12.1 pages 434-435-Where are Services Distributed?

Consumer Services

Consumer services provide services to individual consumers who desire them and can afford to pay for them. 1/2 of all jobs, types are retail, education, health, and leisure.

Types of Consumer Services

1. Retail and Wholesale: These services are provided by retailers who sell goods directly to consumers. Examples include supermarkets, department stores, and online retailers.

2. Leisure and Hospitality Services: These services are provided by businesses in the hospitality industry, such as hotels, restaurants, and bars. They are designed to provide customers with a comfortable and enjoyable experience.

3. Health and social Services: These services are provided by healthcare providers such as hospitals, clinics, and doctors' offices. They include services such as medical treatment, 1/3 are in hospitals.

4. Education Services: This includes educators at public and private schools which job is to provide information to their students.

Business Services

Business services refer to the services provided by businesses to other businesses. These services are essential for the smooth functioning of businesses and can be broadly classified into the following categories:

Professional Services

Professional services are provided by professionals such as lawyers, accountants, and consultants. These services are essential for businesses to comply with legal and regulatory requirements, manage finances, and improve operations.

Financial Services

Financial services include finance, insurance, and real estate. 1/3 in insurance companies. These services are essential for businesses to manage their finances, protect their assets, and invest in growth opportunities.

Transportation Information Technology Services

Information technology services include trucking and warehousing which account for 60% of jobs. the other 40% are in publishing and broadcasting as well as utilities like electricity and water.

Distribution of Services

There is a close link between services and settlements. A settlement is a permanent collection of buildings where people reside, work, and obtain services.

-Locational factors are critical for a service like proximity to the market.

-A settlement is where customers are clustered.

-This varies for factories as they need a wide area of tangible space to function.

Distribution of Services in Developed Countries

• Developed countries have a high concentration of services in urban areas.

• Basic services are available to all citizens regardless of their location.

• Consumer and business services are concentrated in urban areas.

Distribution of Services in Developing Countries

• Developing countries have a low concentration of services in rural areas.

• Basic services are not available to all citizens, especially those in rural areas.

• Consumer and business services are concentrated in urban areas.

Changes in Job sectors

Service jobs have increased while primary and secondary sector jobs have declined. In business services jobs expanded mostly in professional services and less in finance and transportation. In consumer services, the rapid increase has been in the provision of health care, education, entertainment, and recreation.

• Urban areas have a higher concentration of consumer services than rural areas.

• Consumer services are typically located near residential areas and transportation hubs.

• The distribution of consumer services is influenced by factors such as population density, income levels, and local regulations.

• Online consumer services have expanded access to services in rural and remote areas.

• Consumer services in developing countries may be limited and concentrated in urban areas.

The Cultural Landscape: 12.2 Where are consumer services distributed?

Central Place theory is a geographical theory that explains the distribution of human settlements. It was developed by Walter Christaller in the 1930s. The theory states that settlements will be distributed in a hexagonal pattern based on the size and function of the settlement. Larger settlements will be farther apart and have a larger range of goods and services, while smaller settlements will be closer together and have a smaller range of goods and services. The theory has been used to explain the distribution of cities and towns in many parts of the world.

Market Area of a Service

A central place is a settlement that provides goods and services to the surrounding areas. It is typically characterized by a hierarchy of services, with smaller settlements providing basic goods and larger settlements providing more specialized goods and services. Businesses in central places compete against each other.

Market Area- a nodal region, which is the area around a service from which customers are attracted to.

Range of Service

Range- Maximum distance people are willing to travel to use a service. The range is the radius of a circle to hexagon drawn to represent a market area.

-People are willing to only go short distances for groceries or to go to the pharmacy.

-people are more likely to express distance with time rather than miles/km.

threshold- minimum number of people to support the service.

-how potential customers are counted depends on the product. Certain businesses might only take into account wealthier people to calculate their threshold whereas other businesses may appeal to everyone and have no specific counting strategy.

Hierarchy of Consumer Services

Rank size distribution: In developed countries ranking of settlements from largest to smallest follows a pattern. The 2nd largest city is half the size of the largest and the 4th largest city is 1/4 of the largest and so on. Many countries have this pattern.

Primate city rule: a pattern where the largest settlement is more than twice as many people as the second ranking settlement. The largest city is the primate city. An example of a primate city is Mexico which is 10x bigger than the 2nd ranking settlement(Toluca) in Mexico.

How does the rank size rule affect populations?:

The existence of the rank size rule can reflect the quality of life for people. A regular hierarchy, rank-size rule, suggests that the country is sufficiently wealthy. Although the absence of rank-size distribution suggests that the country is developing and is struggling to evenly distribute wealth.

Nesting of Services and Settlements

Market areas in developed countries will be a series of hexagons.

There are 4 levels of market area:

• hamlet

• village

• town

• city

Larger settlements provide consumer services with larger thresholds, ranges, and market areas. Only consumer services that have short ranges, small thresholds, and small market areas are found in small settlements.

Profitability of a Location

Range and threshold is used to determine if a location is profitable.

Steps for determining profitability:

1-Define the Market Area: Defining the area of market would derive most of its sale. Often determined by zipcodes.

2-Estimate the range: Range is estimated depending on type of service.

3- Estimate the threshold: People are counted in an area, usually only the people that have sufficient income to shop regularly.

4-Predict the market share: Sharing customers with competitors. Using analog method preexisting stores are compared to the location of the new store.

Gravity Model

-Predicts the optimal location of a service is directly related to the number of people in the area and inversely related to the distance people must travel to access it.

Consumer behavior reflects 2 patterns:

1: The greater the number of people living somewhere the greater the number of potential customers for service.

2: The farther away people are from a particular area the less likely they are to use it.