chapter 16 location and layout copyright ©2009 pearson education, inc. publishing as prentice hall...
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Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 11Chapter 16 Location and LayoutChapter 16 Location and Layout
Location, Layout, and
Physical Facilities
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 22Chapter 16 Location and LayoutChapter 16 Location and Layout
Choosing a LocationChoosing a Location
The right region of the countryThe right region of the country The right state in the regionThe right state in the region The right city in the stateThe right city in the state The right site in the cityThe right site in the city
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 44Chapter 16 Location and LayoutChapter 16 Location and Layout
Choosing the Region:Choosing the Region:Sources of Sources of InformationInformation
U.S. Census Bureau - U.S. Census Bureau - www.census.gov/www.census.gov/ American Community SurveyAmerican Community Survey Economic CensusEconomic Census
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 55Chapter 16 Location and LayoutChapter 16 Location and Layout
American DemographicsAmerican Demographics AmeriStatAmeriStat Demographics USADemographics USA Lifestyle Market Analyst Lifestyle Market Analyst Rand McNally's Commercial Atlas Rand McNally's Commercial Atlas
and Marketing Guideand Marketing Guide
Choosing the Region:Choosing the Region:Sources of Sources of InformationInformation
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 66Chapter 16 Location and LayoutChapter 16 Location and Layout
Sourcebook of County Sourcebook of County DemographicsDemographics
Sales and Marketing Management’s Sales and Marketing Management’s Survey of Buying Power Survey of Buying Power
Editor and Publisher Market GuideEditor and Publisher Market Guide Small Business Development Small Business Development
CentersCenters
Choosing the Region:Choosing the Region:Sources of Sources of InformationInformation
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 77Chapter 16 Location and LayoutChapter 16 Location and Layout
Geographic Information Geographic Information Systems (GIS)Systems (GIS) Computerized programs combining map-Computerized programs combining map-
drawing with database management drawing with database management capabilitycapability
Example: Census Bureau’s TIGER file Example: Census Bureau’s TIGER file Search through a database and then Search through a database and then
plot the results on a mapplot the results on a map Visual display reveals otherwise hidden Visual display reveals otherwise hidden
trendstrends
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 88Chapter 16 Location and LayoutChapter 16 Location and Layout
Selecting the StateSelecting the State
Factors to consider:Factors to consider: Proximity to marketsProximity to markets Proximity to needed raw materialsProximity to needed raw materials Labor supplyLabor supply Wage ratesWage rates Business climateBusiness climate Tax ratesTax rates Internet accessInternet access
Sample State Evaluation MatrixSample State Evaluation Matrix
Location CriterionWeight10-high1-low
Score5-high1-low
Weighted Score (weight x score)
Total Score Florida Georgia South Carolina
Quality of labor forceWage ratesUnion activityEnergy costsTax burdenEducational/ Training AssistanceStart-up incentivesQuality of lifeAvailability of raw materialsOther
Assign to each location criterion a weight that reflects its relative importance (10 high to 1 low). Then score each state on a scale of 1 (low) to 5 (high). Calculate the weighted score (weight x score) for each state. Finally, add up the total weighted score for each state. The state with the highest total weighted score is the best location for your business.
Assign to each location criterion a weight that reflects its relative importance (10 high to 1 low). Then score each state on a scale of 1 (low) to 5 (high). Calculate the weighted score (weight x score) for each state. Finally, add up the total weighted score for each state. The state with the highest total weighted score is the best location for your business.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1010Chapter 16 Location and LayoutChapter 16 Location and Layout
Selecting the Selecting the CityCity Population trends Population trends Population densityPopulation density CompetitionCompetition
ClusteringClustering CostsCosts Local laws and regulationsLocal laws and regulations
ZoningZoning Compatibility with communityCompatibility with community
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1111Chapter 16 Location and LayoutChapter 16 Location and Layout
Quality of lifeQuality of life Transportation networksTransportation networks Police and fire protectionPolice and fire protection Public servicesPublic services Location’s reputationLocation’s reputation
Selecting the Selecting the CityCity
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Retail and Service Retail and Service Location Location ConsiderationsConsiderations
Trade area sizeTrade area size Retail compatibilityRetail compatibility Degree of competitionDegree of competition Transportation networkTransportation network Physical, cultural, or Physical, cultural, or
emotional barriersemotional barriers Political barriersPolitical barriers
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1313Chapter 16 Location and LayoutChapter 16 Location and Layout
Index of Retail Index of Retail SaturationSaturation
A measure of the potential sales per square A measure of the potential sales per square foot of store space for a given product within foot of store space for a given product within a specific trading area a specific trading area
RF
RECIRS
wwhere C = Number of customers in the trading areahere C = Number of customers in the trading area RE = Average expenditure per person for the RE = Average expenditure per person for the productproduct RF = Total square feet of selling space allocated RF = Total square feet of selling space allocated to the to the product product
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1414Chapter 16 Location and LayoutChapter 16 Location and Layout
Reilly’s Law of Retail Reilly’s Law of Retail GravitationGravitation
An estimate of a site’s ability to attract An estimate of a site’s ability to attract customers customers
a
b
PP
dBP
1
wwhere BP = Distance in miles from location A to break here BP = Distance in miles from location A to break pointpoint d = Distance in miles between locations A and B d = Distance in miles between locations A and B P Paa = Population surrounding location A = Population surrounding location A
P Pbb = Population surrounding location B = Population surrounding location B
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1515Chapter 16 Location and LayoutChapter 16 Location and Layout
Retail and Service Retail and Service Location Location ConsiderationsConsiderations
Customer trafficCustomer traffic Adequate parkingAdequate parking Expansion potentialExpansion potential VisibilityVisibility
ContinuedContinued
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Retail and Service Retail and Service Location OptionsLocation Options
Central Business Districts (CBDs)Central Business Districts (CBDs) Neighborhood locationsNeighborhood locations Shopping centers and mallsShopping centers and malls
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Shopping Centers and Shopping Centers and MallsMalls
Neighborhood Shopping CentersNeighborhood Shopping Centers 3 to 12 Stores; anchor is supermarket or 3 to 12 Stores; anchor is supermarket or
drugstoredrugstore Community Shopping CentersCommunity Shopping Centers
12 to 50 stores; anchor is supermarket, 12 to 50 stores; anchor is supermarket, super-drugstore, or discount department or super-drugstore, or discount department or variety storevariety store
Power CentersPower Centers Combines drawing power of a mall with Combines drawing power of a mall with
convenience of neighborhood shopping convenience of neighborhood shopping centercenter
Theme/Festival CentersTheme/Festival Centers Employ unifying theme (often Employ unifying theme (often
entertainment) and frequently target touristsentertainment) and frequently target tourists
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1818Chapter 16 Location and LayoutChapter 16 Location and Layout
Shopping Centers and Shopping Centers and MallsMalls
Outlet CentersOutlet Centers Rather than use anchor stores, rely on Rather than use anchor stores, rely on
manufacturer’s and retailers’ outlet manufacturer’s and retailers’ outlet stores to draw shoppers stores to draw shoppers
Lifestyle CentersLifestyle Centers Anchor is upscale specialty chain store; Anchor is upscale specialty chain store;
designed to emulate a village main streetdesigned to emulate a village main street Regional Shopping MallsRegional Shopping Malls
50 to 100 stores; anchor is one or more 50 to 100 stores; anchor is one or more major department storesmajor department stores
Super-regional Shopping MallsSuper-regional Shopping Malls Trade area stretches up to 25 milesTrade area stretches up to 25 miles
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 1919Chapter 16 Location and LayoutChapter 16 Location and Layout
Retail and Service Retail and Service Location OptionsLocation Options
Near competitorsNear competitors Outlying areasOutlying areas Home-based businessesHome-based businesses
49% of U.S. businesses are run from 49% of U.S. businesses are run from home home
continuedcontinued
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2020Chapter 16 Location and LayoutChapter 16 Location and Layout
Manufacturing Manufacturing LocationsLocations Foreign trade zonesForeign trade zones
Figure 16.2. How a Foreign Trade Zone (FTZ) Figure 16.2. How a Foreign Trade Zone (FTZ) Works Works
Without FTZ
Imported Parts Imported Parts and Materialsand Materials
Store
Assemble
Package
Manufacture
Process
Mix
With FTZ
DutyDutyPaidPaid
NoNoDutyDutyPaidPaid
U.S.U.S.SalesSales
ExportsExports
U.S.U.S.SalesSales
ExportsExports
Small Company
No Duty Paid
No Duty Paid
Duty Paid
Duty Paid
Duty PaidDuty Paid
No Duty Paid
No Duty Paid
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2222Chapter 16 Location and LayoutChapter 16 Location and Layout
Manufacturing Manufacturing LocationsLocations Foreign trade zonesForeign trade zones Enterprise and empowerment Enterprise and empowerment
zoneszones Business incubatorsBusiness incubators
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Business IncubatorsBusiness Incubators
Locations that combine low-cost, Locations that combine low-cost, flexible rental space with a flexible rental space with a multitude of support services for multitude of support services for their small business residentstheir small business residents
1,400 incubators operate across the 1,400 incubators operate across the U.S.U.S.
They work!! Firms that “graduate” They work!! Firms that “graduate” from incubators have a success rate from incubators have a success rate of 87%of 87%
Source: National Business Incubation Association
4%
6%
7%
37%
47%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Percentage
Other
Service
Manufacturing
Technology
Mixed Use
Business Incubators by Category
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2525Chapter 16 Location and LayoutChapter 16 Location and Layout
Layout:Layout:External FactorsExternal Factors Size and adaptabilitySize and adaptability External appearanceExternal appearance
Create proper image or Create proper image or “personality” in customers’ eyes“personality” in customers’ eyes
Entrances Entrances InviteInvite customers to come in customers to come in
Americans with Disabilities ActAmericans with Disabilities Act SignageSignage
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A Business SignA Business Sign
Tells potential customers who you are Tells potential customers who you are and what you're sellingand what you're selling
Must comply with local sign ordinancesMust comply with local sign ordinances Should be visible, simple, and clearShould be visible, simple, and clear Should be changed periodically to avoid Should be changed periodically to avoid
becoming part of the backgroundbecoming part of the background Should be legible both day and nightShould be legible both day and night Must be maintained properlyMust be maintained properly
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2727Chapter 16 Location and LayoutChapter 16 Location and Layout
Building InteriorsBuilding Interiors
ErgonomicsErgonomics is an integral part of any is an integral part of any designdesign
Proper layout and design pays off in Proper layout and design pays off in higher productivity, efficiency, or higher productivity, efficiency, or salessales
Careful selection of colors can create Careful selection of colors can create the desired impressions among the desired impressions among customers and employeescustomers and employees
Proper lighting is measured by what Proper lighting is measured by what is ideal for the job being doneis ideal for the job being done
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2828Chapter 16 Location and LayoutChapter 16 Location and Layout
Building InteriorsBuilding Interiors
Scents can have a powerful Scents can have a powerful impact in retail stores impact in retail stores Scent marketingScent marketing
SoundSound Background music can be a selling Background music can be a selling
tooltool Classical music encourages Classical music encourages
shoppers to slow down and makes shoppers to slow down and makes them feel more affluent them feel more affluent
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 2929Chapter 16 Location and LayoutChapter 16 Location and Layout
Layout for RetailersLayout for Retailers
The arrangement of merchandise The arrangement of merchandise and fixtures and fixtures
““The stage on which a retail The stage on which a retail company functions” – Paco company functions” – Paco UnderhillUnderhill
Well-designed layout takes Well-designed layout takes customers past plenty of displays of customers past plenty of displays of items they may buy on impulseitems they may buy on impulse 65% to 70% of purchase decisions are 65% to 70% of purchase decisions are
made after a customer enters a storemade after a customer enters a store
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3030Chapter 16 Location and LayoutChapter 16 Location and Layout
Three Layout Three Layout PatternsPatterns GridGrid
Rectangular with parallel aisles; Rectangular with parallel aisles; formal; controls traffic flow; formal; controls traffic flow; uses selling space efficientlyuses selling space efficiently
Supermarkets and self-service Supermarkets and self-service discount storesdiscount stores
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3232Chapter 16 Location and LayoutChapter 16 Location and Layout
Free-FormFree-Form Free-flowing; informal; creates Free-flowing; informal; creates
“friendly” environment; flexible“friendly” environment; flexible Small specialty shopsSmall specialty shops
Three Layout Three Layout PatternsPatterns
Free-form Free-form LayoutLayout
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Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3434Chapter 16 Location and LayoutChapter 16 Location and Layout
BoutiqueBoutique Divides store into a series of Divides store into a series of
individual shopping areas, each individual shopping areas, each with its own theme; unique with its own theme; unique shopping environmentshopping environment
Small department storesSmall department stores
Three Layout Three Layout PatternsPatterns
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3636Chapter 16 Location and LayoutChapter 16 Location and Layout
Layout Layout GuidelinesGuidelines Know your customers buying habits Know your customers buying habits
and plan your layout accordinglyand plan your layout accordingly Display merchandise as attractively Display merchandise as attractively
as your budget will allowas your budget will allow Display complementary items Display complementary items
togethertogether Use music to set the mood Use music to set the mood Recognize the value of floor space; Recognize the value of floor space;
never waste valuable selling space never waste valuable selling space with non-selling functionswith non-selling functions
Space Values for a Small StoreSpace Values for a Small Store
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Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3838Chapter 16 Location and LayoutChapter 16 Location and Layout
Factors to Consider in Factors to Consider in Manufacturing LayoutsManufacturing Layouts
Type of productType of product Type of production processType of production process Ergonomic considerationsErgonomic considerations Economic considerationsEconomic considerations Space availability within the Space availability within the
facilityfacility
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 3939Chapter 16 Location and LayoutChapter 16 Location and Layout
Manufacturing Manufacturing LayoutsLayouts
Product layoutProduct layout
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Manufacturing Manufacturing LayoutsLayouts
Product layoutProduct layout Process layoutProcess layout
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 4343Chapter 16 Location and LayoutChapter 16 Location and Layout
Manufacturing Manufacturing LayoutsLayouts
Product layoutProduct layout Process layoutProcess layout Fixed position layoutFixed position layout
Copyright Copyright ©©2009 Pearson Education, Inc. Publishing as Prentice Hall2009 Pearson Education, Inc. Publishing as Prentice Hall 4444Chapter 16 Location and LayoutChapter 16 Location and Layout
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