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

Chapter 13: Location & LayoutChapter 13: Location & Layout 11Copyright 2005 Prentice Hall Inc. A Pearson Education CompanyCopyright 2005 Prentice Hall Inc. A Pearson Education Company

Choosing the Right Location

and Layout

Choosing the Right Location

and Layout


Choosing a LocationChoosing a Location

The right region of the countryThe right region of the countryThe right state in the regionThe right state in the regionThe right city in the stateThe right city in the stateThe right site in the cityThe right site in the city


Choosing the Region:Choosing the Region:Sources of InformationSources of Information

Census dataCensus dataWorld Wide WebWorld Wide Web

http://www.census.gov/http://www.census.gov/ http://govinfo.kerr.orst.edu/http://govinfo.kerr.orst.edu/

Survey of Buying PowerSurvey of Buying PowerEditor and Publisher Market GuideEditor and Publisher Market Guide


Choosing the Region:Choosing the Region:Sources of InformationSources of Information

(continued)(continued)

The American Marketplace: The American Marketplace: Demographics and Spending PatternsDemographics and Spending Patterns

Rand McNally's Commercial Atlas and Rand McNally's Commercial Atlas and Marketing GuideMarketing Guide

Zip Code Atlas and Market PlannerZip Code Atlas and Market Planner


Geographic Information SystemsGeographic Information Systems(GIS)(GIS)

Computerized programs combining map-Computerized programs combining map-drawing with database management capability.drawing with database management capability.

Search through virtually Search through virtually anyany database and then database and then plot the results on a map.plot the results on a map.

Visual display reveals otherwise hidden trends.Visual display reveals otherwise hidden trends.


Choosing the StateChoosing the State

Proximity to marketsProximity to markets Proximity to needed raw materialsProximity to needed raw materials Wage ratesWage rates Labor supply needsLabor supply needs Business climateBusiness climate Tax ratesTax rates Internet accessInternet access


Choosing the CityChoosing the City

Population trendsPopulation trendsCompetitionCompetitionClusteringClusteringCompatibility with communityCompatibility with communityLocal laws and regulationsLocal laws and regulations


Choosing the CityChoosing the City

Transportation networksTransportation networksPolice and fire protectionPolice and fire protectionCost of utilities and public Cost of utilities and public

servicesservicesQuality of lifeQuality of life



Retail and Service Location Retail and Service Location ConsiderationsConsiderations

Trade area sizeTrade area size Retail compatibilityRetail compatibility Degree of competitionDegree of competition Index of retail saturation Index of retail saturation

(IRS) (IRS)


Index of Retail SaturationIndex of Retail Saturation

C x REC x RE RFRF

wherewhere C = Number of customers in the trading areaC = Number of customers in the trading areaRE = Retail expenditures = the average RE = Retail expenditures = the average

expenditure per person for the product in expenditure per person for the product in the trading areathe trading area

RF = Retail facilities = the total square feet of RF = Retail facilities = the total square feet of selling space allocated to the product in the selling space allocated to the product in the trading areatrading area

IRS = IRS =



Trade area sizeTrade area size Retail compatibilityRetail compatibility Degree of competitionDegree of competition Index of retail saturation Index of retail saturation

(IRS) (IRS) Transportation networkTransportation network Physical, racial, or Physical, racial, or

emotional barriersemotional barriers Political barriersPolitical barriers



Customer trafficCustomer traffic Adequate parkingAdequate parking ReputationReputation Room for expansionRoom for expansion VisibilityVisibility



Retail and Service Location Retail and Service Location OptionsOptions

Central Business Districts (CBDs)Central Business Districts (CBDs)Neighborhood locationsNeighborhood locationsShopping centers and mallsShopping centers and malls

Neighborhood shopping centersNeighborhood shopping centers Community shopping centersCommunity shopping centers Regional shopping centersRegional shopping centers Power centersPower centers


Shopping Centers and MallsShopping Centers and Malls

Neighborhood Shopping CentersNeighborhood Shopping Centers 3 to 12 Stores; anchor is supermarket or drugstore3 to 12 Stores; anchor is supermarket or drugstore

Community Shopping CentersCommunity Shopping Centers 12 to 50 stores; anchor is department or variety 12 to 50 stores; anchor is department or variety

storestore Regional Shopping MallsRegional Shopping Malls

50 to 100 stores; anchor is one or more major 50 to 100 stores; anchor is one or more major department storesdepartment stores

Power CentersPower Centers Combines drawing power of a mall with convenience Combines drawing power of a mall with convenience

of neighborhood shopping centerof neighborhood shopping center


Retail and Service Location Retail and Service Location OptionsOptions

Near competitorsNear competitorsOutlying areasOutlying areasHome-based businessesHome-based businesses



Manufacturing LocationsManufacturing Locations

Foreign trade zonesForeign trade zonesEmpowerment zonesEmpowerment zonesBusiness incubatorsBusiness incubators


Business IncubatorsBusiness Incubators

Organizations that combine low-cost, flexible Organizations that combine low-cost, flexible rental space with a multitude of support rental space with a multitude of support services for their small business residents.services for their small business residents.

More than 900 in operation across the U.S., More than 900 in operation across the U.S., and a new one opening, on average, every and a new one opening, on average, every week.week.

They work!! Firms that “graduate” from They work!! Firms that “graduate” from incubators have a success rate of 87%.incubators have a success rate of 87%.

Average incubator houses 20 businesses Average incubator houses 20 businesses employing 55 people.employing 55 people.


LayoutLayout

Layout – the logical arrangement Layout – the logical arrangement of the physical facilities of a of the physical facilities of a business that contributes to business that contributes to efficient operations, increased efficient operations, increased productivity, and higher sales. productivity, and higher sales.

Study: Look and feel of Study: Look and feel of employees’ work spaces is third employees’ work spaces is third most important consideration most important consideration (after salary and benefits) when (after salary and benefits) when deciding whether or not to accept deciding whether or not to accept or to quit a job. or to quit a job.


Layout:Layout:External FactorsExternal Factors

Size must be adequate to Size must be adequate to accommodate business needs.accommodate business needs.

Appearance must create the proper Appearance must create the proper image or “personality” for the image or “personality” for the business in the customer’s eyes.business in the customer’s eyes.

Entrances must Entrances must inviteinvite customers to customers to come in.come in.


Layout:Layout:External FactorsExternal Factors

Create effective window displays and Create effective window displays and change them often; they can be change them often; they can be powerful sales tools.powerful sales tools.

Must comply with Americans with Must comply with Americans with Disabilities Act (ADA).Disabilities Act (ADA).

Pay attention to the business sign, the Pay attention to the business sign, the most direct method of reaching most direct method of reaching potential customers.potential customers.



A Business SignA Business Sign

Tells potential customers who you are and Tells potential customers who you are and what you’re selling.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 Should be changed periodically to avoid

becoming part of the background.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.


Building InteriorsBuilding Interiors

ErgonomicsErgonomics is an integral part of any design. is an integral part of any design. Proper layout and design pays off in higher Proper layout and design pays off in higher

productivity, efficiency, or sales.productivity, efficiency, or sales. Proper lighting is measured by what is ideal for Proper lighting is measured by what is ideal for

the job being done.the job being done. Careful selection of colors can create the Careful selection of colors can create the

desired impressions among customers and desired impressions among customers and employees.employees.

Appealing to Appealing to allall of the customer’s senses can of the customer’s senses can boost sales.boost sales.


Three Retail Layout PatternsThree Retail Layout Patterns

GridGrid Rectangular with parallel aisles; Rectangular with parallel aisles;

formal; controls traffic flow; uses formal; controls traffic flow; uses selling space efficiently.selling space efficiently.

Supermarkets and self-service discount Supermarkets and self-service discount stores.stores.


Free-FormFree-Form Free-flowing; informal; creates Free-flowing; informal; creates

“friendly” environment; flexible.“friendly” environment; flexible. Small specialty shops.Small specialty shops.

Three Retail Layout PatternsThree Retail Layout Patterns(continued)(continued)


BoutiqueBoutique Divides store into a series of individual Divides store into a series of individual

shopping areas, each with its own shopping areas, each with its own theme; unique shopping environment.theme; unique shopping environment.

Small department stores.Small department stores.

Three Retail Layout PatternsThree Retail Layout Patterns(continued)(continued)


Layout GuidelinesLayout Guidelines

Know your customers’ buying habits and Know your customers’ buying habits and plan your layout accordingly.plan your layout accordingly.

Display merchandise as attractively as your Display merchandise as attractively as your budget will allow.budget will allow.

Display complementary items together.Display complementary items together. Recognize the value of floor space; never Recognize the value of floor space; never

waste valuable selling space with non-selling waste valuable selling space with non-selling functions.functions.


Factors to Consider in Factors to Consider in Manufacturing LayoutsManufacturing Layouts

Type of productType of productType of production processType of production processErgonomic considerationsErgonomic considerationsEconomic considerationsEconomic considerationsSpace availability within the facilitySpace availability within the facility


Manufacturing LayoutsManufacturing Layouts

Product layoutProduct layoutProcess layoutProcess layoutFixed position layoutFixed position layoutFunctional layoutFunctional layout

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

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