temps l’esprit des ordres que j’ai reçus. Personne ne doit entrer dans
la ville, personne n’entrera ; M. Johnston pourra sortir et rester au
dehors jusqu’à ce que la porte soit rouverte à la diane demain matin.
Le lendemain, à six heures, le père et l’enfant rentraient à
Gibraltar.
J’ai dit tout à l’heure que le rocher ne défendait pas le passage,

contrairement à une opinion assez répandue. La possession de
cette fameuse « clef de la Méditerranée » est surtout une question
d’amour-propre pour nos voisins d’outre-Manche. Un convoi de
transports à vapeur pourrait franchir le détroit chaque nuit sans
prendre le moindre souci des casemates et des forts anglais. Seule,
une flotte, appuyée et protégée par les batteries, pourrait barrer le
détroit, dont la largeur, entre Ceuta et la pointe d’Europe, dépasse
22,000 mètres. Aussi, dans le cas d’un grave conflit, quels nombreux
navires ne faudrait-il pas à l’Angleterre pour maintenir ses
communications avec Gibraltar, Malte et aujourd’hui Chypre ?
En réalité, le rocher de Gibraltar n’est qu’un point fortifié de
ravitaillement. Quels autres bénéfices représentent les dépenses
d’un pareil établissement ? La baie d’Algésiras est peu sûre ; elle est
exposée aux vents du sud-ouest, qui parfois arrachent les navires et
les jettent à la côte. Le port de Gibraltar n’a pas une grande valeur
commerciale. On y trouve de bon charbon, fourni aux vapeurs de
passage par une vingtaine de lourds bateaux dits « colliers », des
moutons du Maroc, meilleurs que ceux dont l’Algérie encombre nos
marchés, et il s’y fait un chiffre modeste d’importations en Espagne
de quelques produits d’usage courant, la plupart introduits par des
contrebandiers.
On ne pénètre dans la ville qu’en franchissant pont-levis,
poternes et chemins tournants ; puis on traverse une grande place
en forme de triangle, bordée de casernes. L’artère principale court
parallèlement à la mer jusqu’à la pointe d’Europe, où l’on rencontre,
jetés çà et là, dans de charmants bouquets de verdure — les seuls
qui tachettent agréablement le roc, presque partout dénudé et
comme rongé — les cottages des principales familles anglaises.
Cette rue, la seule où règne un peu d’animation, est propre, bien
construite, mais ne présente aucun caractère spécial.
Peu de marchands anglais dans les magasins, où l’on remarque
des juifs, des Espagnols et quelques Maures, tous petitement
installés, âpres au gain et ayant la réputation d’être peu délicats en
affaires. Étrangers, défiez-vous des juifs de Gibraltar !
On circule à travers un public déjà bigarré comme celui d’une
ville d’Orient. Les uniformes rouges de l’infanterie anglaise se
rencontrent avec les costumes des soldats espagnols, campés sur
les limites du terrain neutre ; les longues lévites noires des juifs,
coiffés d’un petit bonnet toujours crasseux, font tache avec les
blancs burnous des Marocains, et les modernes costumes
européens tranchent avec ceux des paysans andalous, coiffés du
large chapeau relevé en gouttière. Ajoutez à ces types si divers les
toilettes absolument voyantes des señoras des environs, et
principalement de Malaga, portant la classique mantille et jouant de
la prunelle aussi bien que de l’éventail pour mieux attirer l’attention.
Rien de remarquable dans l’architecture des quelques églises,
temples, synagogues et édifices publics que l’on rencontre. En
dehors des casernes, le palais du gouverneur est le seul bâti dans
d’assez vastes proportions.
Gravissons au delà des maisons, dont les dernières n’atteignent
pas à la moitié de la hauteur du rocher. On remarque d’abord les
ruines assez imposantes d’un vieux château maure ; puis, dominant
également la ville, une douzaine d’obélisques ou de colonnes
commémoratives, parmi lesquelles celle surmontée du buste de sir
Elliott, l’énergique défenseur du siège de 1782.
On explore ensuite de vastes cavernes. La principale, dite de
Saint-Michel, a son entrée à mille pieds au-dessus de la mer ; à
l’intérieur, on descend toujours, en traversant une succession de
salles immenses d’où pendent de larges stalactites, puis on arrive à
des passages resserrés, bas, infranchissables, situés à environ cinq
cents pieds au-dessous de l’ouverture de la caverne. L’air vicié, nous
a-t-on dit, empêche des investigations plus profondes. Chose
curieuse : en cet endroit, on entend distinctement le bruissement des
flots, ce qui tendrait à faire croire à une communication de ces
grottes avec la mer.
Le rocher, d’ailleurs, est complètement dépourvu de sources ;
aussi est-on obligé de se contenter de l’eau du ciel, soigneusement
recueillie dans des réservoirs, alimentés à l’aide d’un système de
drainage pratiqué sur les flancs des roches et jusque sur le toit des
maisons.
La population de Gibraltar est d’environ 20,000 habitants,
Espagnols pour la plupart. La garnison est en ce moment
puissamment renforcée par les détachements que la politique
« d’expansion » (nos voisins pourraient traduire : expensive politic)
tient prêts à diriger sur Chypre, sur la côte d’Afrique ou vers le cap
de Bonne-Espérance ; elle ne compte pas moins de 6,700 hommes,
y compris artillerie, génie et transports. Le gouverneur, actuellement
en congé, est le général lord Napier de Magdala ; il est remplacé en
ce moment par le major général Somerset.
Du haut de Gibraltar, quel que soit l’endroit où l’on se place, on
jouit d’un des plus beaux panoramas qu’il soit donné de contempler.
Du côté sud, on a devant soi le large détroit, l’infini des deux mers
dont les lignes extrêmes se fondent dans l’azur, l’immense
développement de la côte africaine ; sur la côte d’Europe, Gibraltar,
Algésiras, Tarifa, et en arrière le soleil, à son coucher, embrasant de
reflets d’un rose ardent les gorges abruptes des sierras de Grenade
et de l’Andalousie…
Mais l’homme n’a guère contribué à cette magnificence ; le seul
collaborateur de la nature en ce lieu fut le légendaire Hercule, qui
sépara de ses puissantes mains le mont Calpé d’avec le mont
Abyla ; et pour résumer mon impression sur des temps moins
fabuleux, je n’ai trouvé dans cette « guérite » inutile qu’une chose
intéressante, c’est un dessin de Henri Regnault fait à grands coups
de charbon sur le mur intérieur de l’une des casernes.
LES ILES MADÈRE
Passage du détroit. — La vie à bord. — La baie de Funchal. — Une fête

villageoise. — Politique et philanthropie mêlées. — Voyage à Porto-Santo. —
Politesses et congratulations. — Excursion au Grand Corral. — Trop de vin
de Madère.
10 août.
Nous avons quitté Gibraltar avant-hier au soir, favorisés par un

temps superbe. La traversée du détroit avec un beau crépuscule est
une promenade charmante. Le vaste horizon ouvert devant nous
semblait accalmi pour toujours ; poussés par une très légère brise,
les navires que nous croisions paraissaient immobiles et comme
endormis sur la mer, à peine bercés par une molle et longue houle
du large, écho affaibli de quelque tempête lointaine.
Nous passions, rapides, à côté d’eux. La nuit, se faisant peu à
peu, effaçait les éclats de lumière que les derniers rayons du soleil
avaient fait briller aux cimes des montagnes. Chaque instant nous
apportait ainsi un aspect nouveau. Les terres, devenues noires,
semblaient enfin confondre leurs détails dans une teinte uniforme ;
mais voici que l’astre des nuits se levant derrière nous était venu
projeter des ombres nouvelles, dessiner des formes imprévues et
nous montrer une dernière fois cet ancien monde, que nous ne
fuyions avec tant d’insouciance que dans l’espoir presque assuré de
le revoir un jour.
On n’apercevait plus du vieux continent que le phare du cap
Spartel, brillant comme une étoile, lorsque nous nous sommes
décidés à quitter le pont pour prendre un peu de repos dans nos
cabines.
Hier et aujourd’hui, nous avons été poussés par une belle brise
de vent arrière, qui permet à la Junon d’établir toutes ses voiles
carrées. Cette vue nous enchante. Nous nous sentons devenir plus
marins, mais nous sentons aussi vaguement qu’il nous faut encore
quelques jours pour pouvoir braver impunément les fureurs ou
seulement les impatiences du terrible Atlantique.
Notre route est dirigée sur Madère. Pendant la nuit qui a suivi la
sortie du détroit, on a rencontré bon nombre de navires. Maintenant,
nous n’en avons plus un seul en vue, et nous voilà pour la première
fois au milieu de la grande solitude.
Je ne dirai que peu de choses de la vie du bord ; les incidents qui
se passent sur un navire, à moins d’être très graves, n’ont guère
d’intérêt que pour ceux qui l’habitent. Notre existence est fort
régulière, et nous la trouverons peut-être monotone dans le cours
des longues traversées (heureusement le programme du voyage
n’en contient qu’un petit nombre). On déjeune à neuf heures et
demie, on dîne à cinq heures ; la table, je crois l’avoir dit, est bonne,
mais le service se ressent un peu de la précipitation du départ. Deux
fois par jour, nous nous trouvons donc tous réunis dans le salon
arrière, situé sur le pont. Outre les voyageurs, il y a là le
commandant, l’aumônier, le secrétaire de l’expédition, deux
professeurs, MM. Collot, de la Faculté de Montpellier, et Humbert, de
la Faculté de Paris, et le docteur, M. Debely.
Presque tous nous sommes jeunes, tous heureux de faire ce
voyage ; les repas sont donc gais, et les relations promettent d’être
agréables. Dans la journée, nous avons pour tuer le temps la
bibliothèque du bord, qui compte environ 500 volumes, dont une
collection du Tour du Monde, déjà fort demandée ; un trapèze et des
anneaux destinés aux amateurs de gymnastique, de grands fauteuils
sur la dunette, dédiés aux rêveurs. Pour combler le vide laissé par
ces éléments peut-être insuffisants, il nous reste nos conversations,
notre patience, et en dernier ressort le sommeil, dont quelques-uns,
fort sensibles au mal de mer, font un usage immodéré.
Aujourd’hui même a commencé la série des conférences
données par les professeurs embarqués dans ce but. La séance a
été ouverte par le commandant, qui nous a dit quelques mots sur les
principes généraux de la navigation ; il nous a appris bon nombre de
choses absolument élémentaires, que tous cependant, je crois, nous
ignorions complètement. Bientôt nous serons capables, non de
conduire un bâtiment, science compliquée et qui nous serait sans
doute parfaitement inutile, mais de comprendre comment on arrive à
le conduire.
En satisfaisant notre curiosité, cela nous permettra de suivre la
marche du navire, d’apprécier les difficultés que nous pourrons
rencontrer, et qui sait, si l’un de nous, dans une circonstance fortuite,
ne sera pas heureux de retrouver quelque jour dans sa mémoire la
trace de ces entretiens, qui ne sont aujourd’hui qu’un passe-temps ?
Après une courte leçon sur les compas, les cartes, les angles de
route, M. Humbert prend la parole et nous donne, aux points de vue
géographique, historique et économique, d’intéressants
renseignements sur Madère, les Açores, les Canaries et les îles du
Cap-Vert.
Vous n’attendez pas de moi, n’est-ce pas ? que je me fasse, à
mon tour, professeur. Ce livre n’est pas un recueil scientifique, et
vous savez, sans nul doute, que les conférences écrites valent
moins encore que les discours récités. Remontons donc sur le pont.
Voici le second coup de la cloche du dîner. A table. Demain matin,
nous serons à Madère.
14 août.
Dimanche, c’était le 11, je me suis levé de bonne heure, et,

comme de toute belle action, je fus récompensé ; mais, ce qui est
plus remarquable et plus rare, je le fus en ce monde, et tout de suite.
La mer, toujours belle, était à peine sillonnée de quelques
courtes vagues ; nous avions, à droite, l’île de Porto-Santo ; à
gauche, un peu sur l’avant, un groupe de terres tout en longueur,
d’aspect désolé, de formes bizarres, nommées les Desertas, et droit
devant, un énorme massif, aux pans doucement ondulés, éclairé en
plein par les rayons du soleil levant : c’était la grande île de Madère.
Elle semblait sortir de l’onde, toute fraîche et parée de ses grâces
naturelles, comme Vénus Amphitrite.
Bientôt, passant au sud de la pointe occidentale de l’île,
prolongeant à petite distance une côte où venaient aboutir de
pittoresques vallées, la Junon atteignit l’entrée d’une grande baie
demi-circulaire, la rade de Funchal.
J’ignore quelles surprises nous réserve ce voyage, et si les
splendeurs des forêts tropicales, la majesté des terres antarctiques,
les bizarreries de la civilisation orientale nous feront perdre le
souvenir de notre arrivée à Madère. J’ose en douter. Je
n’entreprendrai pas de décrire ce panorama enchanteur. Quand je
vous aurai dit qu’au pied de collines élevées, couvertes de forêts et
de plantations, la modeste capitale s’étend et s’éparpille au bord de
la mer, coquettement, capricieusement ; que toutes les teintes
végétales, depuis le vert sombre des pins, entrevus à travers les
nuages, jusqu’à la nuance douce et pâle des bananiers, se
confondent dans un harmonieux ensemble sans jamais se heurter ;
que l’arc gracieux de la baie s’arrête, d’un côté, à de belles falaises
à pic et, de l’autre, se termine par un étrange rocher planté sur la
mer comme le piédestal de quelque statue gigantesque ; quand
j’aurai compté et nommé les ruisseaux, parfois torrents, qui dévalent
le long des ravins, égayant et fertilisant tout ce qui les approche…,
aurez-vous le tableau sous les yeux ? Hélas ! non. Je cherche moi-
même à le retrouver et n’y parviens qu’avec peine. Ce qui me reste,
ce que je puis vous dire, c’est l’impression :
La baie de Funchal n’est pas un lieu gai, riant, c’est plutôt un lieu
calme et reposé ; la gravité des hautes montagnes tempère l’ardeur
luxuriante des vallées qui en descendent. L’endroit semble fait, non
pour ceux qui veulent commencer la vie, mais plutôt pour ceux qui
voudraient paisiblement la finir. Il s’en dégage un charme très grand,
un peu sérieux, presque triste vers le soir. Ce petit monde est une
solitude. L’esprit fatigué, le cœur malade pourront, dans le spectacle
de cette oasis perdue au milieu de l’Océan, chercher et trouver des
consolations, mais ils n’y trouveront que cela. Ils auront échangé le
tumulte contre l’isolement.
Dès que nous fûmes au mouillage, plusieurs embarcations
vinrent se ranger le long du bord, nous offrant du poisson frais, des
légumes et des fruits, parmi lesquels de magnifiques raisins et de
petites figues excellentes. Une nuée de petits êtres à la peau
bronzée sollicitent nos largesses, puis plongent et replongent pour
pêcher la menue monnaie que nous leur jetons par-dessus le bord.
Descendons à terre. Le mode de débarquement est assez
original et même assez amusant. Bien que la baie soit généralement
tranquille, une petite houle du large y entre aisément, et comme il n’y
a pas de quais, du moins en face de la ville, un canot ordinaire ne
pourrait déposer ses passagers à pied sec qu’en certains jours de
calme parfait. Aussi les embarcations du pays sont-elles toutes à
fond plat ; dès que l’une d’elles va aborder, tous les bateliers et
flâneurs de la plage vont au-devant ; les uns la prennent de chaque
côté, d’autres s’attellent à une corde qui leur est jetée du bateau, et,
au moment où la lame arrive, le traînant sur les galets l’espace d’une
quinzaine de mètres, ils le conduisent hors de l’atteinte de la mer.
On embarque de même ; en sorte que chaque appareillage pour
aller de la terre à bord est un lancement en miniature.
C’est dimanche. La ville semble déserte. Les notables sont à la
campagne, dans les gorges. Ce qui reste d’habitants est monté à
une chapelle qui domine la rade, dans laquelle on prie, et autour de
laquelle on s’amuse. Allons-y.
La chaleur est accablante, et nous mettons près de deux heures
à gravir la montée. Le chemin, bordé de maisons basses et de longs
murs formant terrasse, est étroit et pavé d’abominables galets.
Cependant des plafonds de verdure ombragent parfois la route, et,
de chaque côté, des plantes grimpantes sont entrelacées aux
rameaux des arbres ou suspendues en guirlandes. Nous
reconnaissons les produits les plus divers de la flore de l’Europe et
des tropiques. Dans la partie inférieure, nous avons rencontré les
cactus, les bananiers, les palmiers, les lauriers-roses ; mais bientôt,
à côté des aloès et des cannes à sucre, nous retrouvons la ronce
sauvage et le lierre d’Europe, puis le platane, le chêne, l’orme et des
fleurs en profusion : des glycines, d’énormes fuchsias, et l’héliotrope,
le lis du Cap, le myrte, l’amaryllis, le magnolia, etc. ; j’ai déjà parlé de
ce superbe raisin, dont les grappes, suspendues au-dessus de nos
têtes, nous font penser à la terre promise.
Nous arrivons à la chapelle au moment où se termine la fête
religieuse. De chaque côté du portail, ou, pour être bien sincère, de
la porte, de hauts mâts livrent à la brise les pavillons du Portugal et
de la France, de l’Angleterre et des États-Unis. L’intérieur de
l’édifice, tout entier construit en basalte, est tendu d’étoffes de
couleur claire et éclairé a giorno. Un orchestre, presque entièrement
composé de violons, joue des airs quasi dansants et que ne
désavoueraient point nos ménétriers. Au dehors, des bombes, des
fusées éclatent dans les massifs où sont dressées de nombreuses
buvettes enguirlandées de magnifiques hortensias bleus. Et,
pendant que l’on entre et que l’on sort, que l’on va et que l’on vient,
j’admire le superbe point de vue.
Partout des collines couvertes de bois épais ; au-dessous ce sont
des maisons isolées qui se détachent dans la verdure, et, presque
au centre de la rade, notre blanche Junon, maintenant bien sage sur
l’immense miroir de l’Océan sans limites.
Notre retour en ville comptera certainement parmi les plus gais
incidents du voyage. Les voitures n’existant pas à Madère, à cause
de la déclivité très sensible du terrain, on ne circule qu’à cheval ou
en traîneau. Quand il s’agit de monter, les traîneaux sont tirés par
des bœufs, fortes et vigoureuses bêtes au pied sûr qui partent au
pas accéléré, encouragées par les cris étourdissants de leurs
conducteurs, et mieux encore par de fréquents coups de bâton
appliqués sans ménagement sur leurs robustes échines. De temps
en temps, l’un des conducteurs place sous les patins du traîneau un
petit sac contenant de la graisse, afin de rendre le frottement plus
doux. De là cet aspect poli et luisant du pavé de Funchal,
exclusivement composé de galets roulés. Pour descendre, les frêles
véhicules sont lancés sur les pentes, conduits et à peine retenus à
l’aide de cordes dont les guides se servent surtout pour éviter les
chocs aux tournants.
Nous embarquons dans une dizaine de traîneaux placés en file
indienne, et au signal : En avant ! nous voilà glissant avec une
vitesse presque vertigineuse ; nos guides, doublement entraînés par
nos folles excitations, suants et ruisselants, essoufflés et haletants,
conservent encore assez de sang-froid pour éviter les abordages,
qui ne seraient pas sans danger, et, en dix minutes, nous voilà au
bas de la colline.
N’ayant qu’une faible confiance dans les cordons bleus de ce
ravissant, mais primitif séjour, nous revînmes à bord pour l’heure du
dîner et nous apprîmes une grande nouvelle : la Junon appareillerait
le lendemain matin… Ouais ! Et nos trois jours de relâche ! On nous
rassura bien vite. La Junon appareillerait, mais non pour prendre la
haute mer ; elle aurait l’honneur de recevoir à son bord M. le
gouverneur civil des îles Madère, le conduirait à l’île de Porto-Santo,
à deux heures d’ici, et le ramènerait dans la même journée.
Il s’agissait donc d’une simple excursion, que nous pouvions à
notre gré faire ou ne pas faire. On nous disait que Porto-Santo
n’avait pas été visitée par un navire étranger depuis cinq ou six ans,
et que le gouverneur lui-même ne s’y rendait guère qu’une fois tous
les deux ans, n’ayant pas de navire convenable pour l’y mener.
Il y avait là de quoi piquer notre curiosité. Déjà notre imagination
découvrait les choses les plus invraisemblables dans cette colonie
genre Robinson suisse, située à soixante heures de Lisbonne et à
cinq jours de l’Exposition universelle.
Mais pourquoi cette promenade ? Voici.
Le groupe des îles Madère est administré par deux gouverneurs :
l’un civil, don Alfonso de Castro ; l’autre militaire, le colonel Alex.
Cesar Mimoso, se partageant assez inégalement les attributions du
pouvoir exécutif. Le premier a tout le poids des affaires locales ; le
second, le commandement des troupes, véritable sinécure. Le
territoire est divisé en municipalités, à la tête desquelles sont placés
des maires nommés par le roi, sur la proposition du gouverneur civil.
L’île de Porto-Santo, située à vingt-cinq milles environ nord-est de
Madère, forme l’une de ces municipalités et concourt avec elles pour
la nomination des trois députés que la colonie envoie au Parlement
portugais.
Tandis que, sous les rayons d’un ardent soleil, nous gravissions
les pentes caillouteuses qui conduisaient à la fête villageoise, notre
commandant, strict observateur des formalités, était allé mettre des
cartes chez les gouverneurs et, quelques instants après, recevait à
bord la visite d’un aide de camp du colonel Mimoso.
Après l’aide de camp, arrive un abbé. C’est le tuteur d’un jeune
Français qui habite Madère avec sa famille. M. Goubaux, — notre
aimable compatriote, — ayant aperçu du haut de sa villa, située sur
une des collines qui dominent la rade, la Junon portant le pavillon du
pays natal, avait député en toute hâte son aumônier pour nous
transmettre, avec ses compliments de bienvenue, la plus cordiale
invitation.
On cause de choses et d’autres : de la France d’abord, puis de
notre expédition, puis de l’île, de ses habitants, de ses mœurs ; enfin
on en arrive, — il y avait cependant deux abbés dans le groupe, — à
dire un peu de mal du prochain :
— Vous venez de recevoir la visite de l’aide de camp du
gouverneur militaire ; c’est un homme charmant, — dit le visiteur ; —
l’autre, quoique civil, n’est, assure-t-on, pas de même. Il ne rend
point les visites, et, tout dernièrement, nous avons eu ici une frégate
française dont le commandant a laissé sa carte chez lui ; il paraît
qu’il n’a même pas renvoyé la sienne. Je vous préviens, afin que
vous ne soyez pas surpris si vous avez le même sort.
— Commandant, annonce aussitôt le timonier de service, une
embarcation portant pavillon portugais se dirige vers le bord.
Les longues-vues sont braquées sur le nouvel arrivant.
— Eh mais ! c’est le gouverneur, s’écrie l’abbé, du ton d’un
homme surpris en flagrant délit de jugement téméraire.
C’était, en effet, le gouverneur civil, en personne. Remue-
ménage, coups de sifflet, quatre hommes à la coupée pour rendre
les honneurs. Don Alfonso de Castro monte à bord et souhaite la
bienvenue au commandant. La conversation, d’abord banale,
comme les débuts de toute entrevue officielle, se trouva, sans qu’on
sache comment, amenée sur la situation générale de l’île et de ses
dépendances. On parla donc de Porto-Santo. Ce coin de terre, un
peu déshérité, avait été plus malheureux cette année que les
années précédentes, la récolte du raisin, peu importante, avait assez
bien réussi, mais le maïs avait complètement manqué ; bref, une
famine s’en était suivie. Le gouverneur avait envoyé des
embarcations avec des vivres, et les rapports des derniers jours
étaient satisfaisants ; mais « il regrettait bien de ne pouvoir juger par
lui-même de la situation ; il aurait voulu rassurer par sa présence
toute cette population presque abandonnée ; — de plus, le moment
des élections approchait, et on pouvait craindre… un mauvais
résultat. »
Ah ! politique, ma mie, nous te retrouverons donc partout, et
toujours… et la même !
Bref, le commandant offrit à M. le gouverneur de le conduire à
Porto-Santo pour relever le moral de ses administrés, et de leur
fournir des vivres s’ils en avaient besoin.
Son Excellence était homme trop bien élevé et trop diplomate
pour demander un service de cette nature, mais trop bon
administrateur aussi pour ne pas l’accepter. Après toutes les
hésitations obligatoires, il fut donc convenu que la Junon ferait ce
petit voyage.
Le lendemain, à l’aube, le gouverneur, accompagné de quelques
notables, embarque. Tout est paré. Le pavillon portugais est hissé au
grand mât. — « Machine en avant ! » — Vers dix heures nous
mouillons devant Baleria, petite ville de 1,200 habitants, et tout
aussitôt nous descendons à terre. Je pensais, en arrivant dans cette
île si peu fréquentée, faire ample moisson d’observations
intéressantes. Erreur ! J’ai retrouvé là Madère, mais Madère stérile
et desséché, Madère sauvage et déguenillé ; des ruines sans
caractère, des costumes sans couleur, un soleil dur et sans reflets,
se répercutant sur des roches aux arêtes banales. Quant aux
notables, que la redingote noire et le chapeau à haute forme étaient
loin d’embellir, on eût pu les confondre avec quelque députation d’un
petit bourg du midi de la France.
Revenons donc bien vite avec la Junon à Funchal. Le
gouverneur est enchanté ; il a rempli sa mission, il a constaté qu’il
n’est point nécessaire de recourir à nos vivres, attendu que nul ne
meurt de faim dans l’île, que le conseil municipal est respectueux et
que la population semble animée d’un fort bon esprit. Que peut être,
auprès de satisfactions aussi légitimes, l’ennui de n’avoir pu, par la
faute de Neptune, faire honneur au déjeuner et au dîner succulents
que lui avait préparés notre chef !
Le lendemain matin, au moment où nous partions en cavalcade
pour le Grand Corral, le commandant recevait la très aimable lettre
de remerciements que voici :
Funchal, le 13 août 1878.
Monsieur le commandant,
Je viens vous faire mes remerciements les plus sincères du

grand service que vous venez de rendre à l’administration
supérieure de ce département, en mettant le navire de votre
commandement à ma disposition pour me conduire à l’île de Porto-
Santo, qui lutte avec de grandes difficultés et qui est menacée de la
famine.
Convaincu de la nécessité de m’informer par moi-même de l’état
de l’île, et voyant que ma présence donnerait un peu de courage à
ces pauvres gens, j’ai accepté volontiers l’offre si aimable que vous
avez bien voulu me faire, et qui atteste si bien les sentiments de
philanthropie qui sont l’apanage de la grande nation française.
La manière dont j’ai été reçu par vous, les attentions dont j’ai été
l’objet de la part de tous ces messieurs qui composent l’expédition
française autour du monde m’imposent le devoir de vous manifester
les sentiments de ma reconnaissance la plus profonde.
Du service que vous m’avez rendu en me conduisant à Porto-
Santo, et des offres généreuses que vous m’avez faites de
transporter des vivres ou de les fournir vous-même des provisions
de la Junon aux habitants de cette île, je m’empresserai de rendre
compte à mon gouvernement par le premier bateau, et je suis bien
sûr qu’il vous remerciera de toutes ces marques d’attention et de
bienveillance envers son délégué dans ce département, et envers
les malheureux habitants de Porto-Santo.
En vous priant de présenter à vos compagnons de l’expédition
l’expression de ma gratitude, veuillez agréer, monsieur le
commandant, avec mes vœux pour votre bon voyage, les
assurances de la haute considération avec laquelle j’ai l’honneur
d’être
Votre dévoué serviteur,
Le gouverneur civil,
Alfonso de Castro.
La presse locale, écho un peu emphatique de la politesse

officielle, joignait ses remerciements à ceux du gouverneur et
insérait en première colonne, dans le Jornal do Commercio, un
article d’une extrême amabilité.
La lettre et l’article étaient rédigés en français.
Il n’était pas possible d’être plus gracieux, et vous voyez que les
Madériens, en somme, sont loin d’être des sauvages.
Je vous ai dit que nous avions organisé une excursion pour aller
en bande au Grand Corral. Corral, vous le savez, signifie col, défilé,
et le Grand Corral est le plus imposant, le plus pittoresque des
passages qui, tournant le pic Ruivo, ancien cratère de 1,800 mètres

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Retailing 8th Edition Dunne Solutions

Market Selection and Retail Location Analysis

1. Explain the criteria used in selecting a target market.

I. Selecting a Target Market

Market segmentation is a method retailers use to segment, or break down, heterogeneous

B. Identifying a Target Market

II. Reaching Your Target Market

A. Location of Store-Based Retailers

Strengths of the CBD include:

• Variety in images, prices, and services

Weaknesses of the CBD include:

Shopping Centers and Malls

Shopping-center image, preferences, and personality all attract various subsets of

However, freestanding retailing does have some limitations including:

Increasingly, retailers are identifying nontraditional locations that offer greater

III. Geographic Information Systems

Geographic Information System (GIS) is a computerized system that combines physical

Exhibit 7.4 shows the key components of geographic information systems.

IV. Market Identification

A. Retail Location Theories

Retail Gravity Theory

Retail gravity theory rests on two assumptions:

Retail gravity theory does have several limitations:

Research on outshopping by residents of rural areas—that is, leaving your community to

A possible indicator of understored versus overstored markets is the index of retail

Where, IRS = the index of retail saturation for an area,

potential for significant profits.

Other Demand and Supply Factors

B. Market Demand Potential

C. Market supply Factors

A. Size of Trading Areas

B. Description of Trading Area

• Some are race-oriented\

VI. Site Selection

B. Terms of Purchase or Lease

REVIEW AND DISCUSSION QUESTIONS:

[LO01] What criteria are used in selecting a target market?

2. What three criteria should be met to successfully target a market?

6. Why isn’t Walmart a good choice to be an anchor at a mall?

A geographic information system (GIS) is a computerized system that combines physical

in the marketplace for a particular line of retail trade.

IRS (Market A) = (126,000 x $739) / 610,000

Fast-food Restaurant Supermarket

[LO06] How is the best geographic site selected?

17. Why is it so hard to find that 100-percent retail location?

WRITING AND SPEAKING EXERCISE:

houseplants. These other items make up 25 percent of Kathy’s gross sales.

1. Current sales: $452,000

PLANNING YOUR OWN ENTREPRENEURIAL BUSINESS:

Next do some sensitivity analysis.

Square Miles in Household Penetration Frequency Traffic

Nordstrom Market Selection

Growth Through Market Expansion

conclusions on the effectiveness of the market expansion strategy.

discussion can be especially interesting if you focus on groceries and restaurants.

No Men Allowed—Targeting Women Travelers in the Hotel Industry

Zumiez: Where to Expand Next?

Le vent de bout a un peu retardé notre marche. Nous avons

La citadelle. — Une consigne sévère. — L’aventure de la petite Johnston. —

La grande baie de Gibraltar, ou d’Algésiras, a la forme d’un U

Il y a quelques années, un Anglais, résidant à Gibraltar, homme

J’ai dit tout à l’heure que le rocher ne défendait pas le passage,