What is trade area population

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Trade Area Analysis
MARKET PLANNING SERVICES
Retail Trade Areas: Definition & Factors

It measures how far its customer base extends. But there is always the likelihood that a passing Norweigan tourist visits a store in Pune, or even the next visiting US president. In fact, if all infinitesimal probabilities be included in defining the trade area, it would include the entire globe, and even the universe if the one in a trillion trillion probability of a spaceship landing in front of that Pune store be also considered. Hence, a trade area definition is restricted to a bulk fraction of the literally universe of customers that a store attracts. Why a retailer needs to know its trade area is asking why a politician needs to know the constituents of the district he contests elections from. It might choose to ignore it only in a totalitarian state where supplies and competition are both artificially kept scarce.

Trade Area Analysis

But how do you analyze the trade area before you identify the site within the trade area? For years, store development professionals have struggled with this concept.

Which is why most sites that are presented for development consideration begin with an explanation around the characteristics associated with the site.

This is the exact reason why, for decades, people focus more on the site characteristics associated with a potential site and less about the trade area characteristics associated with the site. This line of thinking is, of course, backwards. Why are you even considering a potential new site, regardless of its characteristics, if it is located in a trade area that does not support your business model? Trade area characteristics should always be analyzed before site characteristics.

If anyone tells you different, they are an idiot. What are trade area characteristics? Again, glad you asked! Here are a few examples:. These are all great questions and important to evaluate in any potential real estate development. Unfortunately, the site characteristics associated with the potential development are usually the focal point and end up becoming the selling point. Believe it or not, someone with ZERO restaurant development experience can identify site characteristics.

So many professionals today in restaurant development struggle with proper assessment of the actual trade area surrounding the proposed site. Again, if the trade area sucks for your business model, who cares about the site characteristics? If the trade area is one of the best in the marketplace, then discuss what it is going to take to find the right site characteristics within this high profile trade area?

Determining the boundary lines of a trade area is definitely a combination of art and science. This proprietary method of trade area delineation allows us to choose the site first, determine the primary trade area second and then analyze the potential of the trade area third.

For more information on our unique market planning methodologies, or to find out more about trade area characteristics vs. Trade Area Characteristics vs. Site Characteristics. Parking Spaces. Building Size. Number of Potential Seats. Drive Thru Potential. Residential Population. Median Household Income.

The total market consists of populations in the host community plus population from surrounding towns in the trade area. Market Penetration Approach. Assumes. A store's trade area, also called its catchment, can be likened to its sphere of population density of its catchment, the competitive intensity, and how well its.

Trade area analysis and mapping describe the characteristics of the area around a store or network of stores. Without accurate trade area definitions, you cannot measure the key statistics that impact a store's performance. Analyzing trade areas should be performed regularly to provide key metrics for improving sales and marketing performance. Adding new stores to your network will cause the trade area of nearby stores to change. In a saturated market, or if stores are placed too close to one another, cannibalization can occur.

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Retail Trade Areas: Definition & Factors

But how do you analyze the trade area before you identify the site within the trade area? For years, store development professionals have struggled with this concept. Which is why most sites that are presented for development consideration begin with an explanation around the characteristics associated with the site. This is the exact reason why, for decades, people focus more on the site characteristics associated with a potential site and less about the trade area characteristics associated with the site. This line of thinking is, of course, backwards.

Defining a specific trade area is a fundamental step in any business market analysis. Determining a trade area helps to establish boundaries around the geographic regions where up to 75 percent of your customers are likely to come from. A thorough trade area analysis can also help you uncover key demographic information about your customers that allows you to more precisely target and maximize your marketing efforts. A trade area analysis should be conducted on a regular basis and should take into account a number of factors. Examples include:. Business Maps are an extremely valuable trade-area analysis tool as they help you visualize specific areas of interest exposing hidden sales opportunities and possible gaps in your marketing strategies. Map Business Online is an affordable, easy-to-use online mapping software that is an effective trade-area analysis tool helping you:. Discover how easy it is to create trade area analysis maps by taking advantage of our free mapping software trial offer!

Retail trading areas can be primary, secondary or fringe.