Method for site selection for retail and restaurant chains

Abstract

A method of selecting a site for one or more retail units uses a database of information on existing units in a chain, including store sales or profits, site characteristics available from various databases, and information on marketing expenditure in the relevant market. Sales of potential new units are forecast abstracting from advertising efforts. Thus, potential profit characteristics of a site can be evaluated without regard to existing advertising programs. This corrects a major problem with existing approaches; site decisions can be made simultaneously with marketing allocation decisions.

What is claimed is:  
     
         1 . A method of selecting a site for one or more a retail units comprising: 
 a) providing a database of information, the information comprising a number of variables for a number of proposed sites;, the variables including a binary advertising allocation variable and a non-linear advertising allocation variable;    b) for each proposed site, regressing sales over a selected time of period on the site variables, the regressing step further comprising at least one of: 
 (i) holding constant the effect of the advertising across the proposed sites during the regression step to show the relationship between sales and the non-advertising variables; and  
 (ii) accounting for the effect of the advertising across the proposed sited during the regression step to show the relationship between sales and advertising.  
   
     
     
         2 . The method of  claim 1 , wherein the relationship is displayed in a map for each proposed site.  
     
     
         3 . The method of  claim 1 , wherein profits are calculated from the sales, the relationship between profits and advertising or non-advertising variables being shown.  
     
     
         4 . The method of  claim 1 , wherein the regression step generates coefficients for each variable, and the coefficients for the advertising variables are adjusted to not exceed a maximum value.  
     
     
         5 . The method of  claim 1 , wherein a number of retail units exist in one or more of the proposed sites, and an average sales figure per existing retail unit for each site is used as another variable in the regression.  
     
     
         6 . In a method of site selection for one or more retail units wherein site characteristics are analyzed to determine where one or more retail units should be located, the improvement comprising controlling for advertising allocation as part of the analysis.  
     
     
         7 . The method of  claim 6 , wherein advertising is held constant for the analysis.  
     
     
         8 . The method of  claim 7 , wherein advertising is varied for the analysis.  
     
     
         9 . The method of  claim 8 , wherein the advertising effect is compared to sales or profitability.  
     
     
         10 . The method of  claim 7 , wherein site characteristics without the effect of advertising are compared to sales or profitability.