Assignment 226

Chapter Twelve

Obtaining and Laying

Out Operating Facilities

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Some General Factors Affecting Location Choice

Access to a capable, well-trained, stable work force.

Availability of adequate and affordable supplies and services.

Availability, type, use, and cost of transportation.

Taxes and government regulations.

Availability and cost of electricity, gas, water, sewerage, and other utilities.

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Some Important Location Factors

Figure 12.1

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Specific Factors to Consider for Various Businesses

Retailers

Sell goods to the ultimate consumer.

Producers

Convert materials into products in considerable volume for others to sell to ultimate consumers.

Service companies

Which provide a service for customers, have some characteristics of both retailers and producers.

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Rating Sheet for Sites

Figure 12.3

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Types of Stores

Convenience goods

Products that customers buy often, routinely, quickly, and in any store that carries them.

Shopping goods

Goods that customers buy infrequently, after shopping at only a few stores.

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Types of Stores

Specialty goods

Bought infrequently, often at exclusive outlets, after special effort by the customer to drive to the store.

Downtown locations

Attract business-oriented activities, as government, financial businesses, and head offices of large firms are usually located in the downtown area.

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Types of Stores

Seasonal stores

Those that target customers for specific seasons or events.

Some are open year-round and some are only open seasonally.

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Types of Locations

Freestanding stores,

Found in various locations are usually best for customers who have brand or company loyalty.

The market niche –product and clientele – must conform to the needs of the people in the area.

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Types of Locations

Shopping centers

Vary in size and are designed to draw traffic according to the planned nature of the stores to be included in them.

Anchor stores

Those that generate heavy traffic in a shopping center.

Often large department stores placed at ends of the mall arms.

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Why are shopping centers so popular?

Shopping centers are designed to draw traffic according to the planned nature of the stores to be included in them

Shopping centers offer many services, such as specialized activities to bring in traffic, merchant association activities, parking, utilities, and combined advertising. A current trend is for large "power centers" to compete with one another to be the largest

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Another reason for the popularity of shopping centers is the growing interest in shopping.

Enclosed malls have eliminated weather problems for customers. Indeed, older people are encouraged to use the mall for exercise in a controlled climate.

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Drawbacks of Shopping Centers

Cost: there is now a "total rent" concept for costs that must be considered in a shopping center. These costs may include dues to the merchants' association, maintenance fees for the common areas, and the cost of special events or combined advertising. The most common rental is a basic rent, usually based on square footage, plus a percentage of gross sales (usually 5 to 7 percent). In total, these costs tend to be high and often discourage tenants

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Restrictions imposed by the center’s theme.

Operating regulations.

Possible changes in the center’s owners and managers.

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Plants and Physical Facilities

Manufacturing, or production

Usually involves making or processing materials into finished goods.

Success of a given location can hinge on the availability and cost of the proper mode of transportation.

Facilities

The buildings, machines and other equipment, and furniture and fixtures needed to produce and distribute a product.

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Telecommuting and Remote Locations Needs

Access to phone systems, services, and hig-speed internet.

The best computer and technology you can buy.

Access to pick up Fed Ex, UPS, and USPS.

Access to purchase of supplies.

Knowledge of year-round weather and transportation.

Four-wheel drive and gas efficient vehicle.

Contingency plan for ding business.