GIS FOR RETAIL AND PRODUCT MIX – GIS for Business and Service Planning

Levi Strauss & Company (LS&Co) is a good example of a product retailer that has begun to use geographical technology to customize “product mix”, or the combination of products available in specific stores (Allen 1993). LS&Co is one of the world’s largest clothing manufacturers, and sells many product lines in addition to Levi’s jeans. Unfortunately, the company’s sales had been lagging significantly primarily as a result of mergers, acquisitions, price wars and significant retailers such as GAP chain creating their own product lines instead of selling LS&Co’s products.

“Micro-marketing” has become a popular term for the strategy which LS&Co used to turn their poor sales performance around. Micro-marketing consists of paying much closer attention to product marketing and product mix at a very fine geographical level. A highly visible example of micro-marketing would consist of using Spanish-language billboards in a Los Angeles neighbourhood that is primarily Hispanic. In LS&Co’s case, micro-marketing consisted of tinkering with the product mix on a store-by-store basis. Since LS&Co primarily sell their products through distributors other than themselves (i.e. they own very few stores themselves), this means they must achieve a high level of coordination with their retailers, from large department stores to small boutiques. Their goal is to help the retailers, from large department stores to small boutiques. Their goal is to help the retailers sell large quantities of their products. By geographically analysing the demographics within a specific large department store’s trade area, they can begin to make assumptions about the kinds of product that would be appropriate for that store (Santoro 1993). For example, a slightly older and more affluent population would be likely to warrant more of the “Dockers” products such as khaki slacks, versus a younger crowd, who would buy core Levi’s products such as jeans and jeans jackets.

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GIS FOR BUSINESS

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