1. Central Place Theory TOWN VILLAGE HAMLET
All cities fit within Christaller’s Central Place Theory. Some cities have greater ranges and need bigger thresholds. Range is the maximum distance people are willing to travel to get a product or service. Threshold is the minimum number of peopled needed for a business to operate.

2. What is the Central Place Theory?
Developed by Walter Christaller
Based on uniform assumptions of topography, equal transportation systems, & that people will travel the least distance possible to meet their service needs

3. Central Place Theory
Shows the relationship between urban areas, their hinterlands, & the range that individual cities need to maintain their size
Larger cities need larger ranges & hinterlands
RANGE= Maximum distance people are willing to get a product or service
Urban businesses need a threshold to be profitable
THRESHOLD= Minimum amount of people need for a business to operate

4. Example of LIMITED Range
Range- max. distance you’re willing to travel for a product or service
Let’s say you’re craving a bottle of soda, you have a car & are WILLING to travel a mile to a convenience store for the soda
The RANGE for Soda is thus LIMITED because it is a common item & people can easily access it at a local store

5. Example of GREATER Range
Let’s say you want to buy a Rolls Royce, they’re not sold everywhere & you may have to travel hundreds of miles to purchase one
The range for a Rolls Royce is greater because people may be more willing to travel to enjoy the good if it is more rare

6. Example of Threshold
Threshold- minimum number of customers in order for a product to succeed
Threshold of a bottle of soda is much lower than one for a waterbed
Less RANGE is needed to find customers, but more soda needs to be sold to make the same profit as one waterbed
SO, usually waterbed stores are located in larger urban areas because they need more range to meet their threshold

7. Hinterland & Christaller’s Theory
Hinterland- Market area of a product, the area that a product, urban area, or commercial outlet has influence on
Is what makes the Central Place Theory hexagonal in shape
It is equidistant along all edges to the center area, but people may be willing to travel some distance in the hinterland to make a purchase

8. Central Place Theory- A graphic representation
TOWN
VILLAGE
HAMLET

9. Central Place Theory & Business
Why would it be important for new business owners to know their threshold & range before they open their doors?
Have you ever been asked your zip code when you’re making a purchase?
They are finding out where you are from to determine their range & threshold!