A fresh look at an old problem: saturation in the retail market and how it affects both retailers and consumers
Objective: Traditional saturation analysis on competitive location decision science focuses on diminishing returns for incumbents and newcomers in a specific spatial location pertaining to commercial retail potential past a certain point of market saturation. Methods/Findings: This study looks at this problem but employs a different approach to the subject altogether, wherein saturation is no longer a variable affecting only retailers but one that affects both: the marginal utility of consumers and the revenue of retailers albeit differently. A new mathematical model is proposed based on selected papers, contributing new insight into an already widely discussed subject. Application: Analysis shows that it is important for competitive location decision-making to address saturation from both sides of the overall competitive location decision issue, not just from the retailers’ standpoint.
Clustering, Market Share, Retail Saturation Index
Indian Journal of Science and Technology; Volume 12, Issue 18, May 2019: p.