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Stephen Swales

THE GEOGRAPHY OF DEMAND - retailers (independence vs. retail chains) o retail chains: there is a sense of ownership (the idea of a business- most business in the hands of retail chains) o vast majority of independence is traditional family stores (most stores are independent) - retail concentration Retail supply 1. the major actors: a. independents  private b. retail chains/franchises  private c. shopping center developers  private d. banks/insurance companies (sources of finance) private e. government agencies (have a say in what an how we consumer things, government policies)  public f. planners public  think of the idea of stakeholders  queen street is independent but trying to get on the bandwagon and create a trend (close relationships) Retail concentration (market analysis) - market focused - a few cities command most market and sales o relatively small number of places command most of the business o ie. Vancouver has a physical barrier of distance and mountains - a few cities have most retail chain H.Q.s (headquarters) o the decision making center (i.e. Montreal and shipping over water) - a few locations in the cities command most sales o distribution of shopping malls (found in middle and high income areas rather than low) - there are many retailers but relatively few of them command most sales - most retailers are independents but most sales are in retail chains - retail chains are numerous but a relatively small number of large chains command most sales (i.e. walmart) o mostly in the hands of few very large retail chains o Walmart – what explains its success/concentration? ** exam  What is the difference from independents?  most likely to have to change ownership or run out of business ADVANTAGES OF RETAIL CHAINS an interdependent Vs. Independent Approach 1. General advantage of scale economies a. Most activities are cheaper at larger scale cost per unit/outlet is low b. More specifically below 2. Avoid restrictions of single/few markets a. Countries, regions, cities, trade areas b. Making decisions not just on what sites to select for business, but also what countries would increase business (big retail operators) c. This is possible as they are spread out (retail chain needs depression of tragedy to reduce its business 3. Aspects of overhead can be shared a. i.e. administration, accountancy, locational analysis, training, technology 4. Leverage and purchasing power is high a. Negotiate with suppliers and producers b. shelf space, own brands (walmart tracks its suppliers) c. can go directly to producers rather than just the suppliers (retail chain operations) 5. Experience: success and failure a. This allows companies to know what works through examinations and retail chains will be able to analyze and predict what will work rather than independent stores only having to test and hope for the best b. Test lines in sub-set of stores (test in average towns in southern Ontario  i.e. London, Peterborough, Kingston, etc.) c. Testing = idea whether an idea should be introduced or not 6. Maximum advertising/marketing exposure a. High profile b. Different media c. Generative d. Universal e. Application i. Billboards ii. Designing a cultural symbol (i.e. coca cola) iii. Independent business self advertises (placing ads on poles, etc.) 1. Retail chains have large advertising and mega profit for it 7. Wait-out strategy a. Retail chains will get into the market and promote its coming (future promotion) b. Independent stores has to wait until the market is fully on board with it c. System wide decision making 8. Very familiar and predictable table (disadvantage of retail chains, but could be advantageous) a. Associated with shopping centers i. Retail chains have identical and replicated stores (i.e. MacDonald’s- identical in product and service of store) 1. Many people go in because they know what they are going to get ii. Where’s the opportunity for independence? 1. Independence has the opportunity to be distinctive and do things differently (attracting those who know what they are going to get from MacDonalds and dislike what they know) 2. Unpredictable 3. If aware of the local market/sensitive and on specialized scales you can get the feeling of your customers/clientele and will know them by name or on a personal level (this local level/focus will benefit them) a. Retail stores act as if they know you and what you want, but they will not remember your face ever ** focus on where is the opportunity for independence Types of shopping and retail supply - traditional retailing (where sales are generated from) o approaching 500 billion (online retailing- future is catching up with people) - know the difference btwn online and physical retailing - online retailing o key disadvantages :  sketchy  online shopping  small group of individuals  do not see what you are purchasing in hand (the want to look at your clothes before buying)  no sufficient guidance/direction  want the shopping around experience  concerns with security issues (one of the major concerns)  no instant gratification from shopping (have to wait for the delivery)  tickets online, work immediately o advantages : the world is its oyster (they have that advantage)  get instant results (traveling arrangements, etc.) Online shopping is most likely to not replace traditional shopping because shopping is a cultural, social and punctual experience (recreational component). People like to window shop as well for example. Interactive experience, instantaneous purchases are riveting. Online has only the benefit of not needing to be mobile and saving the gas expenditure prices. MARKET (DEMAND) CHANGES AND RETAIL SUPPLY RESPONSES - demand and supply: how do we bring them together? What analysis and ideas do we use? - think of geographical and physical advantages (online may not be easy to purchase from anywhere in the world making the argument that spatial analysis and GEOGRAPHY counts and is not every going to disappear) - Population size: grown substantially in certain markets o P2= P1 +(births-deaths) + (immigration – emigration) - Population Distribution o Focus on large places (they are amongst the fa
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