As the saying goes, “the three most important words in business are ‘location, location, location!’” Finding an ideal site for a new business is a key element in the success, or failure, of many businesses. Site location analysis is the primary job of geographers working in location intelligence jobs; a major source of high-quality employment for those with a geography degree. Many companies, including McDonald’s, Kohl’s, Wal-Mart, and Walgreens employ geographers to help them select optimal site locations for both retail and warehousing operations. Governments also need geographers to select ideal sites for schools, police departments, airports and fire stations. Sometimes geographers help decide where to close a business or public service facility. The process can be quite complex because multiple factors must be considered at each location. GIS is an indispensable tool for analyzing the interplay of multiple factors simultaneously. A site location analyst analyzes things like traffic patterns, real estate costs, zoning laws, economic competition, as well as the socio-economic, ethnicity and age structures of nearby customers/citizens among other things. Doing fieldwork to collect data about potential site locations is another important step in the decision-making process of location analysts.
Hotelling Model
Harold Hotelling developed the most basic site location model in the late 1920s. It is useful for understanding some basic patterns of retail in many cities. Hotelling’s basic premise was that when competing firms sell a similar product, customers will travel the shortest distance possible to purchase that product. Since competitors frequently sell products that are virtually indistinguishable from each other (gasoline, aspirins, Coca-Colas, etc.), the behavior of customers creates an incentive to agglomerate at a point that maximizes the potential number of customers.
Figure 12-26: Infographic. The logic of the Hotelling Model plays out in a series of moves and counter-moves by competitors arranged in a linear market, like a street or on a beach. Eventually agglomeration will occur.
Suppose there are two competing firms on Main Street in some small town. Each firm has an incentive to capture the market share of its competitor by moving into the territory of the other. To capture the maximum number of customers, Firm A (Amy in the graphic) should move next door to Firm B (Joe), thereby making Amy’s store an intervening opportunity. By moving, Firm A (Amy) will capture the maximum number of customers traveling along Main Street. If Firm B (Joe) is smart, he will leapfrog Firm A (Amy), thereby capturing the maximum number of customers. Under this logic, after a series of moves and counter moves, a state of equilibrium will be reached that finds Firm A and Firm B located adjacent to each other, with each firm capturing nearly fifty percent of the customers. Of course, most businesses try to distinguish themselves from their competition through price, service, and product. Still, if you are the type of person that notices patterns on the landscape, you will have recognized that certain businesses (gas stations, pharmacies, etc.) cluster together in the fashion predicted by this simplistic model, and it’s generally a sign that such businesses are not competing primarily on price, service or quality.
Huff Model
Another of the measures frequently used by retail site location analysts is the Huff Model. It is used to predict the likelihood of a customer at any distance from a proposed store is likely to shop there. It rests on the premise that people won’t drive very far to shop unless the store is worth the effort. Successful stores, according to the model are bigger, have highly desirable goods and lack competition. Those three elements are all calculated using the formula in the figure at right. To those with math phobias, the formula may look daunting, but it’s nothing more than a series of basic math operations (multiplication, division, exponents, subtraction). Luckily, GIS and spreadsheet programs do most of the work, and software can calculate the formula millions of times over, permitting geographers to estimate the number of customers for many stores simultaneously. Not only could this single formula help a geographic information analyst decide the feasibility of a store (or hospital, etc.), but it also indicates to the marketing department where advertising dollars should be spent; a business geography tactic from the realm of marketing geography.
Business geographers also are very good at helping companies identify customers and sell products. Spatial analysts, equipped with sophisticated databases about customers’ income, lifestyles, and shopping tendencies can identify locations where marketing dollars can be most wisely spent, as well as where advertising (or even stores) dollars are wasted. Marketing geographers rely on a number of the same tools as the site location analysts, they just use them for different ends; and they often work for marketing firms rather than for retailers.
Landscape geography, a humanities-flavored component of cultural geography, figures prominently in many contemporary marketing campaigns. Landscapes, because they are saturated with meaning, form an important component of most visual advertisements today. Consider for example, that only 30 years ago, if you watched a car commercial on TV, a spokesperson would generally extoll the virtues of the automobile; its safety features, horsepower, ride characteristics, etc. Nowadays, it is not uncommon to see a TV ad for a car that mentions none of that. In the 2000s Volkswagen had an entire series of car commercials featuring nothing more than cool people riding around VW’s in cool places. If you saw these ads, you may not have even known what product being advertised until the very end, when the VW slogan flashed across the TV screen. The message VW was sending was “buy this car and you could be like the cool, youthful, urban people in this commercial.” Many marketing campaigns use this technique. Alcohol advertisements are especially fond of using landscape to see beer, wine, and liquor. Corona Beer’s long-time marketing campaign is a classic example. Corona ads never tell you the beer tastes great, they only try to get you to imagine yourself on a secluded, tropical beach. Corona wants you to associate luxurious relaxation with a relatively inexpensive beer. Those ads help Corona drinkers to project, or at least think they are projecting, an identity connected to wealth and leisure.
ABERCROMBIE & FITCH
Abercrombie & Fitch, a popular clothing brand trademarked the slogan “casual luxury” to sell their line of slightly upscale jeans, sweaters, and other outerwear. One of the most powerful marketing tools used by this clothier was the landscape imagery of the East Coast yacht club.
Figure 12-28: Hyannis Port, MA. Elitist landscapes frequently serve as backdrops in advertising campaigns because they evoke desires for wealth, exclusivity, sex and comfort. The Kennedys seem to have inspired Abercrombie & Fitch. Photos: PBS
An argument can be made that the Kennedy Family supplied the prototype A&F models. Landscapes are like the setting of a movie that helps frame the plot. Even their company CEO characterized the in-store experience as a movie, noting that shoppers "...buy into the emotional experience of a movie...And that's what we're creating. Here I am walking into a movie, and I say, 'What's going to be [at] the box office today?” (Time, 2/14/2000). Those who have been to an A&F store would suggest that their“movie” is set on Martha’s Vineyard in Massachusetts, or perhaps The Hamptons on Long Island. Both places are historic coastal playgrounds for New England’s “blue blood” families, like the Kennedys.
Place Product Packaging
Landscape geography figures prominently in marketing places in the physical world. Many chain stores use what geographer John Jakle calls place-product-packaging to help sell goods and services. Essentially, the goal of place product packaging is to customers to visit chain or franchise stores repeatedly by using the architecture and landscape of the store itself. Chain restaurants started this practice first in the 1950s. By using consistent architectural designs, interior décors, worker uniforms, logos, and even parking lot layouts, customers are conditioned to expect uniform service, product, and price. Tourists traveling far from home quickly learn that restaurants that look exactly like those back home offer a safe and entirely “predictable oasis ... away from home”. Hotels (especially Holiday Inn) followed suit because their operators knew that most travelers are not interested in experimenting with food or lodging. This is especially true for families traveling with children. Scads of other commercial interests followed suit. This strategy contributes greatly to the creation of placelessness discussed in an earlier chapter. Strict conformity to corporate designs and architecture have loosened in recent years. McDonald’s and Holiday Inns don’t all look exactly the same today the way they did in the 1970s. Those chains long ago established their reputation and no longer need to aggressively remind customers what they are getting. New chains are wise to use place product packaging as they build a customer base and a brand identity.
Architecture, landscape design, and product logos also function to evoke emotional or cognitive responses that advance company interests. Clever business people understand that their customers “read” the landscape, and so strive to design their stores or advertisements in a way that allows the subtext of the landscape to help sell their product or service. These strategies are found at the intersection of psychology, geography, and business. A couple of examples below are presented to help you recognize how landscape can be used to manipulate you as a consumer.
HAM BURGER STANDS
Fast food joints are a nearly ubiquitous element of the American landscape. Many franchises employ similar architectural design formulas to sell burgers and fried food. One of the most instructive design strategies was borrowed from modernist architecture more than 100 years ago. Today, many Americans read the modernist landscape of a hamburger chain like In-N-Out Burger, as an evocation of the 1950s, which is tied to an atmosphere of nostalgic fun. However, the white porcelain, glass, and stainless steel motif pre-dates the 1950s and is rooted in the suspicions Americans had about hamburger meat 100 years ago. Americans first began eating hamburgers, as fast food around the turn of the 20th century. Though hamburgers were ideal for factory workers who often had no other option for a hot lunch, people were apprehensive about the quality of ground meat with good reason.
Landscape and architecture were two potent ways hamburger restaurant owners convinced the public that ground beef was safe. First, the kitchen areas were kept in plain sight of customers. Glass, stainless steel and white porcelain were liberally incorporated into the design of buildings to project a modern, hygienic look. Hamburger joints were designed with a dentist's office aesthetic to assure the public that the food was safe. Even the cooks wore all-white uniforms, to mimic the uniforms worn by medical professionals.
During the early 20th century restaurateurs hoping to convince customers that their food was safe also borrowed design elements from, what was at the time, extremely high-tech machinery:steamships and streamliner trains. Actual dining cars from railroads were used for several decades as hamburger restaurants. Today we call these places diners. Others tried to evoke, through architecture, the slick and luxurious oceangoing streamliners of the day by putting port-hole windows on buildings. After the war, airplanes and spaceships served as inspiration for a period and buildings sprouted angular features that evoked jet aircraft.
Figure 12-29: Winchester, VA - This hamburger joint appeals to nostalgia today, but when it was built shortly after World War II, the design was futuristic, hygienic and modern, assuring customers that the sandwiches were safe to eat.
for several decades as hamburger restaurants. Today we call these places diners. Others tried to evoke, through architecture, the slick and luxurious oceangoing streamliners of the day by putting port-hole windows on buildings. After the war, airplanes and spaceships served as inspiration for a period and buildings sprouted angular features that evoked jet aircraft.
Once Americans were assured that hamburgers were indeed reasonably safe to eat, restaurant owners no longer needed to design restaurants that evoked high-tech machinery or hygienic places like hospitals. Eventually, the hyper-modern stainless steel, glass and porcelain buildings began to look outdated, and perhaps unclean. Around 1970, McDonald’s abandoned the hygienic-modern look for an “environmental” themed landscape that featured weathered brick and mansard roofs; all painted in brown, burnt orange and yellowish earth tones. Burger King, Wendy’s, Pizza Hut and a host of other retail chains followed suit.
Figure 12-30: West Hills, CA (left) and Warsaw, VA (right). The environmental look (left) replaced the glass-steel-porcelain look of the post-war era around 1970s, only to fall out of favor by the 1990s. The building on the right is an attempt to recover the 1950s look with a 1970s era building (mansard roof, brick, etc.)
By the 1990s however, the 1970s “environmental” look itself faded from fashion and several fast food chains adopted nostalgic looks, mostly to evoke the wholesome fun of the 1950s America. Some of the attempts at leveraging 1950s imagery have been blatant and perhaps over-done, but others like In-N-Out Burger are subtler, because they never really abandoned the 1950s motif in the first place. Today, many newer restaurant chains appear to once again be borrowing from high-tech industries by adopting what might be called the “iPhone” or “Apple” aesthetic, with clean, simple lines that suggest quality and wholesomeness. Think about that the next time you visit a Pinkberry or a Chipotle restaurant.
Figure 12-31: Runnemede, NJ (left) and Canoga Park, CA (right). The post-war 1950s era is used to evoke nostalgia among customers, but the hygienic motif at one time was very forward looking and helpful to assure customers of food safety.
ADDITIONAL LINKS
Directions Magazine. GeoInspirations: Ken Smith’s Passion for Area Research and Retail Analytics. https://www.directionsmag.com/article/7257 - A great summary of the role of geography in business analytics.
