Boaje Ioana-Irina

Gr. 1735

Geographic information systems in marketing

A geographic information system (GIS) is a computer system for capturing, storing,

checking, and displaying data related to positions on Earth’s surface. GIS can show many
kinds of data on one map. This enables people to more easily see, analyse, and understand
patterns and relationships.

With GIS technology, people can compare the locations of different things in order to
discover how they relate to each other. For example, using GIS, the same map could include
sites that produce pollution, such as gas stations, and sites that are sensitive to pollution, such
as wetlands. Such a map would help people determine which wetlands are most at risk.

GIS can use any information that includes location. The location can be expressed in
many ways, such as latitude and longitude, address, or ZIP code. Many different types of
information can be compared and contrasted using GIS. The system can include data about
people, such as population, income, or education level. It can include information about the
land, such as the location of streams, different kinds of vegetation, and different kinds of soil.
It can include information about the sites of factories, farms, and schools, or storm drains,
roads, and electric power lines.

Modern GIS technologies use digital information, for which various digitized data
creation methods are used. The most common method of data creation is digitization, where
a hard copy map or survey plan is transferred into a digital medium through the use of a CAD
program, and geo-referencing capabilities. With the wide availability of ortho-rectified
imagery (from satellites, aircraft, Helikites and UAVs), heads-up digitizing is becoming the
main avenue through which geographic data is extracted. Heads-up digitizing involves the
tracing of geographic data directly on top of the aerial imagery instead of by the traditional
method of tracing the geographic form on a separate digitizing tablet (heads-down digitizing).

Although GIS have been used for several years in the natural resources, forestry, and
environmental industries, only recently have they begun to be used for a broader array of
business and management functions such as logistics, site and facilities management,
marketing, decision making, and planning. GIS can help a retail business locate the best site
for its next store. It helps marketers find new prospects. Placing your data on a map highlights
where you have many customers if you own a store. It allows you to view, understand,
question, interpret, and visualize your data in ways simply not possible in the rows and
columns of a spreadsheet. And with data on a map, you can ask more questions. You can ask
where, why, and how, all with the location information on hand. You can make better
decisions with the knowledge that geography and spatial analysis are included.

The primary function of market analysis is to understand the marketplace; in other

words, "market analysis means using customer information to estimate the size and character
of a market”. GIS is a powerful market analysis tool because it provides a platform for
representing the spatial relationship between the components of the market; that is, the
customers, suppliers, and competitors. This has become more important as greater
competition has forced many firms to find new ways to manage their relationships with
customers.

Strategies such as target marketing, micro marketing, and relationship marketing all
require that firms capture and maintain detailed information about their customers. The
ultimate goal of all of these efforts is usually to bring a product or service to someone,
somewhere; thus, an understanding of the geo-demographic characteristics of the firm's
customers is critical to a successful marketing strategy.

In most cases, market analysis applications use historical or transaction (real-time)

data in combination with decision modelling and support tools to analyse the organization's
marketing environment. Furthermore, GIS is a powerful tool in market analyses because it
also provides a way to bring together data from multiple sources and link them based on
spatial attributes. This often involves a process of layering different types of data on the same
map projection so that the decision maker can identify and visualize how data intersect and
interact. Thus, GIS is a useful and unique query tool for accessing and displaying components
of a database based on the data's spatial characteristics.

Several organizations have successfully applied GIS to their marketing intelligence

and analysis needs. For example, fast food restaurants and other food service firms have been
one of the most prominent business users of geographic technologies. Firms such as Arby's,
Burger King, The Olive Garden, Popeye’s, Red Lobster, and others use GIS for market
analysis, franchisee selection and placement, site location analysis, and demographic
profiling. McDonald's has used geographic technologies for a number of years and is
recognized as an industry leader in the use of geographic information technologies because of
its progressive use of GIS for a wide variety of marketing and operational applications. Many
firms apply GIS in market- based site selection and market analyses. Val-Pak Direct
Marketing Services, Inc., the largest US local cooperative direct mail advertising company,
uses GIS to micro market, analyse trade areas, and manage territories. Texaco uses GIS to
explore markets for sitting new Texaco stations and for enhancing existing facilities. Included
in these activities are demographic analyses of neighbourhoods and competitor locations to
identify likely locations for new stations and the appropriate advertising and product mix for
existing stores.
 Levi Strauss and Co., a leader in the casual apparel market, uses GIS for a broad
spectrum of marketing applications. For example, they use geographic technologies to
customize their regional advertising and promotions; to select billboards based on location,
traffic patterns, and visibility; to select and customize the content of billboards and other local
advertisements based on regional demographics; and to customize advertising associated with
special-events promotions. GIS is also used to support national promotional efforts, such as
new product launches, target marketing, custom mailings, advertising, and media selection.
Many car manufacturers such as the American Honda Motor Company and the American
Isuzu Motor Company are also using GIS in a broad spectrum of activities. For example,
these firms use GIS for both internal market analysis and assisting their dealers in analysing
their local markets.

GIS is important for business because most business problems include significant
spatial components and GIS enables decision makers to leverage their spatial data resources
more effectively. GIS is useful for managing databases, even extremely large applications
such as data warehouses, because it provides an enhanced data structure that is based on the
natural organization that geography provides. Today, GIS-based data sources vary from
satellite imagery used to validate the number of new houses in a retail- market to the
individual people-point data of the consumers living in those houses. Data such as these can
add significant value to an organization's database by helping to validate and extend their own
proprietary resources.

Although geographic information technologies have existed for several decades, much
research needs to be completed, particularly research examining issues associated with the
development, implementation, and use of this technology in business settings. One reason for
this is that GIS have traditionally been developed, operated, and researched by people with
ties, in one way or another, to geography and computer science. This has naturally led to a
greater research focus on the technical and cartographic principles related to capturing,
representing, and displaying spatial data.