GGR252H1 Lecture Notes - Lecture 5: Voronoi Diagram, Centroid, Bounded Rationality
31 May 2016
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One important retail strategy chain retailing is almost always identical making the only variable of difference between them distance. An example of an identical retail is beer stores (you wouldn"t go to a more distant one) These behavioral approaches are known as customer spotting or market penetration techniques. To do this, we have to spot the customers many ways to do this. * spatial monopoly technique everyone inside those boxes are going to go to those places. Converse breakpoint method - distance and size, a sample gravity model. Concepts: distance decay and friction of distance, disincentive nature of distance, location and competition (hotelling model, utility of a destination (distance, size, attraction) The usefulness of the destination what is its utility to the potential customer and how would you measure that utility. Thiessen all you need to do to measure utility is measure the distance and the more proximate destinations have higher levels of utility.
