CA 7

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Eastern Michigan University *

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363

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Marketing

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Feb 20, 2024

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docx

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Uploaded by ProfPartridgePerson883

Kamerron Parker MKTG 363 Chapter Assignment #7 1. What are the different types of store-based and nonstore-based retail locations? Provide a real example (store name) for each different type. Store-Based Retail Locations: Department Stores – e.g. Macy’s Supermarkets – e.g. Walmart Supercenter Specialty Stores – e.g. Apple Store Discount Stores – e.g. Target Pharmacies – e.g. CVS Pharmacy Apparel and Fashion – e.g. H&M Bookstores – e.g. Barnes & Noble Furniture and Home Décor – e.g. IKEA Nonstore-Based Retail Locations: E-commerce Websites – e.g. Amazon Mobile Commerce – e.g. Amazon Shopping App Social Commerce – e.g. Instagram Shopping Online Marketplace – e.g. Etsy Subscription Service – e.g. Disney+ Streaming and Digital Downloads – e.g. Apple Music Auction Sites – e.g. eBay 2. Discuss the concepts of over- and understoring and describe their relationship to the Index of Retail Saturation (IRS). Overstoring occurs when there is an excessive supply of retail stores or square footage relative to the demand or population in a given area. This excess supply can lead to increased competition among retailers, lower sales per store, reduced profitability, and potential store closures. Overstoring is often a result of rapid retail expansion without sufficient consideration of market demand or population growth. Understoring, on the other hand, refers to a situation where there is an inadequate supply of retail stores or square footage relative to the demand or population in a specific area. This scarcity of retail options can lead to unmet consumer needs, longer travel distances for shopping, and missed business opportunities. Understoring suggests that there is potential for additional retail development or expansion to better serve the market demand. The Index of Retail Saturation is a metric used to assess the balance between the retail supply and consumer demand in a particular market. It quantifies the relationship between the available retail space and the population or consumer demand. The IRS helps determine if a market is in a state of oversaturation, undersaturation, or an optimal equilibrium.

3. Explain how the concepts of demand density, supply density and site availability can be used by a retailer to optimize site selection. Demand density represents the concentration and intensity of potential customers or target market in a specific geographic area. Retailers analyze demand density to identify locations with a high volume of potential customers. This data is derived from demographic information, consumer behavior analysis, and market research. Retailers can use demand density to prioritize locations with a higher concentration of their target customers. Supply density refers to the presence and concentration of competitors or similar retail offerings in a particular area. Analyzing supply density helps retailers evaluate the level of competition they would face in a specific location. It enables them to identify areas with a lower density of competitors or untapped markets. Retailers can strategically choose locations with moderate supply density, striking a balance between competition and market potential. Site availability encompasses the suitability and accessibility of a potential location for establishing a retail store. Factors like visibility, proximity to transportation hubs, ease of access, parking facilities, and compliance with zoning regulations are key considerations. Analyzing site availability helps retailers assess the practicality and feasibility of a location for their business. Retailers must evaluate site availability to select locations that are easily accessible to customers and comply with local regulations. As for optimizing site selection, retailers should aim for a balanced approach that considers both demand density and supply density. A location with a reasonable demand density and a manageable level of competition is often ideal.

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CA 7

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