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proach goes beyond the simPle site selection or lease-renewal process, and includes strategies and tactics for exploring new markets, penetrating existing markets and other long-term issues.

o Proactive-From a marketing perspective location strategies are proactive or anticipatory to help meet goals for the long range, rather than being threat-related or opportunistic.

o On-Going-Locational analYsis is an on-going process which is found at all levels of the strategic planning process, from the development of corporate objectives, through the site selection process and including the monitoring of store location performance.

o Consumer Oriented-Location strategies are developed which are based on a thorough knowledge of the target market PoPulation, not only in terms of their merchandise and service needs but in terms of their desire for convenience in time and space, and the whole shopping experience.

o Whole-Market-Whole market decisions will occur with increasing frequency in the 1980s. These involve obtaining maximum market coverage within a market. The location of individual stores and their performance will be examined in the light of their impact on market or even regional clusters, and not on individual bases.

o Functionally Integrated-Location analysis provides input for merchandising, customer communications, and especially market share management, and locational decisions are coordinated with other functional areas.

The six strategy options include: o Market Expansion-Entering new market areas, with new stores, but serving the same consumer segments. o Market PenetrationIncreasing market share in current market areas, through infilling with new stores, but again serving the same consumer segment. r Business Performance Improvements - Gaining incremental improvements within existing market areas, without adding additional space and while serving the same consumer segment. r Market Diversification-This is the counterpart of market expansion. It involves adding new store formats to serve other consumer segments in the new markets. r Market Intensification-This is the counterpart of market penetration (i.e. current market areas, and new stores) except, this involves the addition of multiple store formats to serve new consumer segments. o Non-Store PresencePresence is felt in new market through spill over advertising or catalog distribution while no stores are added.

. RepositioningThis is the counterpart of business performance improvements (i.e. current market areas, current stores). This strategy includes stores which are reformatted or reprogrammed to serve a different consumer segment.

Selecting the appropriate strategy can be confusing. Careful attention must be paid to the firm's stage in its life cycle. In addition, one must consider the area's level of store saturation, the state of the economy, as well as specific corporate objectives. As

Doherty explains, "for convenience sake, these strategies are identified as independent thrusts. In actuality they do overlap, and a company may be engaged in several at the same time. This is especially the case for companies with divisions at different life cycle stages or at different levels of competition."

These strategic issues tend to involve varying degrees of risk for the retail company. During the 1980s most successful chains will automatically apply advanced site selection procedures. The result may well be a retail stalemate as all competitors have access to the same demographics and the same statistical models. "Those companies which develop location strategies that are strongly marketing oriented, in conjunction with sophisticated site selection techniques, ' ' says Doherty "will be able to pre€mpt competitive moves, lock up markets, and so rise above the retail competitive plane."

Dr. Peter Doherty, author of the reports, explains, "Location strategies should be thought of as broad-based directional decisions designed to help meet corporate objectives."

Such decisions involve not only locating new stores, but relocating stores, renewing leases, changing the size of stores, and modernizing and reprogramming existing stores. Location strategies should be component parts of a total marketing strategy program which guides the deployment of all the retailing mix variables.

According to the study, once strategies have been developed, specific plans or tactics follow. These are the road maps which point to particular markets and include plans for entering these markets with specific numbers, sizes and types of stores. Thctics then lead to detailed analyses of specific trade areas and ultimately to a site-selection decision.

"The selection of sites is not a final decision," warns Doherty. "Location analysis is an on-going process -store performances need to be monitored on a regular basis. This information is required not only to identify changes due to life cycle changes in location, company and industry, but also to provide feedback as to the wisdom of the site-selection decision, the location tactics, the location strategies, the marketing program, and even the corporate objectives."

Location decisions are believed to

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L-P Forms Venture Subsidiary

louisiana-Pacific Corp., Portland, Or., has formed a new subsidiary, Louisiana-Pacific Ventures Corp., which will join venture capitalist Jacques B. Nichols in a partnership, First Source Capital Fund Ltd., to invest in start-up high-tech companies.

"We're looking forward to being a key participant in technological advances as they occur," said Harry Merlo, chairman and president of L-P. The company reportedly is venturing into the investment opportunities directly or indirectly related to the lumber business, including computerized industrial machinery, systems controls and laser technology.

Evadna Lynn, a Merrill Lynch vice president who analyzes forest products companies, says "It's a way to put their cash to work creatively. It will use a very small portion of the company's cash, and it keeps them abreast of technological developments related to the industry."

The company, according to Lynn, will receive a cash windfall approaching $2SO million in the next year or so. They expect to realize a net gain of $65 million from the reported sale of their stake in National Gypsum Corp. In addition the company has $190 million in receivables due from the federal government for seizure of 27,000 acres of Louisiana-Pacific land for the Redwood National Forest in California.

Montana Dealers' 50th Year

Montana Building Material Dealers Association will celebrate its 5fth anniversary at its annual convention, March 3-5.

Heritage Inn, Great Falls, Mt., has been selected as the site. A buYing show with displays and the convention program are in the planning.

Who Buys What, Where

Baby boomers, shoppers born between 1947 and 1962, most often Purchase plumbing, electric and building materials, paint, wallpaPer and related supplies from a do-it-yourself store.

Additional statistics in a nation- wide study monitoring consumers' retail shopping behavior showed that early baby boomets, (24'27 years of age) bought 9290 of their hardware, lawn and garden, and auto supplies from a d-i-y outlet while those in the late baby boomer category (a$e27-34\ made only 7790 of that type of purchase in such a store, according to Management Horizons, Columbus, Oh.

Remodeling Keeps HealthY

Despite relatively high interest rates for financing remodeling work, remodelers are optimistic that their business will remain brisk through the end of the year.

More than 270/o rate overall remodeling activity as good. Another 22s/o rate the market as fair. They expect those levels to remain about the same through the end of the year. Americans, who spent more than $49.3 billion on remodeling in 1983, are expected to spend an estimated $55 billion in 1984.

QUESTION:

Recently a reader we had met asked: "What should a dispatcher's normal responsibilities be in a lumber yard like ours?" His yard, in the $8 to $10 miuion volume range, owned and operated 12 trucks. The answer given was specifically geared for his operation, but the basis of it applies to almost anyone performing the "dispatching function."

ANSWER:

Literally, one definition of "dispatching" is "to send away," Delivery is often defined as the act of sending to an intended destination. Thus, a lumber and building materials dispatcher is the sender of materials to an intended destination. In many cases, the dispatcher must meet time requirements as well. The implementation of such responsibilities revolves around the l0 basic functions listed.

Questions on delivery costs? Send them to this magazine at 4500 Campus Dr., Suite 480, Newport Beach, Ca. 92660. Wally Lynch will answer them in future issues. This is your chance to take advantage of his expertise in cutting your delivery costs.