4.2a Location Flashcards
What is the meaning of ‘Proximity’ in terms of business location?
How close or far a business wants to be from market, labour, materials, labour, materials and competitors.
What may a business look at before choosing to set up in a particular location?
The footfall
What is footfall?
The number of people passing a particular location within a given time period.
What does the importance of proximity to market depend on?
The importance of proximity to market depends on how important convenience is to the customer.
What would a business do if it needs to recruit a large number of people?
They may chose to locate in an area with high unemployment, as this area should contain a large number of workers willing to work for the National Living Wage.
What is a bulk-gaining product?
A bulk-graining product is one where the end product is bigger (and more difficult or expensive to transport) than the raw materials.
What is bulk-reducing product?
A bulk-reducing product is one where the end product is smaller than the raw materials.
What can a business do if it has a bulk-gaining product?
The business can locate close to the market in order to reduce transportation costs. This is because a business ofte needs to choose between locating close to their raw materials and locating close to their market.
What is a convenience good?
A product that a customer buys frequently or routinely.
What is a shopping good?
A product that a customer takes time to consider before purchasin. They usually compare it with other products first.
Will a business selling a convenience good want to stay away to close to competitors?
Away. E.g. it is unlikely for a newsagent (convenience good) to locate next to another as it will just split the customers between the businesses which could reduce customers.
Why would a business selling shopping goods want to locate close to competitors?
They may offer wider and better choice for customers who are looking for a product. Between two businesses, if one was selling better deals than the other and they are close to each other, customers will go to the better deals one.
