This blog takes an informal look into the debates and methods related to business GIS and mapping
Author: Dr. Murray Rice
One high-priority application for business GIS is the idea of cutting through market complexity to enable businesses to better visualize and identify the locations of their core markets. The last couple of posts focused on strategies from the growing field of spatial segmentation. As we defined it last time, spatial segmentation brings dozens of variables into analysis simultaneously, producing a complex but understandable picture of the structure of local, regional, and national markets.
Now we extend on this analytical tool set by discussing another approach to market identification that we might call market targeting. Market targeting relies on the user being able to identify key characteristics of the businesses market. This is appropriate when the business understands the characteristics that uniquely identify its customers, and those characteristics are well represented in existing data sets that business can access. Such a situation can follow from deep knowledge and experience possessed by the business over the course of its operations, or from a business that has logical and well known customer characteristics. For example, an established restaurant might understand from experience that its customer base skews towards middle income 40-year-olds. Or an automobile repair shop might have deduced through simple logic that a particularly lucrative customer segment in its area is comprised of families driving cars that are 10 to 20 years old and are in need of upkeep.
The following application ideas focus on two levels of complexity. First we will deal with a simple case comprised of market descriptions that are well defined by a single variable. Second we will examine the use of market targeting where ideal customers require multiple variables for identification.
The simple market targeting case comprises situations where access to a single, powerful variable is sufficient to define a useful market profile. The map below provides the example of educational savings accounts as an indicator of market strength for college recruitment. Neighborhoods with strong educational savings accounts balances could be viewed as especially likely sources of college student prospects.
Map 1: Simple Target Zone Example (One Factor)
Use of a single-variable targeting analysis should be viewed with a degree of caution, as in many situations there will be cases where multiple variables interact to identify good market opportunities. But for scenarios where a powerful variable exists that has a clear and obvious link to market opportunity, the simplicity of using a single variable to measure market strength leads to a strong market visualization opportunity.
If there is no single variable that does an adequate job in defining a particularly complex market, we can handle that situation by using multiple factors to identify a very specific market type. For example, a home improvement supply retailer (like Home Depot or Lowe’s) might define one type of profitable market for their business as one that meets the following factors:
Maps 2-4 reflect the individual factors, while Map 5 shows the final market definition that fits all three simultaneously.
Map 2: At least 75% of dwellings are 25 years old
Map 3: At least 75% of dwellings are owner-occupied
Map 4: Household Median Income > $100,000
Map 5: Census Tracts that Meet all 3 Factors
For step-by-step instructions on how to identify target zones for expansion with Maptitude, see this Learning Portal article.
Home | Products | Contact | Secure Store
Call Us 
