CONSUMER PACKAGED GOODS and BPI – GIS for Business and Service Planning

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 consumersโ€™ 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 brandโ€™s products are purchased at what stores is generated. These data are aggregated into approximately 50 โ€œscanner marketsโ€ 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 storeโ€™s BPI, the retailer can improve the product mix (micro-marketing) to โ€œpush through more productโ€ โ€“ to use the industry jargon.