Trading area analysis

Trading Area Analysis

1. Trading Area Analysis
Dr. Gopal Thapa
Tribhuvan University
Email:[email protected]

2. Benefits of Trading Area
Consumers’ demographic and socioeconomic
characteristics are uncovered.
Reveals opportunities and the strategy necessary
to succeed
The focus of promotional activities is ascertained.
Helps to identify media coverage patterns of
proposed or existing locations.
A retailer learns whether the location will serve
new customers or take business from existing
ones.

3. Benefits of Trading Area
Whether competitors want to open nearby stores if
the firm does not do so itself.
The best number of stores for a chain to operate in
a given area is calculated.
Geographic weaknesses are highlighted.
The impact of the Internet is taken into account.
Other factors like competition, financial
institutions, transportation, labor availability,
supplier location, lega.lrestrictions are reviewed

4. Trading Area Analysis
A trading area is a geographic area containing the
customers of a particular firm or group of firms
for specific goods or services.
It is the first step in the choice of retail store
location
which describe and evaluate alternative trading
areas and
then decide on the most desirable one.

5. Characteristics of Trading Area
Population size and characteristics
Availability of labor
Closeness to sources of supplies
Promotion facilities
Economic base
Competition
Availability of location
Rules and regulations

6. Characteristics of Trading Area
▪Population size and characteristics
▪Total size and density
▪Age distribution
▪Average education level
▪Percentage of residents owning homes
▪Availability of Labor
▪Management
▪Management trainee
▪Clerical

7. Characteristics of Trading Area
Closeness of Sources of Supply
❖Delivery cost
❖Timeliness
Promotion Facilities
❖Availability and frequency of media
❖Costs
❖Waste
Regulation
❖Taxes
❖Licensing
❖Operations

8. Characteristics of Trading Area
Economic Base
❖Dominant industry
❖Extent of diversification
❖Growth projections
Competitive Situation
❖Number and size of existing competitors
❖Evaluation of competitors
❖Strengths and weaknesses
Availability of Store Location
❖Number and type of location
❖Access to transportation
❖Owning versus leasing opportunities