University
of
Washington
Introduction to
Geographies of Marketing and Retail
DEFINITIONS
Geography
Marketing vs. retailing
Marketing & retail geography
"New retail geography"
LONG-TERM TRENDS IN RETAILING
In class we reviewed the development
of retailing.
Fordism: an
economic system dominated by large corporations and government
regulation of property and labor rights and of competition in key
industries (e.g., finance and communications). Its dominant
feature is
the mutual reliance on mass production
(economies of scale in the production of standardized products;
the resultant high labor productivity and unionization allowed
relatively high wages) and mass
consumption (supported by high wages, consumer credit, and in
the US, government-supported homeownership). In large national
economies, domestic workers and industries formed the core demand for
industrial output.
Historically, this system depended on integrated national markets (not
possible before the railroad), and declined with the international
economic integration allowed by falling transportation and
institutional barriers to international trade.
For current trends in US retailing,
refer
to the handout, derived from
the Bureau of Labor
Statistics.
RETAIL ACTORS AND BEHAVIOR
Consumers
Retail outlets
Retail chains
Retail developers
GEOGRAPHIC MARKET AREAS
WHO SHOPS WHERE?
Spatial
demand
curve
Spatial
interaction
Spatial competition
How
to
split
the market between competing retailers, when consumers will go
to the closest vendor (i.e., convenience goods)?
Refer to Harold Hotelling, “Stability in Competition,” in this case, a duopoly, in which two vendors share
a linear market.
Illustrate this on the board, noting the assumptions of:
- Identical products
- A randomly distributed market
- Mobile vendors, who stay in one place long
enough for potential consumers to know their location.
Result: vendors will
split the market evenly as long as they’re equidistant from the center,
but the stable
locations are at the
center of the market.
Targeting markets by location
However,
most
vendors
will try to distinguish their offerings from those of
competitors, so that consumers will have more considerations than
proximity (in the case above) or price.
Identify what target market fits with one’s competitive strategy (on
what bases one distinguishes oneself from competitors) and locate to be
most attractive to that target market.
Why would a retailer select a particular target market? In
discussion, we emphasized:
- You can’t create synergy among the components
of marketing without an idea of the target market(s).
- You can have more impact in a targeted market.
- Targeting allows a more strategic use of
assets. I introduced strategic management:
using
and
investing in assets that have the greatest return in the
chosen environment.
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