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Trading Area Analysis Using Modified Huff Model Based on Analytic Hierarchy Process

  • Journal of Knowledge Information Technology and Systems
  • Abbr : JKITS
  • 2014, 9(1), pp.179-190
  • Publisher : Korea Knowledge Information Technology Society
  • Research Area : Interdisciplinary Studies > Interdisciplinary Research
  • Published : February 28, 2014

황수진 1 임채근 1 Bae Jaeho 1

1혜천대학교

Accredited

ABSTRACT

Trading area analysis is a critical basis for determining the merit of a particular location before setting up commercial activity. Yet, it is not rare to come across a case wherein a store has been making high profits in spite of being set up in an inadvisable location. This is because factors apart from the common parameters such as population, floor space of some stores, and distance may have played a role in the store’s success away from a traditional trading area. In this study, we selected the four Ps of marketing as supplemental parameters to decide the trading areas. Furthermore, we have proposed the modified Huff model that considers the distance modification factor based on the analytic hierarchy process. To substantiate our claim, we selected two super stores situated in near-contiguity, applied the proposed model, and checked the impact on the estimated sales amount. The proposed modified Huff model can be possibly used to make more easy and accurate trading area analysis than the traditional Huff model.

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