MKTG 372 FINAL STUDY GUIDE HADDOCK 2026
Evaluating store locations - Answers -Those generate the highest LONG TERM
PROFITS
consists of
- strategic fit
- economic conditions
- competition
- cost of operating stores
Strategic fit - Answers -Economic conditions and needs of consumers in target market
this includes having right demographics and lifestyle profile for the area
Economic conditions - Answers -Population and employment growth levels
Competition - Answers -level of competition in an area affects the demand for retailers
merchandise
Cost of operating stores - Answers -cost of operations for stores vary across areas
- the larger the population and denser, the larger the cost local and state
- legal and regulatory environment can have significant effect on operating cost
EXAMPLE IS CALIFORNIA
Economics of scale vs. cannibalization - Answers -scale is opening multiple stores in
an area to lower promotion and distribution costs versus cannibalization where opening
a new other store lowers the revenue from its sister stores in the same location
- marginal revenues must be greater than marginal costs
Site characteristics - Answers -are the considerations for retailer in selecting a specific
site that affect store sales
consists of
- traffic flow
- accessibility
- visibility
-barriers
- other tenants
- parking
- restrictions and costs
traffic flow - Answers -the amount of traffic that goes by the store and its accessibility
accessibility / visibility / barriers - Answers -consider its traffic flow throughout the day
are there any natural barriers like rivers and mountains or artifical barriers like limited
, highways or parks that may affect people's ability in accessing the location what kind of
parking does it offer and how well is the visibility from the street to the store
natural barriers - Answers -rivers, mountains
artifical barriers - Answers -limited highways, parks
other tenants - Answers -theres complimentary retailers which are in the same target
market with different merchandise offering
Cumulative attraction - Answers -a cluster of similar and complementary retailing
activities will generally have greater drawing power than isolated stores that engage in
the same retailing activities
Site selection - Answers -to analyze attractveness for a potential store, retailers use
information about consumers and competitors in their trade area/ two widely used
sources are data published by EU S Census Bureau and data from geographic
information system known as GIS which is a software that can be used in store
Trade Areas - Answers -are determined by the store's accessibility natural and physical
barriers , level of competition, nature of merchandise, sold assortment offered, and
location of alternative sources of merchandise
Competitive analysis - Answers -which has the highest trade potential and which has
lowest competition
primary trading area - Answers -50 to 70 percent of customers
secondary trading area - Answers -20 to 30 percent of a store's sales
teriary trading area or fringe trading area - Answers -customers who come from widely
dispersed areas, might travel long distances
Tapestry segmentation - Answers -classifies all US residentials neighborhoods into 67
distinctive segments based on demographic and socioeconomic characteristics
present trade area example - Answers -the zones are based on drive times; 5 minutes
for primary, 10 minutes for secondary, 20 minutes for tertiary
Trade characteristics examples - Answers -average household income
three mile ring
population more than 50% hispanic
Percentage Lease - Answers -most common which is rent based on a percentage of
sales
Evaluating store locations - Answers -Those generate the highest LONG TERM
PROFITS
consists of
- strategic fit
- economic conditions
- competition
- cost of operating stores
Strategic fit - Answers -Economic conditions and needs of consumers in target market
this includes having right demographics and lifestyle profile for the area
Economic conditions - Answers -Population and employment growth levels
Competition - Answers -level of competition in an area affects the demand for retailers
merchandise
Cost of operating stores - Answers -cost of operations for stores vary across areas
- the larger the population and denser, the larger the cost local and state
- legal and regulatory environment can have significant effect on operating cost
EXAMPLE IS CALIFORNIA
Economics of scale vs. cannibalization - Answers -scale is opening multiple stores in
an area to lower promotion and distribution costs versus cannibalization where opening
a new other store lowers the revenue from its sister stores in the same location
- marginal revenues must be greater than marginal costs
Site characteristics - Answers -are the considerations for retailer in selecting a specific
site that affect store sales
consists of
- traffic flow
- accessibility
- visibility
-barriers
- other tenants
- parking
- restrictions and costs
traffic flow - Answers -the amount of traffic that goes by the store and its accessibility
accessibility / visibility / barriers - Answers -consider its traffic flow throughout the day
are there any natural barriers like rivers and mountains or artifical barriers like limited
, highways or parks that may affect people's ability in accessing the location what kind of
parking does it offer and how well is the visibility from the street to the store
natural barriers - Answers -rivers, mountains
artifical barriers - Answers -limited highways, parks
other tenants - Answers -theres complimentary retailers which are in the same target
market with different merchandise offering
Cumulative attraction - Answers -a cluster of similar and complementary retailing
activities will generally have greater drawing power than isolated stores that engage in
the same retailing activities
Site selection - Answers -to analyze attractveness for a potential store, retailers use
information about consumers and competitors in their trade area/ two widely used
sources are data published by EU S Census Bureau and data from geographic
information system known as GIS which is a software that can be used in store
Trade Areas - Answers -are determined by the store's accessibility natural and physical
barriers , level of competition, nature of merchandise, sold assortment offered, and
location of alternative sources of merchandise
Competitive analysis - Answers -which has the highest trade potential and which has
lowest competition
primary trading area - Answers -50 to 70 percent of customers
secondary trading area - Answers -20 to 30 percent of a store's sales
teriary trading area or fringe trading area - Answers -customers who come from widely
dispersed areas, might travel long distances
Tapestry segmentation - Answers -classifies all US residentials neighborhoods into 67
distinctive segments based on demographic and socioeconomic characteristics
present trade area example - Answers -the zones are based on drive times; 5 minutes
for primary, 10 minutes for secondary, 20 minutes for tertiary
Trade characteristics examples - Answers -average household income
three mile ring
population more than 50% hispanic
Percentage Lease - Answers -most common which is rent based on a percentage of
sales
