1. Chapter 13: Location & Layout 1 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the Right Location and Layout

2. Chapter 13: Location & Layout 2 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing a Location The right region of the country The right region of the country The right state in the region The right state in the region The right city in the state The right city in the state The right site in the city The right site in the city

3. Chapter 13: Location & Layout 3 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the Region: Sources of Information Census data Census data World Wide Web World Wide Web  http://www.census.gov/ http://www.census.gov/  http://govinfo.kerr.orst.edu/ http://govinfo.kerr.orst.edu/ Survey of Buying Power Survey of Buying Power Editor and Publisher Market Guide Editor and Publisher Market Guide

4. Chapter 13: Location & Layout 4 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the Region: Sources of Information (continued) The American Marketplace: Demographics and Spending Patterns The American Marketplace: Demographics and Spending Patterns Rand McNally's Commercial Atlas and Marketing Guide Rand McNally's Commercial Atlas and Marketing Guide Zip Code Atlas and Market Planner Zip Code Atlas and Market Planner

5. Chapter 13: Location & Layout 5 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Geographic Information Systems (GIS) Computerized programs combining map- drawing with database management capability. Computerized programs combining map- drawing with database management capability. Search through virtually any database and then plot the results on a map. Search through virtually any database and then plot the results on a map. Visual display reveals otherwise hidden trends. Visual display reveals otherwise hidden trends.

6. Chapter 13: Location & Layout 6 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the State Proximity to markets Proximity to markets Proximity to needed raw materials Proximity to needed raw materials Wage rates Wage rates Labor supply needs Labor supply needs Business climate Business climate Tax rates Tax rates Internet access Internet access

7. Chapter 13: Location & Layout 7 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the City Population trends Population trends Competition Competition Clustering Clustering Compatibility with community Compatibility with community Local laws and regulations Local laws and regulations

8. Chapter 13: Location & Layout 8 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Choosing the City Transportation networks Transportation networks Police and fire protection Police and fire protection Cost of utilities and public services Cost of utilities and public services Quality of life Quality of life (continued)

9. Chapter 13: Location & Layout 9 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Retail and Service Location Considerations Trade area size Trade area size  Retail compatibility  Degree of competition  Index of retail saturation (IRS)

10. Chapter 13: Location & Layout 10 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Index of Retail Saturation C x RE C x RE RF RFwhere C = Number of customers in the trading area C = Number of customers in the trading area RE = Retail expenditures = the average expenditure per person for the product in the trading area RF = Retail facilities = the total square feet of selling space allocated to the product in the trading area IRS =

11. Chapter 13: Location & Layout 11 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Retail and Service Location Considerations Trade area size Trade area size  Retail compatibility  Degree of competition  Index of retail saturation (IRS)  Transportation network  Physical, racial, or emotional barriers  Political barriers

12. Chapter 13: Location & Layout 12 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Retail and Service Location Considerations Customer traffic Customer traffic Adequate parking Adequate parking Reputation Reputation Room for expansion Room for expansion Visibility Visibility (continued)

13. Chapter 13: Location & Layout 13 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Retail and Service Location Options Central Business Districts (CBDs) Central Business Districts (CBDs) Neighborhood locations Neighborhood locations Shopping centers and malls Shopping centers and malls  Neighborhood shopping centers  Community shopping centers  Regional shopping centers  Power centers

14. Chapter 13: Location & Layout 14 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Shopping Centers and Malls Neighborhood Shopping Centers Neighborhood Shopping Centers  3 to 12 Stores; anchor is supermarket or drugstore Community Shopping Centers Community Shopping Centers  12 to 50 stores; anchor is department or variety store Regional Shopping Malls Regional Shopping Malls  50 to 100 stores; anchor is one or more major department stores Power Centers Power Centers  Combines drawing power of a mall with convenience of neighborhood shopping center

15. Chapter 13: Location & Layout 15 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Retail and Service Location Options Near competitors Near competitors Outlying areas Outlying areas Home-based businesses Home-based businesses (continued)

16. Chapter 13: Location & Layout 16 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Manufacturing Locations Foreign trade zones Foreign trade zones Empowerment zones Empowerment zones Business incubators Business incubators

17. Chapter 13: Location & Layout 17 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Business Incubators Organizations that combine low-cost, flexible rental space with a multitude of support services for their small business residents. Organizations that combine low-cost, flexible rental space with a multitude of support services for their small business residents. More than 900 in operation across the U.S., and a new one opening, on average, every week. More than 900 in operation across the U.S., and a new one opening, on average, every week. They work!! Firms that “graduate” from incubators have a success rate of 87%. They work!! Firms that “graduate” from incubators have a success rate of 87%. Average incubator houses 20 businesses employing 55 people. Average incubator houses 20 businesses employing 55 people.

18. Chapter 13: Location & Layout 18 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Layout Layout – the logical arrangement of the physical facilities of a business that contributes to efficient operations, increased productivity, and higher sales. Layout – the logical arrangement of the physical facilities of a business that contributes to efficient operations, increased productivity, and higher sales. Study: Look and feel of employees’ work spaces is third most important consideration (after salary and benefits) when deciding whether or not to accept or to quit a job. Study: Look and feel of employees’ work spaces is third most important consideration (after salary and benefits) when deciding whether or not to accept or to quit a job.

19. Chapter 13: Location & Layout 19 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Layout: External Factors Size must be adequate to accommodate business needs. Size must be adequate to accommodate business needs. Appearance must create the proper image or “personality” for the business in the customer’s eyes. Appearance must create the proper image or “personality” for the business in the customer’s eyes. Entrances must invite customers to come in. Entrances must invite customers to come in.

20. Chapter 13: Location & Layout 20 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Layout: External Factors Create effective window displays and change them often; they can be powerful sales tools. Create effective window displays and change them often; they can be powerful sales tools. Must comply with Americans with Disabilities Act (ADA). Must comply with Americans with Disabilities Act (ADA). Pay attention to the business sign, the most direct method of reaching potential customers. Pay attention to the business sign, the most direct method of reaching potential customers. (continued)

21. Chapter 13: Location & Layout 21 Copyright 2005 Prentice Hall Inc. A Pearson Education Company A Business Sign Tells potential customers who you are and what you’re selling. Tells potential customers who you are and what you’re selling. Must comply with local sign ordinances. Must comply with local sign ordinances. Should be visible, simple, and clear. Should be visible, simple, and clear. Should be changed periodically to avoid becoming part of the background. Should be changed periodically to avoid becoming part of the background. Should be legible both day and night. Should be legible both day and night. Must be maintained properly. Must be maintained properly.

22. Chapter 13: Location & Layout 22 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Building Interiors Ergonomics is an integral part of any design. Ergonomics is an integral part of any design. Proper layout and design pays off in higher productivity, efficiency, or sales. Proper layout and design pays off in higher productivity, efficiency, or sales. Proper lighting is measured by what is ideal for the job being done. Proper lighting is measured by what is ideal for the job being done. Careful selection of colors can create the desired impressions among customers and employees. Careful selection of colors can create the desired impressions among customers and employees. Appealing to all of the customer’s senses can boost sales. Appealing to all of the customer’s senses can boost sales.

23. Chapter 13: Location & Layout 23 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Three Retail Layout Patterns Grid Grid  Rectangular with parallel aisles; formal; controls traffic flow; uses selling space efficiently.  Supermarkets and self-service discount stores.

24. Chapter 13: Location & Layout 24 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Free-Form Free-Form  Free-flowing; informal; creates “friendly” environment; flexible.  Small specialty shops. Three Retail Layout Patterns (continued)

25. Chapter 13: Location & Layout 25 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Boutique Boutique  Divides store into a series of individual shopping areas, each with its own theme; unique shopping environment.  Small department stores. Three Retail Layout Patterns (continued)

26. Chapter 13: Location & Layout 26 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Layout Guidelines Know your customers’ buying habits and plan your layout accordingly. Know your customers’ buying habits and plan your layout accordingly. Display merchandise as attractively as your budget will allow. Display merchandise as attractively as your budget will allow. Display complementary items together. Display complementary items together. Recognize the value of floor space; never waste valuable selling space with non-selling functions. Recognize the value of floor space; never waste valuable selling space with non-selling functions.

27. Chapter 13: Location & Layout 27 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Factors to Consider in Manufacturing Layouts Type of product Type of product Type of production process Type of production process Ergonomic considerations Ergonomic considerations Economic considerations Economic considerations Space availability within the facility Space availability within the facility

28. Chapter 13: Location & Layout 28 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Manufacturing Layouts Product layout Product layout Process layout Process layout Fixed position layout Fixed position layout Functional layout Functional layout