We took the systems view of geographic information systems (GIS), describing such technologies as a set of linked components used to capture, store, transform, analyse and display geographical data. In early GIS each of these components might exist as separate programs, with the output from one forming the input to another. Today users expect much greater integration and interoperability, and desktop GIS have become powerful and widely used tools for managing a wide range of geographical information. Continue reading GEODEMOGRAPHIC INFORMATION SYSTEMS AND ANALYSIS
How the following retail question might be answered within a GI analytical environment? Suppose a consumer lives at location i (to be found at coordinate xi, yi) then what is the likelihood that they will visit a particular retail store at some other location j (at coordinate xi, yi)? Continue reading SPATIAL INTERACTION MODELS – Richard Harris, Peter Sleight, Richard Webber
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
Consumer packaged goods are small, non-durable items that are generally bought at the grocery store. These might include soda, breakfast cereal and laundry detergent. Like most retailers and manufacturers of consumers’ goods of any type, the consumer packaged goods industry is beginning to use micro-marketing techniques (Buxton 1993). Through using a sophisticated combination of databases and manipulation techniques, product marketing programmes can be developed at the retail chain level. In the US, almost all grocery stores use check-out scanners. These scanners read a bar-code on each product and automatically provide the price of the product. This is convenient for stores because they can change the price of the product (such as for a sale) without having to re-tag each item. Not only is this convenient for stores, but because of this process, a very rich database of what brand’s products are purchased at what stores is generated. These data are aggregated into approximately 50 “scanner markets” that cover various portions of the US. By combing these data with the demographics that tend to drive product demand, such as age and income, a buying power index (BPI) can be modelled for stores. The BPI indicates how much of various products could be sold at that store. By knowing a store’s BPI, the retailer can improve the product mix (micro-marketing) to “push through more product” – to use the industry jargon.
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. Continue reading GIS FOR RETAIL AND PRODUCT MIX – 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