Geomarketing: About Place and Everything Else

Geo is an intriguing prefix for any science or discipline. Take geopolitics, which has been defined as politics influenced by geographic factors. Similarly, Geomarketing can be defined as marketing influenced by factors like demographics, store locations and physical accessibility.

Introduction

The Oxford dictionary defines marketing as ‘the action or business of promoting and selling products or services, including market research and advertising’. This is as good as any other definition that I have seen, so let’s stick with it.

Geo simple means related to the earth. In the context of this article it includes the use of geospatial (location) data, intelligence, technology, and science in marketing activities. From now on we’ll use the term Geospatial to collectively refer to all the above.

Geospatial has long been used in marketing research to map and analyze demographics, market segments, customer profiles, trade areas and sales territories. These findings are then used to develop a suitable marketing strategy.

Geospatial is becoming real-time and beginning to play a key role in the development and execution of marketing strategies and campaigns. Geospatial can be utilized throughout the marketing mix to inform important marketing decisions.

Geospatial in Market(ing) Research

Marketing and market research are used interchangeably, but market research is a subset of marketing research. Market research seeks to better understand the needs and preferences of buyers and consumers. Marketing research extends to the company’s offerings and marketing activities. It’s important to note that geospatial can contribute to all aspects of research.

Geospatial supports research activities like sales analysis, market segmentation, and customer profiling by answering location-based questions. Here is a list of examples:

  • Where are our best performing stores / sales territories located?
  • Where are our (most valuable) customers located?
  • What are the common market segments in these areas?
  • What is the customer profile of these market segments?
  • Where can we find new consumers or buyers?
  • What areas do we include in our targeted marketing campaigns?
  • What are the best marketing channels to reach these areas?
  • Where are potential new stores / sales territories located?

Geospatial in Marketing Strategy and Campaigns

Geo-technology can play an important role in the planning and execution of a marketing strategy and its tactical campaigns. Each strategy is bound to be unique, but the marketing mix is a popular planning tool that builds a marketing strategy around 4 common elements.

The original marketing mix concept looked at marketing from the perspective of the producer and had 4Ps as its elements. Over time the marketing mix has been considered from the perspective of the consumer (4Cs) and the market (SAVE).

The 4 common elements and the 3 different perspectives are summarized in the table below.

Producer (4Ps) Consumer (4Cs) Market (SAVE) Explanation
Product Customer wants and needs Solution The product (or service) offered as a solution to a customer need or want.
Place Convenience Access The distribution channels through which the product can be accessed.
Price Cost Value Product value needs to be higher than its selling price plus additional costs.
Promotion Communication Education The marketing communications that are used to sell the product.

Here’s a list of key applications of Geospatial across the marketing mix (using SAVE).

Solution

  • Identify market potential for any given product or service in a geographic market and decide which features and services to include to meet customer needs and preferences.

Access

  • Identify the best location for new retail outlets based on customer needs and preferences (e.g. willingness to travel), performance of existing outlets, the location of competitors, and accessibility by road and public transport.
  • Identify the best location within a shopping mall based on traffic density and nearby shops.

Value

  • Use discriminatory pricing for products and services based on existence of competition and the willingness of customers to buy at a higher price.

Education

  • Use geo-fencing in your mobile marketing to offer prospective customers with a GPS-enabled device a coupon when they approach a shopping center or retail outlet.
  • Find areas with a high density of prospective customers with the right customer profile to increase the effectiveness of your targeted marketing campaigns.

Conclusion

The use of Geospatial in marketing has yielded good returns, but the cost of acquiring locational data about consumer needs and preferences (e.g. disposable income), competitors and infrastructure can easily become prohibitive. This is particularly true in countries that are data poor.

However, customers transactions, interactions and conversations will always provide a rich data source for big data and location analytics. This could provide important new insights, especially when geospatial is applied as a filter for battleground areas.

I look forward to hearing your thoughts on Geomarketing and how it can best be applied.

About Author:

Willy Simons came to Kenya from The Netherlands in 1994. He is a serial entrepreneur and co-founder of Oakar Services, Esri Eastern Africa and Spatiality. He blogs about business, geospatial technology and cloud computing.