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The Importance of 'Location' in Retailing

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Module Number: MAR18-3 Retail Marketing Seminar Leader: Robert Hadland The Importance of 'Location' in Retailing Student Name: Xiyue Wu Student Number: 0502131 Introduction As one of the four elements of marketing mix, location is often cited as the three keys to success in retailing. Indeed, as retailers come at the end of the supplier chain and provide the final link between producer and consumer, their success or failure to a large extent depend on their choice of location. Brown elucidated the significance of location in the following way: Important though the other elements of the retail marketing mix undoubtedly are, the most sophisticated store designs, meticulous merchandise planning procedures, imaginative advertising campaigns, astute pricing policies and competent sales personnel all come to naught if a retailer's locational strategy is flawed (1994) However, while acknowledging the crucial role of location, it could be argued that like the majority of the retailing's aphorisms, the 'location, location, location' adage is more a regurgitation of received wisdom than a distillation of prevailing practice (Brown, 1991). If we consider the large number of failed retail business, it is not difficult to see that mistakes in location only account for a small percentage of the reasons for their failure. ...read more.


In the case of the Luton Arndale Centre, Argos, Woolworth, Tesco and many other magnets stores help to draw large number of pedestrians to the intervening smaller outlets such us ELC. In addition, as one of the main attractions of a shopping centre is making it easy for consumers to compare products in the same and complementary category. The resulting extensive customer interchange which tends to occur between compatible and competitive retail outlets is likely to greatly increase store patronage for ELC (Brown, 1994). For example, Mothercare in the Centre sells complementary products compared with the ELC, thus these stores will generates additional traffic for each other. Retail parks originate from increasing car ownership and provide easy car access for consumers, especially when purchasing bulk items like furniture, carpet and DIY items. The Luton retail park clusters many complementary retailers together and attracts more customers for each of the stores than if they are located separately. For instance, in Luton Retail Park, B&Q's target customers are mainly families who need home improvement and among these families, many of them will have children who will drag their parents to Toys R Us while visiting the retail park. Besides the major role of location described above, it also exerts great influence on the performance of retailers indirectly through other elements of the retailing mix. 2. ...read more.


These factors in turn dictate that a site in the Arndale Centre would be the right choice for the ELC. The prominent high street location and all the other elements of retailing mix are added together to build the trustworthy, wholesome, educational personality of their brand. At the Toys R Us at Luton Retail Park, customers will enjoy a completely different package including a large warehouse and exhaustive ranges of toys on very high shelves, keen prices and self-service. In the same way, these elements dictate that an edge of town Retail Park will be the right location. Recommendation The adage that 'the three keys to success in retailing are: location, location, location' have certain veracity in that it accentuate the special role location played in the success or failure of a retailer. However, it is not entirely true since the success of a retail business will require a sound business strategy of which location strategy is only a part, no matter how important it is. All elements of the retailing mix are interrelated and interact with each other. The right location is only meaning for a particular kind of product, at a particular price level and through the particular promotion mix. Management need to look at the marketing mix as a coherent whole when deciding the right location. ...read more.

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