1. Why are businesses and services located where they are?
Central Place Theory
Why are businesses and services located where they are?

2. For a business to succeed or a service to be useful, they need a MARKET.
Market area or hinterland:
The area surrounding a business or service that attracts customers, patients, and/or clients.
The size of the market area depends on two factors: threshold and range.
How far are you willing to travel for…?
Fundamentals:

3. The MAXIMUM distance people are willing to travel to use a service/buy a product.
Groceries: short range
NFL football game: large range
Most people go to the nearest provider.
Range

4. The MINIMUM number of people (potential customers) to support a service or business.
This depends on the type of service
Theaters need more younger people
Chiropractors need more older people.
This explains why Des Moines doesn’t have any top-level sports teams: We don’t have enough people to support it.
Threshold

5. Gravity Model 1. People go to the nearest place that offers a service.
2. The farther away from the service, the less likely people will use it.
Gravity Model