Chapter 12 - Services Business Location Video

Service Economy Service Service Industry An activity that fulfills a human want or need and returns money to those who provide it. Service Industry Economic activity associated with the provision of services – such as transportation, banking, retailing, education, and routine office-based jobs.

Service Economy Types of services—facilitates other businesses Consumer service Retail Wholesale, restaurants, entertainment Personal Services Services that provide for the well-being and personal improvement of individual consumers. Health Care, education, automobile repair, church. Business services Producer Services Financial – Banks, insurance, real estate. Professional—law, accounting, architecture. Transportation and Communication Trucking, publishing and broadcasting Public Services Services offered by the government to provide security and protection for citizens and businesses Military, police, fire, etc.

Service Sector Employment Service Economy Service Sector Employment Fig. 12-1: Over half of workers are employed in the service sector in most MDCs, while a much smaller percentage are in the service sector in most LDCs.

Central Places and Market Area A market center for the exchange of services by people attracted from the surrounding area. Market area (or hinterland) The area surrounding a central place, from which people are attracted to use the place's goods and services. Range The maximum distance people are willing to travel to use a service. Threshold The minimum number of people needed to support the service

Fairbanks to Anchorage Costco 6.5 hours Valdez to Anchorage Costco 5.5 hours

Central Place Theory Central Place theory - Christaller A theory that explains the distribution of services, based on the fact that settlements serve as centers of market areas for services; larger settlements are fewer and farther apart than smaller settlements and provide services for a larger number of people who are willing to travel farther. Proposed by German geographer - Walter Christaller Influenced by von Thünen and Weber Focuses on the role of distance in the location of urban centers Attempts to explain the relationship between cities and their hinterlands TV Maps

Central Place Theory Christaller developed a model to predict how and where central places in the urban hierarchy (hamlets, villages, towns, and cities) would be functionally and spatially distributed. Assumptions: Consumers are evenly distributed across a uniform market plain Transportation is homogeneous. Central places are service centers.

Central Place Theory Hamlet Village Town City

What happens when you use a circle to define trade areas What happens when you use a circle to define trade areas? Unserved consumers living in the white areas. You can’t have unserved areas.

Push the circle together Push the circle together. But, you can’t have market areas (circles) overlapping either: black lenses between circles. If we bisect each lens we resolve the conflict. These bisections give us the only geometric shape that resolves the conflict: a hexagon. With a hexagon, all areas are served and there is no overlap,

The only geometric shape that resolves this conflict is the hexagon The only geometric shape that resolves this conflict is the hexagon. Think about why a square or a triangle would not be better. (Hint: distant corners)

Market area Analysis Linear and Non-linear settlements. Profitability of a location Costco example Optimal location within a market Minimizes distance for the largest number of people. Gravity model A model that holds that the potential use of a service at a particular location is directly related to the number of people in a location and inversely related to the distance people must travel to reach the service. Linear and Non-linear settlements. Beach town –v- Costco

Central Place Theory Normally, the threshold is found within the range, as the diagram shows. Can you think of examples in which the range is larger than the threshold yet businesses thrive and market towns temporarily come alive? threshold range

Rank-Size Distribution of Cities Rank-Size Rule A pattern of settlements in a country, such that the nth largest settlement is 1/n the population of the largest settlement. 2nd largest city is ½ the size of the largest. 4th largest city is 1/4 the size of the largest. It generally works for the US, but not for many Less developed countries. For example: Largest city = 12 million 2nd largest = 6 million 3rd largest = 4 million

Primate City Primate City The largest settlement in a country, if it has more than twice as many people as the second-ranking settlement. It is disproportionately larger than the rest of the cities in the country. For example: London, UK Mexico City, Mexico Paris, France The rank-size rule does not work for a country with a primate city.   Name Population Census (C) 2011-03-27 1 London 8,250,205 2 Birmingham 1,085,810 3 Glasgow 590,507 4 Liverpool 552,267 5 Bristol 535,907 6 Sheffield 518,090 7 Manchester 510,746 8 Leeds 474,632 9 Edinburgh 459,366 10 Leicester 443,760