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Advice You - Site Location - Defining Your Trade Area, Choosing the Right Location for Success
It’s 4:45 PM --- you’ve been up since 5 AM and you’re ready to go home. You get a call out of the blue – asking for a “quick analysis” of a particular piece of geography for a new location for your company. What data can you quickly get your hands on so that you can form an intelligent position, and how do you use all those reports, anyway?
Site location is part art and part science. One n
Site location is part art and part science. One n
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
eeds to understand the current business landscape, the demographics of the area, the traffic patterns and as much as possible about future plans for development. And, a little bit of basic math helps, too!
Basic concept: Primary Trade Area
The primary trade area is actually exactly what one might guess it to be. It is the main area that most of your customers are coming from. Dep
Basic concept: Primary Trade Area
The primary trade area is actually exactly what one might guess it to be. It is the main area that most of your customers are coming from. Dep
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ending upon the frequency of your sales cycle and the uniqueness of your products and services in the market, you make some assumptions about how far your prospects are willing to go to get to your location.
For convenience locations such as grocery stores, gas stations, coffee shops and banks, people generally don’t travel too far (relatively speaking) from their point of origin. The opposi
For convenience locations such as grocery stores, gas stations, coffee shops and banks, people generally don’t travel too far (relatively speaking) from their point of origin. The opposi
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
te is true for destination locations, such as specialty restaurants, theme parks, specialty clothing stores, et al. Distance willing to travel is actually a function of availability of goods and services and population density.
Translated into practical terms, a person in an office in Manhattan is more likely to get cash from the nearest ATM (within a block or two) where as a homeowner on a
Translated into practical terms, a person in an office in Manhattan is more likely to get cash from the nearest ATM (within a block or two) where as a homeowner on a
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
n Iowa farm may have to travel 10 miles to get to the closest bank branch in town.
How do you determine your Primary Trade Area?
You could take a map out of your car, stick it on the wall, and throw darts, OR, you could spend a little time with a mapping package and do some neat calculations.
If your business isn’t very dynamic, you don’t need to reassess your trade area more than o
How do you determine your Primary Trade Area?
You could take a map out of your car, stick it on the wall, and throw darts, OR, you could spend a little time with a mapping package and do some neat calculations.
If your business isn’t very dynamic, you don’t need to reassess your trade area more than o
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ce a year. If you are growing, it makes sense to make mapping out your customers relative to the prospective pool of prospects a company metric.
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
is to plot them out on a map and see where they live. Then, depending upon whether your consider yourself to be a convenience location or a destination location, you determine where the closest 50 – 80% of your customers live (or work). Use 50% if you are more of a convenience location and go out anywhere from 65-90% to determine your primary drawing area for destination locations.
Determ
Determ
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that exist within each mileage band. Another way to look at your customers is to ask for a drive time isochrone….that is, a unique polygon shape that follows the road network that
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
shows you how many minutes most customers need to drive to get to your location. (Picture a city with 5 major roadways convening at the city center. A drive time isochrone might look like a star shape because people driving fast on the major roadways can get in faster than those in the more congested (and lower speed limit) side streets.
Convenience locations are generally 5 minutes or less
Convenience locations are generally 5 minutes or less
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
in the dense suburbs, and can be up to 20 or more out in the more rural areas. There are more detailed ways to calculate trade areas – but if you’re looking for something quick that most people understand and won’t question you’ll get the basics straight so that you can say something like:
“70% of our customers come from within 7 miles of the store, that’s about a 15 minute drive time.”
1. Census counts, current year estimates and five year projections for current population and current households. Include population described by segments such as Education, Home Value, Occupations, Race, Language spoken
2. Income distribution, net worth
3. Lifestyle/Lifestage assessment
4. Traffic counts
5. Business counts
6. Relief map (shows the terrain)
7.
“70% of our customers come from within 7 miles of the store, that’s about a 15 minute drive time.”
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
Now what?
If you have one location, then when you are expanding you know that you have been successful with this particular location and can at least use your current assumptions to review the proposed site. If you have several locations, then classify your stores first by type, profitability, size, or other metrics, then lay out the distance and drive time data in a spreadsheet. You’r
If you have one location, then when you are expanding you know that you have been successful with this particular location and can at least use your current assumptions to review the proposed site. If you have several locations, then classify your stores first by type, profitability, size, or other metrics, then lay out the distance and drive time data in a spreadsheet. You’r
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
e starting to build some intelligence!
Next step, buy data.
Census data is great, but it is dated. Populations are constantly changing in relation to the economy of an area. If you are serious about understanding and growing your business, don’t rely on free or cheap estimates. Spend a few hundred dollars and get what you need so that you can confidently approach the bank (or your
Next step, buy data.
Census data is great, but it is dated. Populations are constantly changing in relation to the economy of an area. If you are serious about understanding and growing your business, don’t rely on free or cheap estimates. Spend a few hundred dollars and get what you need so that you can confidently approach the bank (or your
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
spouse, boss, investor etc.) with information you can hang your hat on.
Here’s what I usually recommend for a good understanding of the potential for a site: Each report is about $50 depending on where you buy it from, and most of the time it is packaged so you can expect to pay between $250 - $500 for a series of site reports that you can use over and over to assess or market a property.
Here’s what I usually recommend for a good understanding of the potential for a site: Each report is about $50 depending on where you buy it from, and most of the time it is packaged so you can expect to pay between $250 - $500 for a series of site reports that you can use over and over to assess or market a property.
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
1. Census counts, current year estimates and five year projections for current population and current households. Include population described by segments such as Education, Home Value, Occupations, Race, Language spoken
2. Income distribution, net worth
3. Lifestyle/Lifestage assessment
4. Traffic counts
5. Business counts
6. Relief map (shows the terrain)
7.
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
Market Potential Estimates
8. Consumer Expenditure, Retail Sales reports
...then analyze it!
So you have the data, now what? Analyze it. What I mean is take some time to study the reports and pull out factors that are important to your business. Make some basic assumptions given what you know. Here's a little secret: no one approach is *right*. No one can predict the futur
8. Consumer Expenditure, Retail Sales reports
...then analyze it!
So you have the data, now what? Analyze it. What I mean is take some time to study the reports and pull out factors that are important to your business. Make some basic assumptions given what you know. Here's a little secret: no one approach is *right*. No one can predict the futur
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
-- no one. But what you can do is estimate based on what you know and prepare for scenarios that might play out.
There are several ways to estimate potential. You can take a bottoms up or a top down approach.
An example of bottoms up logic might work like this: I am starting a new restaurant. How often do people eat out in my area? (Market Potential) How much do they spend on food outs
There are several ways to estimate potential. You can take a bottoms up or a top down approach.
An example of bottoms up logic might work like this: I am starting a new restaurant. How often do people eat out in my area? (Market Potential) How much do they spend on food outs
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ide the home?(Consumer Expenditure data) If X percent of the population eats Y food, how far out do I have to get Z customers? What's my gross sales if I get 5% of the available prospects to come in one time? twice? monthly? What's the turnover in population in my area? Is the area growing? Are people moving away at a rate higher than the county, the state, the metro?
An example of tops do
An example of tops do
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
wn logic might start out with an assumption that you need to bring in $xx,xxx/month to meet your profitablilty goals. You then calculate how many customers you need based on your average service/product cost. Look at similar businesses to get a demographic profile (list of characteristics) of your most likely prospects -- then create a few reports assuming that people can drive 5 minutes, 1
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
0 minutes, 1/2 hour or more to your location.
Site location isn't brain surgery, but it does require spending some time to think about the factors that can make or break a business. Arm yourself with a few reports. Run them for your area as well as for areas that you know are successful. Make up a little formula to help you estimate your potential and use the reports to fill in the blanks
Site location isn't brain surgery, but it does require spending some time to think about the factors that can make or break a business. Arm yourself with a few reports. Run them for your area as well as for areas that you know are successful. Make up a little formula to help you estimate your potential and use the reports to fill in the blanks
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
. Use Excel to create comparisons between what you know and what you estimate.
Whatever you do, don't get "analysis paralysis". The biggest problem with any business planning is pouring over data and market information trying to get an exact prediction of success. Follow your gut, use the data to support your intuition or to make you think harder about various scenarios that might play out
Whatever you do, don't get "analysis paralysis". The biggest problem with any business planning is pouring over data and market information trying to get an exact prediction of success. Follow your gut, use the data to support your intuition or to make you think harder about various scenarios that might play out
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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