Geographic information systems have been described as a set of technologies that help us to see our small blue planet in better ways (Longley et al., 1999). More commonly referred to by the acronym GIS, applications include: local governance; business and service planning; logistics; and environmental management and modelling. In both public and private sector research, GIS are used to manage geographic information, help identify geographical trends and patterns and to model spatial processes.
However, GIS have been described as a “nearly” technology for marketers (McLuhan, 2003). Beyond the hype, the actual use of GIS presently is limited to the larger retailers and suppliers, with little expansion into marketing applications. This, despite widespread agreement that the true value of geographical information is only revealed once that information is analysed geographically! McLuhan (2003) cites a survey by GeoBusiness Solutions revealing that only 28% of company boards fully understand the operation and marketing benefits of GIS, with the perceived (and often, actual) high cost of investing in GI software and data products being one of the barriers to GIS reaching its potential. Continue reading Geodemographics and GIS – Richard Harris, Peter Sleight, Richard Webber
Geodemographics is the “analysis of people by where they live” (Sleight, 1997, p. 16). It is the suggestion that WHERE you are, says something about WHO you are; that knowing where someone lives provides useful information about how that person lives. To quote some product advertising, it is the possibility that “we know who you are, because we know where you live”. It is a simple idea – one that has shown itself to be of commercial value and the catalyst of a rapidly growing and globalizing industry. Continue reading Geodemographics, GIS and Neighbourhood Targeting – Richard Harris, Peter Sleight, Richard Webber
Among fast-food chain restaurants such as McDonald’s and Burger King, the most visible and vocal users of GIS are at Arby’s. Among a variety of applications used at Arby’s is one that uses drive time to establish the likely trade area for an existing or potential store (Freeling 1993). In the fast-food business, customers are likely to be attracted more to the convenience of the product than to its gourmet appeal. It is, therefore, important to look at a trade area from the perspective of drive-time accessibility. Like many retailers, Arby’s personnel know how long someone will drive to access their product. In addition, they are familiar with the demographic characteristics of their typical customers. By analysing the demographics of a trade area established by using drive times, the likely sales performance for a store can be modelled. Arby’s is careful not to “cannibalize” an existing store when developing a new store. Cannibalizing means taking customers from one of their existing stores. Cannibalization should be avoided since a new store should increase overall business, not spread it around. By the same token, they are very eager to take away their competitors’ customers, and so they carefully analyse their competitors’ existing locations in comparison with their own.
GEOGRAPHY AS THE BASIS OF GIS
In the rush to create bigger and better technical solutions, many in the GIS industry tend to forget that the discipline known as “geography” is the basis of GIS. GIS provides nothing more than the opportunity to manipulate and analyse geographical phenomena using automated systems. In fact, Michael Goodchild, director of the US National Center for Geographic Information Analysis (NCGIA) quite “recently” suggested (Goodchild 1992) that the acronym GIS should be understood to stand for “geographic information science”. This new definition would place more emphasis on analysis of “geographic information” and less on “system”.
Continue reading GEOGRAPHY IN BUSINESS? – GIS for Business and Service Planning
The automobile industry is a sector that has long recognized the importance of geographical planning and analysis. All the main auto manufacturers distribute their products to the market via a network of franchise dealers. These dealers are independent businesses but are allocated an exclusive geographical territory to which the manufacturer agrees not to assign any other dealer, subject to the existing dealer meeting certain performance criteria. Clearly most manufacturers aim to maximize their market share and profitability in their market. From analysis of the voluminous amounts of registration data it is clear that there is a very strong relationship between market share and dealer location. In other words the more dealers the manufacturer appoints. The greater the likely market share. However, this is traded off against the fact that as market share increases there are diminishing returns and the sales of each dealer reduce, thus affecting individual dealer profitability and, possibly, the scope for retail price discounting. As a consequence, manufacturers are trying to find a balance between maximizing market share whilst at the same time ensuring that each individual dealership is a profitable business in its own right.
Achieving this balance requires a thorough understanding of existing market performance and the ability to examine alternative scenarios through an intelligent GIS approach. Continue reading Case Study – GIS IN THE AUTOMOBILE INDUSTRY – GIS for Business and Service Planning
After “the past and present of customized and proprietary GIS”, the authors continue with the “GIS futures” at the time, specially for retailers – both for site selection and for other tatics, like retail performance modeling and network performance modeling too.
“Given the range of issues that retailers are now addressing and the more complex problems that GIS will need to consider, proprietary system development must proceed by responding very sensitively to the needs of the client. Only in this way will development remain relevant. There will be a greater role for additional support services alongside software systems and a greater need for tailored and customized solutions for particular problems. Continue reading GIS FUTURES – GIS for Business and Service Planning
Almost everybody’s doing it!
Today everybody’s doing it – well almost! Although an exaggeration, geodemographics and geographical analysis of markets is no longer the leap in the dark that it was in the early 1980s. Many business organizations are now employing the concepts of geodemographics and using GIS in many varying applications – from new site location analysis to merchandising and direct mail. With the increased range of applications to which geodemographics can lend itself, the market has grown considerably with new GIS software and databases to accompany these developments like the following ones.
Continue reading THE PAST AND PRESENT OF CUSTOMIZED AND PROPRIETARY GIS – GIS For Business and Service Planning