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

2. 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.

3. 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

4. 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

5. 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.

6. 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)

7. 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

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

9. 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)

10. 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).

11. 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

12. 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.

13. 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.

14. 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

15. 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

16. 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.

17. 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)