Key Issue #2: Why Are Consumer Services Distributed in a Regular Pattern? Consumer services are distributed in a more regular pattern than business services

Key Issue #2: Why Are Consumer Services Distributed in a Regular Pattern?

• Consumer services are distributed in a more regular pattern than business services (more specialized)

• Central Place Theory (Walter Christaller, 1930s)– Central place – market center for exchange of goods and services by people for

surrounding area (located to maximize accessibility)– Central places compete with each other for customers (creates regular patterns)– Central place theory explains distribution and regular pattern of settlements in

MDCs• Assumes flat, featureless landscape• Assumes evenly distributed population & resources; cities equidistant• Assumes proportionate wealth & demand for goods/services• Assumes customers always travel to nearest central place• Services cluster in settlements• Larger settlements are fewer and farther away from each other• Smaller settlements are more numerous and closer• Larger settlements have more services (quantity & diversity)• Smaller settlements have fewer services


• Central Place Theory (Walter Christaller, 1930s)– Market Area of Service• Market area (or hinterland) is the area surrounding a service

that contains its customers• A market area is a good example of a functional/nodal region• Can be used for around individual services or around entire

cities• Closer to a node, the more likely to use the service• Farther away, less likely to use the service and more likely to

use other services (other nodes)• Circles vs. squares vs. hexagons for market area representation

– Circles cause geometric problem – create gaps or overlap– Squares have too much distance from node to corner– Hexagons minimize distance to corners, have no gap/overlap


• Central Place Theory (Walter Christaller, 1930s)– Size of Market Area• Range – maximum distance most people are willing to travel

(radius around central place or node)– The range is not the farthest anyone will travel (just most, 2/3 to 3/4

of people)– Everyday goods/services (low-order) – people willing to travel only

shorter distances; services must be more numerous; (Examples: grocery, convenience store, fast food, gas station, etc.)

– Higher-order goods/services – people are willing to travel longer distances (Examples: fine dining, concerts, pro sports)

– Irregular shape of market area may be created by competition of similar services/businesses

– Range can also be modified based on time of travel rather than distance (quality of roads, traffic, city streets vs. interstates)


• Central Place Theory (Walter Christaller, 1930s)– Size of Market Area• Threshold - # of people needed to support the service;

minimum number of customers to generate sales to turn a profit– Based on age, income, gender, product type, wealth, demand– Convenience store, fast food, grocery – everyone– Movie theaters – younger people, families– Chiropractors – older people– Thrift stores – lower-income– Upscale department stores, fine dining – wealthy– Amusement parks – families with children– Night clubs – singles


• Market Area Analysis– Study completed by service providers & retailers to

determine suitability of a location (if market is suitable, then determine best location within market area)

– Profitability of a Location• Use surveys, census date, accounting data• If competitors nearby, may need a larger area• Example:

– 15 minute range– $10,000 sales per week for profit– $2 per week average customer– Need 5,000 customers per week– If competitors nearby, must adjust size of market area or shape of area

(will need more than 5,000 people in area)


• Market Area Analysis– Optimal Location within a Market• Once profitability is determined, find best location to

minimize distance to be traveled for the most customers possible

• Linear Settlement– Elongated community (like Miami, Atlantic City, etc.)– A few, long major N-S or E-W streets & many short streets in

perpendicular direction– Best location is middle or median of series (½ to north, ½ to south)– What is different # of customers on each block?

» Use gravity model for optimal location – directly related to population and inversely related to distance

» Greater # of people gives greater potential for customers» Greater distance to travel, less potential for customers


• Market Area Analysis– Optimal Location within a Market• Non-linear settlement

– More complex, but still use gravity model① Identify possible site② Identify where potential customers live within market

range③ Measure distance from possible site to every potential

customer④ Divide each potential by distance to potential site⑤ Sum all results from step 4⑥ Select 2nd possible location & repeat steps 2-5⑦ Compare results from step 5 for possible locations –

highest sum/score has highest potential & is optimal site


• Hierarchy of Services & Settlements– Smaller settlements are limited to consumer services with small

thresholds, ranges, & market areas– Larger settlements have greater # and variety of services – varies by

neighborhood within large settlements– People usually travel shortest distance for services

• May travel farther for lower prices, unavailable services, unavailable/different items

– Nesting of Services & Settlements• MDCs have many small settlements & fewer large settlements• 4 market area levels (smallest to largest):

– Hamlet (average of 800 people, 17 sq. mile market area, 4.4 miles between)– Village– Town– City (wide range of sizes)

• Regular pattern of distances between settlements


• Hierarchy of Services & Settlements– Rank-Size Distribution of Settlements• Regular pattern of ranking settlements by population• Rank-size rule – states that nth largest settlement is 1/n the

population of the largest settlement in a country or province– 1st – 1, 2nd – ½, 3rd – 1/3, 4th – ¼, 5th – 1/5, etc.– Largest city is 1 million; 2nd = 500,000; 3rd = 333,333; 4th = 250,000; 5th

= 200,000; etc.– Generally plots as a straight line on a graph

• Pattern is found in U.S. and several other countries• If it does not graph in a straight line or follow 1/n rule, it does

not have rank-size (example: many European countries)– Sometimes the pattern may not work for larger settlements but will

still work for smaller settlements (often true in Europe)


• Hierarchy of Services & Settlements– Rank-Size Distribution of Settlements

• Often countries that do not follow the rank-size rule, follow the primate city rule• Primate city – largest city in a country; over 2x the size of the next largest city;

usually the center of power for gov’t, economy, culture, education, etc. for the country– Ex: Denmark – Copenhagen (1 million) vs. Arhus (200,000)– Ex: UK – London (8 million) vs. Birmingham (2 million)

• Many LDCs follow primate city rule, but also fail rank-size rule at smaller settlements

• Importance of Rank-Size (Example of Romania)– Indicates regular hierarchy; society is sufficiently wealthy to provide goods/services

throughout the country; proportionate wealth distribution– Absence of rank-size may indicate not enough wealth in country for many to have

adequate goods/services; disproportionate wealth distribution– Romania – under communism WW2-1989; Ceaucescu (dictator) destroyed neighborhoods

& rural settlements with gov’t planning; primate city of Bucharest (capital city); NOW, restrictions on Bucharest’s growth to encourage growth in other cities & rural settlements


Examples of Primate Cities– London (UK)– Paris (France)– Athens (Greece)– Baghdad (Iraq)– Budapest (Hungary)– Bangkok (Thailand)– Cairo (Egypt)– Lima (Peru)– Lisbon (Portugal)

– Manila (Philippines)– Mexico City (Mexico)– Seoul (South Korea)– Tehran (Iran)– Vienna (Austria)– Santiago (Chile)

Examples of Countries with NO Primate City

– U.S.– Brazil– China– Italy– Australia– India

– South Africa– Germany– Japan– Israel– Netherlands– New Zealand– Poland– Russia– Spain

– Turkey– Switzerland– Saudi Arabia– Vietnam– Pakistan


• Hierarchy of Services & Settlements– Rank-size & primate cities can occur on a regional or provincial level

• Atlanta, GA; Winnipeg, Manitoba; Perth, Western Australia are all provincial primate cities

• Periodic Markets– Set up on certain days/weeks/etc. in certain or different places in a town or

city– Common in LDCs & rural MDC settlements– Generally near areas of sparse population and lower income that cannot

support full-time retail– Mobile vendors – drive from farm to market & to different markets– Often sell food, handicrafts– Frequency various by culture

• Muslim countries – once a week in 6 cities, nothing on Friday (day of rest/prayer)• China – 3 cities on a 10-day cycle (based on lunar month 29.5 days)• Korea – 2 cities on 15 day cycles (based on lunar month 29.5 days)• Africa – between 3- and 7-day cycles

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Key Issue #2: Why Are Consumer Services Distributed in a Regular Pattern? Consumer services are distributed in a more regular pattern than business services