Why are consumer services distributed in a regular pattern? Ch. 12 Services Why are consumer services distributed in a regular pattern?

Market Area Analysis Service providers believe that the location of a business is the most important factor to its profitability. Steps to Determine Profitability of a Location Compute the Range Survey local residents about willingness to travel a specific amount of time to the potential site of a new store. Compute the Threshold Identify how many patrons are needed to meet expenses. Draw the Market Area Draw the range around potential location of new store, then identify whether or not the threshold is met within that radius.

Central Place Theory A central place is a market center for the exchange of goods & services (max. accessibility) Central Place Theory explains how services are distributed & why a regular pattern of settlement exists in MDC’s 1930’s – German geographer; Christaller, further developed during the 1950s by others

Market Area of a Service Market area/hinterland – nodal region Consumers location within the circle shows likelihood of using the service Problem w/ various shapes = hexagon best compromise between circles & squares

Market Areas as Hexagons Fig. 12-5: Hexagons are often used to delineate market areas because they are a compromise between circles, which have edges equidistant from the center but leave gaps, and squares, which don’t leave gaps but whose edges are not equidistant from the center.

Size of Market Area Market area of every service varies; need 2 pieces of info about a service: Range & Threshold Range of a Service: How far are you willing to go? - Max. distance people are willing to travel Usually measured in time and not distance - Small vs. Large range examples? - Consumer behaviour analysis (postal code)

Size of Market Area cont’d… Threshold of a service: Min. # of people required to support a service Counting only those the service appeals to Level of income as a factor

Would a town of 20,000 be enough to support….

Market-Area Analysis Profitability of a location; convenience store example Consider how much the ave. person spends Optimal location within a market; best location is one that minimizes the distance to the service for the largest # of people Best location in a linear settlement; gravity model (pop. density & distance)

Optimal Location (for Pizza Shop) Fig. 12-6: The optimal location for a pizza delivery shop with seven potential customers in a linear settlement (top) and with 99 families in apartment buildings (bottom).

Hierarchy of Services & Settlement Nesting pattern of small & large thresholds and settlements Christaller showed distances between settlements follow a regular pattern, identifying 7 sizes of settlements

Central Place Theory Fig. 12-7: Market areas are arranged into a regular pattern according to central place theory, with larger settlements fewer and further apart.

Supermarket and Convenience Store Market Areas Fig. 12-8: Market area, range, and threshold for Kroger supermarkets (left) and UDF convenience stores in Dayton, Ohio. Supermarkets have much larger areas and ranges than convenience stores.

CPT: Limitations Large, contiguous areas of flat land rarely exist There are many forms of transport - cost does not equal distance People and wealth are not evenly distributed People do not always go to the nearest good or service Services and goods are not all equal competitors

Rank-size rule in US and several other countries vs. Primate City Rule nth largest city will be 1/n the size of the largest city Second largest city is 1/2 the size of the largest. Third largest city is 1/3 the size of the largest. Fourth biggest city is 1/4 the size of the largest. vs. Primate City Rule Largest city is far bigger than rest UK, France & LDCs

Rank-Size Distribution of Cities Fig. 12-9: Cities in the U.S. closely follow the rank-size distribution, as indicated by the almost straight line on this log scale. In Romania, there are few settlements in two size ranges.

Examples What is Canada? What is Mexico? Toronto (2.8 million) Montreal (1.6 million) Calgary (1 million) What is Mexico? Mexico City (8.8 million) Ecatepec (1.65 million) Guadalajara (1.5 million)